England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		3rd December 2009

The Honourable Mr Justice Coulson :

1. INTRODUCTION

1. By a claim form issued on 1^st July 2009, the claimant, YJL London limited ("YJL") seeks the sum of £136,395.60 from the defendant, Roswin Estates LLP ("Roswin") arising out of a Final Account Agreement concluded in December 2008. The claim is resisted. By an order made on 4^th November 2009, Ramsey J ordered the hearing of various preliminary issues to take place today, 3^rd December 2009.
2. At the conclusion of the hearing this morning, I resolved the preliminary issues in favour of YJL, and ordered that Roswin pay the sum of £130,000 within 14 days by way of an interim payment pursuant to CPR 25.7. Largely as a result of the unusual sequence of events that arose immediately prior to the hearing, I promised the parties that I would provide a written note of my reasons forthwith.

2. THE MATERIAL FACTS

3. YJL are building contractors. Roswin is a special purpose vehicle set up by a firm of solicitors, Messrs Rosenblatt. I am told that the directors of Roswin are two of the partners in that firm, namely Mr Ian Rosenblatt and Ms Tania MacLeod. Pursuant to a contract made in 2006 and evidenced in writing, Roswin engaged YJL to carry out the refurbishment and extension of an office block at 9-13 St Andrews Street, London, EC3A 3AF. Roswin's agent, named in the contract, was Tweeds Construction Consultancy ("Tweeds").
4. The contract incorporated the JCT Standard Form of Building Contract, With Contractor's Design, 1984 edition. The clauses were the subject of certain home-made amendments. For present purposes, the relevant term is clause 30, which deals with the Final Statement and Final Account. This included the following provisions:

"Final Account

30.5.1. Within 3 months of Practical Completion, the Contractor shall submit the Final Account and the Final Statement referred to in clause 30.5.4 for agreement by the Employer and the Contractor shall supply the Employer with such supporting documents as the Employer may reasonably require.

30.5.2. The Sum shall be adjusted in accordance with the Conditions…

Final Statement

30.5.4. The Final Statement shall set out:

30.5.4.1. the amount resulting from the operation of clauses 30.5.2 and 30.5.3 and

30.5.4.2. the sum of amounts already paid by the Employer to the Contractor

and the difference if (any) between the two sums shall be expressed as a balance due to the Contractor from the Employer or to the Employer from the Contractor as the case may be;

and the Final Statement shall state to what the balance relates and the basis on which the balance has been calculated.

30.5.5. The Final Account and the Final Statement as submitted by the Contractor in accordance with clause 30.5.1 shall within one month from whichever of the following is the latest date

the end of the Defects Liability Period stated in appendix 1

the day named in the Notice of Completion of Making Good Defects.

the date of submission of the Final Account and the Final Statement to the Employer by the Contractor

be conclusive as to the balance due between the parties in accordance with the Final Statement except to the extent that the Employer disputes anything in the Final Account or Final Statement before the date on which, but for the disputed matters, the balance would be conclusive.

Failure by Contractors to submit Final Account and Final Statement - rights of Employer.

30.5.6. If the Contractor does not submit the Final Account and the Final Statement within the three months referred to in clause 30.5.1 the Employer may on the expiry of the said three months give notice in writing to the Contractor that if the Final Statement and Final Account are not submitted by the Contractor within two months from the date of the written notice the Employer himself may prepare a Final Account and Final Statement ('Employer's Final Account', and 'Employer's Final Statement') …

30.5.8. The Employer's Final Account and the Employer's Final Statement as sent to the Contractor by the Employer in accordance with clause 30.5.6 shall within one month from whichever of the following is the later date

the end of the Defects Liability Period stated in Appendix 1.

the day named in the notice of Completion of Making Good Defects.

the date of submission of the Employer's Final Account and the Employer's Final Statement to the Contractor by the Employer

be conclusive as to the balance due between the parties in accordance with the Employer's Final Statement except to the extent that the Contractor disputes anything in that Employer's Final Account or Final Statement before the date on which, but for the disputed matters, the balance would be conclusive.

Balance stated in Final Statement or in Employer's Final Statement - debt due to Contractor or Employer.

30.6.1. Not later than 5 days after the Final Statement becomes conclusive as to the balance between the Parties in accordance with clause 30.5.5 the Employer should give a written notice to the Contractor which shall specify the amount of payment proposed to be made in respect of any balance stated as due to the Contractor from the Employer in the Final Statement or in the Employer's Final Statement.

