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Cite as: [2013] EWHC 2180 (QB)

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Neutral Citation Number: [2013] EWHC 2180 (QB)
Case No: TLQ/12/1293

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL
22/07/2013

B e f o r e :

MR JUSTICE LEWIS
____________________

Between:
MR MALCOLM NEWBURY
Claimant
- and -

SUN MICROSYSTEMS
Defendant

____________________

Edward Knight (instructed by Karslakes) for the Claimant
David Reade QC (instructed by Paul Hastings) for the Defendant

Hearing dates: 15th July 2013

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Mr Justice Lewis :

  1. This is an application for a declaration that a claim and counter-claim were compromised on the terms set out in correspondence dated 3 June 2013. In essence, the Claimant says that a binding agreement was reached when the Defendant offered to settle on certain terms and those terms were accepted by letter of 3 June 2013. The Defendant says that their letter made an offer in principle, that the parties still had to negotiate other terms and conditions and that, in any event, any settlement was to be recorded in a suitably worded agreement and, until such a written agreement was reached, there was no binding contract.
  2. THE FACTS

  3. By way of background, the Claimant had issued a claim for contractual commission in the sum of US $2,028,760 that he said he was entitled to in relation to the financial year which ended on 30 June 2009. The Defendant counterclaimed for recovery of an alleged overpayment. Proceedings were issued in June 2011 and the trial was set down for 8 days to commence on the 12 June 2013.
  4. On 3 June 2013, solicitors for the Defendant wrote to the Claimant's solicitors. The opening paragraph stated that the solicitors had taken their client's instructions and the letter set out their client's final position. The letter then dealt with the evidence on two of the matters that were contested between the parties in the proceedings. The letter then said this:
  5. "Terms of the Offer
    To reach a compromise between the parties, our client has agreed to make a further offer of settlement to the Claimant. The offer reflects the strength of its evidence on the QBM but does not seek to place a discount on the Claimant's assertion of revenue of $173 million.
    Our client is willing to settle the entire proceedings by paying the Claimant within 14 days of accepting this offer, the sum of 601,464.98 (the "Settlement Sum") inclusive of interest by way of damages, by means of an electronic transfer into his nominated bank account, in full and final settlement of the Claim and counter-claim plus the sum of 180,000 in relation to his legal costs such settlement to be recorded in a suitably worded agreement.
    This offer is open for acceptance until 5pm this evening after which it will be automatically withdrawn without further notice to you."
  6. The parties agreed to extend the time for acceptance to 5.30 p.m. At 5.21 p.m., solicitors for the Claimant e-mailed a letter to the Defendant's solicitors. The letter, marked without prejudice save as to costs, said this:
  7. "We thank you for your letter dated 03 June 2013.
    We are instructed that the Claimant accepts the terms of your client's offer, being payment of the Settlement Sum of 601,464.98 plus 180,000.00 in relation to his legal costs.
    We will forward a draft agreement for your approval on Tuesday 04 June."
  8. On 4 June 2013, according to the witness statement of Ms Horne, the solicitor for the Defendant, there was a telephone call between her and the solicitor for the Claimant. She said that she was pulling a settlement agreement together. The Claimant's solicitor said he was working on that with counsel. Ms Horne said that they would need to cover off the issue of Oracle. I was told that Oracle was the parent company or owner of the Defendant and that the reference was intended to ensure that the agreement recorded that full and final settlement of the claim precluded any prospect of pursuing the claim against the parent company. There is no reference in Ms Horne's witness statement to any discussion during that telephone call of other matters needing to be dealt with or agreed.
  9. On 5 June 2013, the Claimant's sent a letter, again marked without prejudice save as to costs, which said this:
  10. "Further to our exchange of correspondence on 03 June 2013, we attach for your approval draft Order in Tomlin form recording the terms agreed. Please confirm your approval of the Order by signing and returning the same, by email in the first instance. Alternatively please revert with your proposed alterations or amendments for agreement."
  11. Attached to the letter was a draft Order recording that the proceedings in the claim were stayed save for the purpose of carrying the terms into effect and stating that the Defendant was to pay to the Claimant his costs in the agreed sum of 180,000. The schedule to the order first set out the sum, 601,464.98, to be paid to the Claimant, secondly it said that the Defendant would pay the sum of 180,000 in costs to the Claimant, thirdly it provided for transfer to be made of the sum 601.464.987 to the account of the Claimant by 5.30 p.m. on Monday 17 June 2103 and gave details of the account and fourthly it provided for payment of the 180,000 to be paid to the Claimant's solicitors and gave details of their account.
