Contra Holdings Limited v Mark Joseph Cyril Bamford

A success fee payable on completion of a defined transaction is not ordinarily payable merely because a different transaction achieves a similar commercial objective. The court must construe the agreement the parties made, considering its language, context and commercial consequences, but must not rewrite it to improve the bargain or relieve imprudence.

A term may be implied only where necessary to make the contract work, including because it is so obvious that it goes without saying or because it is necessary to give business efficacy. An implied term inconsistent with clear express provisions cannot be adopted. Where the agreed trigger for a success fee has not occurred, there is no entitlement to payment for services unless the contract provides otherwise.

Contra Holdings Limited claimed a 2% success fee under an agreement with Mark Joseph Cyril Bamford. The fee was expressed to be payable on completion of Project Crakemarsh, described in the agreement as steps to prepare the JCB Group for sale in 2012.

No sale of the JCB Group had occurred. Contra contended that the agreement should also cover an alternative divestment or restructuring, or alternatively that terms should be implied requiring payment for such an event or remuneration for work performed. Bamford applied to strike out the claim under CPR 3.4(2)(a), alternatively for reverse summary judgment under CPR 24.2(a)(i).

1. Application granted. The claim was dismissed under CPR 3.4(2)(a). Alternatively, reverse summary judgment was appropriate under CPR 24.2(a)(i).
2. The Touch Agreement, read as a whole, defined Project Crakemarsh as the proposed sale of the JCB Group. Clauses 3, 4 and 6 reinforced that meaning. The agreement did not extend the success fee to a different restructuring or to another means of separating Bamford’s interests.
3. The factual matrix did not justify a wider construction. It confirmed that a sale was the transaction contemplated when the agreement was made. The court was required to remain loyal to the contractual text and could not use background circumstances to contradict or rewrite it.
4. The proposed implied term covering alternative restructurings was not necessary, obvious or required for business efficacy. It was also inconsistent with the express trigger for payment.
5. The further proposed term requiring Contra to be made whole for services performed also failed. The payment was a success fee payable upon success as defined by the agreement. Since the sale had not occurred, no payment was due and no term could properly be implied to create a different entitlement.