Seeney & Anor v Gleeson Developments Ltd & Anor

On a summary judgment application, the court may decide a short point of law or construction where the evidence is sufficient and the parties have had a proper opportunity to argue the issue. It must assess whether the opposing case has a realistic prospect of success, while avoiding a mini-trial.

Whether negotiations resulted in a binding contract depends objectively on the negotiations as a whole, including the parties’ words and conduct. A contract may be binding even though the parties contemplate a later formal document. The critical question is whether that document is a condition of being bound or merely records an agreement already reached.

The claimants sought summary judgment on part of their claim concerning a property settlement. Under an earlier written agreement, the defendants were to rebuild a house and the claimants were to pay for specified additions and alterations. Following negotiations, an email dated 1 September 2011 stated that the claimants’ net contribution for extras was £30,000.

The defendants argued that the figure was conditional upon execution of a further formal agreement and was therefore not binding. The application required the court to determine whether the parties had reached a binding agreement and whether the issue should be resolved summarily.

1. Summary judgment. The court applied the principles summarised in Barclays Bank PLC v Landgraf [2014] EWHC 503 (Comm). The defendants needed a realistic, rather than fanciful, prospect of success. The court should not conduct a mini-trial, but could analyse documentary evidence where factual assertions lacked substance. It should also consider evidence reasonably expected to be available at trial.
2. Where the evidence is complete and the issue is a short question of law or construction, the court should decide it under CPR Part 24. It should not postpone determination merely because something might emerge at trial. The contemporaneous correspondence was complete, the parties had addressed the issue, and the issue was of relatively low value.
3. Formation of the agreement. Applying RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG [2010] BLR 337 and Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd’s Rep 601, the court considered the negotiations as a whole. A binding contract can arise despite an expectation that a formal document will later record or add to the agreed terms. The objective question is whether the parties intended to be bound immediately or only on execution of the formal document.
4. The 1 September email contained no qualification or reference to “subject to contract”. The earlier correspondence indicated that the parties were first to agree the extras figure and would then append that figure and the specification to a simple supplemental contract. The later document was intended to record the agreement, not to create it.
5. The defendants’ conduct supported that conclusion. Agreement on the extras was treated as necessary before the works could proceed, and the works did proceed after 1 September 2011. The defendants’ former solicitor also described the proposed agreement as recording matters already agreed. The agreement had been brokered through a mediator, and the court stated that courts should be reluctant to undo agreements reached with or through a mediator.
6. The court rejected the proposed reasons for a trial. Issues concerning credibility on other matters, later extras and enfranchisement costs did not affect the declaration sought. The court declared that the parties had reached a binding agreement that the extras ordered as at 1 September 2011 were valued at £30,000, which was the relevant figure for clause 15(b) of the Property Agreement.