J WANSTALL & SONS v FRIDAYS LIMITED

On an application for strike-out or summary judgment, the court must determine whether the claim has a realistic prospect of success without conducting a mini-trial. 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 address it. A compromise agreement requires an unequivocal agreement relating to a clearly defined dispute. Correspondence referring generally to resolving an issue will not necessarily compromise an unformulated claim or an unidentified dispute. Post-contractual communications are inadmissible for contractual construction, although they may be relevant for other purposes.

The Defendant applied to strike out the claim under CPR rule 3.4(2)(a), or alternatively for summary judgment under CPR rule 24.2(a). The dispute arose from Salmonella outbreaks affecting the Claimant’s egg farms and the parties’ subsequent correspondence concerning a £50,000 payment described first as a loan and then as a faster payment.

The Defendant contended that the payment and the Claimant’s confirmation that the “zoonosis matter” was closed amounted to a settlement of claims for losses. The Claimant denied that any financial claim or compromise had been discussed or agreed. The central issue was whether the June 2019 emails established a binding settlement agreement capable of defeating the claim at this interlocutory stage.

1. The Defendant’s application was dismissed. The court refused both strike-out under CPR rule 3.4(2)(a) and summary judgment under CPR rule 24.2(a).
2. The court applied the summary judgment principles stated in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch), as approved in AC Ward & Sons Ltd v Catlin (Five) Ltd [2010] Lloyd's Rep. LR. 301. The question was whether the Claimant had a realistic, rather than fanciful, prospect of success. The court was not to conduct a mini-trial, but could reject assertions contradicted by contemporaneous documents. It could decide a short point of law or construction where the evidence was sufficient and the parties had been properly heard.
3. Applying the contractual interpretation principles summarised in Wood v Capita Insurance Services Limited [2017] AC 1173, the four June emails were construed as an arrangement looking forward, intended to enable the parties to continue trading. The reference to the “zoonosis matter” meant the Salmonella outbreak, but the emails did not identify any existing dispute about responsibility for the parties’ costs or losses.
4. The correspondence contained no unequivocal agreement to compromise a clearly defined dispute. It referred neither to a claim by the Claimant against the Defendant nor to the compromise or settlement of losses. The Claimant therefore had a strong prospect of establishing at trial that no binding settlement agreement had been reached.
5. The September 2019 email was post-contractual and inadmissible on construction. In any event, it supported the conclusion that the Claimant may not yet have formulated a claim against the Defendant in June 2019. The court would hear counsel on the form of order and costs if not agreed.