UVC Limited (t/a Power Train Projects) v Doug Kiddie Engineering Limited

Whether a settlement constitutes a complete agreement is determined objectively, in its factual context. The relevant observer is not assumed to possess specialist legal qualifications. The factual matrix may include matters not foremost in the parties’ minds, but it does not require them to infer terms that were neither expressed nor made part of the negotiations. Where a defendant’s solicitor intends a settlement with the claimant to depend on resolving a Part 20 defendant’s costs, that reservation must be made clear. In a second-tier appeal, permission requires an important point of principle or practice, or another compelling reason. A fact-specific dispute about whether an unstated costs obligation formed part of a settlement does not satisfy that threshold.

The claimant brought proceedings for damages arising from a contract for heat treatment of crankshafts. The defendant had joined Bowmic Ltd as a Part 20 defendant. During negotiations shortly before trial, the claimant and defendant agreed that the claim would not be pursued and that the claimant would pay £6,000 towards the defendant’s costs. No reference was made to Bowmic’s costs.

His Honour Judge Hall held that no final settlement had been reached because the Part 20 costs remained unresolved. Goldring J allowed the claimant’s appeal, holding objectively that an agreement had been concluded. The defendant sought permission for a second appeal. The central issues were whether the agreement was complete and whether the proposed appeal raised an important point of principle or practice or another compelling reason.

1. Permission refused. The defendant’s renewed application for permission to bring a second-tier appeal was dismissed. The proposed appeal had no real prospect of success and raised no important point of principle or practice, nor any other compelling reason for the Court of Appeal to hear it.
2. The question was whether the telephone agreement constituted a complete agreement. That question had to be determined objectively, by considering what the agreement connoted to a reasonable observer in its factual context. The observer need not be a solicitor or possess a special qualification.
3. The factual matrix could include matters that were not uppermost in the parties’ minds. It did not require the claimant’s solicitor to divine an unstated term that the settlement depended on payment of an unknown amount for the Part 20 defendant’s costs.
4. The negotiations concerned the claim between the claimant and defendant. The defendant’s solicitor did not reserve his position or state that any settlement depended on resolving Bowmic’s costs. Those costs were the defendant’s responsibility. If the solicitor intended the claimant to bear them, it was for him to make that condition explicit.
5. On the objective facts, the agreement to discontinue the claim and pay £6,000 towards the defendant’s costs was complete. The dispute was fact-specific and did not justify a second appeal.

Order: application for permission to appeal refused.

1. Court of Appeal (Civil Division) — renewed application for permission to appeal refused: [2001] EWCA Civ 922.
2. High Court, Queen’s Bench Division — Goldring J allowed the claimant’s appeal from the preliminary-issue decision.
3. County Court — His Honour Judge Hall held that no compromise had been reached and gave judgment for the defendant on the preliminary issue.