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The Requirements Of A Settlement Agreement

One of the roles of a solicitor is to ensure that agreements between parties are properly documented, both to provide a record of what has been agreed and to ensure that an agreement is legally binding. Whether or not an agreement has not been recorded in this way, clients will often assume that it has been. This is why solicitors have a duty to ensure that agreements are documented legally as soon as possible after a settlement has been reach - and if this is not done to explain to their clients the nature of the agreement that has been reached. The case of David Frost v Wake Smith & Tofields Solicitors [2013] EWCA Civ 1960 highlights this very effectively.The factsThe case involved two brothers who had been in business together for many years but whose relationships had broken down. As a result, a complex mix of business interests, predominantly property and management, needed to be separated. Both brothers had legal representation and mediation was undertaken during which agreement was reached. One of the brothers’ solicitors was left to record what had been agreed during the mediation and this was later signed by the two brothers.Agreement not legally bindingHowever, the document that had been signed was not a legally binding document, principally because it contained a number of uncertainties and there were elements of the document that had yet to be finished, for example a lack of description of certain properties caught up in the business and an insufficient dealing with the tax implications. In addition, a company that was jointly owned by the two brothers and which had been set up as the legal owner of a number of the properties mentioned in the agreement, was not a party to the agreement. For these reasons – and more – the agreement was not sufficient to meet the demands of the Law of Property (Miscellaneous Provisions) Act 1989 and so was not legally enforceable. Despite this, both brothers left the mediation assuming they had signed a legally binding document. When one brother highlighted some of the incomplete issues at a later date a second mediation was sought.A charge of negligence?Subsequently, the solicitor who was charged with recording the results of the first mediation was charged with negligence for not creating a legally binding agreement after the first mediation. Both the court of first instance and the Court of Appeal agreed that there was no duty on the solicitor to create the legally binding agreement and that it would have been impossible in the circumstances, given the enormously complex matters at play and the fact that at that stage the brothers hadn’t yet reached agreement on certain issues. However, despite this the Court of Appeal made it quite clear that it would be part of a solicitor’s duty to advise a client that a document agreed was not legally enforceable but only an agreement in principle.To Note: where it is possible to reach agreement, this should be documented in legally binding form as soon as possible after the mediation. Where it is not, then clients should always be informed by their solicitors that a legally binding agreement has not been reached and make it clear that further work will be required to reach it.If you would like legal advice about any of these issues, or any other issues relating to settlement agreements, please contact San Chima at +44 (0) 207 790 2000 or This email address is being protected from spambots. You need JavaScript enabled to view it.
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Striking Out Family Proceedings

You are no doubt aware that a number of legal proceedings result in trials or full hearings. However, there are also numerous other ways in which the court can deal with claims and applications. In particular, a claim or application may come to an end when one party’s statement of case is “struck out”. The power to strike out a statement of case in family proceedings has recently been discussed in Vince v Wyatt, focussing on how a delay may affect the court’s approach.Procedure rulesWhen you bring a claim in the civil courts, there are a number of ways with which that claim could be dealt. One obvious route is for the claim to be defended and proceed to trial. However, if the claim is not defended, the claimant may apply for a default judgment. In addition, either party may apply for the other party’s statement of case to be struck out, or for the court to give a summary judgment.The multitude of routes by which the court can deal with a case is set out in the Civil Procedure Rules (“the CPR”). The CPR give the court extensive case management powers in order to achieve the overriding objective of “enabling the court to deal with cases justly and at proportionate cost”.Clearly it is not appropriate for all of the case management options to be translated from civil cases into family proceedings. Therefore, the family courts are governed by the Family Procedure Rules (“the FPR”). However, in 2010, a new power was introduced into the FPR, allowing the court to strike out a statement of case.Power to strike outA statement of case is a written document that discloses the details of the claim or application being made, or a defence to such a claim or application. The power to strike out a statement of case means the power to prevent a party from relying on their statement of case. Under rule 4.4 of the FPR, the court has four heads under which it may strike out a statement of case: (a) if it discloses “no reasonable grounds” for bringing or defending the application, (b) if it is an abuse of the court's process, (c) if the other party has failed to comply with a rule, practice direction or court order and, in some instances, (d) if the parties consent.Vince v WyattIn Vince v Wyatt, the Court of Appeal considered a case in which Ms Wyatt had made a claim for a financial remedy, but Mr Vince had applied to have her statement of case struck out because (a) it disclosed no reasonable grounds and (b) it was an abuse of the court’s process.The facts of the case were exceptional in that the parties had been married in 1981, separated in 1984, and divorced in 1992, but Ms Wyatt had only brought her claim in 2011, some 19 years later. The trigger for the claim appeared to be that, in 1996, Mr Vince had founded a company now valued at £90 million.Although the court initially refused to strike out the statement of case, the Court Appeal agreed to do so, stating that the judge at first instance “had to… exercise his case management powers not just to protect against the greater prejudice but also to husband the resources of the court”.Therefore, the court may seek to use its power to strike out in order to best apportion the courts resources, refusing to incur the cost of long stretches of court time. In particular, the court may be quick to strike out claims in order to prevent a party from being “harassed by claims for financial relief which (a) are issued many years after the divorce and (b) have no real prospect of success”.If you would like advice about bringing or defending a family claim, or about any other area of family law, please contact San Chima at This email address is being protected from spambots. You need JavaScript enabled to view it.
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What is a fixture?