30.6.2. The final date for payment of the said balance payable by the Employer to the Contractor or by the Contractor to the Employer as the case shall be shall be 21 days from the date the Final Statement becomes conclusive as to the balance due between the parties in accordance with clause 30.5.5…."

5. Practical completion was certified on 25^th June 2007. Thereafter, YJL and Tweeds, on behalf of Roswin, negotiated YJL's Final Account claim. It appears that the process of negotiation was extremely protracted and it was not until 15^th December 2008 that an agreement was recorded in writing by Tweeds. It is that agreement which lies at the heart of the preliminary issues.
6. On 15^th December 2008, Tweeds wrote to YJL in the following terms:

"Please find attached two copies of the Final Account Statement based on our agreed Contract Completion Value of £3,144,045. Can you please sign both copies of this statement and return them to me to forward to the Client.

We will also be issuing the final valuation in due course to reflect this agreed Final Account."

7. The Final Account Statement, which was attached, contained two separate documents. The first was the Final Account Agreement. That was in these terms:

"The Contractor hereby acknowledges that the payment of £3,144,045 shall be in full and final settlement of all demands, claims for extension of time or otherwise, requests, liabilities, costs expenses whatsoever and howsoever owed to the Contractor by the Employer under the Contract or otherwise implied by law or arising in tort and whether in relation to events arising which have accrued prior to the date hereof and which arise or could arise in the future.

The Contractor hereby agrees that the aforementioned represents full and final settlement in respect of his obligations for work executed under the Contract to include but not be limited to the following:-

1) Compliance with all drawings, Employer's Requirements, Contractors proposal's descriptive schedules, etc, detailed in the contract Documentation.

2) Compliance with the Employer's Representative's Contract Instructions and Contractor's confirmation in writing of verbal instructions issued by the Employer's Representative.

3) Compliance with making good all defects, shrinkages or other faults within the Defects Liability Period until the Certificate of Making Good Defects is issued.

4) Compliance with all contractual responsibilities as described in the Form of Design and Build Contract relating to the Design, Refurbishment and Construction of an additional floor of 9-13 St Andrew Street, London EC3A 3AF.

5) All works undertaken after the date of Practical Completion."

8. The second document was referred to as the 'Final Summary', but it was actually headed 'Final Account Contract Sum Analysis'. It was designed to demonstrate how the final figure of £3,144,045 was calculated. The document set out a whole variety of items and potential disputes that were taken into account and included within a gross figure of £3,180,045. It then showed a deduction of £36,000, to reflect the liquidated damages claimed by Roswin against YJL, which led to the Final Account Summary total of £3,144,045.
9. Expressly included within the gross figure of £3,180,045 were the following:

"5. Items Carried Out By The Client (To Be Deducted)

a) Items not completed by the Contractor but in scope e.g. Canopy Glazing Architectural Issues, Parapet Capping, Vision Panels, Fire Stopping, Ductwork Sealing, Entrance Soffit, Basement Fire Doors, Acoustic Screens etc

e.g. Air-Conditioning, Fire Alarm Connections and Testing, Acoustic Testing, Electrical Certification, Warranties, Carpets, Gaskets on curtain walling, front double door non-compliance, etc

b) Items identified as still requiring attention."

10. On 18^th December 2008, the Final Account Agreement was signed and returned by Renew Holdings PLC, YJL's parent company. The signed document explained how and why Renew had signed on behalf of YJL.
11. It is common ground that the agreed Final Account value of £3,144,045 meant that a final balance was due and owing to YJL of £136,395.60. Following the turn of the year, attempts were made by YJL and their solicitors to recover this sum, but to no avail. There was a good deal of email traffic and correspondence. I regret to say that, having considered the correspondence in question, I am driven to conclude that Roswin were prepared to take any point, no matter how bad, in order to avoid payment of the £136,395.60. Happily, following the provision of the Defence and Counterclaim, the vast bulk of those points were no longer pursued in defence of the claim.

3. THE PRELIMINARY ISSUES

12. The order of 4.11.09, made by Ramsey J, identified in a schedule the Preliminary Issues for my determination. They are as follows:

1. What is the true meaning and legal effect of the agreement recorded in the Final Account Statement in connection with the refurbishment of the office block at 9-13 St Andrew St London dated 15^th December 2008. In particular:

1.1. Did the agreement effect a full and final settlement of any claims that the Defendant may have had against the Claimant, as alleged in sub-paragraph 3.8 of the Particulars of Claim?

