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IN THE HIGH COURT OF JUSTICE
Between: JBW GROUP LIMITED
Claimant
3. This summary of the legislation though incomplete is, I hope, sufficient for the purpose of the resolution of the contractual dispute. The scheme is reasonably clear. When a parking fine has remained unpaid for a sufficient period, the local authority to which it is due may apply to the county court for a warrant. (As a matter of administrative arrangement all parking fines are dealt with through the Northampton County Court.) The warrant is then supplied to a certificated bailiff for enforcement. The bailiff begins the process by writing a letter as provided for in the first item in the charges schedule. He may then take possession of goods. If the debtor continues not to pay, his goods are sold and the fine and the charges which have accrued are collected in that way. The only way in which the charges can be recovered is through voluntary payment by the debtor or by sale of his goods. They become payable but are not a debt like other debts. In re Long, ex parte Cuddeford (1888) 20 QBD 316 a judgment debtor sought to add the costs of an abortive execution to the judgment debt to reach the 50 necessary to support a petition for bankruptcy. It was held he could not do so. Lord Esher MR relied on the case of The Marquis of Salisbury v Ray (1860) 8 CB(NS) 193, but that case is not helpful here, I think, as it turned on whether under section 123 of the Common Law Procedure Act 1852 the expenses of a previous execution by fi. fa. could be added to those of an execution by ca.sa., it being held they could not. But Fry LJ stated:
4. I was told by Mr
Peter Knox QC on the instructions of his clients,
JBW, that if no recovery of charges is made through
the execution process a certificated bailiff has in
practice no right to recover anything from the
judgment creditor who instructs him. No authority
for that was cited by counsel, but it may correctly
reflect the position where a certificated bailiff
is employed and there is no express agreement for
him to recover his fees from the judgment creditor
if the execution fails. I am not concerned with
executions carried out through a sheriff or under
the direction of a county court, nor with the
provisions of Part 3 of the Tribunals, Courts and
Enforcement Act 2007. An exception to the bailiff
being unable to recover fees from the judgment
creditor must be where the judgment creditor is
paid directly by the debtor, when the creditor must
hold for the bailiff that part which represents the
bailiff's fees. It is to be borne in mind that it
is only the holder of a warrant who can execute it.
That is because, inter alia, the bailiff must be
able to produce it to the debtor. 5. The dispute between
JBW and the Council has arisen in this way. When
the contract ended JBW had about 9,400 warrants
which had been delivered by the Council to them for
execution on which no recovery had been made.
Nonetheless fees totalling 1,871,072 were
chargeable in respect of actions taken by JBW
towards the execution of those warrants. When the
contract ended the Council required the warrants to
be handed back to them. Had JBW been able to
continue with them, JBW say that about 24% of those
fees would have been recovered, that is 455,044.
Following the ending of the contract the warrants
were given by the Council to another company,
Phillips Collection Services Limited. Phillips were
instructed that they should commence afresh, and
should ignore any steps taken by JBW. So nothing
has been done to collect the fees which it would
otherwise have been open to JBW to try to collect
had the agreement not ended and the warrants handed
back. This is in the context that JBW received
19,881 warrants for execution over the period of
the contract, which attracted total fees of
5,296,685, of which 598,654 was recovered. I was
told also that the average time for JBW to get a
payment under a warrant was 156 days. I understood
that this was a figure for JBW's business overall.
