Maguire v Maguire

Where a party disputes whether a settlement agreement has extinguished an appeal, the Court of Appeal should not determine a first-instance dispute about the agreement’s validity or effect. Under Part 52.10(2)(b) of the Civil Procedure Rules 1998, it may refer the issue to the lower court. That court should decide whether a binding compromise exists and define its terms, including whether it resolves costs. The appeal may be stayed pending that determination. If the compromise is binding and comprehensive, the appeal cannot proceed; otherwise, further appellate directions may be required.

The appellant had obtained permission to appeal from Moses LJ against an order of HHJ Cowell dated 28 May 2010. During the appeal process, the parties’ representatives signed a minute of order dated 31 October 2011. It provided, among other terms, for payment of £10,000 and purported to settle all claims and counterclaims relating to the proceedings and property.

The payment was made and the appellant cashed the cheque, but he later declined to proceed with the proposed order. He alleged that he had been misled or rushed into the agreement and sought to continue with the appeal. The central issue was whether a binding contract of compromise existed and, if so, whether its terms included the costs of the litigation.

The Court of Appeal made a procedural order rather than deciding the disputed settlement issue itself.

1. The minute of order appeared to provide a full and final settlement of the claims and counterclaims. The payment had been made and accepted. However, the appellant challenged the basis on which he had agreed to the arrangement. That raised a dispute about formation, validity and effect which required determination at first instance.
2. As an appellate court, the Court of Appeal could not itself determine that first-instance dispute. It therefore used its power under Part 52.10(2)(b) of the Civil Procedure Rules 1998 to refer the issue to the county court.
3. The county court was to determine whether there was a binding contract of compromise evidenced by the minute dated 31 October 2011 and, if so, its terms, particularly whether it compromised the costs issue.
4. The current appeal was stayed pending that determination. If the compromise was binding and included costs, the appeal would be at an end. If it could be set aside, or did not resolve the relevant issue, the future course of the appeal could then be considered.
5. The costs of the Court of Appeal hearing were made costs in the issue before the lower court. The judge also encouraged mediation, but imposed no such requirement.

• Court of Appeal (Civil Division) — In [2012] EWCA Civ 560, Aikens LJ referred the disputed compromise issue to the county court, stayed the appeal and directed that the hearing costs be costs in the issue.
• Central London Civil Justice Centre — The appeal arose from an order of HHJ Cowell dated 28 May 2010. Permission to appeal had been granted by Moses LJ.