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No manifest error in the construction of a settlement agreement

By: Colm Scott Byrne BL

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Court of Appeal dismisses appeal from High Court, and: (a) affirms order that the appellant was obliged to release the sum of €15 million plus interest from a nominated account for the benefit of the respondent and the appellant was to take all steps necessary to release the said sum on foot of a settlement agreement on the grounds that there was no manifest error arising in the construction and operation of the terms of settlement; and (b) refuses order directing respondent to produce documents for inspection, on the grounds that the contents of documents which might reveal the subjective beliefs of the respondent or its solicitors regarding the interpretation of the settlement agreement were irrelevant to the construction of same because such an exercise would be carried out objectively by the court at trial based on the text.

Whelan J (nem diss): Appeal of a decision of the High Court to order that the appellant was obliged to release certain funds on foot of a settlement agreement - appeal of a decision of the High Court refusing the appellant's application for an order directing the respondent to produce for inspection copies of various documents specified in a notice to produce and affidavit - interpretation of a settlement agreement - whether the term tenants is to be construed as meaning tenants of a high quality commensurate with the status of the Shopping Centre as a whole as mutually understood by the parties on execution of the settlement agreement - whether it has been established that “binding” agreements for lease have been executed within the meaning of the settlement agreement - the terms of settlement were a commercial contract which was negotiated on an arm’s length basis with the benefit of extensive legal and expert advice by two highly experienced counterparties in the context of a commercial transaction and the compromise of subsequent litigation - in order to determine the common intention of the parties to an agreement which has been reduced to writing, same must be construed by reference to the document itself and extrinsic evidence is inadmissible - whether there was a manifest error - whether the contents of documents which might reveal the subjective beliefs of respondents or its solicitors regarding the interpretation Terms of Settlement were relevant to the construction of same - no manifest error - both appeals dismissed.

Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.

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