1.2. Or did it instead fail to displace the terms of the Contract with respect to payment and the Final Account as alleged in paragraph 14 of the Defence and Counterclaim; and/or have the effect only that the sum of £3,144,045.00 was agreed to be the Contract Sum, as alleged in paragraphs 2 and 12 thereof? And

1.3. Did that agreement relieve the Claimant of liability for defects in its performance of the Contract, or otherwise preclude the Defendant from raising those defects by way of a set-off or counterclaim, contrary to sub-paragraph 28 (c)(ii) of the Defence and Counterclaim? And

1.4. Did that agreement oblige the defendant to make payment as alleged in sub-paragraph 4.1 of the Particulars of Claim, and if so, in what amount? Or

1.5. Was no sum payable thereunder as alleged in paragraph 1.2 of the Defence and Counterclaim?

13. I provide my answers to those preliminary issues in Section 7 below. However, I have, I hope not unhelpfully, analysed the issues that arise for my determination in a slightly different way and in a slightly different order. It seems to me that the substantive issues between the parties are these:

a) Was the agreement of 15^th December 2008 intended to replace the contractual clause 30 process (Section 4 below)?

b) Did the agreement of December 2008 give rise to an entitlement on the part of YJL to payment of £136, 395.60 (Section 5 below)?

c) Did the agreement of December 2008 amount to a full and final settlement of all claims and cross-claims arising between the parties, or did it exclude the making of certain claims, and if so which (Section 6 below)?

4. WAS THE AGREEMENT OF DECEMBER 2008 INTENDED TO REPLACE THE CONTRACTUAL CLAUSE 30 PROCESS?

14. At paragraphs 14 and 15 of its Defence, Roswin allege that the agreement did not (and was not intended by the parties to), displace clause 30 of the contract, and that YJL were and remain in breach of clause 30.5.1 because they failed to submit a Final Account or a Final Statement. Accordingly, so it is said, no sum is yet payable by Roswin to YJL.
15. I reject that contention in its entirety. Clause 30.5 envisaged the provision, by the Contractor, of a Final Account and a Final Statement, and clause 30.5.6 envisaged that, if there was no such documentation from the Contractor, the Final Account and the Final Statement could instead be provided by the Employer. In this case, the parties sensibly chose to arrive at the Final Account and the Final Statement by a process of agreement. That agreement was clearly reflected in the Tweeds' documents of 15^th December 2008, set out above. I am in no doubt whatsoever that the sum of £3,144,045 was the Final Statement agreed between the parties pursuant to clause 30.5. That is the only conceivable interpretation of the words used by Tweeds in their 15^th December documents.
16. Furthermore, even if there was any doubt about it, I am in no doubt that this is the correct answer by reference to two well-known rules of contract construction. First, that is the only interpretation of the documents that is in accordance with business common sense: see Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191. The expressions used by Tweeds - 'Final Account', 'Final Account Statement' 'Final Account Agreement' and 'Final Summary' - all have one thing in common; they are all designed to be (and would be taken by the reasonable businessman to be) final. They are not intended to be, in some way, the start of an accounting process under clause 30.5. They are plainly intended to denote the end of that process.
17. Secondly, if (which I do not accept) there is any ambiguity in the words used by Tweeds, then that ambiguity must be resolved against Roswin in any event (because Tweeds were acting on their behalf in preparing and sending these documents), in accordance with the contra proferentem principle: see Carnwath LJ in Lexi Holdings v Stainforth [2006] EWCA Civ 988.
18. Accordingly, for all these reasons, I have concluded that the contractual clause 30.5 process was completed by agreement, and that the agreed Final Statement has the effect that the gross sum due to YJL on their Final Account is £3,144,045.

