BAILII is celebrating 24 years of free online access to the law! Would you
consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it
will have a significant impact on BAILII's ability to continue providing free
access to the law.
Thank you very much for your support!
[New search]
[Printable PDF version]
[Help]
SHERIFFDOM OF TAYSIDE, CENTRAL AND FIFE AT DUNDEE
[2024] SC DUN 39
PER-CA13-23
JUDGMENT OF SHERIFF JILLIAN MARTIN-BROWN
in the cause
STAFFSCANNER LIMITED, a company incorporated under the Companies Acts
(registered number SC566169) and having its registered office at 125 West Regent Street,
Glasgow, G2 2SD
Pursuer
against
HUDSON HEALTHCARE LIMITED, a company incorporated under the Companies Acts
(registered number SC08376121) and having its registered office at 1st Floor, Sutherland
House, 70-78 West Hendon Broadway, London, NW9 7BT
Defender
Pursuer: Ms Niven; Morton Fraser MacRoberts LLP
Defender: Mr Casiday; Mitchells Roberton
Dundee. 4 April 2024
Introduction
[1]
In this case the pursuer sought payment of invoices rendered to the defender for the
supply of temporary workers in its care homes. Parties were in dispute as to whose terms
and conditions governed the contract between them.
Findings in Fact
[2]
The pursuer is Staffscanner Limited, a company incorporated under the Companies
Acts (registered number SC566169) and having its registered office at 125 West Regent
2
Street, Glasgow, G2 2SD ("Staffscanner"). Staffscanner supplies temporary workers to care
homes.
[3]
The defender is Hudson Healthcare Limited, a company incorporated under the
Companies Acts (registered number SC08376121) and having its registered office at 1st Floor,
Sutherland House, 70-78 West Hendon Broadway, London, NW9 7BT ("Hudson"). Hudson
operates care homes across the United Kingdom, including care homes at 146 Pitkerro Road,
Dundee, DD4 8ER and Lornebank Care Centre, 3 Lorne Street, Hamilton, ML3 9AB.
[4]
In January 2021 Staffscanner approached Hudson to offer their services. Staffscanner
explained that they had a booking app that Hudson would have access to for placing all
booking requests and provided a demonstration. Hudson asked Staffscanner to agree to
their terms and conditions ("the care home terms and conditions"). On 12 January 2021,
Staffscanner's employee, Amir Najafian, signed the care home terms and conditions on
behalf of Staffscanner and returned it to Hudson via email.
[5]
Paragraph 2 of the section on Bookings and Signing In / Out provided:
"2. Agency staff must sign in and out of their shift using the touch screen Careblox
Time and Attendance Terminal as an `Agency Worker'. Only shifts signed in and
out of Careblox will be invoiced."
[6]
Paragraphs 1, 2 and 3 of the section on Timesheets provided:
"1. Agency staff should submit their manual timesheet to the Home Manager,
Administrator or Receptionist.
2. The Home Manager, Administrator or Receptionist will send manual timesheets
away in accordance with the electronic information recorded on Careblox time and
attendance and scan these back to the agency provider on a Monday of each week for
the previous week's shifts.
3. Only the Home Manager, Administrator or Receptionist are authorised to sign
timesheets. Timesheets signed by an unauthorised person will not be invoiced."
[7]
Paragraph 1 of the section on Invoicing provided:
3
"1. Invoices must be sent directly to Head Office within 14 days of their issuance and
the shift dates worked."
[8]
Following the demonstration, Hudson was sent a secure link by email to enable it to
setup its profile on the Staffscanner app. Hudson followed the link to create an account,
using a password of its choice. Hudson set up profiles for use at its homes. Once the
account and profiles were set up, Hudson's managers were able to log in using its password
to start posting shifts and booking staff. Hudson's managers began booking staff through
Staffscanner's app in January 2021 for the care home in Dundee and in July 2021 for the care
home in Hamilton.
[9]
All persons using Staffscanner's app to book temporary workers were required to
accept Staffscanner's terms and conditions ("the agency terms and conditions") every time
they logged in by ticking the box accepting Staffscanner's "licence terms and conditions"
before proceeding to the next page. The agency terms and conditions were updated
regularly and could be accessed at any time via the client dashboard or via Staffscanner's
website.
[10]
Hudson's managers posted the details of the shifts they were looking to book
workers for, including the duration and rate of pay. Workers were shown details of
Hudson's available shifts when they logged into the app. The workers could then click
"apply" to notify Hudson's managers that they wanted to cover the shift. Hudson's
managers were notified of all applicants, which allowed them to choose which applicant
they wanted to fill the shift. The successful applicant was notified through the app that they
had been allocated the shift.
[11]
When workers arrived for their shifts, they had to use the app to electronically start
their shift. Workers could only clock in or out when they were within a certain radius of the
4
centre of the care home in which they were working. If they clocked in late or clocked out
early then a deduction would be applied to the amount charged to Hudson, based on 15-
minute blocks of time.
[12]
Hudson's managers were notified through the app that workers had completed their
shifts. Hudson's managers were prompted at that stage to give the workers a rating and
were given the option to leave a comment about the workers' performance.