If you are buying or selling a property, especially if it is a commercial property, you would be well advised to pay close attention to a recent case in the High Court concerning the nature of items in a steel plant. The nature of these items - whether they are fixtures or fittings (otherwise known as “chattels”) - affects whether they are sold with the property or not. Therefore, especially in the case of commercial items, the value of the property can be greatly increased if the items on the land are deemed to be fixtures.Fixtures or fittingsAccording to the Law of Property Act 1925, a property is sold inclusive of “all outhouses, erections, fixtures, cellars, areas, courts, courtyards, cisterns, sewers, gutters, drains, ways, passages, lights, watercourses, liberties, privileges, easements, rights, and advantages”. Some of these items are easy to identify (e.g. gutters), but others are more complex. In particular, the courts have be left to interpret the meaning of “fixtures”, which are sold with the property, as opposed to fittings, which are not.GuidelinesThe courts have built up general guidelines to help distinguish between fixtures and fittings. The main principle is to establish the intention of the person who brought the items onto the land. In order to judge this intention, the court will have regard to (i) the degree of attachment to land, and (ii) the purpose of attachment. Fixtures are those items that are more firmly attached to the property, generally being added in order to enhance the property and intended to remain when the property is sold.Peel Land and Property v TS Sheerness SteelIn a recent case, the High Court gave some further guidelines about what may or may not be considered a fixture. Mr Justice Morgan set out a series of questions that should be addressed: What is the physical extent of the item to be considered? Can the item be physically severed and, if so, with what degree of difficulty? What is the effect of severance of the item on the premises which remain and is that effect remediable? What is the effect of severance of the item on the item itself and is that effect remediable? Does the item when severed retain its essential character and utility?By asking these questions, the judge decided that cranes running on rails were fittings, whereas the rails they ran on were fixtures. One key feature was that the cranes could be lifted intact from the rails, without damage to themselves or the land. Although this would take two to four days at a cost of around £10,000 for each small crane, or up to £25,000 for a large crane, the judge held that “the fact that the item is bulky and awkward and that the exercise of severance is complex” does not necessarily mean that it is a fixture.If you would like legal advice about any of these issues, or any other issues relating to property disputes, please contact San Chima at This email address is being protected from spambots. You need JavaScript enabled to view it.
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Habitual Residence