  12. There was a further e-mail at 11.41 on 5 June 2013 where the Claimant's solicitors referred to the draft Tomlin order and indicating that they wished to tell the Listing Office that the case had been settled and seeking the Defendant's agreement to that course of action. The Defendant's solicitor replied saying she had had the order for one and a half hours and needed time to review it properly and indicating that she thought it premature to notify the Listing Office. At 3 p.m., the Defendant's solicitor sent an e-mail to the Defendant's solicitor which said this:
  13. "Please see my preferred approach. I have discussed it with David Reade but I do need to take instructions this evening-particularly around payment timing. Can you possibly confirm this afternoon if the attached is acceptable or if you have any comments? Then I am hoping we can finalise and sign tomorrow morning."
  14. Attached to that was a draft order with amendments which did not contain any substantive terms but referred to the claim being stayed on the terms set out in a waiver deed. Also attached was a document entitled draft waiver agreement. That sought to provide for payment to be made within 14 days of date of the agreement. It dealt with the position in relation to taxation and national insurance contributions. It included an obligation on the Claimant not to discuss or divulge the existence or the contents of the order, the agreement or negotiations to any one, subject to certain exceptions.
  15. At 17.01, the solicitors for the Claimant replied, marking the reply as without prejudice, saying:
  16. "Dear Suzanne,
    The draft Tomlin Order records the terms of settlement as stated in your firm's letter dated 3 June 2013. With respect, the draft Consent Order and Deed of Waiver do not.
    Our client would agree to a Consent Order directing payment of the Settlement Sum as well as the agreed sum for Costs. Otherwise, your client is requested to agree the draft Tomlin Order as drawn."
  17. Ms Horne, the Defendant's solicitor replied at 17.10 on 5 June 2013 saying this:
  18. "Dear David,
    The offer made on 3 June states that the settlement was to be set out in a "suitably worded agreement". What I have sent across to you is such an agreement. We did not agree to an order where the schedule can be disclosed as a matter of public record or states that your client receives a contribution to his costs. The purpose of the structure is to keep the terms confidential. If your client has specific comments I am happy to consider them but otherwise these are the terms of the offer."
  19. The Claimant contends that a binding contract was entered into when the Claimant accepted the Defendant's offer by the letter timed at 17.21 p.m. on 3 June 2013. Those documents contain an agreement which was intended to bind the parties. The agreement was to be recorded in a suitably worded agreement, that is, in an agreement which reflected the agreed terms. The execution of such an agreement, however, was not a condition of the agreement coming into effect.
  20. The Defendant contends that a concluded agreement was not reached between the parties in the correspondence dated 3 June 2013. The Defendant says first, that their letter of 3 June 2013 was not an offer capable of acceptance, but was an offer seeking to resolve a dispute by indicating the figures they were prepared to agree. The letter was, however, agreement in principle only and depended on agreement on other matters. Alternatively, the Defendant contends that the offer was subject to execution of a suitably worded agreement and, until that agreement was reached, there was no binding agreement between the parties.
  21. THE LAW

  22. Subject to one point, the parties are agreed on the legal principles that govern the resolution of this dispute. These principles, derived from earlier authorities, are helpfully set out in the judgment of Males J. in Air Studios (Lyndhurst) Limited T/A Entertainment Group v Lombard North Central PLC [2012] EWHC 3162 (Q.B.) at paragraphs 5 to 12. They are as follows:
  23. "5. In deciding whether the parties have reached agreement, the whole course of the parties' negotiations must be considered and an objective test must be applied: Chitty on Contracts , 31st edition (2012), Vol 1, paras 2-028 and 2029. Once the parties have to all outward appearances agreed in the same terms on the same subject matter, usually by a process of offer and acceptance, a contract will have been formed. The subjective reservations of one party do not prevent the formation of a binding contract. Further, it is perfectly possible for the parties to conclude a binding contract, even though it is understood between them that a formal document recording or even adding to the terms agreed will need to be executed subsequently. Whether they do intend to be bound in such circumstances, or only as and when the formal document is executed, depends on an objective appraisal of their words and conduct.

