W H Smith Travel Holdings Ltd v Twentieth Century Fox Home Entertainment Ltd

W H Smith Travel Holdings Ltd v Twentieth Century Fox Home Entertainment Ltd

The parties did not operate a true running account; their ledgers were maintained independently and the contractual terms required settlement of individual transactions. The legal and evidential burden of proof lay initially on W H Smith, but once the validity of the credit notes was established, Fox bore the evidential burden to prove that those credits had been properly off-set against debts. Fox failed to demonstrate that the credit notes had been exhausted by set-off, and the AR Ledger was unreliable due to concessions and inability to match credits to debts.

Parties
Claimant/respondent: W H Smith Travel Holdings Ltd; Defendant/appellant: Twentieth Century Fox Home Entertainment Ltd
Jurisdiction
England and Wales
Judgment Date
26 November 2015
Procedural Posture
Civil Appeal / Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Running Accounts, Burden of Proof, Set Off, Accounting Reconciliation, Sale of Goods, Credit Notes and Debit Notes
Commercial Law Contract Law Running Accounts Burden of Proof Set Off Accounting Reconciliation Sale of Goods Credit Notes and Debit Notes

Case Brief

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Parties

W H Smith Travel Holdings Ltd

Claimant/respondent

Twentieth Century Fox Home Entertainment Ltd

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal Judgment

Legal Issues

  1. 1 Whether the transactions between the parties were recorded in a running account
  2. 2 Which party bore the burden of proof regarding the set-off of credit notes against receivables
  3. 3 Whether Fox established that credit notes had been properly off-set against debts due from W H Smith

Ratio Decidendi

The parties did not operate a true running account; their ledgers were maintained independently and the contractual terms required settlement of individual transactions. The legal and evidential burden of proof lay initially on W H Smith, but once the validity of the credit notes was established, Fox bore the evidential burden to prove that those credits had been properly off-set against debts. Fox failed to demonstrate that the credit notes had been exhausted by set-off, and the AR Ledger was unreliable due to concessions and inability to match credits to debts.

Court Disposition

Appeal dismissed

Orders

  • Judgment for W H Smith Travel Holdings Ltd in the sum of £1,215,000
  • No further sums due to Fox