“Habitual residence” is not intended to be a term of art, or a specific legal concept, but simply to describe a person who is resident, rather than merely present, and is so habitually, rather than just temporarily. The term appears in section 3 of the Family Law Act 1986 (“the 1986 Act”), which places constraints on the powers of the courts.Statutory constraintsUnder the Children Act 1989 (“the 1989 Act”), the court can make a “Part I order” in relation to, for example, contact with or residence of a child. The High Court also has inherent jurisdiction to declare a child a “ward of the court”. This power, known as parens patriae, allows the court to act on behalf of vulnerable adults and children by putting them under the guardianship of the court.However, in some circumstances the 1986 Act limits both the court’s power to make a Part I order under the 1989 Act, and its inherent jurisdiction which “gives care of a child to any person, or provides for contact with, or the education of, a child,” to cases where the child is “habitually resident” in England and Wales. Therefore, the court’s interpretation of “habitual residence” can be crucial in some family proceedings.Supreme Court judgmentOn 9 September 2013, the Supreme Court gave judgment in a case in which the mother sought the return of her four children from Pakistan. The elder three children were born in England between 2001 and 2005. However, in 2008, the mother moved into a refuge complaining of abuse. In 2009, she and her three children visited Pakistan where she was pressurised to reconcile with her estranged husband. She subsequently became pregnant and, despite wishing to return to England, gave birth to her fourth child in Pakistan in 2010.It is this fourth child that was the subject of the Supreme Court’s judgment. Having finally travelled to England without her children in 2011, the mother applied for her children to be returned to her. At first instance, the High Court made the relevant order, holding that all four children were habitually resident in England. There was no issue with the elder three children, all of whom have dual British-Pakistani nationality, but the father appealed the decision in relation to the youngest, who has never stepped foot on English soil.The Supreme Court held, by a majority of four to one, that the youngest was not habitually resident for this very reason, stating: “It is one thing to say that a person can remain habitually resident in a country from which he is temporarily absent. It is another thing to say that a person can acquire a habitual residence without ever setting foot in a country.”However, the Supreme Court decided that the High Court still had jurisdiction to order the return of the youngest child, even though he was not habitually resident in England and Wales. Therefore, the case was remitted to the High Court for a decision on whether or not to should exercise this jurisdiction.If you would like advice about this issue, or about any other area law, please contact San Chima at This email address is being protected from spambots. You need JavaScript enabled to view it.. Save
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Forming a Contract

People make promises every day, and such agreements form the basis of contract law. A contract is, simply, a legally binding agreement and, through years of case law, the courts have established guidelines specifying which agreements are binding, and which are not. In a recent case in the High Court, set out below, emphasises the importance of observing these rules when considering whether or not to bring a contractual claim.What is a contract?In order to form a contract - a legally binding agreement - you need to have two key elements: an offer and an acceptance. Analysing these two elements is the first step in establishing whether or not you have entered into a contract.A common area of dispute is over the terms of the contract. Any acceptance must be on the same terms as the offer that has been made: you cannot be talking at cross-purposes. The terms of an offer are usually relatively clear in written contracts. However, contracts can also be formed orally, which is often when disagreements over the terms arise.White v Parton and othersIn a recent High Court case, the well-known celebrity chef, Marco Pierre White, brought a contractual claim against the Yew Tree Inn, a gourmet pub in Berkshire, and two of its directors, Messrs Parton and Featherman. The dispute concerned whether or not a contract had been made and, if so, on what terms.Mr White, who has trained chefs such as Gordon Ramsey, alleged that he made an oral contract with the directors on 9 November 2007. He stated that one of the terms of that contract was that he would gain a 38 per cent interest in a new company set up to run the Yew Tree Inn. However, he claimed that he never received these shares, which amount to £174,000.By contrast, the directors accepted that they had agreed to give Mr White an interest in the new company, but claimed that this was in return for the use of “his name over the door”. They contended that, although the pub had been called “Marco Pierre White’s Yew Tree Inn” until 2010, Mr White had then withdrawn the company’s right to use his name.The judge, Mr Justice Morgan, dismissed Mr White’s claim. He agreed with Mr White that there was no contract in relation to the use of his name, but that therefore there was no contract in relation to the 38 per cent interest in the company. The judge stated that: “if there was no contract as to an essential part of the plan it cannot seriously be said that there was a contract as to any part of the plan.”Mr White’s claim was not helped by the fact that he changed his case on numerous occasions. He did not mention the use of his name in his written pleadings, then stated that there was a separate contract in relation to his name in his witness statement, but in cross-examination he appeared to agree with the directors.This case comes as a warning to those seeking to exaggerate their contractual rights. The judge gave Mr White 14 days to pay the first £240,000 of a likely £500,000 in legal costs, saying, “I think that it is not a bad thing for Mr White to face up to the consequences of his actions.”If you would like advice about forming a contract or bringing a contractual claim, or any other area of contract law, please contact Salim Mansoor at This email address is being protected from spambots. You need JavaScript enabled to view it.. Save
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