29 Buckland Crescent Management Company Limited v Rojer Taylor White

Contractual construction is a unitary and iterative exercise. The court must balance the language of the agreement, its wider context, commercial consequences and the quality of the drafting. A clause preserving claims arising from a settlement may extend beyond claims for contractual damages or specific performance where the agreement, read as a whole and against its factual matrix, indicates that related enforcement proceedings were intended to remain available. The expression “in respect of” is context-sensitive and cannot be resolved by impressionistic comparisons between differently worded release provisions.

The landlord appealed against an order of HHJ Dight CBE dated 7 November 2023 in the County Court at Central London. The underlying dispute concerned repeated leaks from the respondent’s flat and alleged breach of a repairing covenant in a long lease.

The parties entered into a settlement agreement. The respondent admitted the lease breach and promised to remedy it by carrying out specified works. The agreement released claims connected with the earlier proceedings and contained an exception for claims in respect of breach of the settlement agreement.

The works were not completed by the agreed date. The landlord served a notice under s146 of the Law of Property Act 1925 and commenced forfeiture proceedings. The central issue was whether those proceedings fell within the exception in clause 7.2.

1. Appeal allowed. The settlement agreement did not preclude the landlord from bringing the forfeiture proceedings.
2. The proper approach to construction was the unitary and iterative approach described in Lukoil Asia Pacific Pte Ltd v Ocean Tankers (Pte) Ltd (The “Ocean Neptune”) [2018] EWHC 163 (Comm). The court had to ascertain the objective meaning of the language used, considering the agreement as a whole, the available background, commercial common sense, drafting quality and the consequences of the competing constructions.
3. The words “in respect of” in clause 7.2 were capable of bearing both parties’ proposed meanings. They could refer narrowly to claims directly for breach of the settlement agreement, or more broadly to proceedings concerning the respondent’s failure to ensure that the flat had a functioning shower, where that failure also constituted breach of the settlement agreement. The perceived breadth of clause 6 did not determine the meaning of clause 7.2, because the clauses operated by reference to different concepts.
4. The possibility that clause 7.2 would become a statement of the obvious on the respondent’s construction was only a slender pointer. The principle that a construction rendering a clause entirely surplus is disfavoured, discussed in Nord Naptha v New Stream Trading [2021] EWCA Civ 1829, was therefore of limited weight.
5. Clause 4 was the strongest indication. The respondent’s admission was specifically tied to s168(4) of the Commonhold and Leasehold Reform Act 2002. Objectively, that admission had the obvious legal consequence of enabling service of a s146 notice for the admitted breach. Read with the factual background, it indicated that the landlord retained the possibility of forfeiture if the settlement obligations were not performed.
6. Clauses 10.1 and 10.2 provided additional, though weaker, support because they appeared to contemplate future proceedings connected with the earlier proceedings beyond an action directly for breach of the settlement agreement. The landlord’s interpretation was consequently more consistent with the cumulative indications. The parties were invited to agree the consequential order, failing which a further hearing would be required.

• High Court, Chancery Appeals: Appeal allowed. Mr Justice Richards overturned the County Court’s conclusion that the settlement agreement barred the forfeiture proceedings.
• County Court at Central London: HHJ Dight CBE’s order dated 7 November 2023 held that the settlement agreement precluded the landlord from bringing forfeiture proceedings.