Burley v Joseph W Burley and Partners Ltd & Anor

A court order, including an order made by consent, must be construed according to the natural meaning of its words in the light of the surrounding circumstances, particularly the pleadings. General words dismissing the “remaining elements” of a claim do not compromise an issue integral to quantifying a claim already identified for dismissal, where no separate claim or issue concerning it remains. Any intended compromise of that issue should be stated clearly. Courts should also exercise caution before ordering preliminary issues, since they may increase costs rather than save them, especially where costs become disproportionate to the amount in issue.

Mr Kenneth Burley claimed damages for breach of an alleged contractual promise that his pension would be at least as favourable as that available from his former employer. An earlier summary judgment dismissing the principal claim was set aside by the Court of Appeal on 2 July 2002. HHJ Behrens’s order of 27 November 2001 had dismissed the claim pleaded in paragraphs 11 and 12 of the amended Statement of Claim and, by consent, dismissed the remaining elements of the claim.

Before trial, HHJ Bush decided two preliminary issues in favour of the respondents. The second issue, concerning Inland Revenue guidance, was resolved by consent. The appeal concerned whether the order prevented Mr Burley from disputing the respondents’ figure for his final remuneration, which was necessary to calculate the alleged pension entitlement.

The Court of Appeal unanimously allowed the appeal on the first preliminary issue. The second preliminary issue had been resolved by consent.

1. Construction of the order. The order of 27 November 2001 had to be construed in the light of the Court of Appeal’s order of 2 July 2002, the pleadings and the surrounding circumstances. Its natural meaning showed that the words “the remaining elements of the claim” referred to claims remaining after the claim in paragraphs 11 and 12 of the amended Statement of Claim had been dismissed. The order did not compromise every issue mentioned elsewhere in the pleadings.
2. Final remuneration. The amount of final remuneration was integral to the claim for a pension calculated by reference to two thirds of final remuneration. That claim could not be quantified without deciding the final remuneration issue. After dismissal of the claim in paragraphs 11 and 12, no separate claim or issue concerning final remuneration remained to fall within the consent dismissal of the remaining elements. The appellant was therefore not precluded from arguing for a figure other than £18,616.65. If the parties had intended to compromise that issue, they could and should have said so clearly.
3. Other matters. The payment into court did not support the judge’s construction. Nor did Part 24.1 of the Civil Procedure Rules, which merely provided a procedure for deciding a claim or issue without trial. The court also noted that the measure of damages for breach of a contractual pension promise was the difference between the value of the pension that should have been received and that actually received, subject to valuation evidence and assumptions.
4. Preliminary issues. Baker LJ gave an obiter warning that resolving preliminary issues can add to costs rather than save them. The court considered that the costs incurred had become disproportionate to the amount in dispute.

1. Court of Appeal (Civil Division) On 18 February 2004, the court allowed the appeal concerning the first preliminary issue. The decision is reported at [2004] EWCA Civ 248.
2. Court of Appeal (Civil Division) On 2 July 2002, the court allowed an earlier appeal against summary judgment on the principal claim. No citation was stated.
3. High Court, Chancery Division HHJ Bush decided the two preliminary issues in favour of the respondents.
4. High Court HHJ Behrens’s order of 27 November 2001 dismissed the principal claim and, by consent, the remaining elements of the claim.