NUA Facades Ltd & Ors v Brady (t/a Terry Brady Developments Ltd)

Settlement agreements made by an agent acting for a financially pressured employer remain enforceable unless fraud, bribery, dishonest assistance, undue influence or illegitimate pressure is proved. Substantial overvaluation does not, without more, establish collusion or dishonesty. Contractors commonly advance claims exceeding their strict contractual entitlement as part of negotiation.

Fraud and dishonesty must be clearly pleaded and supported by cogent evidence commensurate with the seriousness of the allegation. A project manager’s failure to exercise reasonable care and skill does not necessarily constitute breach of fiduciary duty when the manager acts as agent. Commercial pressure and a stronger bargaining position do not, without illegitimate conduct, amount to undue influence or economic duress.

The claimant companies carried out construction works at a residential development for the defendant. Following disputes over payment and termination, the parties entered into settlement agreements and related letters recording sums payable for the works. The defendant later contended that the agreements were unenforceable because they resulted from bribery, fraudulent or unlawful conspiracy, dishonest assistance in breach of fiduciary duty, surreptitious dealing, undue influence or duress.

The defendant also challenged the authority of Four Square Management Ltd, his project manager, to agree the settlements. The central issues were whether the agreements and Silk letters were binding, whether the surrounding conduct established any vitiating factor, and what sum was recoverable under a separate AGM2 contract.

1. Disposition. The settlement agreements and the First and Second Silk Letters were enforceable. The claimant companies were entitled to the agreed sums. The separate AGM2 claim was recoverable in damages, but credit had to be given for loss of profit already included in the AGM settlement, leaving damages of £51,598.94.
2. The allegations of bribery, conspiracy and dishonest assistance failed on the facts. The payments to Mr Elkin were improper but did not prove that the settlement agreements were procured by bribery or a wider conspiracy. Inflated final accounts were not inherently dishonest. They could represent speculative or overstated negotiating claims, particularly where the underlying items were genuinely arguable.
3. The court required clear pleading of both the primary facts and the inferences relied upon for fraud. The civil standard remained the balance of probabilities, but cogent evidence commensurate with the seriousness of the allegation was required. The agreements’ disadvantageous terms and the disparity between the settlements and later expert valuations did not, by themselves, establish wrongdoing.
4. Mr Pierce’s role had to be distinguished. When acting as project manager and adviser, he owed a duty of reasonable care and skill. When acting as Mr Brady’s agent in entering the agreements, he owed fiduciary duties. Any failure in valuation or negotiation would have been a failure of care and skill, not necessarily a breach of fiduciary duty. No fiduciary breach was proved.
5. The pleaded undue influence case failed because the claimants lacked the necessary relationship of trust and confidence with Mr Brady, and the required elements identified in BCCI v Aboody were not established. Financial and commercial pressure did not amount to undue influence. Duress likewise failed because no illegitimate pressure was proved. The proposed reliance on fluctuating labour, threats to withdraw, or other matters was also materially unpleaded.
6. The principle concerning surreptitious dealing stated in Panama and South Pacific Telegraph Company v India Rubber did not assist: the necessary dealing was not proved, and the court left open whether the principle was a free-standing vitiating factor.