These figures refer to the performance of the
contract. They emerged because I wanted to get an
idea of how the sum claimed related to the total
earnings under the contract. They are irrelevant to
the contract's construction. They do show why the
uncollected fees are important to JBW in the
context of the whole. The average collection period
of 156 days shows that the original 6 month
contract must have been taken on very much in the
belief that an extension would be granted. 6. Clause 9 is headed
'Commencement and contract period'. Clause 9(1)
provided:
7. Clause 10 provided
that the contract was not to be exclusive and that
there was no guarantee as to what warrants if any
would be given to JBW for enforcement. 8. Clause 14 provided:
9. Clause 25 is headed
'Collection of fees and debts'. By clause 1(1) 'Fee
means the Reasonable Charges set by the City
Council, which the Contractor shall be entitled to
charge a debtor in relation to actions taken under
a Warrant.' Likewise 'Reasonable Charges means the
reasonable rates set by the City Council, which may
be amended from time to time, and which the
Contractor shall be entitled to charge a debtor in
relation to actions taken under a Warrant'. The
effect is that the fees chargeable by JBW shall be
as set by the Council but that they shall not
exceed the rates set by the Regulations. Clause 25
then provided: 10. Clause 30 headed
'Termination' entitled the Council to terminate the
contract if a number of matters occurred, including
corruption, insolvency and a substantial and
material breach of contract. 'Termination' is
however defined in clause 1(1) in wider terms than
might be expected from clause 30. For 'Termination
means termination or expiry of the Contract in
accordance with its terms, in common law or
statute.' So 'termination' was not limited to
termination by the Council under clause 30, but
included the expiry of the contract at the end of
the contract period. 11. Clause 31 is headed
'Consequences of termination'. It will be seen to
refer to 'Termination or expiration' and
'Termination or expiry'. So there is no doubt that
it covers the contract ending at the end of its
period. It provides: 14. Mr Peter Susman QC
submitted on behalf of the Council that clause 31
which deals with what happened when the contract
came to an end was clear. He submitted that JBW was
required to cease work (clause 31.2.10) and to
return to the Council all warrants and associated
paper work (clause 31.2.2). He submitted that
'documents' in clause 31.2.2.1 included warrants,
because the definition in clause 1(1) began
'Warrant means a written document '. So, he
submitted, JBW had no further duties or rights in
respect of warrants under which full collection had
not been made. If fees had not been collected, that
was the end of it: there was no provision which
gave JBW any rights in respect of warrants in
respect of which fees were chargeable but which
fees had not been paid. They were not entitled to
continue to pursue payment. He excepted from that
fees which happened to be paid to JBW after the
contract ended, which they could retain. Such fees
would be paid with the amount due to the Council,
and the Council would first be entitled to that.
But JBW had no right to require any monies to be
paid to them after the end of the
contract. 15. Mr Knox advanced
three claims on behalf of JBW. The first is for an
account of fees received by the Council from
debtors on the warrants handed back by JBW and
transferred by the Council to Phillips 'to the
extent of the fees owed to [JBW] for its work up to
31 August 2008' amended particulars of claim,
paragraph 20(2). 16. Mr Knox's first way
of putting this claim was that the right to charge
debtors fees had been assigned by way of an
equitable assignment to JBW. He said that
alternatively it was a right vested in JBW under
the legislation. He submitted that the assignment
was necessarily to be implied from the express
terms of the contract. The contract expressly
provided that JBW should be entitled to charge the
fees: I refer to the definition of 'Reasonable
Charges'. The fees were not debts in the usual
sense: they were sums which might be recovered by
JBW through the process of the execution of the
warrant ending, if necessary, in the sale of the
debtor's gods. No question of any assignment
arises. 17. As I have said, the
contract gave the right to charge the fees to JBW.
If, during the currency of the contract, money was
paid to the Council by a debtor in respect of JBW's
fees, the Council would, in my view, be accountable
to JBW for that money. For as a matter of general
agency law, if a principal agrees that his agent is
to be rewarded with particular monies and those
monies come into the hands of the principal, the
agent must be entitled to them. Clause 25.3
provided that where direct payment was made to the
Council, the Council took no responsibility for
fees owed to JBW, and should if possible direct
payment of fees to JBW. In my view that is to be
construed as meaning that the Council had no duty
to accept fees due to JBW but should direct the
debtor to pay the fees to JBW. But if the Council
did accept fees due to JBW, the Council would be
accountable as I have stated. 18. What happens after
the contract has ended? What is the position if an
agent of the Council such as Phillips receives fees
which are chargeable in respect of work carried out
by JBW? In my judgment the Council would be
accountable for those fees unless the contract
provides otherwise. The same principle would apply
as during the period of the contract. The problem
for JBW with this way of putting its case is that
the Council have not in fact received any monies on
