Inform CPI Ltd v London Borough Of Tower Hamlets

A contingency fee under a software licence is payable only where information supplied by the licensor is used and is the effective, though not necessarily immediate, trigger for the relevant rating-list amendment. The claimant bears the ultimate burden of proving that causal connection on the balance of probabilities. A licensee’s prior awareness defeats the claim where the property was already actively on its radar, subject to any contractual notification mechanism. A licence is not extended objectively by correspondence which states that it has expired and contains no offer capable of acceptance. Mere access to information, or copying information into an eBAR after an independent instruction to submit it, does not establish causation.

The claimant supplied business-rates software to the defendant local authority under a one-year licence beginning on 30 May 2014. It sought contingency fees for increases in rateable value and additions to the local rating list, alleging that the defendant had used information in the claimant’s database. The defendant disputed liability on the grounds that the properties were already known to it or that the software had not caused the relevant eBARs.

The claimant also alleged that the licence had been extended beyond its contractual expiry and pursued claims concerning sixteen hereditaments. The court had to construe clauses 4.2 and 4.3, determine the burden and standard of proof, decide whether the licence had been extended, and assess causation in relation to each property.

1. Construction and causation. Clauses 4.2 and 4.3 were poorly drafted. Clause 4.2 was construed as requiring a contingency fee only for an identified and validated increase arising out of information supplied by the claimant. The necessary causal connection existed only where access to information on the claimant’s database was the effective, although not necessarily immediate, trigger for submission of an eBAR to the Valuation Office Agency. The chain would not be broken merely because the eBAR was not actioned, if its submission triggered a corresponding VOR.

2. Notification and burden of proof. The notification provision in clause 4.3 applied to missing hereditaments. A term was implied requiring notification as soon as reasonably practicable after the licence was entered into or, later, after the property first came to the council’s notice. Full awareness meant awareness of circumstances indicating that the hereditament was likely to be available for entry into the rating list; it did not require sufficient information to submit a successful eBAR. The claimant retained the burden of proving causation. The council bore the burden only where it relied on notification as a defence.

3. Licence expiry. Applying an objective approach to contractual communications, the letter of 2 July 2015 did not extend the licence. It expressly stated that the agreement had expired, and any extension would have required a new quotation and objectively identifiable offer and acceptance.

4. Individual claims. The claimant failed to prove causation for the disputed hereditaments except 8B Huguenot Place. There, the council’s property officer had accessed the claimant’s report shortly before instructing submission of the eBAR, and the court inferred on the balance of probabilities that this access prompted the instruction.

5. Order. Judgment was entered for the claimant for £378, with simple interest at 8% per annum from 7 August 2014. The remaining claims were dismissed.