[13]
Hudson's managers booked 304 temporary workers for their site at Pitkerro, Dundee
and 512 workers for their workers at Lornebank, Hamilton during the period from June 2021
until August 2022. Staffscanner issued invoices to clients on a weekly basis every
Wednesday. The sum of £30,567.45 remained outstanding and represented the sum sued
for.
[14]
Hudson ceased using Staffscanner's app in respect of both care homes in
August 2022.
[15]
Contrary to the care home terms and conditions, some agency workers did not sign
in and out of Careblox. Hudson made payment of most invoices issued by Staffscanner,
which were compliant with the care home terms and conditions. Hudson made payment of
non-compliant invoices where it was Hudson's Careblox system that was non-functioning.
In such circumstances, Hudson informed Staffscanner timeously and contemporaneous
alternative evidence was obtained.
[16]
On 19 August 2021 Hudson's executive assistant Aviva Kushner emailed
Amir Najafian stating that Hudson would only honour and pay invoices that complied with
the care home terms and conditions and re-stating the steps necessary to comply with those
requirements.
5
[17]
On 30 September 2021 Aviva Kushner emailed Amir Najafian that a specific shift
would not be processed because the agency worker had not complied with the care home
terms and conditions.
[18]
Clause 6 of the agency terms and conditions deals with the payment of fees and VAT
by clients. It provides:
"6.1
The client will pay Staffscanner Temporary Worker Fees in respect of
Temporary Workers in accordance with the scale of charges advised to the client via
the Staffscanner platform. The Temporary Workers Fees comprise of the Temporary
Worker's pay and holiday pay and include Staffscanner Limited's commission and
employer national insurance contributions. The following conditions apply to the
Temporary Worker fees:
(a)
Fees are calculated according to the number of hours worked by
the Temporary Worker (to the nearest quarter hour).
(b)
The client shall during the Assignment verify the number of hours
worked by the Temporary Worker. If a client is unable to verify hours
worked due to the client disputing the hours claimed, the client shall inform
Staffscanner immediately and shall cooperate fully and in a timely fashion
with Staffscanner to enable Staffscanner to establish what hours, if any, were
worked by the Temporary Worker.
(c)
Failure to verify hours does not absolve the client of its obligation
to pay the Temporary Worker fees in respect of the hours actually worked.
(d)
The client acknowledges that it shall not decline to verify hours
worked on the basis that it is dissatisfied with the work performed by the
Temporary Worker. In cases of unsuitable or unsatisfactory work the
provision of clause 5.2 shall apply.
(e)
Staffscanner shall submit all invoices verifying the number of hours
worked by the Temporary Worker.
(f)
Staffscanner shall invoice the client in arrears and invoices are payable
within 14 days of receipt. No fee is incurred by the client until the Temporary
Worker has commenced the assignment unless the client cancels the
assignment within 24 hours of the commencement time.
(g)
The client may terminate an assignment only upon giving 24 hours'
notice via the Staffscanner app failing which it shall be entitled to terminate
6
an assignment, but it may do so only upon payment of a sum equal to 50% of
the assignment.
(h)
The client shall not be required to pay Temporary Worker fees for any
absences (for whatever reason) of a Temporary Worker.
6.2
Staffscanner sub-charge VAT to the client, at the prevailing rate.
6.3
If the client fails to make a payment due to Staffscanner Limited under this
agreement by the due date then Staffscanner may, without prejudice to its other
rights, suspend the services of Temporary Workers to the client, and a client shall
pay interest on the overdue sum from the due date until payment of the overdue
sum, whether before or after judgment. Interest under this clause shall be accrued
at 8% plus the Bank of Scotland base rate accrued on a daily basis."
[19]
Clause 16 of the agency terms and conditions is an entire agreement clause which
provides:
"16.1 This agreement constitutes the entire agreement between the parties and
supersedes and extinguishes all previous agreements, promises, assurances,
warranties, representations, and understandings between them, whether written or
oral, relating to its subject matter.
16.2
The client acknowledges that in entering into this agreement it does not rely
on, and shall have no remedies in respect of, any statement, representation,
assurance or warranty (whether made innocently or negligently) that is not set out in
this agreement."
Findings in Fact and Law
[20]
Hudson made an offer for the supply of temporary workers on 12 January 2021,
subject to the care home terms and conditions.
[21]
That offer was met by counter offers from Staffscanner in January 2021 onwards for
the care home in Dundee and from July 2021 onwards for the care home in Hamilton. Those
counter offers were subject to the agency's terms and conditions.
[22]
Hudson accepted the counter offers as a result of creating an account on receipt of a
secure link from Staffscanner using a password of its choice; setting up profiles for use at the
homes; permitting their managers to book staff via the app by virtue of supplying them with
7
the log in details, including the password; and their managers ticking a box confirming
agreement to the agency's terms and conditions before being able to book staff via the app.
[23]
The agency terms and conditions were readily available via a hyperlink. They were
updated regularly and could be accessed at any time via the client dashboard or via
Staffscanner's website. The agency terms and conditions were sufficiently drawn to the
attention of Hudson and its managers. The agency terms and conditions were incorporated
into the contract between the parties.
[24]
The invoices issued by Staffscanner are overdue for payment. Interest accrues at 8%
plus the Bank of Scotland base rate on a daily basis.
