JBW Group Ltd v Westminster City Council

A contractual right enabling a bailiff to recover fees through execution of warrants may arise during the contract as an incident of the agency relationship. That right does not necessarily survive expiry or termination. The contract must be construed as a whole. Express provisions requiring the return of outstanding warrants and ending the services may show that the parties intended to draw a line at expiry. A term requiring the authority or a successor contractor to continue recovering, or account for, the former contractor’s fees should not be implied merely because it would produce a commercially attractive result. The question is whether the term is necessary to give the contract practical and commercial coherence, applying the approach in Attorney General of Belize v Belize Telecom Ltd.

JBW Group Limited provided certificated bailiff services to Westminster City Council for the recovery of unpaid parking fines. The contract was extended to 31 August 2008. At expiry, approximately 9,400 warrants supplied to JBW remained uncollected, although JBW had taken steps on them and fees were chargeable under the applicable regulatory scheme.

The Council required the warrants to be returned and allocated them to a successor contractor, which was instructed to start afresh. JBW claimed an account of fees received by the Council or successor contractor, damages for breach of an implied term, and loss of profits. The judgment concerned liability only. The central issue was whether JBW retained rights to recover or receive fees relating to work done before expiry.

1. Claim dismissed. The expiry of the contract created no liability for the Council in respect of warrants returned by JBW on which fees could previously have been collected.

2. During the contract, fees relating to JBW’s work which were paid to the Council would be held for JBW under general agency principles. The same principle could apply if a successor contractor received such fees. The right arose from the agency relationship created by the contract, rather than from an assignment or an express contractual term.

3. That right did not survive expiry. Clause 31 required JBW to cease providing the services and to return documents, including the outstanding warrants. Clause 31.1 preserved amounts outstanding between the contracting parties at expiry; it did not preserve a right to pursue debtors through continuing execution.

4. No term could be implied requiring the Council to allow JBW to complete execution or to instruct a successor contractor to recover and account for JBW’s fees. Applying the approach in Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988, the proposed obligation was not what the instrument, read as a whole against the relevant background, would reasonably be understood to mean. The contract operated coherently without it.

5. The express provision dealing with reallocation of warrants in Schedule 2, which required fees added by an earlier bailiff to be written off, reinforced that conclusion. The fact that implication might better reflect JBW’s work was insufficient.