Costcutter Supermarkets Group Limited v Ameet Kumar Vaish & Anor

A contractual limitation clause directed to liability arising from tort, breach of contract or statutory duty does not ordinarily extinguish a primary obligation to pay an agreed price. A debt claim enforces that primary obligation and is distinct from a claim for damages for breach. Clear words would be required to produce the extreme result that goods could be accepted without any effective obligation to pay. On an appeal against factual findings, the appellate court must not reweigh the evidence merely because it might have reached a different conclusion. Intervention requires a material error, an irrational or plainly wrong finding, or a conclusion outside the range of reasonable disagreement.

Costcutter appealed against a judgment of HHJ Sephton KC dated 14 October 2022 concerning unpaid goods supplied under trading agreements for convenience stores operated by Ameet Vaish and Pradeep Vaish. The judge held that clause 19.2 limited liability under the 2009 and 2012 agreements to five times the preceding year’s service charge, which was zero, and therefore dismissed those debt claims. Pradeep Vaish cross-appealed against the judge’s factual finding, based principally on a spreadsheet, as to the value of goods supplied under the 1997 agreement. The central issues were the construction of clause 19.2 and whether the factual finding could properly be challenged on appeal.

1. Appeal allowed; cross-appeal dismissed. The findings as to the value of goods supplied were upheld. Pradeep Vaish remained liable under the 1997 agreement, and was additionally held liable under the 2009 agreement for £33,616.81 plus interest. Ameet Vaish was held liable under the 2012 agreement for £84,110.78 plus interest.
2. The court applied the ordinary principles of contractual construction stated in Arnold v Britton [2015] UKSC 36, Rainy Sky SA v Kookmin Bank [2011] UKSC 50 and Wood v Capita Insurance Services Limited [2017] UKSC 24. The relevant words had to be construed in their documentary, factual and commercial context, starting with their natural and ordinary meaning and applying clear language even where the result was commercially unattractive.
3. Clause 4.1 imposed an express primary obligation on the retailer to pay the service charge and actual cost of goods. Clause 13.8 expressly preserved an action for the price even before title passed. Applying the distinction discussed in AB v CD [2015] 1 WLR 771, a claim in debt enforced the primary obligation and was not a claim for damages arising from the breach constituted by non-payment.
4. Clause 19.2 limited liability arising from tort, breach of contract or statutory duty. It was directed to secondary liability in damages, including direct losses caused by contractual breaches. Clause 19.3 dealt with consequential losses. The words “or otherwise” were insufficiently clear to remove or limit the primary obligation to pay for goods received. The zero service-charge result reinforced the need for clear wording but did not drive the construction.
5. The court adopted the modern approach to limitation clauses described in Triple Point Technology, Inc v PTT Public Company Limited [2021] UKSC 29: commercial parties may allocate risks, but clear words are required before ordinary contractual rights and obligations are relinquished.
6. On the cross-appeal, the high threshold for appellate interference with factual findings was applied. The trial judge was entitled to rely on all the evidence, including the respondents’ spreadsheet, and to reject the explanation given for its entries. CPR 16.5(4) concerned what was in issue on the pleadings and did not govern the weighing of evidence at trial.

• High Court (King’s Bench Division): allowed Costcutter’s appeal from the judgment of HHJ Sephton KC dated 14 October 2022, dismissed the respondents’ cross-appeal, and made consequential liability orders.