Procedural History
[25]
Evidence was led from the following witnesses by WebEx on 27 February 2024:
1.
Amir Najafian;
2.
Reza Najafian;
3.
Gary Anderson;
4.
Aviva Kushner;
5.
Rita Ribeiro; and
6.
Samuel Maierovits.
[26]
Oral submissions followed the conclusion of the evidence on 27 February 2024 and I
made avizandum.
Pursuer's Evidence
Amir Najafian
[27]
Amir Najafian was previously employed by Staffscanner Limited as a pharmacist.
He left the company at the end of 2021. He supported business development activities. He
was introduced to Hudson by one of the managers in or around January 2021 and set up a
8
meeting with Aviva Kushner. At the meeting he provided a demonstration of the app and
its capabilities. He agreed to provide Hudson with a one week trial period, during which
Hudson would arrange agency workers for Staffscanner conventionally.
[28]
Amir Najafian conceded that Aviva Kushner asked him to sign the care home terms
and conditions, which he did. He conceded that unless the policy was signed then
Staffscanner would not have been able to provide staff to Hudson. However, he maintained
that he told Aviva Kushner that if the trial period was a success Hudson would be required
to sign up to the agency terms and conditions, which would take precedence over the care
home terms and conditions. When pressed, he was unable to explain why he would enter
into a contract which he anticipated would be overridden in the space of a week.
[29]
The trial period went well and Aviva Kushner wanted to proceed with setting up an
account on the platform. He arranged for the business development team to send her a link
so that Hudson could sign up to the app and create their own account.
[30]
I found Amir Najafian to be a credible and reliable witness overall. However, I did
not accept his position that he told Aviva Kushner that if the trial period was a success
Hudson would be required to sign up to the agency terms and conditions, which would take
precedence over the care home terms and conditions.
Reza Najafian
[31]
Mr Reza Najafian was the Chief Executive Officer of Staffscanner Limited and was
responsible for the overall strategic operation of the company. He also ran his own care
home, which had led to him setting up Staffscanner.
[32]
In the version of the app that Staffscanner was operating in January 2021, new clients
were sent a link to sign up to the app and create their own account. They followed the link
9
to create an account, using a password of their choice. Once their account was set up they
were able to log in to start posting shifts and booking staff. When logging in, clients had to
agree to Staffscanner's terms of business by ticking a box confirming agreement to the
agency terms and conditions. They were not able to proceed with logging in if they had not
ticked the box.
[33]
The terms of business were updated regularly and could be accessed at any time via
the client dashboard or via Staffscanner's website. Updates were usually to the provisions
relating to the app.
[34]
Conventional staffing agencies relied on paper timesheets which were not always
accurate, vulnerable to being misused and could often go missing. In the app, workers
could only start their shift when they were within a certain radius of the care home location.
If a worker was late in clocking in for their shift, 15 minutes would be deducted from the
length of time worked. Once a worker ended their shift in the app, the client received
notification saying that the worker had finished their shift and they were prompted to
provide a rating for the worker. The client did not have to rate the worker, that was
optional.
[35]
Staffscanner calculated fees based on the information recorded in the app. The wage
payment for the worker and invoice for the client was automatically generated at the same
time through their accounting software, Xero. All workers were paid within 48 hours of
completing their shift. Invoices were collated and sent out to clients once a week. The
process was automated. On the rare occasions that invoices were challenged, it tended to be
because a worker had fallen asleep during their shift. In those circumstances, the client
would not be charged and the worker would be put on disciplinary measures.
10
[36]
Reza Najafian first became aware of Hudson's unpaid invoices at one of their
monthly finance meetings. Staffscanner did not have any credit controllers. Their payment
terms were 14 days but in reality they allowed clients 30 days as most providers completed a
monthly payment. He believed that Hudson was paying the minimum number of invoices
that they could in order for them to be able to keep their service going. As time went on, the
debt began to mount up.
[37]
Reza Najafian did not know whether Careblox was a tool that was unique to Hudson
or something used more widely across the sector. It was not something any other client had
referred to before. He maintained that Staffscanner did not expressly agree to only issue
invoices for shifts recorded in Careblox, nor did they undertake to ensure that their workers
would use Careblox.
[38]
Reza Najafian had two meetings with Samuel Maierovits and Aviva Kushner. The
first meeting took place on 8 February 2022 and was amicable. Samuel Maierovits told him
that Hudson used Careblox to budget and their policy was not to pay agency staff if they
had not recorded their shift on Careblox. Reza Najafian was surprised to hear this as he did
not think it was legal nor moral not to pay staff that had worked. He indicated Staffscanner
could not issue fees in accordance with what was recorded on Careblox because Staffscanner
had no access to it. He took the opportunity to demonstrate the reporting facilities in the
app which clients could download, in which all shifts recorded on the app were time and
date stamped. Samuel Maierovits and Aviva Kushner wanted to continue using the app so
they committed to going away and looking at each invoice.
[39]
Several months passed and the same pattern of partial payment behaviour
continued. Hudson would pay some invoices but not all. Staffscanner continued to raise
11
this with Aviva Kushner, who would respond by raising questions about the invoices and
referring to Careblox. This was all just a way of avoiding paying the invoices.
