Thomson Fisher Ltd (“Thomson”) is the owner of an Ice Rink (the “Rink ”), which is located in the centre of Selby, which has an auditorium with a capacity of 600 seats and a Rink skater capacity of 120. The Rink stages various dramatic Shows, concerts and comedy shows throughout the year. A number of legal issues have recently arisen in relation to the Rink, on which Thomson now seeks your advice.
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In 2023 Thomson decided to carry out a major refurbishment of the Rink. In April 2023, Thomson entered into a contract with PDQ Construction Ltd (“PDQ”) for PDQ to carry out the refurbishment of the Rink for a total price of £3.5 million. PDQ began working on the project on 1 July 2023 and the work was due to be completed by 28 February 2024, in time for the Rink reopening in early March 2024.
By early January 2024 Thomson was becoming alarmed at the slow rate of progress with the work and called a meeting with PDQ to discuss the situation. PDQ admitted that it had underestimated the number of staff required to deliver the job on time and that furthermore, some of the key construction materials had been delayed because of delivery issues beyond their control. PDQ informed Thomson that the only way that the work could be completed on time, would be if PDQ paid a premium on the materials, but that to do so it would need to increase the price payable by Thomson under the contract by £125,000. Thomson responded that it did not seem fair that Thomson was being expected to pay for a misjudgement on the part of PDQ but PDQ responded that the situation “is what it is” and completing the job on time was “simply not realistic without the price being increased”.
Thomson knew that the works had to be completed on time, as a 5-week sold-out run of The Icescapades was due to begin on 4 March 2024. The implications of the failure to complete the work on time were significant, and included the postponement of the start of the Show, or the cost of moving to a different venue to ensure that the Show started on time. It could also have meant cancellation of the show, if the Icescapades were not able to accommodate the postponement. This would be financially damaging in terms of having to refund ticket-holders, sponsors, as well as the additional cost of paying for Icescapades staff and accommodation costs, if there was a postponement and of course the costs of the hire of the alternate venue.
Consequently, Thomson reluctantly agreed to increase the price by £125,000. PDQ proceeded to complete the work on time. Although Thomson has paid the full price agreed under the original contract, it is reluctant to pay the extra £125,000 and seeks your advice on whether it is legally obliged to do so. PDQ is threatening to sue Thomson for the money if payment is not forthcoming very soon.
Advise Thomson’s on whether it is legally obliged to pay the sum of £125,000 claimed by PDQ.
Part 2
While the Rink was closed for the refurbishment, Thomson entered into a separate contract with a specialist company, Sparkies Ltd (“Sparkies”) for the rewiring of the Rink’s old electrical system. Thomson took quotes from a number of companies but ultimately gave the job to Sparkies as their quote was far cheaper than the rest by £40,000. The contract was entered into using Sparkies’ standard terms of business and the work was completed on 15 February 2024.
Three hours before the Show was due to start, there was a power-cut, with most areas of the Rink, including the Rink itself and main auditorium, being left without power. It turned out that this was caused by defective wiring work carried out by Sparkies. Thomson were advised by their insurers to get a different company to address the problem. They appointed Light and Sound Ltd to fix the issue.
As a consequence of the power-cut, 5 performances had to be cancelled, with the cost of refunded tickets coming to £25,000. Furthermore, earlier on the day that the power-cut occurred, Thomson had received a delivery of flowers for the performers. Because of the power cut, the flowers had not been stored in the dry cool room, so this meant that they wilted and needed to be replaced immediately at a cost of £450.
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The original purchase price of the flowers was £350. The specific ice cream ordered for that series of performances, which cost £2500, had to be stored in separate freezer trucks, which Thomson had to rent at a total cost of £1500. Thomson would have made profits of £2,000 from selling the ice cream to Rink -goers.
When Thomson informed Sparkies that it expected them to pay for all losses incurred by them as a result of the power-cut, including sums due to third parties, , Sparkies pointed to the following term in its standard terms of business:
“While we undertake to rectify any clear defects in work carried out by us if such defects are notified to us by the customer within one month of the work being completed, under no circumstances shall we be liable for any otherlosses whether resulting from negligence or otherwise”.
Thomson now seeks your advice on the following points:
i.Has Sparkies’ standard term has successfully excluded their liability
Part 3
for Thomson’s losses following the power cut
ii.Assuming the term does not successfully exclude liability for consequential loss, can Thomson claim damages from Sparkies for (a) the cost of refunding the Rink tickets for the
cancelled performances; and (b) the losses in relation to the ice cream which had to be disposed of; and (c) the flowers.
Each year during February the Rink stages an Open Air Ice song festival (“the Icesong Festival”), during which different Musicals are performed to audiences each night. At the start of 2023, Thomson decided that from the 2024 season onwards, rather than running the Festival itself, it would engage a specialist outside promoter to manage the Festival. Thomson entered into discussions with Musicality Ventures Ltd (“Musicality”) about running the festival.
Musicality advised Thomson that they had some high-profile musical theatre groups on its books including a very well-known group known as “the Singerees” who would be able to perform “several shows” at the Festival. This group was very well known and included Samantha Song, who was in her own right a “Star Turn”. Musicality stated that it was “very confident” it would be able to sell at least 80% of available tickets for the Festival. Impressed by their sales pitch, Thomson entered a contract whereby Musicality would run the Festival for the next three years.
Under the terms of the contract Thomson would pay a flat fee of £25,000 each year to Musicality for managing the Festival but Thomson would be entitled to 25% of the face value of all tickets sold. If Musicality’s projections on ticket sales were correct, Thomson could expect to take in at least £30,000 per year over and above the annual fee paid to Musicality. The 2024 Festival run, however, has turned out to be a major disappointment. Just prior to the first event, Samantha Song had indicated that she was leaving the Singerees and did not perform. Only 30% of available tickets were sold. Thomson’s share of ticket sales came to just £15,000, producing a loss of £10,000 when the £25,000 fee it paid to Musicality is taken into consideration.
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Thomson feel aggrieved that Musicality’s projection for ticket sales has proved to be so wide of the mark. It has also discovered that although Musicality did act for the Singerees at the start of negotiations, relations between the Singerees and Musicality soured somewhat in the later part of 2023 and 3 days after Thomson had concluded its contract with Musicality, the Singerees formally terminated its contract with Musicality and signed a deal with a new promoter. Consequently, the Singerees only performed twice rather than the several times promised.
Thomson now seeks your advice on
Whether it has any legal grounds for terminating its contract with Musicality as well as claiming from Musicality the losses it has incurred from entering into the contract.
REFERENCING, REFERNCES AND CASE LAW MUST BE OSCOLA AND BRITISH BASED.
FOOTNOTES IS COUNTED IN THE WORD LIMIT AND BIBLOGRAPGHY IS NOT NEEDED.