Contra Holdings Limited v Mark Joseph Cyril Bamford

Informality does not displace ordinary principles of objective contractual interpretation. Context may carry greater weight for an informal document, but it cannot give clear words a meaning they cannot legitimately bear. Where a contract specifies a particular event as the trigger for a success fee, the court will not reinterpret it as an absolute or deferred entitlement linked to a different event. Nor will it imply a term inconsistent with express and complete payment provisions. A court may determine contractual interpretation and implication issues summarily where the pleaded facts and admissible factual matrix are assumed, the evidence is sufficient, and no useful purpose would be served by a trial.

Contra sued Mark for breach of an alleged 2011 agreement concerning remuneration for services relating to the JCB Group. Mark applied under CPR Part 3.4(2)(a) and CPR Part 24.2 to strike out the claim or obtain summary judgment.

The High Court, Jacobs J, granted the application and dismissed the claim, holding that the agreement made payment conditional on completion of the proposed sale of the JCB Group and that the alternative implied terms were unsustainable: [2022] EWHC 1857 (Comm). Contra appealed, alleging errors in contractual interpretation, implication of terms and the decision to determine the matter summarily. The central issue was whether the agreement entitled Contra to payment when Mark’s interests were separated by means other than the specified sale.

1. Disposition. Lady Justice Carr delivered the judgment, with Sir Geoffrey Vos MR and Lord Justice Newey agreeing. The appeal was dismissed on all grounds. The claim was bad in law and there was no useful purpose in allowing it to proceed to trial.
2. Interpretation. The claim was for breach of contract alone. In the absence of a claim for rectification or estoppel, purely subjective understandings were irrelevant. The Touch Agreement was informal but logically structured and sufficiently clear, so the ordinary rules of objective contractual interpretation applied. Context could carry greater weight in interpreting an informal document, but could not contradict clear language or give the words a meaning they could not legitimately bear.
3. Express terms. The structure of the agreement distinguished the past June 2011 settlement from the proposed future sale of the JCB Group, called Project Crakemarsh. Clause 6 therefore provided for a success fee payable only on completion of that sale, calculated by reference to the relevant shareholding. It did not create an absolute or deferred entitlement payable upon separation of interests by another route. This was not a special change-of-circumstances case; the task remained to ascertain the parties’ objective, putative intention.
4. Commerciality and implication. The scale of the fee was consistent with a contingent success fee and was not commercially absurd merely because the contingency might not occur. Neither proposed implied term was necessary to make the contract work or so obvious as to go without saying. The complete express payment provisions were inconsistent with an alternative obligation to pay. The majority reasoning in Barton v Gwyn-Jones [2023] UKSC 3 further confirmed that conclusion, including the limited scope for implication under the Supply of Goods and Services Act 1982 where the agreement was not silent as to remuneration.
5. Summary disposal. The application proceeded on the basis that Contra’s pleaded factual allegations and admissible factual matrix were true or assumed to be true. The Judge had sufficient material to determine the contractual issues. Allegations requiring Mark’s credibility to be tested did not establish a compelling reason for a trial.

• Court of Appeal (Civil Division): the appeal was dismissed on all grounds. The High Court was right to strike out the claim and grant summary judgment: [2023] EWCA Civ 374.
• High Court of Justice, Commercial Court: Jacobs J granted Mark’s application under CPR Part 3.4(2)(a) and CPR Part 24.2 and dismissed Contra’s claim: [2022] EWHC 1857 (Comm).