    "6 These principles are well established. They were summarised, for example, by Lord Clarke giving the judgement of the Supreme Court in RTS Flexible Systems Ltd. V Molkerei Alois Muller GmbH [2010] UKSC 13, [2010] 1 WLR 735 at [45]:
    "The general principles are not in doubt. Whether there was a binding contract between the parties and if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. Even if certain terms of economic or other significance have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a precondition to a concluded and legally binding agreement."

    "7 Lord Clarke went on at [49] to set out the well known summary of the relevant principles by Lloyd LJ in Pagnan SpA v Feed Products Ltd. [1987] 2 Lloyd's Rep 601 at at 619, adding that the same principles apply where the question is whether a contract was concluded in correspondence as well as by oral communications and conduct:

    (1) In order to determine whether a contract has been concluded in the course of correspondence, one must first look to the correspondence as a whole

    (2) Even if the parties have reached agreement on all the terms of the proposed contract, nevertheless they may intend that the contract shall not become binding until some further condition has been fulfilled. That is the ordinary 'subject to contract' case.
    (3) Alternatively, they may intend that the contract shall not become binding until some further term or terms have been agreed

    (4) Conversely, the parties may intend to be bound forthwith even though there are further terms still to be agreed or some further formality to be fulfilled
    (5) If the parties fail to reach agreement on such further terms, the existing contract is not invalidated unless the failure to reach agreement on such further terms renders the contract as a whole unworkable or void for uncertainty.
    (6) It is sometimes said that the parties must agree on the essential terms and it is only matters of detail which can be left over. This may be misleading, since the word 'essential' in that context is ambiguous. If by 'essential' one means a term without which the contract cannot be enforced then the statement is true: the law cannot enforce an incomplete contract. If by 'essential' one means a term which the parties have agreed to be essential for the formation of a binding contract, then the statement is tautologous. If by 'essential' one means only a term which the Court regards as important as opposed to a term which the Court regards as less important or a matter of detail, the statement is untrue. It is for the parties to decide whether they wish to be bound and if so, by what terms, whether important or unimportant. It is the parties who are, in the memorable phrase coined by the Judge [at page 611] 'the masters of their contractual fate'. Of course the more important the term is the less likely it is that the parties will have left it for future decision. But there is no legal obstacle which stands in the way of the parties agreeing to be bound now while deferring important matters to be agreed later. It happens every day when parties enter into so-called 'heads of agreement'."

    "8 The fourth of these principles was already well established by the time of Parker J's judgment in Von Hatzfeld-Wildenburg v. Alexander [1912] 1 Ch 288 . Parker J said at 288:
    "It appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case, there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract. In the latter case, there is a binding contract and the reference to the more formal document may be ignored."
    " 9 I refer also to the helpful summary by Andrew Smith J in Bear Stearns Bank plc v Forum Global Equity Ltd. [2007] EWHC 1576 (Comm) at [171]:

    "The proper approach is, I think, to ask how a reasonable man, versed in the business, would have understood the exchanges between the parties. Nor is there any legal reason that the parties should not conclude a contract while intending later to reduce their contract to writing and expecting that the written document should contain more detailed definition of the parties' commitment than had previously been agreed."

    "10 More recently, this principle was applied by the Court of Appeal in Immingham Storage Company Ltd. v Clear Plc [2011] EWCA Civ 89, 135 Con LR 224. The facts there were particularly compelling in favour of a conclusion that the parties intended to be bound notwithstanding the contemplation that a formal contract would be signed in due course. The parties had reached express agreement in writing as to the application of one party's standard terms and conditions; certain subjects (board approval and tank availability) which had previously been stipulated had been lifted; the defendant had been expressly assured of the availability of the tank space in question and that it could now proceed to source its product; and the reference to a formal contract to be sent was stated to be in confirmation of what had been agreed. Giving the judgment of the court, David Richards J at [19] and [25] contrasted these factors with a case where agreement was stated to be subject to contract or subject to execution of a formal agreement and observed that they pointed overwhelmingly to an intention to create a contract. He added:
    "Set against those factors, the provision that a 'formal contract will then follow in due course' does not indicate that the claimant's acceptance of the signed quotation will be no more than an agreement subject to contract."
    "11 Of course, these facts were merely an example, albeit a particularly strong one, of a case falling on one side of the line. Each case will depend on its own facts.
    "12 Because the existence of a binding agreement needs to be determined objectively and does not depend on the parties' subjective state of mind, evidence from the parties about what they intended by or understood from their written communications is of little or no relevance. There was a certain amount of such evidence from the witnesses on both sides in this case, despite the fact that the objective nature of the question was common ground, but such evidence was of no real assistance when all of the parties' relevant exchanges were in writing. The evidence was, however, relevant in informing me of the background against which the parties' negotiations took place."

