“(1) The Section 27A Application and the Section 20C Application having been withdrawn, there be no order on either application “SCHEDULE “1. In this Schedule “ “The Aina Works” means such works as are necessary to remedy any breach or breaches of the Respondent’s repairing obligations under Ola Aina’s lease in so far as such breach or breaches relate to Flat A001 “ “The Cabral Works” means such works as are necessary to remedy any breaches of the Respondent’s repairing obligations under Saradha Cabral’s lease in so far as such breach or breaches relate to Flat B009 “ “The Reserve Fund Deficit” means such amount as from time to time represents the difference between (i) the sum which would be held by the Respondent in the reserve fund if of the lessees on the Jam Factory had paid their respective reserve fund contributions to the Respondent (ii) and the sum which the Respondent in fact holds in the reserve fund PROVIDED THAT “The Reserve Fund Deficit” shall not include: (a) Any arrears of reserve fund contributions payable by Sam Bond and/or Carol Marshall in respect of any their respective flats (b) Any arrears of reserve fund contributions payable by Angel Property (Hartley Buildings) Limited and/or Angel Property (Jam Factory) Limited “ “Service Charge Arrears” means any sums claimed by the Respondent in the Section 27A application which remain outstanding from the Applicants as at the date hereof PROVIDED THAT such arrears shall not be deemed to include service charge arrears payable by Sam Bond and/or Carol Marshall in respect of any of their respective flats “ “The Join Statement” means a statement to be sent to the all lessees on the Jam Factory in the following terms: “On 25 th – 29 th July and 10 th /11 th October 2011, the Leasehold Valuation Tribunal heard an application brought by certain of the lessees at the Jam Factory against JFFL, as landlord, for a determination of service charge in respect of the years 2006 – 2011. On 11 th October 2011, those proceedings were settled by the parties on terms commended by their respective lawyers and the LVT having heard the evidence.” “2. The Respondent agrees that it will within a period of 14 months from the date hereof ensure that the Reserve Fund Deficit is reduced to nil and such funds to be held in accordance the RICS Code “3. The Respondent agrees that in pursuance of its obligations under paragraph 2 above, it will use its best endeavours to obtain payment of service charge arrears from those lessees on the Jam Factory who are not parties to these proceedings “4. The Applicants agree that they will discharge the Service Charge Arrears within 28 days hereof. “5. The Respondent agrees to carry out the Aina Works and the Cabral Works within a period of 3 months from the date hereof unless otherwise agreed between the Respondent and Ms Aina or Mr Cabral as the case may be. “6. The Applicants and the Respondent agree that the Respondent will issue the Joint Statement within 28 days hereof and that neither party shall publish an alternative analysis or account of the Section 27A Application. “7. The Respondent agrees that hereafter it will use its best endeavours to obtain an appropriate contribution towards the estate service charge costs from the owner for the time being of Blocks D and E. “8. The Respondent agrees that in respect of the budged for 2012 and every year thereafter it will in ensure that the budget is approved by a qualified surveyor.”
“34. The issue which has arisen under the Compromise Agreement is simple. Does the agreement absolve Mr Bond (and Miss Marshall) of any further liability in respect of the service charges for the years 2006 to 2011 which were the subject of the section 27A application before the Tribunal, as Mr Bond asserts, or did the Compromise Agreement leave the Respondent free, as it argues, to bring separate proceedings against Mr Bond and Miss Marshall to recover the same service charges?”
