Ombudsman rejected S75 Claim for £12,250.What next?

pinkshoes

Why not just ask the company how much profit they were set to make on this project, and pay that from the deposit then have the rest returned?

GDB2222

pinkshoes wrote: »

Why not just ask the company how much profit they were set to make on this project, and pay that from the deposit then have the rest returned?

You don't think that might be £12000? They have their showroom and salesmen to support, plus a design service sold as a loss leader. I can well imagine there's a 100% markup.

newwave19

i would be very careful with this one as the retailer hasn't done anything wrong. From what I read, you paid a deposit, but didn't actually place an order at that time ("The Seller required 12 weeks notice to place the order with the manufacturer. At this stage, the Seller was well aware that we were in the early stages of a construction project to extend our house and kitchen."). Correct me if i'm wrong though.
Secondly, the time scale isn't on your side. Even if you did order it, and it had of been delivered to the retailer, do you think its reasonable to have it left in they're store for over a year.
If you do go down the legal route though, just remember that you might get hit with more than just your own legal fees.

onyx911

Sorry about the delay on this but many of you said you'd be interested in what the barrister had to say. I had to wait 2 weeks for the written advice in the end and have appealed the Ombudsman decision based on the advice below. The initial decision from the FOS is by an adjudicator that is not legally trained. It's done that way to manage work loads. If a party doesn't agree with the decision then they can appeal to an actual Ombudsman which I did last week. I am copying most of the relevant sections of the barristers opinion below but have changed our name to Smiths (yes yes, I know, very unoriginal) and the name of the retailer to The Kitchen Store. The actual advice was 10 pages long and dealt with whether Tesco were liable under S75 (he concluded they were) and the procedure to appeal and if necessary, make a civil claim. Some of you did hit the nail on the head with your advice on the thread.


Facts and Background
1. The Smiths planned to build a new extension to the rear of their property which was to house a kitchen. They were in the early stages of that project when they approached THE KITCHEN STORE to quote for the supply of kitchen units, worktops and appliances.

2. The Contract was entered into, on 14/12/15 by payment of the £12,250 deposit (half of the Contract price of £24,500). The Smiths paid £257 (including credit card fees) on their Tesco credit card and the remaining £12,000 on a debit card.

3. The Contract provides that the kitchen was to be sourced by Second Nature Kitchen (“Second Nature”), which is a particular supplier of kitchen units. THE KITCHEN STORE was to source the made-to-measure units from Second Nature and supply them to the Smiths.

4. There is no price breakdown of the Contract, which also includes several appliances supplied by external providers.

5. There is no provision for installation of the kitchen.

6. It is noted that the ‘carcasses’ are “Made to Measure in 8-10 weeks (Ready Assembled)”.

7. The T&C state the following of relevance:

“13. Design/Specification: The Seller reserves the right to alter, modify or improve the design of any Goods without notification. Purchaser’s orders will be executed with current production.

14. Cancellation of Orders: we regret that we are unable in any circumstances to accept cancellation of orders for goods that have been ordered or manufactured to customer’s special requirements unless agreed by the Seller in writing.

18. Nothing in these conditions shall affect the statutory rights of a consumer.”

8. The order was not placed with Second Nature or the suppliers of the kitchen appliances by THE KITCHEN STORE therefore clause 14 of the Seller’s conditions does not apply.

9. In April 2016, the Smiths ran into issues with the extension build and commenced litigation against the parties responsible, which was settled in January 2017. In November 2016, the Smiths s informed THE KITCHEN STORE that the extension works would recommence in January 2017.

10. THE KITCHEN STORE then informed the Smiths that the curved internal doors, being a key feature of the kitchen design that they had ordered were no longer available. Following discussions, THE KITCHEN STORE suggested that an alternative supplier could provide the units but that the price would be increased by £2,400. The alternative supplier was considered by the Smiths to be inferior to Second Nature.

11. Following this development, the Smiths emailed THE KITCHEN STORE on 14/12/16 to request a refund as they did not want to proceed with the alternative brand.

