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A signed agreement is final
March 27, 2018
One of the attractions of mediation is that those involved in a dispute reach resolution and end it in a legally binding agreement, often a Tomlin order. The recent case of Johal v Elm Property Finance Ltd, decided by May J on 13 March 2018, had to consider the circumstances in which a Tomlin order was agreed during a mediation. The defendant applied to set the Tomlin order aside on the basis that he had not understood what he was signing. When this was refused, the defendant then applied for permission to appeal against the dismissal of his application.
The case arose from possession proceedings as the defendant stopped paying the mortgage. The defendant said that he was elderly, could not speak English, and that the mortgage had been obtained by undue influence. He was represented by counsel at the mediation and agreed to pay £950,000 or give up possession of the house. Afterwards, he asserted that he had not understood what had happened at mediation as he could not speak English, and his son – who he said had undue influence over him – had made the agreement, and that he had not known the terms of the agreement when he had signed it. The defendant advanced the legal argument of ‘non est factum’ which provides a defence in contract law allowing a signing party to escape from abiding by the terms of the agreement if it is fundamentally different from what he or she intended to sign.
In refusing permission the court found that the defendant’s credibility was severely compromised. Whilst he claimed to be unable to speak English, there was CCTV footage showing him speaking clear English outside of his home. Given that the court viewed his grasp of English to be more than adequate, the argument that the defendant had not known or understood what had been agreed had to fail. Further, there was no evidence as to what agreement the defendant believed he was signing instead nor was there evidence that the son had used undue influence to make his father sign. The evidence was that the defendant’s son did have authority to sign on his father’s behalf and that although the defendant was unhappy with the agreement, he had not misunderstood the amount or the agreement’s terms that he was to pay £950,000 before he had signed the agreement.
Mediators know that once an agreement is reached, it is the teasing out of the details and drafting the agreement which can take a very long time while parties check and re-check what is to be done by whom and when. This case is a useful reminder for mediators to be aware of the final process of the mediation to ensure as far as possible that the signed agreement is the end of the dispute and not the start of another.
