JBW Group Ltd v Westminster City Council

On construction of a bailiff-enforcement contract, a clause preserving rights accrued before termination does not itself create an accrued right to fees. Where the contract provides that the contractor may retain fees only from money recovered after the underlying debt has been paid, the right arises only on that recovery during the contract period. The contract does not imply a term requiring the customer to procure collection and accounting by a successor contractor, particularly where there is no exclusivity and termination provisions require a clean break. Serious commercial risk or apparent unfairness cannot replace a missing express term. A contractor has no right to complete enforcement work after termination unless the contract provides for it.

JBW Group Ltd, a bailiff company, appealed from the decision of Mr Justice Jack dismissing its claim against Westminster City Council for damages for breach of contract.

Under the contract, JBW enforced warrants for unpaid parking charges and could retain specified fees when money was recovered. On termination, approximately 9,400 warrants remained outstanding and were transferred to a successor company. JBW claimed that it had accrued rights to fees for pre-termination work, or alternatively that the Council had to require the successor to collect and account for those fees.

The central issue was whether the contract, properly construed, preserved such rights after termination.

1. Application refused. The Court of Appeal agreed substantially with the reasoning and conclusions of Jack J.
2. The contract had to be construed as a whole. Clause 25 limited JBW’s entitlement. It excluded payment by the Council for the services and provided that JBW could retain the fee element only when the underlying debt had been paid and the relevant money recovered. Clause 31.1 preserved rights and remedies already accrued, but it did not create an accrued right where the contractual conditions for entitlement had not been met.
3. There was no assignment of the fees. The underlying parking debts remained debts owed to the Council, and the contractual arrangement did not formally assign any fee entitlement to JBW. Nor was there an implied term requiring the Council to instruct a successor company to collect and account for fees relating to JBW’s earlier work. The contract contained no exclusivity provision, and a term of that significance would have required specific contractual provision.
4. Clause 3.2 contemplated a clean break on termination, including the return of documents, materials and data. JBW therefore had no contractual right to complete work on warrants on which it had begun enforcement before termination.
5. The commercial risk that work undertaken near the end of the contract might produce no recoverable fee did not justify the proposed construction or implication of a term. The smaller alternative claim was also unsustainable. There was no real prospect of establishing the claimed entitlement.

1. Court of Appeal (Civil Division): refused JBW’s application for permission to appeal and upheld the conclusion that the claimed contractual entitlements were not established.
2. High Court of Justice, Queen’s Bench Division: Mr Justice Jack dismissed JBW’s claim for damages for breach of contract on the issue of liability on 3 November 2009.