12. THE KITCHEN STORE refused to refund and relied upon their T&C.

13. The Smiths s accordingly wrote to Tesco on 6/1/17 requesting a refund. Tesco refused.

14. The Smiths s then complained to the FOS, which investigated and rejected the complaint on 8/6/17. The essence of the reasoning was:
a. There was no breach of contract or misrepresentation by THE KITCHEN STORE.
b. It was not unreasonable for THE KITCHEN STORE to not place the order prior to the units being discontinued, as THE KITCHEN STORE would not have known if and when the issues with the extension would be resolved.
c. The issue with parts being discontinued and the increases in price were due to issues outside THE KITCHEN STORE’s control.
d. Nothing in the Consumer Rights Act 2015 indicated any wrongdoing by THE KITCHEN STORE.


Claim for Return of the Deposit or Reduction in Price

15. The Smiths have rightly placed reliance upon the Consumer Rights Act 2015 (“CRA”), which since 1/10/15 has provided the principal source of redress for “consumers” in disputes with “traders”. In this case, it is plain that the Smiths were consumers and THE KITCHEN STORE was a trader.

Breach

16. Section 11 of the CRA provides:

“11 Goods to be as described
(1) Every contract to supply goods by description is to be treated as including a term that the goods will match the description.
(2) If the supply is by sample as well as by description, it is not sufficient that the bulk of the goods matches the sample if the goods do not also match the description.
(3) A supply of goods is not prevented from being a supply by description just because—
(a) the goods are exposed for supply, and
(b) they are selected by the consumer.
(4) Any information that is provided by the trader about the goods and is information mentioned in paragraph (a) of Schedule 1 or 2 to the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134) (main characteristics of goods) is to be treated as included as a term of the contract.
(5) A change to any of that information, made before entering into the contract or later, is not effective unless expressly agreed between the consumer and the trader.
(6) [irrelevant]
(7) See section 19 for a consumer's rights if the trader is in breach of a term that this section requires to be treated as included in a contract.”

17. I would consider the difference in brands/supplier and to be a breach of s11.

18. It is a slightly unusual situation insofar as the goods have not actually been supplied. This is a case where the trader is telling the consumer that the goods it proposes to supply will breach s11. At common law, it would be referred to as an anticipatory breach.

19. Addressing the point made (obliquely) in the FOS Determination, I do not think that THE KITCHEN STORE can escape liability on the basis that the discontinuance of the Second Nature units occurred during a period of delay for which it was not responsible. The test is whether the goods THE KITCHEN STORE proposes to supply under the Contract match the description of the Contract. They do not.

Remedies – Rejection and Refund

20. If s11 is breached, s19(3) provides that consumers have the short-time right to reject, the right to a repair or replacement and the right to a price reduction or final right to reject.

21. By s20(5), the short-term or final right to reject is communicated to the seller by indication by the consumer to the trader that the consumer is rejecting the goods or treating the contract at an end.

22. By s20(10), any right to reject entitles the consumer to a refund of any monies paid.

23. The short-term right to reject is limited to 30 days from when ownership or possession of the goods has passed to the consumer, the goods have been delivered and (if installation is within the contract) installed – s22(3). Whilst it is obvious here that the Smiths s do not have possession of the goods under the Contract, they are further protected by s22(5), which expressly provides that the short-term right to reject is exercisable before the events specified in s22(3).

Remedies – Discount/Alternative Performance

24. I shall now address the alternative position – whether the Smiths s could proceed with the Contract but obtain a discount to take into account the breach of s11.

25. In this vein, the Smiths s would seek to rely upon s23 – the right to require repair or replacement. However, I do not think this is open to the Smiths s. Section 23(3) provides that a consumer cannot require replacement if it is impossible. The Smiths s want units that are no longer available from THE KITCHEN STORE, so replacement is impossible. They are being offered alternative units from a different manufacturer, at a higher cost, which they do not want. This is not replacement as envisioned in the CRA.

