Think before you sign – Enforcing Settlement Agreements

Point West –v- Mivan (2012) CILL.TCC, Ramsey J

Point West was the developer of a site at Cromwell Road in West London.  Mivan was the main contractor.  The works were concluded but there were “patent” defects in the curtain walling system and in the heating and cooling system.  Mivan proposed a settlement by letter offering to accept a further payment of £50,000 in “full and final settlement in respect of the above works…this final agreement concludes Mivan’s responsibilities and obligations in respect of their works”.  Point West accepted this subject to Mivan agreeing to help Point West in a dispute with the purchaser of part of the development which Mivan agreed to.  Four years later Point West sued Mivan for alleged serious defects in the curtain walling and heating and cooling system.  They argued that they had not originally appreciated how serious the defects were.

HELD:

Both parties knew when the deal was done that there were problems even though neither knew the full extent of those problems.  Those problems were therefore covered by the settlement terms and Mivan had no further liability in respect of them.

Comment

Point West clearly did not appreciate just what it was signing away.  Legal or commercial advice would have been helpful to it.  Generally the Court will interpret a contractual agreement – such as a settlement agreement – from the plain meaning of the words on their face.

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