Burley v Joseph W Burley Partners Ltd & Anor

The parol evidence rule does not automatically exclude evidence of an oral contractual term merely because the parties later record related arrangements in a detailed written document. The court must consider all admissible evidence to determine objectively whether the writing was intended to contain the whole agreement, or whether the oral term was intended to survive alongside it.

The same question arises where the oral term is characterised as a collateral contract. The label is not decisive. Evidence of subjective intention and mere negotiations remains inadmissible, but evidence of a completed oral agreement may be relevant. Where that issue cannot fairly be resolved on the evidence before the court, summary judgment should not be given.

The claimant alleged that, when he left employment with the Automobile Association to join the family insurance-broking business, he was promised a pension equal to two-thirds of his final salary, less his existing pension entitlement. Written pension arrangements were subsequently issued in 1966 and supplemented in 1968, followed by a pension scheme in 1972.

The defendants obtained summary judgment on the basis that the written arrangements were exclusive and that the alleged oral promise was inadmissible under the parol evidence rule. The claimant appealed. The central issue was whether the oral promise had been superseded by the written arrangements or was intended to remain contractually effective.

1. Appeal allowed. The summary judgment dismissing the claimant’s case was set aside. The issue required a trial.

2. The court could not conclude, as a matter of law, that the 1966 letter was intended to contain the whole agreement concerning the claimant’s pension. The reference to making “some provision” was at least neutral, and the written pension terms were not necessarily inconsistent with an oral promise of a two-thirds final-salary pension.

3. The objective question was whether, having regard to all the circumstances and admissible evidence, the parties intended the alleged completed oral agreement to be superseded by the written arrangements or to continue alongside them. The court should consider the evidence from start to finish to determine the bargain made, consistently with the principles stated in Gillespie Bros & Co v Cheney, Eggar & Co [1986] 2 QB 59 and J Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078.

4. The same issue arose whether the alleged promise formed part of the employment contract or constituted a collateral contract. The categories of collateral contract were not closed, and the court should not be misled by contractual labels. The decisive question remained whether the antecedent agreement was intended to survive the later written contract.

5. This did not make subjective intentions or mere negotiations admissible. The exclusion of such material, including the principle discussed in Prenn v Simmonds [1971] 1 WLR 1381, was accepted. The claimant’s evidence concerned an alleged completed oral agreement and could not be excluded without a trial.

The Vice-Chancellor agreed. Appeal allowed with costs.

• Court of Appeal (Civil Division): Allowed the appeal against summary judgment obtained before His Honour Judge Behrens. The case was required to proceed to trial.