Mantegazza & Anor v Neil Holland Architects Ltd & Anor

A compromise is construed from the words used by the parties in their proper context. Subjective intentions are irrelevant. Wording such as all claims made ordinarily settles claims actually made, not every potential claim that might have been discovered through further investigation, unless the agreement uses sufficiently broad language. A later claim is not automatically an abuse of process merely because it could have been raised earlier. The court must make a broad, merits-based assessment of whether pursuing the claim misuses the court’s process. A lay claimant is not generally required to investigate unknown defects to avoid that consequence.

The claimants brought claims against their former architect concerning defects in an extension to their home. In 2002, they accepted £35,000 in full and final settlement of all claims made at that time. They later advanced claims concerning unsuitable mortar and negligent structural design, alleging that these defects and their consequences had only subsequently become known.

The first defendant applied to strike out the claims, contending that they were within the earlier compromise or, alternatively, constituted an abuse of process under the principles discussed in Johnson v Gore-Wood. Reliance was also placed on reasoning in Pirelli v Oscar Faber.

1. Application refused. The court treated the scope of the compromise as primarily a question of construction. The parties’ intention was to be derived from the words used in their proper context. Evidence of the claimant’s subjective intention was irrelevant.

2. The phrase all claims made referred to claims actually made in the February 2002 letter. It did not compromise all present and future claims, because the agreement did not use the broad formulae ordinarily employed to achieve that result. Nor could the phrase be expanded to include claims which might have been made with reasonable diligence.

3. The later claims were materially distinct from the earlier complaints about poor brickwork and workmanship. They concerned the use of inappropriate mortar and an alleged failure in the structural design of the extension. Similar references to mortar did not make the claims the same in substance.

4. The court applied the broad, merits-based approach to abuse of process identified in Johnson v Gore-Wood. Abuse of process did not apply where the claims were outside the compromise and had not become known until later. A layperson was not required to spend money investigating potential claims which had not occurred to him. The reasoning in Pirelli v Oscar Faber had no application to the construction of the compromise in this case.

5. The court recognised that exceptional circumstances might preclude a claim for abuse of process even if it was not included expressly or implicitly in a compromise. This was not such a case.