England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
(MR RECORDER BELLAMY QC)

		Royal Courts of Justice Strand London WC2 Friday, 9th March 2001

Friday, 9th March 2001

1. LORD JUSTICE TUCKEY: This is the defendant's renewed application for permission to appeal from the judgment of Mr Recorder Bellamy QC given in the Central London County Court on 7th March 2000 in which he decided as a preliminary issue in these proceedings that the claimant was not bound by a compromise agreement dated 18th April 1998.
2. There is a long history to this matter which I need not elaborate but which centered around a Mercedes car. In 1997 the claimant worked for the fourth defendant company as a chauffeur. The first three defendants are directors of that company, but we are only concerned with the second defendant ("Saleem") who owned the car but agreed to sell it to the claimant for £27,000, the price to be paid by instalments.
3. In December 1998 the claimant was dismissed after which there was a very acrimonious dispute as to who owned the car. Both men had keys to it and it changed hands several times. On 16th April 1998, Saleem got it back into his possession, and in retaliation the claimant took a Jaguar belonging to the company. Very sensibly, so it would seem, the parties, realising that things could not go on like this, agreed to meet on 18th April at the Landmark Hotel. The upshot of this meeting was the compromise agreement, to which I have referred, and which was written out by the claimant and signed by him, Saleem, and other people who were present. Broadly, it provided that Saleem would keep the car and pay £11,000 by instalments to the claimant.
4. It is necessary to refer to a number of terms in this agreement. By the recital the parties stated that:

"We both agreed today 18th April 1998 that we have decided to resolve the dispute regarding ownership of the above mentioned vehicle in the way and terms and conditions described and also consent with witnesses present and this contract is legally binding to both parties...

(1) Mr MF Saleem will retain possession of the vehicle B8 MFS eventually.

(2) Mr BS Sujeeun [the claimant] will be paid out a total sum of £11,000... The payments will be made out to Mr Sujeeun in the following way;

(i) First payment of £2000... on Monday 20th April 1998."

5. The second payment of £2000 was to be made on the same date the following month and further payments of £750 per month.

"(4) This agreement will be recorded and duly registered with each party's solicitor to be legally enforceable and binding each party.

(5) We will both entertain a friendly relationship... towards each other...

(6) This agreement invalidates any former agreements entered into, any allegations and/or accusations made against each other up to this date 18th April 1998, but will be re-instated should any or either party breach this contract.

(8) I, Mr Sujeeum will forfeit all rights of ownership of the above mentioned vehicle... as long as all payments are made according to the terms and conditions of payment described above; should any payment be dishonoured, I, Mr Sujeeum, will immediately resume all rights to claim ownership of the same vehicle....

(9) This contract is now complete and final."

6. At the time the agreement was signed both parties had instructed solicitors. Saleem's solicitors were given a copy of the agreement by their client, and tried to speak to the claimants' solicitors about it, but in due course discovered that they were no longer instructed.
7. The £2000 was not paid by Saleem to the claimant on 20th April. In his witness statement Saleem said that he had done so, but at the hearing before the Recorder he said that he had arranged for the claimant to collect the money from the company's offices and the claimant had not done so. The Recorder rejected this evidence and other evidence given by Saleem about how the first payment came to be made. He accepted the claimant's evidence that he had not been paid on the 20th and that he had gone to the offices of the company on 29th April and said that the agreement had broken down and that he wanted the car and money. Saleem had then tendered him a cheque for £2000 dated 24th April, but he had not cashed it.
8. These proceedings followed and were met with the defence that the dispute had been compromised. The Recorder found that the claimant was not bound by the compromise agreement on three grounds. Firstly, duress; secondly, that clause 4 was a condition precedent to any binding agreement and had not been fulfilled; thirdly, repudiatory breach by Saleem, which had been accepted by the claimant, on 29th April.
9. I dealt with the application for permission on paper on 15th January 2001 when I said:

"I should have given permission to appeal the Recorder's findings on duress and condition precedent, but I think he was right to find that clauses 6 and 8 made time for payment of the essence of the agreement. His findings of fact on pages 11 to 13 of the Judgment dispose of any argument that the agreement was varied or the breach was waived and/or that the claimant did not accept it as repudiatory and are, I think, unassailable on appeal. This means that there is no real prospect of persuading this Court that the agreement is still binding on the claimant."

10. Very helpfully Mr Bailey has confined his submissions to meeting my observations and to the question of repudiatory breach. Firstly he submits that the contract did not make time of the essence. What he says is that clause 6 is the governing provision. It provides for what is in effect recission for (if one reads it literally) any breach by either party of any of the obligations in this agreement. Thus, for example, any act of unfriendliness breaching clause 5 would trigger clause 6. That cannot have been intended. The parties must only have intended serious breaches to have such an effect. Clause 8, he submits, is a subsidiary provision which simply makes it clear that if clause 6 is triggered, then the claimants' rights include the right to claim ownership of the car.
11. Ingenious though this argument is, I do not accept it. I do not think one needs to speculate about what would or would not trigger clause 6, because it seems to me that the effect of clause 8 is clear. Any failure to pay on time enables the claimant immediately to resume his right to claim ownership of the car, and as this is a breach of the contract it also triggers clause 6.
12. Mr Bailey's second argument is that the obligation to make payment did not arise until the obligation to refer the agreement to solicitors had been performed. As the claimant had not done this, the time for payment had not arrived.
13. This submission comes perilously close to resurrecting the condition precedent argument upheld by the Recorder which I think was probably wrong, but on the assumption that it does not I think the argument fails as a matter of construction of the agreement. What the parties thought the agreement meant is irrelevant. Looking at the agreement and accepting, as Mr Bailey does, that it became binding when it was made, there is nothing whatsoever in its terms to suggest that payment would not become due until clause 4 (whatever it means) had been complied with.
14. For these reasons, valiant though his attempts to persuade me to the contrary have been, I do not accept Mr Bailey's arguments and remain of the view that permission to appeal should be refused in this case.
(Application dismissed) (Order does not form part of approved Judgment)