Bracken v Billinghurst

The homeowners' acceptance of the cheque tendered by the contractor's company in full and final settlement of the homeowners' claims against the contractor constituted a compromise of the homeowners' claims
 
BRACKEN v BILLINGHURST

Technology and Construction Court
His Honour Judge David Wilcox
10 June 2003
 

Adjudicators awarded the homeowners specified sums in respect of their claims against the contractor. One of the homeowners wrote to the contractor and offered to discontinue the case in return for payment by the contractor of a lesser sum than the sums awarded by the adjudicators. A week later the homeowner wrote to the contractor’s solicitors expressing the hope that the contractor would agree to the figure he had offered to the contractor direct and stating that the response to the offer should be given by a specified date. The solicitors in their response made it clear that they acted for the contractor’s company (rather than the contractor himself). The solicitors stated in their response that the contractor’s company was not prepared to pay the sum offered by the homeowner and instead made a counter offer in a smaller sum in full and final settlement of all issues and sent the homeowner a cheque in that (smaller) sum. Some three weeks later the homeowner presented the cheque for payment. Two days after the cheque had been cleared for payment, the homeowner wrote to the contractor stating that he withdrew all previous offers of settlement on the basis that he was entitled to the full amount awarded by the adjudicators. The homeowners instituted court proceedings against the contractor and applied for summary judgment in respect of the balance of the amounts awarded (having taken account of the amount of the cheque).

 

Judge Wilcox held that the contractor had a complete defence to the homeowners’ application for summary judgment. This was on the basis that the tendering of that cheque represented a (counter) offer of compromise made by a third party (the contractor’s company) and that the encashment of that cheque by constituted the clearest acceptance of that offer by the homeowners. The counter offer admitted of only one construction, ie that it was an offer of compromise made by the contractor’s company which clearly accepted by the homeowners. 

 

Advice Note

The general rule is that an adjudicator’s decision will be enforced by the courts. However, this general rule is displaced where, as in the instant case, the claimant accepts an offer to pay a lesser sum with the result that there is a valid compromise.