[40]
The second meeting took place via Microsoft Teams on 22 September 2022 between
Reza Najafian, Rita Ribeiro, Samuel Maierovits and Aviva Kushner. Samuel Maierovits and
Aviva Kushner talked about Careblox again. Reza Najafian reiterated that Careblox was
Hudson's internal system, had no bearing on Staffscanner's system, and that the agency
terms and conditions took precedence.
[41]
In an attempt to move forward, Samuel Maierovits proposed that Staffscanner
discount 15% from the outstanding invoices and applied the same discount to any future
invoices for shifts not recorded on Careblox, conditional on Staffscanner reaffirming a
commitment to their agency policy. Reza Najafian rejected that proposal and made a
counter offer of a discount of 5% on the historic invoices and 5% on any future invoices
where the worker had not recorded their shift on Careblox, conditional on a process being
established whereby compliance with Careblox was checked and reported to them on a
weekly basis. Staffscanner did not receive any response to that offer and suspended
Hudson's account on 7 October 2022.
[42]
I found Reza Najafian to be a credible and reliable witness. In light of the difficulties
conventional staffing agencies experienced through reliance on paper timesheets, he had
devised a system for recording shifts, paying workers and issuing invoices which avoided
such difficulties, from which care homes could not opt out if they wished to use his agency.
Rita Ribeiro
[43]
Rita Ribeiro was Staffscanner's finance manager and had worked there for over four
years. Her responsibilities included sending out invoices to clients.
12
[44]
Hudson's payment of invoices was sporadic from the beginning. When asked why
they were not paying they said it was because the relevant worker had not clocked in or out
using Careblox. She responded to this by saying that Staffscanner could confirm that the
shift had been completed through the information recorded in the app. She had never heard
of Careblox before. It was not something any of their other clients used.
[45]
Careblox was something Hudson brought up regularly. It was the excuse used for
withholding payment numerous times. Workers told her that they were told not to bother
with Careblox because the system was down and were told not to worry. That was fed back
to Aviva Kushner, who reassured her that when the system was down the workers would
still get paid.
[46]
Things were made more difficult because Hudson challenged invoices months after
they had been issued. Under the agency terms and conditions, a failure by clients to verify
hours worked did not release them from their obligation to pay the fee for the hours
worked. In addition, the agency terms and conditions provided that if the client was
disputing the hours, then the client should inform Staffscanner immediately and raise any
issues timeously. She informed Hudson on numerous occasions that even if the worker did
not record their time on Careblox, Staffscanner would calculate the wage payments and
issue invoices on the basis of the shift recorded by the worker in the app, in line with the
agency terms and conditions.
[47]
Issues continued and Staffscanner was left with no choice but to threaten to suspend
Hudson's account on 18 October 2021. Aviva Kushner called her and said Hudson would
sort out the unpaid invoices and asked them not to suspend their account. Staffscanner
agreed to this. However the same thing started happening again, at which point
Reza Najafian got involved and had a meeting with Samuel Maierovits and Aviva Kushner.
13
It was not the case that Hudson was not paying any of the invoices between June 2021 and
August 2022. They paid the majority.
[48]
Rita Ribeiro did not attend the first meeting. She attended the second meeting on
22 September 2022 via Microsoft Teams. Prior to the meeting Staffscanner had sent
Samuel Maierovits and Aviva Kushner a breakdown of the outstanding invoices, which
included the amount paid to the worker and their margin on each invoice. The only reason
given for non-payment was that the workers had not clocked in or out of the Careblox
terminal. Samuel Maierovits tried to reassure them at the meeting that Careblox was not a
system for avoiding payment. At the meeting Reza Najafian said that the agency terms and
conditions governed the agreement between both parties and were deemed accepted by
virtue of the fact that Hudson was continuing to book workers though the app.
Samuel Maierovits was not happy. At the end of the meeting he said he would be seeking
legal advice. As a gesture of goodwill, Reza Najafian offered a nominal discount on the
outstanding sum to draw a line under matters. That was rejected and Staffscanner
suspended Hudson's account permanently.
[49]
Some payments were received after the meeting on 22 September 2022. The last
payment was received from Hudson on 4 November 2022.
[50]
I found Rita Ribeiro to be a credible and reliable witness. She conceded that from the
beginning, the reason given by Hudson for not paying invoices was because the relevant
worker had not clocked in or out using Careblox and that Careblox was brought up
regularly.
14
Gary Anderson
[51]
Gary Anderson was head of technology at Argo Digital. Staffscanner was their
biggest client. He was responsible for the entire technology side of Staffscanner and was
supported by a team of five people.
[52]
The current version of the software was launched on 6 April 2021. Hudson signed
up to a previous version of the software. In that version, a client was able to register
themselves on the platform by completing a form. Once registered, they would then have to
log in to the platform. The log in process would not allow them to proceed unless the user
checked a box labelled "I agree to the licence terms and conditions." The terms and
conditions text was a hyperlink that brought up the agency terms and conditions.
[53]
Gary Anderson was not involved in drafting the agency terms and conditions. He
was given the agency terms and conditions from the operations team and asked to mirror
them on the platform. The agency terms and conditions were available on demand via the
web dashboard which the clients saw when they logged into the platform.
