Summary

In the circumstances, the language of compromise agreements made between the parties was wide enough to include any claim on the grounds of conspiracy and the judge was right to strike out the claims and award summary judgment in favour of three of the respondents.

Facts

The appellants (K) appealed against a decision ((2005) EWHC 3003 (Ch)), striking out their claims and awarding summary judgment in favour of the first, second and seventh respondents. K had operated a number of Burger King franchised restaurants, some operated through a partnership (P) and others through a limited company (C). The first respondent operated Burger King restaurants under licence from the second respondent. The seventh respondent was the authorised distributor of products to all franchised Burger King outlets. Burger King issued proceedings and sought forfeiture of leases held by K. An administration order was made against P, and C went into liquidation. Burger King entered into compromise agreements with P and C in full and final settlement of any disputes. P's administrators sold the business and paid some of the proceeds to Burger King. K issued proceedings claiming, inter alia, that as a result of a conspiracy between all the defendants, the business had been sold at an undervalue. Further, that the compromise agreements were invalid. The claims were struck out and summary judgment awarded in favour of the first, second and seventh respondents. K contended that on a proper construction the compromise agreement could not apply and the judge was wrong to hold that the claims had no real prospect of success.

Held

The compromise agreements had to be construed like any other agreement and the language used interpreted with regard to the circumstances in which they were made. Given the background of the dispute against which the agreements were made, and the allegations made against Burger King, the words of the compromise agreements were plainly wide enough to include claims for conspiracy. The judge was right to reach the conclusion that the claims were claims that P and C had agreed to release in the compromise agreements.

Appeal dismissed.