Bewley Homes Plc v CNM Estates (Surbiton) Ltd

A clear commercial settlement must be enforced according to its terms. Where payment is required without set-off before a contractor’s obligation to remedy agreed defects arises, the employer cannot defer payment by asserting those defects. An unsigned and incomplete draft agreement does not establish variation or estoppel by convention. A stay of execution because a commercial defendant cannot pay is rare and exceptional.

A contractor sought summary judgment for £474,522.90 plus interest under a settlement agreement resolving disputes arising from a building contract and adjudication. The agreement required the employer either to transfer a flat free of encumbrances or to pay the specified sum without set-off. The contractor’s obligation to remedy agreed defects arose only after transfer or payment.

The employer relied on negotiations with the mortgagee and an incomplete draft supplemental agreement, asserting that the settlement had been varied. It also sought a stay of execution based on the parties’ financial positions.

1. Summary judgment was appropriate because the defendant had no real prospect of defending the claim and there was no compelling reason for a trial.
2. The settlement required payment without set-off before the contractor’s obligation to remedy agreed defects arose. The employer therefore could not withhold payment for alleged defects.
3. No variation was established. The negotiations were incomplete, the employer had not agreed to the draft supplemental agreement, and no amendment signed by all parties existed. There was no estoppel by convention.
4. Under RSC Order 47, a stay because a commercial defendant cannot pay is rare and exceptional. The evidence did not establish a probable inability by the contractor to repay a future judgment, and the employer’s financial evidence was inadequate.

Judgment was entered for the claimant. There was no stay of execution, and costs were summarily assessed in the claimant’s favour.