[54]
Gary Anderson suspended Hudson's account on the platform on 7 October 2022 by
disabling certain items in Hudson's settings on the platform. On 8 October 2022, Hudson
accessed those settings and re-enabled these items before posting a new shift. That was
noticed and the shift removed. Gary Anderson terminated the account following this
incident to prevent Hudson being able to use Staffscanner's services by revoking access
rights from all of Hudson's user accounts.
[55]
I found Gary Anderson to be a credible and reliable witness. He was candid that he
was not involved in drafting the agency terms and conditions.
15
Defender's Evidence
Aviva Kushner
[56]
Aviva Kushner was known as Aviva Ryan prior to 9 December 2021. She had
worked at Hudson Healthcare since March 2020, when she joined as an Executive Assistant.
She was the primary contact for service contracts at head office. That included agency work,
food contracts, mechanical engineers, goods and services. Hudson operated one system for
service providers and another for goods providers. By way of example, service providers
were required to sign in when they arrived at the care homes. There was no such
requirement for delivery of goods.
[57]
Aviva Kushner took initial consultation with agencies to determine whether Hudson
would enter into a contract with them. At any given time Hudson might work with up to
eight agencies across all four homes. All the agencies required to agree to observe the terms
of the care home terms and conditions and if they did not agree to do so, she would end the
discussion.
[58]
Once an agency had been approved by head office, day to day operations were
overseen by the managers at the home. The managers did not have authority to agree
contracts. Invoices were sent to the head office for reconciliation and payment. Any
problems in respect of terms of service were referred to the head office.
[59]
When carers and nurses arrived at one of their homes, they tapped in using the
Careblox system. That applied to direct employees as well as agency workers. Agency
workers were required to identify the approved agency that sent them and sign their names
before beginning work. Carers and nurses tapped out using Careblox when they finished
their work.
16
[60]
Careblox generated data that was used by the head office inter alia to pay staff. In the
case of agency workers, Careblox generated the data that she used to reconcile invoices sent
to Hudson by agencies. She authorised payment of invoices to the extent that she could
reconcile their content with Careblox data. If she could not reconcile the data she notified
the agency that there was a problem. If the problem could be overcome, she authorised the
payment. Otherwise, she contacted the agency and explained that the invoice would not be
paid in full under reference to the care home terms and conditions.
[61]
Aviva Kushner thought a third party recommended Staffscanner. Her initial
dealings were with Amir Najafian. She had a preliminary discussion with him using Teams
and explained to him the care home terms and conditions. He did not raise any problems.
At no point did Amir Najafian indicate that Staffscanner would seek to incorporate their
terms of business into the contractual relationship, nor that their terms of business existed.
If he had done so, she would have brought the discussion to an end.
[62]
Aviva Kushner thought that Amir Najafian offered a demonstration of the
Staffscanner app but that had little relevance for her since the use of the app would be a
matter for the managers at the homes. Profiles were set up for use at the homes. The app
was not used in the head office. From her perspective, there was no difference between the
managers requesting agency staff using the Staffscanner app and the managers requesting
agency staff by phoning other agencies.
[63]
She was able in most instances to reconcile the contents of Staffscanner's invoices
with Careblox data and authorise payment. If she declined payment for specific items in
Staffscanner's invoices, she notified them that she had done so. On 19 August 2021 she
wrote to Amir Najafian reminding him that under the policy Hudson honoured only those
invoices supported by Careblox data. On 30 September 2021 she wrote to Amir Najafian
17
again and informed him that she was declining payment for a specific item. Her practice
was to encourage compliance so that Hudson and its agencies worked well together.
Mistakes happened and sometimes adjustments were needed in developing the commercial
relationship with agencies.
[64]
Staffscanner disputed Hudson's decision to withhold payment and insisted that
payment should be made according to the agency terms and conditions. That was how she
came to be aware that Staffscanner considered that the agency terms and conditions had
been incorporated into the contract between the parties. That came as a surprise. So far as
Amir Najafian had made her aware, the app was simply what the managers in the homes
would use to book workers.
[65]
On 14 February 2022 Reza Najafian emailed Aviva Kushner with a spreadsheet for
Lornebank showing a breakdown of the invoicing which was under dispute and those
where he understood people did not sign into Careblox. He also indicated that the
templates for Hudson had now been changed to state clearly all applicants must sign into
Careblox at the care home on arrival as this would affect payment. She took this as
acknowledgment that he understood and accepted the importance for Hudson of signing in
using Careblox and accepted the consequences of failing to use Careblox. As discussions
continued, it became clear that her optimism was premature. Reza Najafian insisted that the
agency terms and conditions were incorporated into the contract between the parties.
[66]
After a second meeting between Reza Najafian and Samuel Maierovits,
Mr Maierovits told her to stop using Staffscanner. She had no recollection of Staffscanner
threatening to suspend their account and was certain that no such threat made its way to
head office.
18
[67]
I found Aviva Kushner to be a credible and reliable witness. She was conceded that
mistakes happened and that if problems could be overcome, she authorised payments.
Samuel Maierovits
[68]
Mr Maierovits was the Managing Director of Hudson since November 2012. He was
supported by his Executive Assistant Aviva Kushner.
