Westminster City Council v Urban Wimax Ltd

Wireless broadband services – Contract between appellant provider and respondent council for development of wireless network – Respondents to permit use of their buildings’ roofs for apparatus – Pilot stage to be followed by roll-out if successful – Respondents obtaining injunction requiring appellant to remove apparatus – Whether respondents obliged to permit use of and access to rooftops irrespective of outcome of pilot stage – Whether respondents arguably in breach of implied term regarding roll-out – Appeal dismissedThe appellant company provided broadband services using WiMAX wireless technology. In October 2005, it entered into two written agreements with the respondent council to provide a WiMAX network in the Westminster area. The first agreement set out the basis of a “working partnership” between the parties to achieve various stated objectives. Under para 2, the appellant was to carry out a pilot stage over a six-month period, during which the respondents would grant free access to a number of rooftops for use host sites and to several residential buildings for connectivity trials; if connectivity were required after that stage, a commercial agreement was to be drawn up. Paragraph 3 provided for the roll-out of a fixed WiMAX network in the Westminster area should the pilot stage be successful, in which case the appellant would pay £10,000 pa to the respondents for each host site. Paragraph 1 provided that, “on completion of this agreement”, the respondents would grant the appellant unlimited access to and exclusive use of all their rooftops for WIMAX network deployment for a mimimum period of 15 years.Relations between the parties deteriorated and the respondents asked the appellant to remove its apparatus from the roof of the city hall. The respondents obtained summary judgment in their favour on a claim against the appellant, as a result of which the appellant was ordered to remove its apparatus and to pay damages for trespass. The judge rejected the appellant’s contention that the words “on completion of this agreement”, obliged the respondents to provide unlimited access and use of their rooftops for the appellant’s networks for 15 years, irrespective of the outcome of the pilot stage.However, the judge refused to grant summary judgment to the respondents on the appellant’s counter-claim, by which it sought damages of more than £3.4m for breach of an implied term relating to the roll-out of the network in the event of a successful pilot stage. The appellant appealed; the respondents challenged the refusal to dismiss the appellant’s counter-claim summarily.Held: The appellant’s appeal was dismissed; the respondent’s appeal was allowed and summary judgment was given to dismiss the appellant’s counter-claim.(1) Both agreements were legally binding documents that fell to be construed in accordance with the usual principles of contractual construction. Their wording had to be interpreted in context, reading the documents as a whole and having regard to the expressly stated objectives. Since both documents were poorly drafted, the court would be less willing, on the basis of semantic niceties, to attribute to the parties an improbable and unbusinesslike intention: Investors Compensation Scheme v West Bromwich Building Society (No 1) [1998] 1 WLR 896 and Mitsui Construction Co Ltd v Attorney-General of Hong Kong (1986) 33 BLR 1 applied. The reference, in para 1 of the first agreement, to the grant of unlimited access “on completion of this agreement” could not sensibly mean on the execution or signing of that document, but, rather, on completing what it was envisaged would be done in accordance with the agreement. The appellant was to have unlimited access to and use of the respondents’ rooftops only in the event that the parties and entered into a commercial agreement as set out in para 2. There was nothing commercially absurd in an arrangement under which the appellant conducted a pilot at its own expense in the hope of securing a commercially lucrative arrangement should that pilot prove successful. By contrast, it would be contrary to good sense to suppose that the respondents had granted unlimited access to their rooftop sites for the appellant’s exclusive use, free of charge, for 15 years irrespective of the outcome of the pilot stage.(2) The purpose of the pilot was to determine the effectiveness of connectivity to the respondents’ buildings. Accordingly, the connectivity trials were to be conducted by the appellant in respect of the buildings that the respondents had provided for that purpose. The document that the appellant relied on as showing the result of the trials did not report results relating to the respondents’ buildings; in fact, the appellant accepted that it had not conducted connectivity tests in connection with those buildings. A pilot had not therefore been conducted in accordance with the requirements of the two agreements and the respondents could not have breached any implied term of the type asserted. Since that conclusion flowed from the proper construction of the contracts, there was no obstacle to reaching it summarily. The appellant’s counter-claim should be dismissed.Jonathan Seitler QC (instructed by Hammonds LLP) appeared for the appellant; Stephen Smith QC and Clive Jones (instructed by the legal department of Westminster City Council) appeared for the respondents.Sally Dobson, barrister