Harris v Holland & Anor

A contractual dispute-resolution clause requiring notice and mediation should ordinarily be upheld. However, a stay may be refused where the existing notice sufficiently identifies the underlying dispute, even if a new legal argument arises from later facts, particularly where separate issues have already completed the process and delay would cause prejudice.

On construction, an agreement providing for property sales at prices advised by independent agents may operate by reference to advice given from time to time. A schedule identifying phases does not impose a phased sale where the operative clause gives agents discretion over the number and timing of sales and singles out only Phase 1 for immediate sale. Consultation does not require a response, and undisclosed personal circumstances do not invalidate it.

The claimant and first defendant had dissolved their former business relationship and entered into a sale and purchase and settlement agreement for winding down their joint business and selling partnership properties. The agreement contained dispute-resolution provisions requiring an Agreement Dispute Notice and mediation before court proceedings.

Following an unsuccessful mediation, the claimant issued this expedited Part 8 claim. The defendant sought a stay, contending that the phasing issue had not been included in the earlier notice. The substantive issues concerned whether agents’ advised sale prices were fixed or dynamic, whether properties had to be sold in the phases listed in Schedule 4, and whether prior consultation required a meaningful response.

1. Stay. Clause 21 of the SPSA was binding and should ordinarily be given effect. However, it concerned the underlying dispute rather than every legal argument supporting the parties’ positions. The earlier Agreement Dispute Notice sufficiently engaged the overarching dispute about whether the parties had relinquished control over the marketing and sale of the properties. The phasing issue arose from later facts but did not create a separate underlying dispute. A stay was therefore refused. Even if a further notice had been required, the court would have exercised its discretion to refuse a stay because the pricing and consultation issues had already been ventilated, a stay would cause delay and additional cost, and the phasing issue was a short question of construction.
2. Pricing. Applying the approach in Arnold v Britton [2015] AC 1619, clauses 12.2 and 12.3 required the relevant agents’ advice on sale price to be treated as advice given from time to time. The clauses placed the portfolio with the agents and entrusted them with the marketing and sales process. The 95% threshold therefore operated by reference to the agents’ current advice, rather than only the initial asking price. No implied term was necessary.
3. Phasing. Schedule 4 primarily identified the properties, agents and other details. It contained no operative provision or explanation requiring sales to proceed through six phases. Clause 12.3 gave the agents broad discretion over the number and timing of sales, subject only to the requirement that properties marked Phase 1 be placed for immediate sale. The proposed phased-sale term was neither obvious nor necessary for practical coherence and was inconsistent with clause 12.3.
4. Consultation. Proper consultation did not require a response from either party. The agreement imposed no requirement for a reasonable or meaningful opportunity to respond, and personal circumstances preventing or delaying a response did not suspend or invalidate the process.
5. The claimant’s constructions on all three issues were accepted. The alternative implied terms were rejected. Consequential relief was reserved for further submissions.

First-instance Part 8 claim. Birss J ordered an expedited trial on 30 October 2020. The High Court determined the construction issues and refused a stay.