Premier Paper Group Ltd v Buchanan McPherson Ltd

Procedural fairness does not require a pleaded case to be followed rigidly where the evidence reveals a different case and the opposing party has had a fair opportunity to address it. A general assertion of prejudice is insufficient; the alleged prejudice must be particularised by identifying the evidence, investigation, cross-examination or amendments that would have been undertaken. A settlement agreement may be established even though its precise contractual mechanics are not separately identified, provided the parties’ agreement, consideration and sufficiently certain substance are shown. Where the parties agree that compensation is payable, the amount may be quantified subsequently through their representatives and confirmed by issuing and accepting a credit note.

The respondent claimed the balance of a compensation credit note issued by the appellant after defective paper had caused business losses. It pleaded an oral settlement made in November 2010, including agreed repayment of the paper price and compensation of £19,381.59. Its evidence instead showed an early agreement that compensation would be paid, followed by later quantification.

The judge permitted the respondent to advance the case disclosed by its evidence, found that the appellant’s branch manager had authority, and held that the credit note formed part of a binding settlement. The appellant appealed on procedural unfairness, lack of evidential support, and absence of offer, acceptance, consideration and certainty. The central issue was whether the judge was entitled to decide the case on the basis of the evidence and whether that evidence established an enforceable settlement.

The appeal was dismissed.

1. Procedural fairness. The discrepancy between the pleaded case and the respondent’s evidence was apparent before the end of the trial. The appellant’s counsel cross-examined the respondent’s principal witness on the changed case and had a proper opportunity to address it. General submissions that an amendment might have produced different evidence, investigation or cross-examination did not establish unfairness. The appellant identified no particular step it would have taken, and its suggested challenge to the manager’s authority in December 2011 had no stated evidential basis. The judge was therefore entitled to permit the respondent to develop the case supported by its evidence.
2. Findings and evidence. The judge’s reasoning had to be read as a whole. His findings established an initial agreement that compensation would be paid, followed by agreement on the amount of the respondent’s losses. Those findings were supported by the written and oral evidence. The issue of the compensation credit note was otherwise inexplicable except as acceptance of the respondent’s claim for loss.
3. Binding settlement. The settlement involved consideration by the respondent, including forbearance from suing and agreement to accept a reasonable sum for its losses. Where the parties’ agreement is established, it is unnecessary to identify the precise mechanics of offer and acceptance. The amount was subsequently quantified through discussions between the parties’ representatives and the issue and acceptance of the credit note. The agreement was sufficiently certain and binding, particularly since the credit note had been issued with authority and accepted in settlement.

Lord Justice Gross agreed with Lord Justice David Richards.

• Court of Appeal (Civil Division) — Premier Paper Group Ltd v Buchanan McPherson Ltd, [2018] EWCA Civ 15: appeal dismissed.
• County Court sitting in Birmingham — Edis J found that the parties had entered into a binding settlement concerning defective paper and that the appellant owed £14,243.63 under the compensation credit note. The judgment citation was not stated in the judgment.