Iphone damaged on receipt why do I have to pay for repair

We have a family contract with Vodafone, we were due an upgrade towards the end of last year and wanted an iPhone 5c in time for Xmas. We contacted Vodafone towards end of October 2014 and they said we could anytime now so we ordered the iPhone. We briefly looked at the iPhone then it was wrapped ready for Xmas. On xmas day the phone was turned on for the first time and a couple of days later we took it to the Vodafone store in Swindon to get a new sim and activate phone switch contacts from old iPhone etc.... My daughter then noticed the speaker on the phone wasnt very clear and had to use it on loud speaker....she returned to the store who said they would have to send it off for repair but it would take a couple of weeks....since my daughter is at university in Bristol she asked if it could be taken there instead. She sent it off for repair mid Jan and has just received a message saying it will cost 204 to fix as the mesh is damaged and it is not under warranty.
Surely a a fault with a phone overrides any warranty. I am disappointed with both the service I am getting.

Yes we contacted our service provider to ensure we could upgrade our phone in time for Xmas as iPhone was daughters Xmas present. provider told us we could upgrade anytime now (end out) we received iPhone and after one quick physical check wrapped it in original box. was opened on 25th and we took it to pro idea local store on 2nd Jan....told it would be sent off for repair taking up to 3 weeks....daughter at uni in different county so waited until she went back to uni to take it to providers local store there.... Sent off then received text,es sage saying the mesh was damaged and £204 for repair.....I asked how could an internal piece be damaged by her when there was no physical evidence from the outside ....told it was normally to do with the ihone being crushed!!!
SO effectively even though we physically received iPhone at end oct it was not turned on or activated on Vodafone until after Xmas....call us naive but I did have faith in Apple products and customer service

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