[69]
Mr Maierovits developed the care home terms and conditions. He aimed for them to
be clear and concise so that contractors could understand how agency workers fitted within
their business model. It was only two pages long because he wanted to ensure it was easily
understood by agencies. He wanted it to be clear that Hudson was not sneaking anything
into the contract. There was a counterpart document for goods suppliers. That was the
framework within which their homes operated.
[70]
Careblox was the system that Hudson used at the homes for all staff clocking in and
out of shifts. Careblox generated data that Hudson used to confirm and process payroll of
their own staff as well as to authorise and pay agency staff invoices. They used this data to
analyse staffing levels against staffing requirements of the home to help ensure appropriate
and sustainable levels of staffing. Careblox data was used to respond to any periodic
requests from the Care Inspectorate for Hudson's rotas and records. In the event of an
emergency, they knew who was there.
[71]
He knew that occasionally it took time for the relationship with agencies to settle.
Hudson took a sensible and pragmatic approach to any difficulties in the early stages of
those commercial relationships. However, given the importance of Careblox to its business
model, Hudson did insist on compliance with its care home terms and conditions. Hudson
19
did not enter into bespoke contracts with any agency who refused to accept the care home
terms and conditions.
[72]
He entered into discussions with Reza Najafian when Aviva Kushner told him there
were disputes about invoices. She was declining to pay items in invoices where she could
not reconcile them with Careblox data as per the care home terms and conditions. He told
Reza Najafian that as long as Staffscanner's agency workers were also following and using
Careblox, it did not matter to him whether they were booked on the app. Booking was
handled by the homes. The app was simply a way for managers to book agency workers.
Reza Najafian's position was that the agency terms and conditions had displaced the care
home terms and conditions and Staffscanner had no obligation to use Careblox.
Samuel Maierovits was surprised by this.
[73]
There was never an agreement between the parties to incorporate the agency terms
and conditions into the contract between them. Allowing a service provider to vary the
contractual terms would undermine the entire purpose of the care home terms and
conditions. Managers could not enter into contracts for Hudson in their role as end users of
the app. As discussions progressed he had a frustrating sense that Staffscanner was trying
to sneak in its own contract as a consequence of terms and conditions embedded in an app.
In hindsight it seemed to him they only pretended to agree to the care home terms and
conditions, without any intention of ever abiding by them. He felt Staffscanner had acted in
bad faith and tried to trick Hudson.
[74]
Reza Najafian and Samuel Maierovits informally discussed settlement as a pragmatic
way to bring the relationship to a close but made little progress. Thereafter,
Samuel Maierovits determined that Hudson would no longer use Staffscanner. He rejected
the assertion that Hudson was paying the minimum number of invoices they could in order
20
to be able to keep their service going and fly under the radar. He accepted payments had
been made to Staffscanner in late November 2022, because the corresponding invoice was
compliant with the care home terms and conditions. Several years ago another agency tried
to unilaterally change the terms of their service contract with Hudson and seemed to think if
they threatened to withhold agency staff, then he would agree to the changes. In response,
he withdrew their status as an approved service provider. He mentioned that incident to
Reza Najafian to illustrate the point that he would not be bullied into agreeing the changes
to the care home terms and conditions.
[75]
I found Samuel Maierovits to be a credible and reliable witness. He conceded that
occasionally it took time for the relationship with agencies to settle and tried to take a
sensible and pragmatic approach to any difficulties in the early stages of commercial
relationships. The importance of Careblox to his business model was such that he
developed clear and concise care home terms and conditions.
Legislation
[76]
Section 1 of the Contract (Scotland) Act 1997 provides as follows:
"1.
Extrinsic evidence of additional contract term etc.
(1)
Where a document appears (or two or more documents appear) to
comprise all the express terms of a contract or unilateral voluntary obligation,
it shall be presumed, unless the contrary is proved, that the document does
(or the documents do) comprise all the express terms of the contract or
unilateral voluntary obligation.
(2)
Extrinsic oral or documentary evidence shall be admissible to prove,
for the purposes of subsection (1) above, that the contract or unilateral
voluntary obligation includes additional express terms (whether or not
written terms).
21
(3)
Notwithstanding the foregoing provisions of this section, where one
of the terms in the document (or in the documents) is to the effect that the
document does (or the documents do) comprise all the express terms of the
contract or unilateral voluntary obligation, that term shall be conclusive in the
matter.
(4)
This section is without prejudice to any enactment which makes
provision as respects the constitution, or formalities of execution, of a contract
or unilateral voluntary obligation."
Authorities
[77]
Parties referred me to the following authorities:
·
·
Difference Corporation Limited v Unitel Direct Limited [2019] EDIN SC 56;
·
Grafton Merchanting GB Ltd t/a Buildbase v Sundial Properties (Gilmerton)
Limited [2013] 1 WLUK 643;
·
Robert Allan and Partners v McKinstray [1975] S.L.T. (Sh Ct) 63;
·
Robert Barry and Company v Doyle [1998] S.L.T 1238; and
·
Pursuer's Submissions
[78]
Ms Niven submitted that the facts of this case were straightforward. It was not
disputed that the parties contracted with each other. The only dispute was whether Hudson
was entitled to withhold payment for services because the care home terms and conditions
excluded any right to be paid when certain administrative requirements were not complied
with. The situation did not arise because Staffscanner's own agency terms and conditions
took precedence. In any event it was entitled to be paid for work done. On any view this
was a technicality.