5. DID THE AGREEMENT OF 2008 GIVE RISE TO AN ENTITLEMENT ON THE PART OF YJL TO PAYMENT OF THE £136,395.60?

19. It is Roswin's pleaded case that, in the absence of any reference to payment in the 15^th December 2008 documentation, YJL are not entitled to be paid the balance which would otherwise be due, namely £136,395.60.
20. The first and obvious reason why that argument must fail is because it ignores the opening words of the Final Account Agreement (paragraph 7 above). There, YJL are expressly acknowledging "the payment of £3,144,045". The whole Final Account Agreement is based on the assumed payment of that sum. Accordingly, if, at the time of the Agreement, a sum less than the £3,144,045 had been paid by Roswin to YJL, then YJL were entitled to be paid any balance outstanding, in accordance with the express words of the Final Account Agreement.
21. Furthermore, it seems to me that Roswin's stated position fails to appreciate the nature of the December 2008 agreement. What was there being agreed was the amount of the Final Statement. True it is that, contrary to clause 30.5.4.2, the document failed to set out the sum already paid by Roswin, and therefore did not identify the difference between the two sums and the balance due. But that was an omission by Tweeds, Roswin's agent, and it cannot afford Roswin with a defence to this claim that they would not otherwise have, because they would then be seeking to take advantage of their own breach of contract: see Alghussein Establishment v Eton College [1988] 1 WLR 587 . In my view, it was merely an administrative oversight.
22. Still further, and again as a matter of commercial common sense, it seems to me that the fact that the balance was not expressly stated within the December 2008 documentation was ultimately neither here nor there. The amount that had already been paid was agreed. The sum that was agreed as representing the Final Statement meant that, as a matter of straightforward mathematics, the final balance of £136,395.60 was due to be paid by Roswin to YJL. No further step in any accounting process was intended or required. Accordingly, as a matter of sensible interpretation, the agreed Final Statement meant that an agreed final balance of £136,395.60 was due and payable by Roswin to YJL.

6. DID THE AGREEMENT OF SEPTEMBER 2008 AMOUNT TO A FULL AND FINAL SETTLEMENT, OR DID IT PERMIT THE MAKING OF FURTHER CLAIMS?

23. Roswin alleges that the settlement was not in full and final settlement of all claims and cross-claims between the parties, and that they are permitted to raise allegations of defective work in defence of the claim. It is important at the outset to identify those allegations, which can be found at paragraphs 37 and 38 of the Defence and Counterclaim in these terms:

"The Claimant's breaches

37. In the design and/or construction of the Works the Claimant breached the express and/or implied terms of the Contract and/or its common law duty of care as follows:

Glazing

(a) A large glazing panel on the west elevation at sixth floor level is cracked. The crack emanates from the right hand edge (viewed internally) and extends, at present, for approximately 700 millimetres along the inner pane.

Structural Columns

(b) The structural columns supporting the roof at sixth floor level are out of plumb vertically, by up to 50 millimetres across their height of 2.3 metres.

(c) The plaster at the head of columns cracked, as the result of either misalignment of the column or subsequent movement.

Flooring

(d) The flooring has "bowed" as the result of distortions in the timber used to construct it.

(e) The standard of finish in the flooring is poor.

(f)The timber installed in the flooring lack continuity of grain and/or continuity of colour.

Cladding

(g) The cladding panels on the east elevation at floor level one through five inclusive, are damaged and/or suffer from imperfections.

Health and Safety Files

(h) The claimant has failed to provide the health and safety files for the building and/or all of the information necessary for the compilation of the health and safety files.

Collateral warranties

(i) The claimant has failed to procure and/or provide to the defendant collateral warranties from any/or all of its sub-contractors and/or consultants.

38. By reason of the claimant's breaches aforesaid, the defendant has suffered loss and damage.

(a) The defects will require remedial works.

(b) The defendant will be obliged to incur costs in obtaining the information for, and in compiling, the health and safety files.

(c) In the absence of the collateral warranties required under the terms of the Contract, the defendant has lost the right to bring claims against the Claimant's subcontractors and consultants in respect of any defects in the building that now exist or which may later materialise."

