The claimant had retained the defendant as architect in connection with certain construction works that the claimant wished to be carried out at his property. Before the works were completed certain disputes arose between the two parties. The claimant instructed solicitors who wrote a letter of claim to the defendant particularising the claimant鈥檚 failure to administer the building contract with due care and skill. In particular it was alleged that there were failures in respect of a variation in colour consistency of the mortar and an extremely poor standard of workmanship in most of the bricklaying and pointing.
The defendant鈥檚 solicitor responded with a general denial accompanied by a part 36 offer, offering payment of 拢35,000.00 in full and final settlement of all claims made by the claimant inclusive of costs and interest. The claimant accepted this offer in 鈥渇ull and final settlement of all claims made by our client (inclusive of interest and costs)鈥�.
Two years later the claimant鈥檚 solicitor again wrote to the defendant with a second detailed letter of claim, alleging claims that were different to the previous claim. The letter stated, among other things, that the claimant had discovered that the limestone mortar used in the brick walls was unsuitable and should not have been approved by the defendant.
The defendant鈥檚 solicitor rejected the claim on the basis that the condition of the brickwork and mortar was known to the claimant at the time of the settlement and therefore the matters had been settled.
The issue was whether the matters raised in the second claim had already been settled. The defendant contended that they had and sought to strike out the claimant鈥檚 case as disclosing no reasonable cause of action or alternatively as an abuse of process.
Reference
The court held that the words 鈥渁ll claims made鈥� were not, as one might expect them to be, expressed to be in full and final settlement of all claims whatsoever which either party had or may have had against each other. Further, the words were not expressed in any of the other formulae that lawyers use when seeking to give effect to an intention by the parties to finally resolve all present and future disputes between them.
鈥淎ll claims made鈥� referred to those claims which had actually been made rather than to potential claims which might have occurred had the claimant instructed an expert and conducted some exercise into what potential problems might arise in the future.
The court further held that while there was some familiarity in the wording between the two claims they were in substance distinct and different claims.
With regard to abuse of process, this had no application to claims which were not included in the compromise and which did not become known until much later. A layman could not be expected to dig around and spend money on claims which had not occurred to him in order to avoid a claim of abuse of process later.
For those reasons the court rejected the application.
Full case details: Carlo Mantegazza & Another vs Neil Holland Architects Ltd and Another, TCC, Judge Mackie QC [2006] EWHC 2133 (TCC)
Contact Fenwick Elliott on 020 7421 1986 or NGould@fenwickelliott.co.uk
Postscript
This case serves as a useful reminder that is important that when compromising a claim both parties are clear on exactly what is being compromised and that the wording used reflects the intention of the parties. If the intention is to compromise future claims then words to that effect should be used.