  24. The one point of dispute is that the Defendant contends that, in determining whether the letters of 3 June 2013 did give rise to a binding contract, the court is entitled to look at the conduct of the parties, and their communications, after that date. The Claimant contends that where it is alleged that certain written documents give rise to a binding agreement, the task of the court is to construe those documents to determine whether or not, objectively, those documents gave rise to a binding legal agreement. Conduct occurring after the date of those documents is not admissible to determine whether or not the documents, properly construed, gave rise to a binding contract. Such conduct may be relevant to whether or not there was a variation or new agreement or for the purpose of certain other exceptions but not for determining whether the documents constituted a binding agreement. I shall return to that issue.
  25. The Defendant also relies upon observations of the Chancellor at paragraph 25 of the judgment in Whithead Mann Limited v Cheverny Consulting Ltd. [2006] EWCA Civ 1303 that:
  26. "Obviously each case depends on its own facts but in my view, where as here, solicitors are involved on both sides, formal written agreements are to be produced and arrangements made for their execution the normal inference will be that the parties are not bound unless and until both of them sign the agreement. In a sense, this case is an a fortiori case in that on any view there are at least three agreements to be executed."
  27. That may be the normal inference in the circumstances described but, as the Chancellor observed, and as Mr Reade Q.C. for the Defendant accepts, ultimately each case turns upon its facts.
  28. DISCUSSION

