Mogens Alex Bastholm & Ors v Peveril Securities (Dalton Park Retail) Limited & Ors
[2023] EWHC 438 (Ch)
BL Goodman (General Partner) Limited v Morris Homes (Midlands) Limited
15 May 2024
[2024] EWHC 1129 (Ch)
High Court
Two companies had a contract dispute over a large sum of money. One company tried to force the other to use a complicated clause in the contract to settle it. The judge said the contract's wording on how to settle disputes was too confusing. So, the judge decided he would settle the dispute. The judge also decided that using a simpler process for this type of legal argument would be faster and cheaper.
Key Facts
- •BL Goodman (Claimant) and Morris Homes (Defendant) entered into a contract in 2013 concerning a residential development.
- •A dispute arose regarding the calculation of overage payments under Schedule 4 of the contract, exceeding £3m.
- •The dispute centers on the interpretation of three elements within the calculation process in Schedule 4.
- •The Claimant issued a Part 8 claim seeking a determination of the legal interpretation of these elements.
- •The Defendant challenged the court's jurisdiction, arguing the dispute falls under contractually agreed expert dispute resolution provisions in Schedule 4.
- •The Defendant also challenged the use of Part 8 proceedings.
Legal Principles
Presumption that agreed dispute resolution mechanisms prevail; party seeking departure must show good reason.
Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] 1 All ER 664 (HL)
Court should be slow to interfere with parties' choice of dispute resolution; stay usually granted unless strong grounds exist.
Cott UK Ltd v FE Barber Ltd [1997] 3 All ER 540
Where parties use unambiguous language, the court must apply it.
Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900
Issues of interpretation and construction fall within the broad scope of questions of law.
Finelvet AG v Vinava Shipping Co Ltd [1983] 1 WLR 1469; Stern Settlement Trustees v Levy [2007] EWHC 1187 (TCC)
Part 8 is a flexible procedure; transfer to Part 7 only if claim is unsuitable for Part 8.
Cathay Pacific Airlines Ltd v Lufthansa Tehnick AG [2019] EWHC 484 (Ch)
Outcomes
The court has jurisdiction; the dispute falls outside the scope of the expert determination provisions in Schedule 4.
The court preferred the Claimant's interpretation of Schedule 4, concluding that paragraph 4.6 explicitly carves out issues of law (including construction and interpretation) for court determination. The contract's dispute resolution clauses are not clear or unambiguous, creating a dispute about the dispute resolution process itself.
The claim should proceed as a Part 8 claim.
The court found no compelling reason to transfer to Part 7. The core dispute is one of legal interpretation, not fact, and there is no obvious prejudice to the Defendant. The Defendant's arguments for requiring factual or expert evidence were not persuasive.