Andrew John Bolton v Tameside Metropolitan Borough Council

Parties to a negotiated compromise may agree freely which sums are payable and how they are to be described. A legal classification that would apply to an award made by a tribunal does not prevent the parties from structuring their written compromise differently.

Where a compromise separately provides for pre-reference costs to be paid and assessed if not agreed, those costs are payable in addition to an agreed lump sum. The agreement must be construed objectively from its written terms. Evidence of the parties’ subjective intentions is inadmissible for that purpose.

The claimant’s reference arose from the acquiring authority’s compulsory purchase of premises. At a mediation, the parties agreed that the Council would pay £475,000, the claimant’s costs of and incidental to the reference, and his pre-reference costs, with both categories of costs to be assessed if not agreed.

A dispute then arose over whether the pre-reference costs claimed in the bill of costs were included in the £475,000. The Deputy President directed determination of that preliminary issue by written representations. The central issue was the proper construction of the compromise agreement.

1. Preliminary issue determined for the claimant. The Council was required to pay the claimant’s pre-reference costs, subject to assessment by the Tribunal if not agreed.
2. The agreement objectively distinguished three obligations: payment of £475,000, post-reference costs, and pre-reference costs. Its ordinary meaning was that the pre-reference costs were separately payable, rather than included in the lump sum.
3. London County Council v Tobin [1959] 1 All ER 649 (CA) established that reasonable professional fees incurred in preparing a compensation reference could form part of compensation awarded by the Tribunal. That classification did not control the parties’ compromise. Parties were free to provide that this component would be assessed and paid separately.
4. The fact that the £475,000 was not described as compensation reinforced that it was only one element of the overall settlement. The parallel provisions for assessment of pre- and post-reference costs also supported that construction.
5. The Council’s proposed distinction between pre-reference costs and preparation costs had no basis in the wording of the agreement or in principle. What costs were recoverable remained a factual issue for assessment, including their reasonableness.
6. The witness evidence as to subjective understanding or intention was inadmissible. The issue was a straightforward construction of the written agreement.

• Upper Tribunal (Lands Chamber): A preliminary issue arising from a mediated compromise of the claimant’s compulsory-purchase reference was determined by written representations.