  29. The factual background is that the parties were shortly due to begin an 8 day trial. There had been attempts at settlement previously but those attempts had not been successful as explained in paragraphs 4 to 6 of the witness statement of Ms Horne. Against that background, the Defendant's solicitors sent the letter of 3 June 2013. That was said to set out their client's final position. Under the heading "Terms of the Offer", the Defendant said that to reach a compromise, the client had agreed to make a further settlement offer.
  30. Reading the letter of 3 June 2013, and the reply from the Claimant's solicitor of later that day, I am satisfied that, viewed objectively, that correspondence did give rise to a binding legal contract between the parties. The terms of the contract were that the Defendant would pay certain sums to the Claimant in full and final settlement of the claim and counter-claim by a specified time. That agreement would be recorded in a suitably worded agreement, that is, one which reflected the terms of the agreement, but execution of that agreement was not a condition of the creation of a binding agreement but was simply intended to record more formally the contract that had been reached.
  31. I reach that conclusion for the following reasons. First, the letter of 3 June 2013 was expressed in terms of constituting an offer of settlement and set out the terms of that offer. Secondly, the offer was stated to be available for acceptance by a specified time. If accepted by that time, payment would be made within 14 days of the acceptance of that offer. Both those factors are, in my judgment, a clear indication that this letter was intended to be a binding offer capable of acceptance with certain legal consequences following from acceptance. The terms of the letter are not consistent with the Defendant's submission that their letter of 3 June 2013 was not, on its face, an offer capable of acceptance but was simply an offer indicating willingness in principle to consider settlement on the figures set out and subject to agreement on other matters.
  32. Thirdly, the letter refers to "such settlement to be recorded in a suitably worded agreement". The reference to "such" settlement is in my judgment a reference back to the terms set out in the earlier part of the paragraph. If the offer is accepted, the terms set out will constitute the terms of the settlement agreed between the parties. The reference to "such settlement" is not a reference to terms still to be negotiated and agreed. Fourthly, that conclusion is reinforced by the reference to the terms being "recorded" in a suitably worded agreement. Read objectively, the letter of 3 June 2013 offers to settle the claim on certain terms. If accepted, those terms will be "recorded" that is, they will be committed to writing as an authentic record of that which has already been agreed. The letter, in my judgment, therefore, constitutes a binding offer of settlement on certain terms which was accepted.
  33. Fifthly, the letter is not expressed to be "subject to contract". Had those words been used, it would have been clear that the terms were not yet binding or agreed until a formal contract was agreed. The Court of Appeal has held, and Mr Reade Q.C. for the Defendant accepts, that the absence of a reference to the words "subject to contract" may be significant: see paragraph 25 in Immingham Storage Company Ltd. v Clear plc [2010] EWHC 1085. The fact that the Defendant did not use those words in the letter is in my judgment a relevant factor. It indicates that the letter was an offer of terms capable of acceptance as it stood. It was not intended to be subject to discussion and agreement on additional or different terms.
  34. The offer and acceptance was to be recorded in a suitably worded agreement but execution of that suitably worded agreement was not a condition of the agreement. Rather, that was an expression of the wishes of the parties that there be a formal record of what had been agreed. I am satisfied that the reference to a suitably worded agreement, read in context, means an agreement which reflects the terms set out in the offer and accepted by the Claimant. I do not accept the Defendant's submission that the reference to a suitably worded agreement means an agreement on terms acceptable to each party (which could include changes to the terms, such as the payment date, referred to in the Defendant's solicitors' letter of 3 June 2013 or any additional terms which either of the parties wished to include in any agreement).
  35. For those reasons, in my judgment, the two letters of 3 June 2013, read objectively, do lead to the conclusion that they were intended to create legal relations and the parties had agreed upon all the terms which they regard as essential for the formation of a legally binding agreement. That conclusion is reinforced by, but is not dependent upon, the factual background against which those letters were exchanged. The parties were shortly due to start what would potentially be an expensive trial. Read against that background, the Defendant's solicitors' letter of 3 June 2013 is an attempt to reach a final compromise and therefore avoid the litigation. It was stated to be, and would be read as being, their client's final position. It would be read as being intended to bring about a "compromise between the parties", leading to full and final settlement of the claim and counter claim and to payment within 14 days of the acceptance, which acceptance had to be given by 5 p.m. on 3 June 2013 (although the time for agreement was, in fact, extended by agreement to 5.30 p.m. on 3 June 2013).
  36. The Defendant submitted that the essential question was whether or not the parties had reached agreement and that had to be assessed by looking at what Mr Reade Q.C. for the Defendant described as the totality of the progression of events including the communications passing backwards and forwards between the parties' legal representatives. Mr Knight for the Claimant contends that where the contract is said to be contained in written documents, the task of the court is to construe those documents to determine whether, objectively, they lead to the conclusion that the parties had entered into a binding contract.
  37. It is relevant to consider the purpose for which the Defendant says that the post-documentary evidence is admissible and relevant. The Defendant seeks to establish that the parties did not regard the correspondence of 3 June 2013 as giving rise to a binding agreement, but that the terms of any settlement still needed to be negotiated. The Defendant accepts that the subjective intention of the parties would not be relevant but contends that the question of whether, objectively, the parties had entered into a contract was to be determined by the totality of events not simply by reference to the documents said to amount to an agreement. Here, the Defendant contends, the parties' subsequent conduct demonstrates that they were still negotiating and had not reached a binding agreement.
