City of Westminster v Urban Wimax Ltd

Commercial contracts must be interpreted as a whole, against their relevant background and stated objectives. Commercial common sense may assist construction, but it does not permit the court to rewrite the parties’ agreement merely because the result appears unexpected or unwise. Poor drafting may justify rejecting semantic interpretations that produce commercially absurd results.

On a summary judgment application concerning construction, a party resisting judgment must identify evidence capable of affecting the outcome. A speculative assertion that further evidence may emerge is insufficient. A term should be implied only where necessary to make the contract work, not merely because it would be reasonable. A contractual obligation to consider the results of a pilot scheme may be arguable, but an obligation to enter into a subsequent commercial agreement was not necessary.

Urban Wimax appealed from summary judgment granted by the Central London County Court in favour of the City of Westminster. The claim concerned equipment installed by Urban Wimax on the roof of City Hall under two contracts: a Legally Binding Memorandum of Terms dated 20 October 2005 and a Memorandum of Understanding dated 26 April 2006.

The first-instance judge ordered removal of the equipment and damages for trespass. She declined to imply a term requiring the Council to proceed with a full network deployment, but considered it arguable that the Council had to give proper consideration to the results of any pilot. Urban Wimax also appealed the construction of the contractual provisions concerning rooftop access, the permitted frequency range and the pilot stage. The Council sought permission to appeal concerning the counterclaim.

1. Appeal on the claim. The appeal was dismissed. The Memorandum and MOU had to be read together and as a whole, against their factual background and stated objectives. The phrase “on completion of this agreement” referred to completion of the stages envisaged by the agreements, including the pilot and arrangements for a commercial agreement, rather than execution of the Memorandum.

   Reading paragraph 1 as granting an immediate 15-year exclusive right would make the pilot provisions duplicative or inconsistent, permit unrestricted commercial use after a failed pilot, and produce an implausible result concerning payment for rooftop use. The court could reject that construction without conducting a commercial evaluation of the parties’ bargain.

2. The contractual expression “the 2-5Ghz ranges of spectrums” was capable of ending at 5.0 GHz. Urban Wimax had provided no relevant technical evidence capable of supporting its wider interpretation. It therefore had no realistic prospect of success on that issue, applying the summary judgment principles in Swain v Hillman [2001] 1 All ER 91.

3. Counterclaim. Permission to appeal was granted and the appeal was allowed, but the counterclaim was dismissed under CPR Part 24. The contractual pilot required connectivity trials to be conducted in buildings nominated or provided by the Council. Urban Wimax had accepted that it had not conducted those tests. The document relied upon was a working plan, not a report of the required pilot results. There was therefore no realistic prospect of establishing breach.

4. The implication of terms was consequently academic. Nevertheless, a term requiring the Council properly to consider the pilot results was at least arguable. Such a term might incorporate a public-law obligation into the contract and make contractual remedies available. By contrast, there was no realistic prospect of implying a term requiring the Council to enter into a commercial agreement after a successful pilot. That obligation was not necessary to make the contracts work and the Council retained discretion whether to proceed.

5. The court applied the approach to summary judgment in ED&F Man Liquid Products v Patel [2003] EWCA Civ 472: the court must avoid a mini-trial, but need not accept unsupported factual assertions where contemporary documents show that the claim has no real substance.

• High Court (Chancery Division): On appeal from the Central London County Court, the appeal concerning the claim was dismissed. The appeal concerning the counterclaim was allowed, and the counterclaim was dismissed under CPR Part 24.
• Central London County Court: HH Judge Hazel Marshall QC granted summary judgment to the Council on its claim, ordered removal of the apparatus and damages for trespass, and refused summary judgment against Urban Wimax on the counterclaim.