24. In my judgment, the agreed Final Account and the Agreed Final Statement were the documents intended to comply with clause 30.5.5 of the JCT contract. Thus they are "conclusive as to the balance due between the parties". Prima facie, therefore, it might be thought that those words were intended to convey that no further claims for money, whether by way of damages or sums due under the contract, could be made by one party against the other.
25. That view, that this Final Account Agreement was intended to be in full and final settlement of all claims and cross-claims, howsoever arising, is strengthened further by the words used in both the Final Account Agreement (paragraph 7 above) and the Final Summary (paragraph 9 above). Taking the Final Account Agreement first, that expressly states that the figure of £3,144,045 "represents full and final settlement in respect of his obligations for work executed under the contract". That work is then said to include compliance with all the contract documentation. In those circumstances, it is difficult to see how any claims for defects might be subsequently advanced by Roswin.
26. Similarly, the Final Summary is expressly designed to include a number of items of work which YJL did not complete (paragraph 5A) and items of defective work, described in paragraph 5B as items "still requiring attention". Both of those categories are expressly described in non-exhaustive terms, hence the repeated use of the word "etc". That would again suggest, very strongly in my view, that incomplete or defective items of work were intended to be incorporated into this agreement, howsoever and whensoever they arose.
27. It may therefore be difficult to see what claims for defects could survive this Final Account Agreement. Certainly, for the reasons explained above, it seems to me clear beyond doubt that any claims arising from patent defects, namely defects that were either known about as at December 2008, or defects which could reasonably have been discovered at that time, were intended to be settled, and were settled, by the Final Account Agreement. The words in the Final Account Agreement admit of no other interpretation. I accept it may be more difficult to say that claims in respect of latent defects were in the parties' minds at the time of the settlement, and therefore more difficult to say that - in the absence of any express reference to them - the Final Account Agreement encompassed such defects, although even there I acknowledge Ms Cheng's point that the Final Account Agreement expressly encompassed events which "could arise in the future".
28. But, for the purposes of the Preliminary Issues, it is unnecessary for me to decide that point. As I said during the argument, it is never wise for a judge to make findings as to the scope of a compromise agreement which may go outside the particular issues which have been pleaded by the parties. In this case, what matters is whether the defects described in such skeletal terms in the Defence and Counterclaim, and set out in paragraph 23 above, could be said to be defects which were or could have been identified in December 2008, and were therefore patent defects.
29. From the descriptions of those defects as pleaded, it seems to me clear that they are patent defects. Indeed, many of them are within the Items expressly identified in paragraph 5A of the Final Summary: Glazing and the Health and Safety Files, to take two examples, are expressly referred to in the Final Summary. There is nothing to indicate that the other pleaded defects are not either within the non-exhaustive list in paragraph 5A or within the very general words of paragraph 5B of the Final Summary. They appear to be snagging items or items which were, or could have been, seen well before the Final Account Agreement. The alleged imperfections in the cladding, poor quality flooring, and columns out of true – to take just three examples from the pleaded allegations – would plainly have been apparent at the time of Practical Completion, over two years ago. The pleaded items are therefore patent defects and caught foursquare by the Final Account Agreement.
30. I should add that, in the circumstances, Roswin's pleading of the defects is significantly deficient. They knew or should have known that what was going to matter was whether these defects fell within the Final Account Agreement and that, in turn, this debate was likely to require an analysis of these items by reference to paragraphs 5A and 5B of the Final Summary, and/or an explanation of how and when the pleaded defects first came to light. No such case is pleaded. This appears to be consistent with Roswin's fallacious stance that they could raise these matters as of right, notwithstanding the terms of the Final Account Agreement. That was a high-risk strategy because, as I have found, they were not so entitled. There is no other case advanced which on its face, would suggest that these pleaded defects fell outside the agreed Final Account Summary.

7. ANSWERS TO PRELIMINARY ISSUES

1.1. Did the agreement effect a full and final settlement of any claims that the Defendant may have had against the Claimant, as alleged in sub-paragraph 3.8 of the Particulars of Claim?

31. The Final Account Agreement effected a full and final settlement of all claims and cross-claims. The only possible exception to that would be a claim by the defendant, Roswin, for latent defects. However, no such claim is set out in the current Defence and Counterclaim.

1.2. Did the agreement instead fail to displace the terms of the Contract with respect to payment and the Final Account and/or have the effect only that the sum of £3,144,0445 was agreed to be the contract sum?

32. No. The Final Account Agreement was in accordance with clause 30.5 of the contract and meant that no further steps in relation to clause 30.5 were necessary or appropriate.

Did the agreement relive the Claimant of liability for defects in its performance of the contract, or otherwise preclude the defendant from raising those defects by way of a set off or counter-claim?

33. The agreement relived the claimant, YJL, of liability for all defects that were either identified or were reasonably capable of being identified as at December 2008. That would include all the matters pleaded at paragraphs 37 and 38 of the Defence and Counterclaim. I leave open the question as to whether the Agreement also encompassed a settlement in respect of any liability for latent defects. No such latent defects have been pleaded in the Defence and Counterclaim, so the issue does not arise.

Did the agreement oblige the defendant to make payment as alleged and if so, in what amount?

34. Yes. The Final Account Agreement obliged Roswin to pay to YJL the balance due of £136,395.60.

Or was no sum payable there under?

