Application to discharge

Placito v Slater and another CA TLR 29 January

In a compromise agreement, the claimant undertook not to commence proceedings after a certain date, but applied to the court for an extension of the last date specified for the commencement of the proceedings in his undertaking. The Court of Appeal dismissed his appeal from the decision of the judge refusing his application and striking out the claim he had brought in breach of the undertaking as an abuse of process under CPR rule 3.4(2)(b). Three matters were of importance when deciding whether release of an undertaking was in the public interest and fair as between the parties, or both. First, the context in which the undertaking was given. Second, whether the undertaking was given to the court or whether it was part of a collateral bargain between the parties. Third, the circumstances in which the application was made. Are there ‘special circumstances’ in the sense of circumstances so different from those which might properly be regarded as contemplated or intended to be governed by the undertaking at the time that it was given, such that it was appropriate to release the undertaker from the burden of his undertaking? This was likely to give rise to two principle considerations. First, was the undertaking pursuant to, or independent of, a compromise agreement? Second, was the purpose of the discharge to avoid a future breach of the undertaking or, as in the present case, had the undertaking already been breached with the result that its release or modification would retrospectively deprive the beneficiary of the very benefit which the bargain was designed to procure and which had already accrued. Because the effect of a refusal to discharge the undertaking would result in the claim falling to be struck out as an abuse of process, the court should treat the matter as involving considerations necessary to be taken into account on an application to strike out the claim as an abuse of process under CPR rule 3.4(2)(b). It was well within the overriding objective of the CPR to require of the claimant that he demonstrated special circumstances which had prevented or impeded him or his solicitor in complying with his undertaking. Although the judge made no reference to the requirement to have regard to the overriding objective and therefore the exercise of his discretion was to that extent flawed, the striking out of the claimant’s claim did not produce a disproportionate result and the appeal was therefore dismissed.