Ipswich Town Football Club Company Ltd v Suffolk Constabulary

A public authority which unlawfully demands payment for services that it has a public duty to provide without charge may be liable in restitution under the Woolwich principle. That principle is not confined to taxes or fiscal charges. A mistake-of-law claim is an additional and complementary route, allowing the claimant to rely on the more advantageous cause of action. For a mistake claim, limitation runs from when the mistake was discovered or could reasonably have been discovered; an authoritative ruling is not always required. A recipient cannot use quantum meruit or change of position to rewrite the parties’ completed bargain where the claim is based on an unlawful public demand. Restitution is assessed by reference to the contractual price as the best evidence of fair market value. Simple interest may be awarded, but compound interest requires proof of additional loss and benefit to the recipient.

This was the second stage of proceedings between Ipswich Town Football Club Company Limited and the Chief Constable of Suffolk Constabulary. The earlier judgment, [2016] EWHC 1682 (QB), held that the Police could in principle charge for special police services provided in the traffic-control area around Portman Road stadium, but not for operational policing outside that area.

The Club sought restitution of sums paid under contracts which covered both chargeable special police services and non-chargeable operational services. The issues were whether the Club had a Woolwich-type restitutionary claim, whether it also had a claim based on mistake of law, the availability of change of position or quantum meruit defences, limitation, the method of apportionment, and the award of simple or compound interest.

1. Restitutionary causes of action. The Club had two complementary causes of action. It could recover sums paid in response to an ultra vires demand by a public authority under the Woolwich principle, and it could recover sums paid under the parties’ admitted mutual mistake of law. The availability of one cause of action did not exclude the other.
2. Scope of the Woolwich principle. The principle extends beyond taxes and analogous fiscal charges. Waikato Regional Airport Ltd v Attorney-General and South of Scotland Electricity Board v British Oxygen Co Ltd showed that restitution could arise where a public or statutory authority demanded charges which it had no lawful entitlement to retain. The Police had purported to charge for operational services which fell within their public duty and for which the public had already paid through taxation. The case therefore lay on the public, rather than private, side of the relevant spectrum.
3. Defences and valuation. No change-of-position or quantum meruit defence was available to defeat the Woolwich claim. In relation to the mistake claim, the contracts were composite and the unlawful element could not practically be severed. The proper apportionment basis was the contractual price actually paid. It was the best evidence of fair market value. The Court would not reconstruct the negotiations retrospectively to allow the Police to correct an alleged undercharge.
4. Limitation. Section 32(1)(c) of the Limitation Act 1980 applied to the mistake claim, but the Club could reasonably have discovered the mistake by 1988, or at the latest by 2006. The later decision in Leeds United Football Club Ltd v Chief Constable of West Yorkshire Police was not required before time could begin to run.
5. Interest. Compound interest was refused. The Club had not proved a loss exceeding simple interest, and the Police had not obtained an incremental benefit from holding the money and would be out of pocket if compound interest were ordered. Simple interest was awarded under section 35A of the Senior Courts Act 1981.