35. The sum of £136,395.60 was payable for the reasons I have indicated.

8. CPR Part 24/Striking Out

36. It seems to me that the parties agreed in December 2008 that YJL would be paid by Roswin the sum of £136,395.60. Roswin are in breach of contract for failing to pay that sum. But for the matters dealt with in Sections 9 and 10 below, I would have ordered Roswin to pay that sum pursuant to CPR Part 24.
37. For the reasons I have given, I do not regard the matters raised by way of defects as giving rise to an arguable defence of set off. Indeed, in this regard, I notice that Roswin have not even bothered to identify any figure that might be said to be recoverable in respect of the defective work, despite the fact that the Final Account was agreed a year ago. Again, therefore, subject to Sections 9 and 10 below, I would strike out the entirety of the Defence and Counterclaim.

9. EVENTS LEADING UP TO TODAY'S HEARING

38. Yesterday afternoon, YJL and the court were provided with a letter written by Mr Barnes, the defendant's solicitor. This raised two matters. The first, about which YJL had had no prior warning whatsoever, was the suggestion that, as long ago as September, the directors of Roswin, Mr Rosenblatt and Ms MacLeod, had applied under s. 652A of the Companies Act 1985 to strike Roswin off the company register, and that this occurred two days ago, on 1^st December 2009. The second point raised, and allegedly supported by way of a statement of Mr Jeremy Middleton, another of Roswin's agents, was to the effect that the whole claim had been compromised in mid-November in the sum of £130,000. I deal with each of these new points in turn below.
39. As to the alleged dissolution of the defendant company Roswin, there are no documents at all which make good this assertion: no application, no supporting documents, no order by the registrar have been provided to the court. In addition, as Ms Cheng points out, any application to strike off, and therefore any decision made on the basis of such an application, may well be invalid. There are two reasons for this.
40. First, it appears that Roswin failed to notify YJL of the application, in breach of s. 652B(6) of the 1985 Act. In addition, on the face of it Ms Cheng is right to say that the application should never have been made because, pursuant to s.652B(1)(d), those making the application had been engaged in activity relating to the company, namely the pursuit of these proceedings, in the 3 months before the alleged application.
41. The underhand way in which two solicitors, Mr Rosenblatt and Ms MacLeod, have apparently gone about the dissolution of Roswin, without at any stage notifying either YJL or the court, seems to me to be lamentable. It is not conduct that I would have expected of solicitors of the Supreme Court. Given the absence of any evidence of the alleged dissolution, and the serious question marks raised about the legitimacy of any such dissolution, it seems to me that this is not a matter which I can usefully address further. It certainly does not make any difference to the orders that I propose to make.
42. The other issue is the question of settlement. It appears to be common ground that a global figure of £130,000 was agreed between the parties. However, there is a dispute as to whether this gave rise to an effective compromise. Among other things, YJL contend that the parties were agreed that the compromise needed to be recorded in writing, and, despite negotiations, no agreed document has ever been concluded. This, of course, gives rise to the age-old argument as to whether the requirement for a written agreement was a term or condition, the absence of which would mean that there was no binding agreement, or whether the reference to a document was merely a joint expression of desire as to form: see Van Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284 at 288, and, more recently, Bishop v Berkshire Health Authority [1999] PIQR P92.
43. Having taken instructions, Ms Cheng told me that, beyond noting that, on any view, the sum of £130,000 must be due to YJL in any event, she was not in a position to deal with the alleged compromise of November 2009.

10. CONSEQUENTIAL ORDERS

44. Accordingly, it seems to me that the position is this. I have found that – absent the point about the alleged compromise of November 2009 - YJL are entitled to the sum sought and that the Defence and Counterclaim based on the alleged defects must be struck out. I have also found that the alleged dissolution of the defendant company can make no difference to the order I make today, for the reasons explained above.
45. I am unable to give summary judgment for the sum sought of £136,395.60, because a defence has been raised to the effect that not more than £130,000 is due and payable. Through no fault of her own, Ms Cheng is not in a position to deal with that defence. Accordingly, the right order is for an interim payment in the sum of £130,000 - the alleged amount agreed by way of compromise - to be paid within 14 days by Roswin to YJL. This order is made under r25.7(1)(a) – the £130,000 having been admitted – and/or r25.7(1)(c) – the court being satisfied that, for the reasons given, YJL will recover at least this sum at trial.
46. Beyond that, I urge the parties to resolve their differences. If they cannot, then Roswin will need to amend their Defence and Counterclaim by deleting the present document and adding the defence of compromise in the sum of £130,000. YJL will need to serve a reply. The only remaining issue would then be whether YJL are entitled to more than £130,000 (which in this case would be the additional £6,395.60, together with interest on the full amount, and their costs), or whether the entirety of their claims have been settled in the sum of £130,000. That debate, however, is for another day.