  38. First, where a contract is said to be contained in a document or documents, I do not consider that it is legitimate to have regard to the parties' subsequent conduct for the purpose of considering whether those documents give rise to a binding agreement. In those circumstances, the question for the court will be whether, considering the whole course of events up to and including the documents in question, the parties, objectively, have reached agreement. That will involve consideration of the meaning of the documents viewed against the whole of the relevant background to the negotiations. But, as Males J. put it in the Air Studios case at para. 5, "Once the parties have to all outward appearances agreed in the same terms on the same subject matter, usually by a process of offer and acceptance, a contract will have been formed". Conduct after that date is not a legitimate aid in determining whether or not the parties had reached an agreement by that date. Such conduct may be relevant if it is said there is a variation or a new agreement or it is alleged that the contract is a sham or in other, limited, circumstances such as claims of estoppel. It may be that evidence of such conduct may be admissible and relevant if there is a dispute as to whether or not particular terms, not included in the written documents, were terms of the agreement. If the contract is oral, or partly in writing and partly oral, the parties' conduct may be relevant to test the evidence as to whether or not the terms were agreed or which terms were included. But where the contract is said to be contained in documents, conduct occurring after the date of the documents will not be a legitimate aid in determining whether, properly construed, those documents were intended to give rise to a binding contract.
  39. Secondly, in any event, evidence of post-contractual conduct is unlikely to have much, if any, significance where there is said to be a written contract, given that the essential question is whether, objectively, the documents demonstrate that the parties had entered into a binding agreement on the terms set out in those documents. The existence of a binding agreement needs to be determined objectively and does not depend on the subjective intent of one, or even both, parties. What the parties thought, or what it can be inferred they thought from their conduct, is, therefore, unlikely to have much, if any, significance to the question of whether, objectively, the documents demonstrate that the parties had reached a binding agreement.
  40. In those circumstances, I do not consider that evidence of the conduct of the parties after the 3 June 2013 is either legitimate, or would in any event, be of much assistance or significance, in determining whether or not the parties had reached a binding written agreement on 3 June 2013. For completeness, however, I have, however, considered the conduct occurring after 3 June 2013 to determine whether that conduct indicates that the agreement of 3 June 2013 was not a binding agreement.
  41. The Defendant relies, amongst other matters, upon the fact that the letter of the 3 June 2013 from the Claimant's solicitors, stating that the Claimant accepted the offer, was marked without prejudice save as to costs, as was a later e-mail dated 5 June 2013. The Defendant submits that the use of such words indicates that the parties considered that they were still negotiating and the terms are not agreed.
  42. Reading the two e-mails as a whole, they are, in my judgment, consistent with the view that the letters of 3 June 2013 constituted a binding agreement on the terms set out in the Defendant's offer letter of 3 June 2013. The letter of 3 June 2013 states that the Claimant is accepting the terms offered by the Defendant. It says it will include a draft agreement for approval. That is consistent with the letters of 3 June 2013 giving rise to a binding contract, and to the fact that the terms of the contract would need to be recorded in a formal contract. The e-mail of 5 June 2013 is also consistent with that view. The e-mail says that it is attaching a draft order in Tomlin form "recording the terms agreed". Terms were included albeit within a schedule to a Tomlin order rather than a separate document headed agreement, but the terms included only the terms in the offer letter. When the Defendant's solicitors produced a draft agreement on 5 June 2013, setting out their "preferred approach" (see their e-mail of 5 June 2013), which included a different payment date, and added terms relating to payment of tax and national insurance and a confidentiality obligation, the Claimant's solicitors wrote back stating that their draft Tomlin order recorded the terms of the settlement but that the Defendant's solicitors draft documents did not. That again is consistent with the 3 June 2013 letter being a binding agreement and is inconsistent with the suggestion that all the parties considered that they were still negotiating the terms of a settlement after 3 June 2013. Viewed as a whole, I do not consider that the use of the words without prejudice on certain of the correspondence indicates that both parties considered that they were still negotiating and the terms of an agreement had not been reached. Even if it were legitimate to rely upon subsequent conduct, the correspondence relied upon, read as a whole, does not support the Defendant's contention that both sides were still negotiating and had not reached agreement. The Claimant's conduct does not, in my judgment, demonstrate that both parties were still negotiating. So far as the Defendant is concerned, the principal conduct relied upon is said to be a reference by the Defendant's solicitor in a telephone call to ensuring that the issue of suing the parent company was dealt within the agreement and the fact that the Defendant did seek to change the terms relating to payment date and add other terms. That may or may not indicate what the Defendant's solicitors' subjective state of mind was. However, I do not consider that the evidence, taken as a whole does demonstrate that both parties were still negotiating terms after 3 June 2013. Even if subsequent conduct were relevant, therefore, I do not consider that that evidence alters the fact that, read objectively, the letters of 3 June 2013 do constitute a binding agreement.
  43. CONCLUSION

  44. In the circumstances, the letters of 3 June 2013 do, in my judgment, constitute a binding agreement settling the claim and counter claim and setting out the terms of that settlement. That settlement was to be recorded in a suitably worded agreement, that is, in a formal agreement which reflected the terms agreed by the acceptance of the offer of 3 June 2013. The settlement agreement was not conditional upon the execution of such an agreement. The offer and acceptance letters of 3 June 2013 themselves constituted a binding agreement. There will therefore be a declaration that the claim and counter-claim were compromised in the terms set out in the correspondence of 3 June 2013.


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