Stewart Milne Group Ltd v Protex Corp Ltd

A settlement described as full and final settlement of all claims and cross-claims arising from a construction agreement ordinarily prevents a party pursuing liabilities falling within that wording, including alleged obligations to remedy defective work. A commercial party’s statement that proceedings will be issued unless an agreement is signed is ordinarily no more than the rough and tumble of commercial bargaining and does not, without improper pressure, establish commercial duress or undue influence. Where a defendant fails to attend trial, the claimant must still prove its case even if the defence could be struck out under Civil Procedure Rules 1998, rule 39.3.

The claimant supplied timber frames for the defendant’s housing development. Following disputes about payment and possible defects, the parties signed a settlement agreement under which the defendant was to pay £110,000 in full and final settlement of all claims and cross-claims arising under or in connection with the agreement.

The defendant pleaded undue influence or commercial duress and alleged that the settlement was conditional on remedial works. It did not attend the trial. The central issues were whether the settlement covered any remedial-work liability and whether the pleaded circumstances vitiated the agreement.

1. Judgment for the claimant. The claimant had reduced its asserted entitlement to £110,000 in full and final settlement of all claims and cross-claims arising under or in connection with the agreement. Any claim that the claimant remained liable for remedial works was within that settlement and could not be pursued separately.
2. The pleaded facts did not establish commercial duress or undue influence. A statement by one commercial party that it would commence legal proceedings unless the other signed the settlement was conduct to which it was entitled and amounted, at most, to the ordinary rough and tumble of commercial bargaining. The disparity between the parties’ financial strength did not alter that conclusion.
3. Undue influence more commonly arises where a fiduciary relationship enables improper pressure to be exerted, including in family, probate and solicitor-client contexts. It does not ordinarily arise between commercial companies settling a construction dispute, absent evidence of improper pressure or influence.
4. The defendant’s absence did not relieve the claimant of proving its case. Under rule 39.3 of the Civil Procedure Rules 1998, the court could proceed in the defendant’s absence and could strike out the defence, but fairness would ordinarily require notice of an application to strike out. Even without a defence, the claimant would still have to prove its claim by evidence.
5. The court therefore entered judgment for the claimant for £110,000 and reserved interest and costs for further argument.

First-instance decision. No appellate history is stated in the judgment.