Baltimore Wharf SLP v Ballymore Properties Limited & Anor

Summary

A claimant sued over the collapse of a nursery roof. The defendant and the party it had brought in applied for summary judgment or strike-out, arguing the whole dispute had already been compromised by a binding settlement reached in September 2024. The claimant said no binding settlement had been concluded because the negotiations remained subject to contract.

The single question was whether there was a reasonably arguable defence to the contention that a legally binding settlement had come into existence. The applicants said the parties had plainly agreed to settle; the claimant said the agreement was never more than subject to contract and so was not binding.

Mr Recorder Singer KC dismissed the applications. The negotiations had been conducted subject to contract, that reservation had not been removed, and so there was no binding settlement. The application to amend the defence was also refused, and the underlying claim can proceed.

Background and facts

The underlying dispute concerned the collapse of the roof of a nursery at Baltimore Wharf in East London in July 2023. The claim against the defendant was brought under a collateral warranty dated January 2013, with an additional claim in tort, and damages were estimated at over £2 million. The defendant had in turn brought in a Part 20 defendant.

Shortly before trial the parties negotiated over settlement. The applicants said those negotiations produced a binding settlement in September 2024, so that the proceedings were at an end. The claimant said the discussions had been carried on subject to contract and that no concluded, binding agreement had been reached.

The issue

On an application for summary judgment or strike-out, the applicants had to show there was no reasonably arguable defence to their case that a binding settlement existed. The real question was whether the parties had removed the subject to contract reservation under which they had been negotiating, so that a binding agreement came into being before any settlement document was executed.

The decision

Mr Recorder Singer KC applied the principles on subject to contract negotiations, drawn from Joanne Properties Ltd v Moneything Capital Ltd [2020] EWCA Civ 1541, in which Lewison LJ explained when and how the subject to contract umbrella can be lifted, together with Sherbrooke v Dipple (1980) 41 P&CR 173, Cohen v Nessdale Ltd [1982] 2 All ER 97 and RTS Flexible Systems Ltd. Where parties negotiate expressly subject to contract, they are taken not to be bound until a formal contract is made, unless they expressly or by necessary implication agree to remove that reservation.

On the facts, the reservation had not been removed. The claimant had not implicitly given it up, and the agreement stayed subject to contract:

"the evidence shows clearly for the reasons I have stated that there was no implicit removal of the subject to contract reservation by the Claimant and the agreement remained subject to contract."Mr Recorder Singer KC, paragraph 50

Because the claimant had a reasonably arguable, indeed on the evidence a strong, case that no binding settlement had been concluded, the applicants could not obtain summary judgment or strike-out:

"The applications are dismissed."Mr Recorder Singer KC, paragraph 51

The judge also refused permission to amend the defence, since the proposed amendment raised the same settlement argument and had no real prospect of success. The effect was that the settlement issue could go no further and the underlying claim would continue.

Practical implications

Subject to contract negotiations are not binding until a contract is made. Where parties negotiate under a subject to contract label, neither is bound until a formal agreement is concluded, even if the main terms have been agreed. A party who wants to be able to hold the other to a deal should remove the reservation in clear terms.

Removing the umbrella requires express or necessarily implied agreement. The subject to contract reservation continues until the parties expressly agree to lift it, or it is a necessary implication of what they have done. Conduct short of that, even acting as though a deal is close, may not be enough.

Settlement as a knockout blow needs a clear-cut agreement. A defendant seeking summary judgment or strike-out on the basis of settlement must show there is no reasonably arguable defence to the existence of a binding contract. Where the negotiations were subject to contract, that is a demanding threshold.

Reduce settlements to a signed agreement. Much of the difficulty here flowed from a deal negotiated but not executed. Parties who reach a settlement, particularly on the eve of trial, should record and sign it promptly, and state expressly if and when the subject to contract reservation is lifted.

Baltimore Wharf SLP v Ballymore Properties Limited and WSP UK Limited [2026] EWHC 312 (TCC), Technology and Construction Court, Mr Recorder Singer KC sitting as a Judge of the TCC. Judgment handed down 16 February 2026.