On 22 September, 2014, McCrorys Removals Ltd. of Nottingham won its case against the National Guild of Removers (NGRS) in the Milton Keynes County Court.

The NGRS had been claiming a sum of over £14,000, plus interest and costs from McCrorys on matters relating to a Free Trial Offer the company accepted in 2011. The Judge dismissed the claim.

In April 2011 McCrorys agreed to a free trial offer to become a member of NGRS.  The offer gave the company free membership until the end of the year after which it would be entitled to two years’ follow-on membership at a discounted price of £3,384 including VAT.  It was a requirement of the offer, however, that McCrorys inform NGRS by 18 November, 2011 if it did not wish to remain in membership after 31 December, 2011.  McCrorys failed to do this or pay the £3,384 in outstanding charges after the passage of the deadline. 

Subsequently NGRS brought the action and increased its claim against McCrorys for the full, undiscounted costs of two years membership amounting to £14,076 including VAT as it claimed it was entitled to do in accordance with its rules.  McCrorys paid the admitted sum of £3,834 on 20 December, 2013. 

On 22^nd September, 2014 NGRS claimed the remaining £10,242 including VAT plus costs and interest. District Judge Bennett, sitting at the Country Court at Milton Keynes, dismissed the claim from NGRS and ordered the association to pay costs to McCrorys of £4917.20.  McCrorys was required to pay NGRS £295, that being the fixed cost of issuing, what in the Court’s opinion, should have been a Smalls Claims Track case.

Commenting after the judgement, Patrick McCrory from McCrorys Removals Ltd said: “The comment, by District Judge Bennett, that the NGRS claim was 'wholly unmeritorious', sums up the opinion that McCrorys Removals Ltd always held, on this case.” McCrorys Removals has uploaded a detailed blog about its experience of being taken to court at www.mccrorys.co.uk.

The Mover also asked NGRS for a comment which is published verbatim below:

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Dear Mr Jordan

Further to your email dated 29 September, asking whether we had any comments on the outcome of the court proceedings against McCrory’s Removals, I am conscious that you are likely to have been given an extremely one side [sic] version of events from those looking to publicise the dispute; no doubt with a view to furthering the malicious campaign against NGRS.  I have therefore set out below the factual background and details of the actual proceedings. 

Having been provided with the information below, I trust that should you deem this dispute between two companies to be “newsworthy” or of interest to the industry, any article with be factually correct, balanced and reflect the issues.  That said, I should also mention that I fail to see how a contractual dispute between two companies could be newsworthy or of interest to the industry; there are often disputes between companies or individuals, just as removal companies may have disputes with their customers.  If those disputes cannot be resolved, the courts may be required to decide the issues.  Perhaps you could clarify why a dispute between NGRS and one of its 200 or so members, could be considered “newsworthy” or of interest to an industry or [sic] more than 4000 removal organisations?  It may also be worthwhile posing the question as to what McCrorys or any other removal company would have done if one of their customers had refused to pay for a job or service which they had provided...

The Free Trial Offer

1. On or around 21 April 2011 McCrorys signed the NGRS’s “Free Trial Offer Rules of Membership 2011” (“the FTO Rules”).  The Free Trial Offer offered McCrorys the opportunity to experience the benefits membership of the NGRS’s organisation free of charge for a limited period [sic], namely, until 31 December 2011. McCrorys was also provided with and signed a copy of some “Frequently Asked Questions” and answers.
2. It was a term of the FTO Rules that if McCrorys did not wish to remain in membership of the Guild after 31 December 2011 it was required to give notice to NGRS no later than 18 November 2011: clause 6.2. warning of this deadline was also repeated in the Frequently Asked Questions.
3. Clause 3.2 of the FTO Rules provided that:

These Free Trial Offer Rules of Membership shall apply only to the Initial Membership Period and any subsequent Membership Period shall be governed by NGRS standard Rules of Membership in place from time to time, a copy of which will be provided to the Member at the Compulsory Seminar

1. This was in essence repeated in Annexes 1 and 2 of the FTO Rules, which provided respectively that:

The 99 Day Super Saver Subscription package is subject to the National Guild of Removers and Storers Limited Rules of Membership 2011, a copy of which will be provided to the Member at the Compulsory Seminar (or upon the request of the Member) save as varied by the following provisions…

The Follow On Membership Subscription Package is subject to the National Guild of Removers and Storers Limited Rules of Membership 2011, a copy of which will be provided to the Member at the Compulsory Seminar (or upon the request of the Member), save as varied by the following provisions…

1. Annex 2 also set out the benefits of Follow On Membership:

The Member shall be entitled to the following, in addition to the benefits of Membership as set out in clause 2 of NGRS Rules of Membership 2011:

            24 x Month Interest Free Membership Payment Plan

            100 x Peace of Mind Packs…

McCrorys’s Follow On Membership

1. McCrorys did not inform NGRS that it wished to terminate its membership. Accordingly, following expiry of the Free Trial Offer period of membership on 31 December 2011, McCrorys entered into a further 24 month period of membership, commencing on 1 January 2012.
2. In accordance with Annex 2 of the FTO Rules, on 12 January 2012 NGRS invoiced McCrorys requesting the first monthly instalment of the Follow On Fees.  McCrorys refused to pay this instalment, and denied membership of NGRS.
3. NGRS replied to McCrorys on 20 January 2012, explaining that membership had continued as McCrorys had not terminated the agreement by 18 November 2011 as required by the FTO Rules.  As no payment was received, NGRS again wrote to McCrorys on 14 February 2012.  This letter provided that:

In accordance with the Follow On Membership Subscription, we sent you an invoice dated 12 January 2012 requiring payment of the membership subscription fees. We are concerned to note that you have failed to make any payment of the Membership Fees or set up the required standing order. In those circumstances, you are in breach of the Membership Rules.