[79]
It was an express term that Staffscanner was entitled to be paid. If not there should
be an implied term that they were entitled to payment for services.
22
[80]
Staffscanner's business was entirely online. Amir Najafian made it clear that the
agency terms and conditions would take precedence when he signed the care home terms
and conditions at Aviva Kushner's request. Once Hudson logged in to post shifts and
assign workers it had to agree to the licence terms and conditions and an agreement was
formed between the parties.
[81]
Difference v Unitel was an example of a contract formed by a purchase order. It was
held the process was electronic and there was no need to deliver an electronic copy of
standard terms and conditions. Grafton v Sundial was an example of the battle of forms,
which held that the party that got terms in last won. A party can circumvent the last shot
rule by saying that their conditions will prevail over other party's terms and an example
could be seen in the Butler Machine Tool case. However, in this case the agency terms and
conditions contained an entire agreement clause, whereas the care home terms and
conditions did not. Under the Contract (Scotland) Act 1997, that was conclusive.
[82]
Hudson relied on the Panasonic case which was an exception to the last shot rule. In
that case Panasonic's terms were deliberately and carefully drafted to protect against the last
shot doctrine and should be distinguished.
[83]
If there was no express term then there was an implied term of quantum meruit to be
paid for a service provided. An example was in Robert Allan. People were presumed not to
do professional work gratuitously. Careblox was not material to performance and there was
no basis for withholding payment. The information in the terminal was the same
information available to Hudson from the Staffscanner app, namely the date, name of the
worker and duration. It was not in a format that could be easily plugged into other internal
processes therefore it appeared that it was primarily a matter of convenience rather than
23
material to the performance of the contract. In reality, using Careblox was never an issue
until payment was required and it was far too late to be raising that issue at that stage.
Defender's Submissions
[84]
Mr Casiday submitted that the relevance of the Panasonic case was not the emphasis
on a tightly worded contract overriding another contract but about the parallel features to
this case, which were striking. In Panasonic the customer file was analogous to the care
home terms and conditions.
[85]
The purpose of approved status was to allow services to be provided with no further
difficulties at places of business like Pitkerro and Lornebank. There was no guarantee
services would be provided and instead there was an umbrella agreement.
[86]
Amir Najafian signed the care home terms and conditions. No one else had been
shown to have accepted terms and conditions who clearly had authority to enter into a
contract. He conceded that he signed it as per Aviva Kushner's request because she stated
unless the policy was signed they could not provide staff. When pressed he was unable to
explain why he would enter into a contract which he anticipated would be overridden in the
space of a week. That aligned with the status of the Panasonic customer file in that it was a
framework agreement.
[87]
Reza Najafian indicated that accounts were connected to care homes. He was not
able to confirm accounts were ever associated with head office. The evidence was very clear
that contract formation rested with head office and delegated responsibilities to care homes
did not include entering into contracts. No evidence had shown that anyone with authority
to enter into a contract ever created such an account, much less used the app.
24
[88]
The function of a master contract or framework was to provide access to services.
That was so whether the breach of terms of the contract was significant or trivial. It was not
impossible to modify the terms of the contract. What kind of notice was required could be
seen from the authorities. In Butler Machine Tool it was held that a buyer ought not to take
advantage unless a term is drawn to their attention. Failure by the proferens to draw
attention to an unusual provision disabled the party from relying on it. The degree of notice
required varied according to the onerousness of the relevant provision. In this case, the
agency terms and conditions were described as "licence terms and conditions". Neither
Amir Najafian nor Reza Najafian were able to provide assistance as to why that phrase was
used. Samuel Maierovits repeatedly said he felt tricked. There was no suggestion of
Hudson acquiescing by abandoning their rights under the care home terms and conditions.
For the reasons outlined, the invoices that did not conform to the care home terms and
conditions did not fall due to be paid.
[89]
As regards quantum meruit, that operated when there was a lack of specification and
no contractual relationship. Here, both parties agreed there was a contract but disagreed as
to which contract it was. If the contractual terms were as per the care home terms and
conditions, there was no unjust enrichment. There was enrichment but it was not
unjustified because of the terms of the care home terms and conditions.
Decision
[90]
Although I was not specifically referred to McBryde's The Law of Contract in
Scotland (3rd edn.), paragraphs 6-97 6-109 were discussed within Grafton v Sundial. I agree
with Sheriff NMP Morrison, KC that the traditional approach set out in McBryde represents
the current law.
25
[91]
McBryde at para 6-97 explains the "battle of forms" succinctly as follows:
"The requirement that offer meet acceptance has given rise to problems with the use of
standard forms. The supplier A offers to supply goods to B. The offer is on a form with
printed conditions. B accepts the offer by sending an order on the back of which are B's
standard conditions. B's conditions, if different from A's, are a "counter offer" to A which A
may accept by conduct, i.e. by supplying the goods. That A has not intended this result is
irrelevant if A's conduct, viewed objectively, is acceptance."
