The scope of a settlement agreement

In Point West London Ltd v Mivan Ltd [2012] EWHC 1223 (TCC), [2012] All ER (D) 91 (Jun) Mr Justice Ramsay held that, as a matter of interpretation, a settlement agreement concluded between the claimant developer and the defendant contractor had been intended to bring to an end the defendant’s responsibilities and obligations in respect of any and all outstanding matters, including defects which were patent in the work carried out by the defendant at the date of entry into the agreement so that the agreement covered all outstanding payment matters and outstanding defects in all of the defendant’s works. He therefore held that the defendant was entitled to a declaration that, in essence, the settlement agreement precluded the claimant from seeking damages or specific performance in respect of the defects in respect of which the claimant brought the present proceedings.

The facts

The claimant, Point West Ltd, sought a declaration as to the scope of a settlement agreement entered into with the defendant, Mivan Ltd, and in particular the impact of the agreement on the defendant’s liability for defects in the works. The claimant was the developer on a development now known as Point West. The defendant was employed by the claimant as the building contractor in respect of Phase 4 of the works which consisted of the design and construction of a marketing suite, sky lobby and 48 apartments. The contract was entered on 22 August 2000 and incorporated the JCT Standard Form of Building Contract with Contractors’ Design (1998 edition). The original contract sum exceeded £10 million and included £750,000 in respect of the fit out works to the penthouse flat on floors 16, 17 and 18 (known as ‘flat 1601’).