UT (Tax & Chancery) UT-2024-000044 - [2025] UKUT 00094 (TCC)

We agree with Mr Stone that there was no error of law in the FTT’s construction of the “ad hoc as and when required” term of the actual contract. The FTT gave five reasons supporting its interpretation of this clause at [46] and these are unimpeachable.

We reject each of the submissions made by Mr Firth, accepting the submissions of Mr Stone.

First, the FTT’s interpretation of “ad hoc” does not render the term otiose or irrelevant. It gave meaning to the words “ad hoc”, i.e. the occasion of the service was not fixed in advance.

Second, there is no inconsistency between the occasion for the service not being pre-determined and the service provider having to provide the service “as required” by the party procuring those services.

Third and fourth, “as and when required” has been given its natural meaning. The FTT’s interpretation of “required” was not that it means “requested”. It found it to mean that the party providing the services (i.e. the Appellant) must provide the services when the party paying for them (i.e. Sky) decides that the services are required. There is no need to add the words “by Sky” in order to make this clear. In any event, the 2015 contract did use the phrase “… on an ad hoc as and when required basis by Sky …” in its definition of Services. The Appellant did not, and does not, suggest that the interpretation of that contract should be different from the 2013 contract. As there is no real doubt or ambiguity when the clause is interpreted against the background and commercial purpose of the contract, there should be no application of the contra proferentum rule: see Lewison, The Interpretation of Contracts, 8^th Ed (“Lewison”), at 7.88.

Fifth, and sixth, the FTT’s construction of “ad hoc as and when required” accords with the contract read as a whole. For example, the following clauses are particularly relevant:

The Appellant’s interpretation, which either would not oblige Mr Thompson to provide any Services at all or to provide the Services only on occasions agreed between Sky and Mr Thompson, gives no meaning to the word “required”, replacing it instead with the word “agreed”. That is an impossible construction because it directly contradicts the express terms. The FTT correctly concluded that no such term could be implied into the contract, as it would be inconsistent with the express terms of the contract and not necessary for business efficacy. As the FTT noted [46] there is no term in the contract or in the definition of services that states that the Appellant’s or Mr Thompson’s agreement is necessary.

Further, it gives no meaning to clause 2.6, or the concept of “first call” and the Appellant’s interpretation would give it the unfettered right to turn down any, or indeed all, work. In circumstances where the Appellant was entitled to a fixed fee equal to or greater than £150,000 per annum, that is very unlikely to have been the bargain reached between the parties.

Seventh, the FTT recognised that the parties cannot have agreed that Mr Thompson would be required to work on all days and at all hours. It found that there was an implied term that the assignment would be on an ad hoc as and when “reasonably required” basis: [47] (having already given itself a correct self-direction of the test for implication of a term at [23]). Such a clause is not inconsistent with the express terms of the contract. The FTT’s interpretation was consistent with common sense in a business arrangement.

Mr Firth submits that such an approach is impermissible as there are no objective criteria by which reasonableness can be determined. We agree with Mr Stone that this fails to recognise how “reasonableness” clauses are commonly deployed in contracts for personal service. By way of example a reasonableness term is implied as a matter of law into every contract of employment “the employee should carry out the reasonable instructions of the employer” (Footnote: ²). In Eagland v British Telecommunications plc [1993] ICR 644, Parker LJ envisaged an employment contract being terminable on “reasonable notice” (at 652H).

Outside the employment context, Mr Stone drew our attention to Wells v Devani [2019] UKSC 4, [2020] AC 129 (“Wells”), where the Supreme Court unanimously held that it is possible to imply a term into an agreement to render it sufficiently certain or complete to constitute a binding contract; and that in default of agreement it may be appropriate to imply a term that, “… a reasonable price must be paid.” (per Lord Kitchin at [33]).

In those circumstances, the FTT was not required to identify any objective criteria by which reasonableness was to be determined in order to imply the term. Nonetheless, as Mr Stone pointed out during the hearing, the reasonableness of the frequency or timing of Sky’s requirements for the Appellant to provide Mr Thompson’s services could be judged objectively. For example, by reference to the extent, frequency and timing of his previous provision of services to Sky in respect of Soccer Saturday under earlier direct contracts since 2005.

Mr Firth referred to Mr Thompson’s witness statement and his understanding of the contract – essentially that he could pick his shows and do what he wanted. He contends that the small risk that Mr Thompson might decide never to provide services was one that Sky had decided to take (Footnote: ³) and would simply lead to non-renewal of the contract. As held in Atholl House UT at 8(4)

As part of his submissions Mr Firth also contends that the clause is void for uncertainty. However, Mr Stone directed us to Rule 10 of Chapter 8 of Lewison which states:

“A contract, or a provision in a contract, may be uncertain if it is unintelligible; if it is meaningless; if the court is unable to select between a variety of meanings fairly attributable to it, and the circumstances are not such that one or other party to the contract may elect between meanings; where the court is unable to discern the concept which the parties had in mind; or where the terms of the contract require further agreement between the parties in order to implement them.”

None of those conditions applies in the present case. In any event, as Lord Kitchin said in Wells, at [18], “… the courts are reluctant to find an agreement is too vague or uncertain to be enforced where it is found that the parties had the intention of being contractually bound and have acted on their agreement.” (Footnote: ⁴) Sky and the Appellant clearly had an intention to create legal relations and acted on the two agreements for the four years they covered. A court or tribunal should strive to uphold bargains already performed and be reluctant to strike them down for uncertainty.

For these reasons there was no error of law by the FTT in its interpretation of the “ad hoc as and when required” clause in the actual contract between Sky and the Appellant.

Further and in any event, there would be no material error in implying a reasonableness term as the FTT found at [47] that the implied term of reasonableness was not material to rejecting the Appellant’s interpretation of the Assignment clause: “In any event, even if we did not imply such a term of reasonableness, the clause remains unambiguous and would be inconsistent with Mr Firth’s implied terms as to [Mr Thompson having] a right of refusal or a requirement of mutual agreement.”

In further alternative, any error was not material as the FTT was entitled to conclude when constructing the hypothetical contract between Sky and the Appellant that Mr Thompson would have been required to provide his services on “an ad hoc as and when reasonably required” basis, and in any event with appearances limited to “only Soccer Saturday, mid-week games, associated marketing and publicity events, and relevant interviews (such as news items relevant to Liverpool)” ([57]). There is no challenge to the FTT’s finding on the extent of the more limited services to be provided under the hypothetical contract.