[92]
At para. 6-102, McBryde makes reference to the Butler Machine Tool case and
summarises the current law as follows:
"Despite judicial attempts by Lord Denning to suggest that the problem should be solved by
looking at what was agreed in the whole correspondence, the traditional approach has been
followed in England and Scotland. A qualified acceptance is a counter offer which amounts to
rejection of the original offer. The counter offer may be accepted expressly or by conduct. The
result is often referred to as a battle of forms in which the "last shot" wins. If both parties
have careful drafting neither will win. The result is no contract which is commercially
inconvenient and the reason other systems consider alternative solutions."
[93]
An example of careful drafting on the part of one of the parties can be seen in
Panasonic, in which the English Court of Appeal held that, in signing the supplier's customer
file which contained general conditions subject to German law, the English purchaser had
acknowledged that those conditions would be incorporated into any subsequent supply
contract between them. Accordingly, the supplier's first shot prevailed.
[94]
More commonly, in the battle of forms, the last shot wins. A recent example can be
seen in Grafton v Sundial, in which a buyer completed and returned an application for a trade
account, which contained the seller's terms and conditions. Subsequently, the buyer
submitted a purchase order, which referred to its own terms and conditions. With reference
to McBryde, Sheriff NMP Morrison, KC held that looking objectively at what the parties had
to be taken to have intended, the seller's offer to contract on its conditions had been met by
the buyer's counter offer to contract on its own conditions. The seller then proceeded to
process the order and would have to be regarded as having accepted the buyer's conditions.
26
A proof before answer was allowed on whether the buyer's conditions had been brought to
the attention of the seller.
[95]
What is sufficient to provide adequate notice of standard terms and conditions can
vary in each case and has evolved over time as business transactions have moved online. A
modern example can be seen in Difference v Unitel, in which there was a dispute whether a
call centre's standard terms and conditions had been incorporated into a contract with a
software supplier. The contract was formed by the software supplier's purchase order form,
which had been sent to the call centre electronically and electronically signed by the call
centre's director. The purchase order form contained a live link via the internet to the
software supplier's standard terms, which excluded liability on the part of the software
supplier in contract, tort or for consequential or indirect loss. Sheriff N A Ross held that the
software supplier's terms had been sufficiently brought to the call centre's attention and had
been accepted without having been read. The contracting process was entirely electronic
and the terms and conditions were readily available on a hyperlink.
[96]
Applying those general principles to the circumstances of this particular case,
following the demonstration of the app by Amir Najafian to Aviva Kushner, Hudson made
an offer to Staffscanner to supply them with temporary workers on 12 January 2021, subject
to the care home terms and conditions.
[97]
That offer was met by counter offers from Staffscanner in January 2021 onwards for
the care home in Dundee and from July 2021 onwards for the care home in Hamilton. Those
counter offers were subject to the agency's terms and conditions.
[98]
Hudson clearly did not intend for the agency's terms and conditions to govern the
contract between them. However, viewed objectively, Hudson accepted the counter offers
as a result of its conduct in creating an account on receipt of a secure link from Staffscanner
27
using a password of its choice; setting up profiles for use at the homes; permitting their
managers to book staff via the app by virtue of supplying them with the log in details,
including the password; and their managers ticking a box confirming agreement to the
agency's terms and conditions before being able to book staff via the app.
[99]
When logging in, the managers had to agree to Staffscanner's terms of business by
ticking a box. They were not able to proceed with logging in if they had not ticked the box.
The agency terms and conditions were readily available via a hyperlink. They were updated
regularly and could be accessed at any time via the client dashboard or via Staffscanner's
website. The agency terms and conditions were therefore sufficiently drawn to the attention
of Hudson and its managers. The agency terms and conditions were incorporated into the
contract between the parties.
[100]
It is clear from the evidence that both parties assumed that their own terms and
conditions would prevail. However, by virtue of the requirement to tick the box confirming
agreement to the agency's terms and conditions, Staffscanner ensured that it fired the last
shot in the battle of forms. Hudson did not avail itself of the careful drafting seen in
Panasonic, providing that the care home terms and conditions would be incorporated into
any subsequent contract between the parties for the provision of agency workers. Had it
done so, it is possible that its first shot would have prevailed. By contrast, Staffscanner
included an entire agreement clause in the agency terms and conditions. In light of the
provisions of section 1(3) of the Contract (Scotland) Act 1997, that is conclusive on the
matter.
[101]
Accordingly, the agency terms and conditions govern the contract between the
parties. That contract provides that fees are calculated according to the number of hours
worked by the temporary worker to the nearest quarter hour. Failure to verify hours does
28
not absolve Hudson of its obligation to pay the temporary worker fees in respect of the
hours actually worked. Invoices are payable within 14 days of receipt. Interest accrues at
8% plus the Bank of Scotland base rate on a daily basis.
[102]
I therefore granted decree in favour of the pursuer as craved, together with interest
thereon.
Expenses
[103]
I was not addressed on expenses so I assigned a case management conference on this
point.
BAILII:
Copyright Policy |
Disclaimers |
Privacy Policy |
Feedback |
Donate to BAILII
URL: http://www.bailii.org/scot/cases/ScotSC/2024/2024scdun39.html
