Bellway Homes v Blackwell

A settlement is binding where the parties have objectively agreed all material terms. The fact that the agreement is intended to be embodied in a court order does not, without more, make it subject to further approval or formal documentation. An agreement to agree may be enforceable where the outstanding machinery can be objectively determined, including by a standard of reasonableness. Matters of drafting, semantics and logistics do not prevent conclusion of a compromise where the substantive terms have been settled.

The claimant owned land adjoining the defendant’s property and sought to exercise a reserved right of entry to carry out works to a boundary wall. Following interlocutory proceedings, the parties negotiated a settlement. The defendant contended that a final compromise had been reached, while the claimant maintained that material matters remained unresolved and that no agreement would bind until recorded in a court order or written contract.

The court tried that preliminary issue, including whether the negotiations had resulted in a complete and certain settlement.

1. Burden and legal principles. The burden of proving a complete and certain settlement lay on the defendant. An agreement to agree may form part of a concluded contract where its terms can be objectively established, including by reference to reasonableness.
2. No subject-to-contract basis. The parties’ intention that their agreement would be embodied in a court order did not itself establish that negotiations were subject to formal approval or documentation. The claimant had not communicated any such condition, and the correspondence did not support it.
3. Concluded compromise. The material terms had been agreed during the negotiations. The defendant’s acceptance of a reduction rather than complete demolition of the wall resolved the principal dispute. The timetable for reactivating the party wall award was a matter of logistics, governed by reasonable steps and a reasonable timetable. The wall-height issue was understood to require a capped wall of at least 2.4 metres. The description of the payment as compensatory or ex gratia was a drafting matter and did not affect the compromise.
4. The matters said to remain outstanding were minor and could be dealt with in drafting the order. The court therefore held that the action had been compromised on the terms identified in the defendant’s witness statement, while leaving the parties free to agree improved wording for the order.