Strydom v Vendside Ltd

A contractual term is implied only where necessary to give the contract business efficacy. The court cannot imply a term merely because it would make an unusual or one-sided bargain fairer. An allegation that a party concealed its entitlement to payment is ordinarily a matter for misrepresentation or another recognised cause of action, not an implied contractual term.

Relief for an unconscionable bargain requires three cumulative elements: relevant disadvantage, morally culpable exploitation, and a transaction that is overreaching and oppressive. A bargain that is merely unreasonable is insufficient. Oppressiveness is assessed at the time of contracting and from the disadvantaged party’s perspective.

The claimant, a former miner, appealed from a Nottingham County Court judgment dismissing his claim to recover £352.50 paid to Vendside Ltd for handling a vibration white finger compensation claim.

The defendant had received a claims-handling fee from the Department of Trade and Industry under a government compensation scheme. The claimant argued that the additional payment was recoverable because a term should be implied requiring disclosure of the defendant’s government remuneration, or because the bargain was unconscionable. The defendant also challenged the finding that limitation was postponed by deliberate concealment.

1. Appeal dismissed. The claimant had to show that the county court’s decision was wrong under CPR Part 52.11(3). He failed to do so.
2. The defendant’s admitted contractual duty to exercise reasonable skill and care and give fair, full, frank and honest advice concerning the merits and handling of the claim did not include a duty not to mislead about the defendant’s entitlement to costs. Such a duty, if available, would ordinarily be pursued through misrepresentation, which was not advanced. The admission did not extend to the pleaded term.
3. The proposed continuing term could not be implied. The applicable test was necessity to give the contract business efficacy, derived from The Moorcock (1889) 14 P.D. 64. The unusual background and non-commercial setting did not give the court a discretion to add terms that appeared fair or reasonable. The written agreement did not reasonably convey the proposed term when read against its background.
4. The test for an unconscionable bargain, applied from Alec Lobb Ltd v Total Oil (GB) Ltd [1983] 1 WLR 87, required relevant disadvantage, morally culpable exploitation and an overreaching and oppressive transaction. All three elements were necessary. Inequality of bargaining power alone was insufficient.
5. The fee was payable only on success, was capped at £300, and represented payment for union representation by a person no longer paying union dues. Although the defendant’s remuneration from the DTI and the profitability of the scheme created legitimate public concern, the bargain was not oppressive in the legal sense. A merely unreasonable bargain did not suffice, applying Multiservice Bookbinding Ltd v Marden [1979] Ch 84.
6. The county court correctly held that the claim was not time-barred. Under section 32(1)(b) of the Limitation Act 1980, deliberate concealment postponed limitation. The claimant’s case had been adequately put to the defendant’s witnesses, and the judge was entitled to rely on the claimant’s untested evidence and make the finding of deliberate concealment.

• High Court (Queen’s Bench Division): appeal from the Nottingham County Court dismissed. The county court’s judgment of 6 March 2009 was upheld.