account of JBW's work because the Council
instructed Philips to ignore what had been done by
JBW. So, even if JBW are right in law, it fails on
the facts. I will revert to the hypothetical
question whether the terms of the contract relating
to termination are such as to negate such a right
when I have considered JBW's other claims and the
terms of the contract relevant to them. 19. JBW's second claim
is for damages and was initially on either of two
bases. But in his closing submissions Mr Knox
stated that he was not pursuing the second - which
relied on the terms of JBW's letter returning the
warrants to the Council. Mr Knox submitted that
there was either an implied term that after
termination JBW would be able to complete execution
of warrants on which it had started, or an implied
term that the Council would instruct JBW's
successor, here Phillips, to recover the fees and
to account for them. It was said that on either
basis the term had been broken and JBW was entitled
to damages. 20. The terms of the
contract are plainly inconsistent with a right for
JBW to continue to execute the warrants in respect
of which it was entitled to charge at the
termination of the contract. Clause 31.2.1 states
that on termination JBW shall cease to provide
services under the contract. Clause 31.2.2.1
provides for JBW to return all documents, and that
must include warrants - in particular because of
the definition of 'Warrant' in clause 1.1. Mr Knox
submitted that clause 31.1 assisted him because it
preserved the right of JBW to recover amounts
outstanding from debtors. I do not consider that
the clause does that. What it is doing is to
preserve any amounts which have become due between
the parties to the contract, the Council and JBW,
prior to termination. It does not relate to amounts
which JBW might be able to recover from a debtor in
an on-going execution. 21. The suggested
alternative, an implied term that the Council would
instruct a company taking over warrants formerly
given for execution to JBW that the company should
pursue fees due to JBW, would require the writing
into the contract of an obligation which the
parties might have included but did not. It is an
obligation which in the context of the contract one
would expect to see expressed if it was intended.
It cannot be said that the parties must have
intended such a term. If the question posed by Lord
Hoffman in Attorney General of Belize v Belize
Telecom Ltd [2009] 1 WLR 1988 in paragraph 21, 'is
that what the instrument, read as a whole against
the relevant background, would reasonably be
understood to mean?', the answer is no. Clause 31
provides in its express terms for the delivery up
of outstanding warrants. It is plainly to be
expected that such warrants will be given to
another contractor, yet the contract is silent as
to the consequences of that as regards JBW.
Paragraph 7.18 of Schedule 1 had obliged JBW to
take warrants which had been previously allocated
to another contractor. It was silent as to the
terms on which they would do so. But paragraph 4.3
of the Persistent Evaders Service Requirements in
Schedule 2 is an express provision in relation to
earlier contractors, which is to the opposite
effect to that which JBW submit should be implied
in its favour. That makes it more difficult to say
that here is a gap in clause 31, which must be
filled in the way favourable to JBW. In my view the
contract works without the suggested implied term.
The fact that if the term was implied the outcome
might seem more reasonably to reflect the work JBW
had done is not enough to result in its
implication. Further, there may well have been good
reasons for the Council to want to start with a
clean sheet, as it were, for the contractor to whom
it allocated warrants previously given to
JBW. 22. The third claim
builds on the first way of putting the second
claim, and so fails with it. The claim is for loss
of profit arising from loss of the further fees
which would have become chargeable if JBW had been
able to continue to work on warrants which JBW
handed over following the contract's end. 23. I return to the
question which I left over in paragraph 18, namely
whether, if Phillips had collected fees relating to
work carried out by JBW, the Council would be
liable to account for those fees. My analysis of
the terms of the contract in the context of JBW's
alternative claims provides the further context for
this question. The right of JBW to have fees
relating to its work which come into the hands of
the Council during the Contract arises as a matter
of agency law applied to the situation created by
the contract rather than from an express term of
the contract. There is certainly nothing to negate
that right during the contract period: I refer to
my comments on clause 25.2 in paragraph 9 above.
But once the contract has come to an end, JBW no
longer has a right to collect its fees and the
contract provides no express mechanism for them to
be provided to JBW in any circumstances. The tenor
of the contract is that when its period is over a
line is drawn and there are no ongoing obligations
save as to amounts which have become outstanding
during its duration. I conclude that, if a
subsequent contractor had collected fees arising on
warrants in respect of work done by JBW, the right
of JBW to receive those fees is negated by the
terms of the contract. 24. I conclude that the termination of the contract has not resulted in any liability of the Council in relation to warrants delivered back by JBW on which JBW were entitled to collect fees or charges from the debtors while JBW held the warrants. Source: Bailii
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