“57. Against that background we consider that the most significant aspect of the Compromise Agreement was the withdrawal of the Application itself. While technically Mr Duckworth is correct when he points out that the Application was not a claim by the Respondent for the payment of service charges, but rather was a request by the leaseholders for their liability to be quantified which would never, by itself, have resulted in a judgment, it is clear from the Compromise Agreement that the parties did not have that subtlety in mind. The Service Charge Arrears are defined as “ sums claimed by the Respondents in the section 27A application which remain outstanding ” excluding those of Mr Bond and Miss Marshall. For the parties and for all practical purposes, the Application was the Respondent’s claim for the outstanding service charges, and it was the Application, in its entirety, which was being compromised by the terms of the Schedule. “58. It would, we consider, have been inconceivable to the parties that the Compromise Agreement should leave either of them free, on12 October 2011 , to commence litigation or to issue a new application under section 27A relating to the same service charges. Such proceedings would have involved a duplication of much of the effort and expenditure which had already been put in to the withdrawn application; they would have required the commitment of the additional time, effort and cost which the parties had sought to avoid by entering into the Compromise Agreement; they would have negated one of the main objects of the compromise, namely to bring this disproportionately expensive and unpredictable dispute to a conclusion. “59. Mr Duckworth floated the slightly cynical point that, for the Respondent, there was a positive advantage in reducing the number of leaseholders it had to fight from sixteen to two while preserving the right to pursue the same claims, since that would lay the expense and burden of the dispute on far fewer shoulders. We did not understand him to suggest that such had actually been the Respondent’s intention (which would in any case have been irrelevant) but that an objective observer would understand the attraction for the Respondent of proceeding in that way. The same observer would equally appreciate the disadvantageous position which Mr Bond and Miss Marshall would be placed in by a temporary settlement on those terms, and would, we consider, have been confident that such an outcome cannot have been intended by all of the parties to the Compromise Agreement. “60. If the Respondent’s construction of the Compromise Agreement is correct, it is difficult to see what reason Mr Bond could have had for entering into it. He derived no significant personal benefit from the payments which the Respondent became entitled to receive, and none at all from the works which the Respondent agreed to carry out. He and Miss Marshall conceded the Respondent’s entitlement to add its costs to the service charge, and lost the strength in numbers they had enjoyed when making common cause against the Respondent with their fourteen fellow leaseholders. It is obviously not impossible that Mr Bond and Miss Marshall might have been prepared to put themselves in that weak position, or that they may have felt unable to continue in the face of the willingness of their fellow leaseholders to compromise, but given the lengths Mr Bond had gone to obtain his judgment and charging order, as the Respondent knew, such a capitulation would be surprising. “61. For these reasons we consider that the true interpretation of the terms of discontinuance of the Application is that they involved an agreement by all of the parties that the liability of the applicants as a whole was limited to the Service Charge Arrears as defined in the Compromise Agreement. We consider that that conclusion derives support from paragraph 4 of the schedule, which we read as an agreement that all of the applicants would see to it that all of the Service Charge Arrears were discharged within 28 days. We acknowledge that that construction leaves open the theoretical possibility that some of the applicants could have found themselves responsible for paying a greater share than was attributable to their own lease, if one or more of their fellow leaseholders defaulted. We do not think that the assumption of that risk is so extraordinary an outcome as Mr Duckworth suggested; the leaseholders were neighbours who had co-operated in the proceedings for more than a year; there is no suggestion that the arrears had accumulated because leaseholders could not afford to pay; there is no reason to doubt that the leaseholders were able to make their own assessment of the risk involved in assuming collective responsibility for the full amount of the Service Charge Arrears. In those circumstances we do not regard a choice to settle the dispute on terms which provided for collective responsibility in preference to continuing the struggle to be an irrational or uncommercial one. “62. We are not diverted from our conclusion by the absence from the document of a general release of claims by the parties. The Compromise Agreement equally lacks any express preservation of the right to resume hostilities, and in the circumstances we regard that feature as more significant. So clear is the intention of the Compromise Agreement to deal once and for all with the disputed service charges, and so counter intuitive is the suggestion that the parties intended to preserve the right to fight on the same ground on another day, that no additional release of rights was required. Had the parties really intended that each should be entitled to resurrect the dispute at will, we think it inevitable that they would have reserved that right specifically.”
“In construing this provision, as any other contractual provision, the object of the court is to give effect to what the contracting parties intended. To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties’ relationship and all the relevant facts surrounding the transaction so far as known to the parties. To ascertain the parties’ intentions the court does not of course enquire into the parties’ subjective states of mind but makes an objective judgment based on the materials already identified.”