The Validity and/or Applicability of THE KITCHEN STORE’s T&C

26. As relevant to this case, s31 CRA provides that THE KITCHEN STORE cannot exclude or restrict its liability under s11, or restrict the remedies available to the Smiths s for any breach of s11.

27. In my view, both clause 13 and clause 14 seek to do just that:
a. Clause 13 purports to give THE KITCHEN STORE the right to alter the subject matter of the Contract, and therefore breach s11, without recourse to the Smiths s. This makes it ineffective under s31.
b. Clause 14 purports to remove the Smiths s’ rights to reject the goods under ss20-22 and/or s24. This makes it ineffective under s31.

28. One might be forgiven for considering those clauses a little ironic given that clause 18 states “Nothing in these conditions shall affect the statutory rights of a consumer.”

29. Given the my strong opinion above, I consider it unnecessary to further consider in detail whether the terms would be unfair under the CRA, although, for the avoidance of doubt, I do consider they would be taking into account the matters stated in section 62 CRA, as well as the indicative list of unfair terms in Part 1 of Schedule 2 to the CRA (see 2, 3, 4, 11, 12, 13 and 16).

Conclusion
a. The Smiths s should be entitled to a refund by exercising their short-term right under ss20-22 CRA for breach of s11 CRA on the basis that the goods THE KITCHEN STORE are proposing to supply do not match the description in the Contract. The goods have not yet been supplied so the Smiths s are not ‘out of time’ for pursuing this remedy.

b. THE KITCHEN STORE’s T&C are ineffective under s31 CRA because they purport to limit liability under s11 and remove the right to reject under ss20-22 and s24, which is prohibited.

Chrysalis

thanks for keeping us updated, it be great if you let us know the result when it happens

The-Truth

onyx911 wrote: »

I think you guys are really scrapping the barrell now on ways to criticise me.

No it's you who is scraping the barrell with blaming the retailer!

And to be honest you've been so legally hot headed the relationship to the party who could have actually helped you out here has been shattered!

onyx911

The-Truth wrote: »

No it's you who is scraping the barrell with blaming the retailer!

And to be honest you've been so legally hot headed the relationship to the party who could have actually helped you out here has been shattered!

Did you even read counsel's opinion of the retailer's terms? or were you so desperate to post this comment you just skipped the last 3 pages of the thread? If you don't agree with the Opinion then I'd certainly be interested in how your take of the CRA 2015 differs from his. Maybe he missed something that I can bring to his attention.

onyx911

We have had a call from the Ombudsman today letting us know our appeal has been upheld. This means Tesco Mastercard have to pay us back the £12,250 deposit plus interest at 8% from the date we paid the deposit so roughly £1,900. I can post a copy of the decision when they e mail it to me. In short, the Ombudsman agreed that the clause that stated orders can't be cancelled once placed didn't apply because the order was never placed by the manufacturer and there was nothing in the contract to prevent the order being cancelled.

I want to thank those of you that supported me at a very difficult time and recognised that this contract was one sided in favour of allowing the retailer to change any terms but leaving us bound without any option of withdrawing. I had posted the barrister's opinion above which may help explain the reasoning for anyone curious. Thanks again.

Al_Ross

onyx911 wrote: »

We have had a call from the Ombudsman today letting us know our appeal has been upheld. This means Tesco Mastercard have to pay us back the £12,250 deposit plus interest at 8% from the date we paid the deposit so roughly £1,900. I can post a copy of the decision when they e mail it to me. In short, the Ombudsman agreed that the clause that stated orders can't be cancelled once placed didn't apply because the order was never placed by the manufacturer and there was nothing in the contract to prevent the order being cancelled.

I want to thank those of you that supported me at a very difficult time and recognised that this contract was one sided in favour of allowing the retailer to change any terms but leaving us bound without any option of withdrawing. I had posted the barrister's opinion above which may help explain the reasoning for anyone curious. Thanks again.

:T Great Result-Welldone.