The High Court yesterday handed down judgment in JMW Solicitors LLP & Others v Injury Lawyers 4U & Others [2024] EWHC 3103 (Ch), a reverse summary judgment application on a shareholder dispute.
David Lascelles acted for the successful Defendants (instructed by John Lord and Harry Wells of Horwich Farrelly).
The following points may be of particular interest to practitioners:
1. An entire agreement clause can defeat a claim of estoppel based upon a pre-contractual representation and/or some other assumption said to exist at the time of entering the contract containing such a clause. Where reliance is placed on post-contractual representations or conduct then the entire agreement clause will not bite but a non-oral modification clause may still prevent reliance upon an estoppel unless there are some words or conduct unequivocally representing that the variation was valid notwithstanding its informality. In so deciding, the Judge reconciled apparently conflicting decisions on whether an entire agreement clause can defeat an estoppel claim. See [93] – [96].
2. When drafting an entire agreement clause which is intended to have the effect of ensuring that the agreement supersedes an earlier contract it is best to spell this out. The shareholders’ agreement did so here with the result that the Claimant’s claims under an earlier shareholders’ agreement were found to be hopeless: – see [69] – [74]. (The position may be contrasted with a High Court decision from November 2024, Capgemini UK Plc v Dassault Systems UK Limited [2024] EWHC 2728 (Comm) (cited to the Judge in JMW), where the Court had declined to order summary judgment based on an entire agreement clause, finding that such clauses more commonly take effect as extinguishing an alleged collateral agreement rather than an admittedly binding previous contract between the parties).
3. Even aside from any entire agreement clause, where parties contemplate that their agreement will be reduced to a lengthy written agreement, drafted and advised on by lawyers, and formally executed, there is a strong presumption that the parties do not intend to be bound by anything not recorded in their written agreement. If there is no such objective intention, then not just a collateral warranty but also any estoppel by convention claim will fail. See [84] – [88].
4. If a claimant faces a summary judgment application on contractual construction but wishes to raise an (as yet un-pleaded) rectification claim, the claimant should apply to amend (or at a minimum provide a draft amended pleading) rather than simply raising the argument in its evidence and skeleton argument. Otherwise, they run the risk that the summary judgment will simply be granted: – [76]. (On the facts the Judge held the rectification claim would in any event have been bound to fail).
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