The Follow On Membership Subscription Fee of £125 per month provides a substantial discount on the standard subscription membership. However, you should appreciate that any discounts are strictly subject to the member complying with the membership Rules…

So you are fully aware of your potential liability, should you fail to remedy the breach, the annual subscription costs will default to the sum of £5200 plus VAT; the annual inspection fees will default to £200 plus VAT; and the annual Ombudsman Fee will default to £465 plus VAT

1. Again, no payment was made by McCrorys.  Notwithstanding this McCrorys continued to advertise its membership of the Guild on its website up to August 2012.

10.  McCrorys also continued to utilise the NGRS’s “For Sale/Wanted” listings.

11.  On 21 September 2012 NGRS’s solicitors, Coyle White Devine, sent McCrorys a letter before action.  In this letter, NGRS requested payment of the full, undiscounted Subscription Fee.

The Proceedings

12.  Given the stance taken by McCrorys – refusing to pay the membership fees to which it had contracted to pay while still advertising membership and using the benefits of membership – NGRS was left with no alternative other than to issue court proceedings.

13.  It will be noted that NGRS repeatedly sought to avoid having to issue proceedings.  To this end, it will also be noted that the court proceedings were issued on 1 August 2013, 18 months after having first raised the issue of non-payment in January 2012.

14.  Having refused to make any payment whatsoever to NGRS and filed a defence to the claim, at a court hearing on 12 December 2013:

1. McCrorys admitted its liability to pay the Follow On Membership Fees and agreed that it had entered into the 24 months Follow On Membership Period; and
2. The Judgment was entered for the admitted sum of £3,384.

The Defence

15.  Whilst the Defence was difficult to follow and in parts wholly unparticularised, MrCrorys raised numerous ill-founded allegations including:

a)     That the invoice dated 15 July 2013 was not sent;

b)     That NGRS’s delay in presenting the 2011 Rules was a form of misrepresentation, notwithstanding the acknowledgment that a copy of the 2011 Rules were provided to Mr Patrick McCrory at the Seminar, in accordance with the agreed terms of the Free Trial Offer;

c)      That the 2011 Rules were not incorporated into the contract between the parties;

d)     That the requirement to pay the Full Subscription Fee was a penalty and is unenforceable; and

e)     That certain clauses of the 2011 Rules were unfair under the Unfair Contract Terms Act;

f)       That certain clauses of the 2011 Rules were unfair under The Unfair Terms in Consumer Contracts Regulations.

 

16.  McCrorys also sought to make a counterclaim against NGRS but once again, this was wholly unparticularised and raised numerous ill-founded allegations.

17.  It is telling that on 14 April 2014 McCrorys discontinued its ill-foundered counterclaim.  

18.  It is also telling that 2 days before the trial of dispute, McCrorys discontinued all of its ill-founded allegations in its defence, except for the allegations that the 2011 Rules were not incorporated and/or that the fees claimed were a penalty.

The Hearing

19.  At the hearing on 22 September, NGRS’s claim was dismissed but, it was not because McCrorys succeeds on any of the issues raised in its defence.  On the contrary, the District Judge dismissed the claim solely on the basis of her own interpretation of the contractual provisions of the Follow on Membership under the FTO Rules at that time.

20.  It should be noted that the interpretation of the Rules by the District Judge was not a point raised by McCrorys, at any stage; it was certainly not a point raise [sic] in its defence.  On the contrary, the legal representatives of all of the parties, as well as McCrorys and NGRS had consistently read the clauses as meaning that the fee was a “discount”, which reinforced that that was the natural reading of the words.

Summary

21.  As will be clear from the above:

• McCrorys had refused to pay any membership fees whatsoever, yet was still advertising membership and using the benefits available to paying members;
• NGRS is not litigious: it was necessary to issue court proceedings against McCrorys in circumstances where McCrorys had refused to pay any membership fees whatsoever yet was still advertising membership and using the benefits available to paying members;
• Court proceedings are always a last resort: NGRS sought to resolve the matter with McCrorys for 18 months before issuing proceedings, which were only issued as McCrorys had refused to pay membership fees yet was still advertising membership and using the benefits available to paying members;
• Court proceedings are not a “cash cow” for NGRS, as has previously been alleged; there is always a risk of losing, a risk that a Defendant will not pay and the fact that the full costs incurred are never recovered in any event;
• NGRS has always stated that it is the courts which determine any disputes and that each case is dealt with and addressed on its particular facts and merits;
• The only “winners” from this (and almost all) litigation are lawyers; both NGRS and McCrorys have paid legal fees which have not been recovered.

 

22.  Whilst McCrorys will no doubt seek to put its own “spin” on the outcome of the hearing, to follow up its other ill-founded and defamatory statements, the simple fact of the matter is that the dispute arose solely because of the conduct of McCrorys and its refusal to comply with what it had agreed. 

23.  Finally, I should also mention that in light of the manner in which the case was determined, NGRS is currently considering whether to appeal; as I have said above, the interpretation by the District Judge was not an interpretation ever contemplated or even argued by the parties.

 

Yours sincerely

Jon Martin

Membership Secretary

 

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Photo: Patrick McCrory



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