Sympathy no defence
Posted: 18th March 2013
In rejecting a company’s plea that it was not bound by the terms of an agreement with energy consultants, the Court of Appeal acknowledged that a better deal might well have been achievable but emphasised that ‘sympathy does not found a defence’ to a breach of contract claim.
The company engaged the consultants at a time when it was encountering difficulties in its relations with its gas and electricity providers. The consultants argued that, as a result of advice they gave, the company’s utility bills were substantially reduced and that they were entitled to be paid 50% of those savings.
The consultants claimed entitlement to more than £280,000 in respect of invoiced sums that had not been paid, damages for repudiation of contract and interest. At first instance, they were granted summary judgment in respect of liability and the company was ordered to pay £100,000 on account as well as legal costs.
The company disputed the consultants’ interpretation of the contract and the method of calculating their remuneration. It was also argued that the agreement had been entered into on the basis of a misrepresentation and that the company was therefore entitled to rescind the contract.
Dismissing the appeal and finding that the company’s defence to the claim had no reasonable prospect of success, the court ruled that the consultants’ construal of the contract was correct and that its terms had been unequivocally accepted by the company. The exact sum payable by the company to the consultants will be assessed at a further hearing if not agreed.
Sir Raymond Jack observed: “One may have some sympathy with the company in that, if it had conducted things differently, it might well have secured a better deal and it may well be that the consultants have driven a hard bargain with a company which was in a difficult position as regards its energy suppliers. But sympathy does not found a defence”.