Weston v Dayman
| Jurisdiction | England & Wales |
| Judge | LADY JUSTICE ARDEN,LORD JUSTICE WALL,LORD JUSTICE BROOKE |
| Judgment Date | 07 June 2006 |
| Neutral Citation | [2006] EWCA Civ 1165 |
| Docket Number | A3/2005/2533 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 June 2006 |
[2006] EWCA Civ 1165
Lord Justice Brooke,
Vice President, Court of Appeal (Civil Division) and
Lady Justice Arden
Lord Justice Wall
A3/2005/2533
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
SIR ANDREW MORRITT (THE CHANCELLOR OF THE HIGH COURT OF JUSTICE)
Royal Courts of Justice
Strand
London, WC2
MR M WARWICK (instructed by Messrs Cartwright Cunningham Haselgrove & Co) appeared on behalf of the Appellant
MR P GREENWOOD (instructed by Messrs Simmons & Simmons) appeared on behalf of the Respondent
Judgement
This is an appeal from the order of Sir Andrew Morritt, Chancellor dated 25 October 2005. The Chancellor came to the conclusion, which on the face of it is surprising, that a consent order discharging a receivership made by Henriques J on 23 January 2003 was to be interpreted as releasing the defendant receiver from all liability for any failure properly to manage the estate of the receivership during the period of the receivership. Very simply the position was that, pursuant to an order of Hidden J dated 17 November 1988 under the Criminal Justice Act 1998, the court appointed a receiver of the property of Mr Weston, the appellant. The receivership was discharged on 1 February 2003 pursuant to the order of Henriques J to which I have referred which was a consent order. Paragraph 10 of the order stated that the receiver was not to be liable for any failure by her to properly manage the estate of Mr Weston after her discharge.
Mr Weston alleged in these proceedings, which were commenced by claim form dated 15 November 2004, that the receiver had acted in breach of duty by failing to take proper care of a motor yacht called Poseidon. By order dated December 2003 Elias J gave permission for Mr Weston to commence these proceedings against the receiver. Since she had been appointed by the court, permission of the court was needed to commence those proceedings. The receiver put in a defence in the course of which, she relied on paragraph 10 of the order of 23 January 2003. She subsequently applied for summary judgment, and Master Bowles ordered a trial in preliminary issue. It was on that preliminary issue that the Chancellor gave the judgment to which I have referred. Mr Weston argued that the correct interpretation of paragraph 10 was that the receiver was released from liabilities properly to manage the estate which were incurred after the discharge of the receivership. The point at issue, therefore, was a short one, namely as to the meaning in paragraph 10 of the words "after the discharge of the receiver". There was a further question as to who should bear the costs of the application, and there is an appeal from that matter also. There is also before this court an application to vary the terms of the order of Henriques J in order to permit these proceedings to be commenced and pursued to trial.
This court has heard a helpful argument from Mr Warwick on behalf of Mr Weston and has had substantial skeleton arguments from the parties, for which I am most grateful. In my judgment, however, the appeal fails on the substantial point of construction. I have six major reasons for coming to this conclusion which I would like to summarise and then expand. First, a consent order is to be interpreted like a contract. Secondly, there is no rule that a contractual provision for a release from claims is to be interpreted differently from other provisions of a contract; but the court will be slow to conclude that unknown claims – that is, claims that were unknown to the parties at the date of the contract – are to be released by a contractual release. Thirdly, the reliance by the appellant, Mr Weston, in this appeal on the practice of the court as to general releases for receivers and as to the requirement for leave to commence proceedings does not assist him, because the order in the present case was an order made by consent. Fourthly, the relationship between clause 9 of the order, which I have yet to read and which deals with the maintenance and the insurance down to the date of the discharge of the receiver, and clause 10 which is the provision for release to which I have already referred, does not support the argument of the appellant that it would follow from clause 9 that the provision of clause 10 was to apply only to acts of management following discharge. Fifthly, there was in this case ground for inferring that there was a good reason for a general release of claims against the receiver. The order represented a settlement of claims between the receiver and Mr Weston. Sixthly, although the Chancellor held that a transposition of the words "after the discharge of the receiver" in clause 10 was permissible because there was an absurdity in the language and that transposition would avoid the absurdity, in my judgment the Chancellor was not suggesting any improper re-writing of the contract and his conclusion did not constitute such a re-writing. While it is not necessary that there should actually be such a transposition, this was a conclusion which does not invalidate the conclusion to which he came.
I have not at this stage set out the background, which I propose to do when I consider the first reason which I have set out above. I will now turn to the reasons in turn and amplify them.
First, as I have said, a consent order is to interpreted like a contract. The authority for this proposition may be found in the speech of Lord Steyn in Sirius International Insurance Co v FAI General Insurance Limited [2004] 1 WLR 3251. At paragraph 18 Lord Steyn said:
"The settlement contained in the Tomlin order must be construed as a commercial instrument. The aim of the enquiry is not to probe the real intentions of the parties but to ascertain the contextual meaning of the relevant contractual language. The inquiry is objective: the question is what a reasonable person, circumstanced as the actual parties were, would have understood the parties to have meant by the use of specific language. The answer to that question is to be gathered from the text under consideration and its relevant contextual scene".
As to the principles applying to the interpretation of contracts generally I would refer to the well-known passage from the speech of Lord Hoffmann in Investors Compensation Scheme Limited v West Bromwich Building Society [1998] 1 WLR 898 at 912–3. It is sufficient to cite Lord Hoffmann's first and second propositions:
"1. Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
2. The background was famously referred to by Lord Wilberforce as the 'matrix of fact', but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man".
We have been taken to certain contemporary correspondence and to the application which the receiver made, her discharge which led to the order of Henriques J on 23 January 2003. I will summarise some of the material points that emerge, although I should say at the outset that not much of this background evidence is relevant or helpful because it does not in terms refer to the object or aim of paragraph 10. The background, so far as relevant, may be summarised thus. At the date of the receivership Mr Weston had in Spain a motor yacht, then called Poseidon. On her appointment the receiver took possession of the yacht and removed it to moorings in the United Kingdom. Another entity, namely Axholme Limited, which was a company associated with Mr Weston, claimed ownership of the yacht, as indeed did yet another entity called Abstract Holdings Limited. Mr Weston was tried for certain offences of which he was acquitted. On 15 November 2002 the receiver accordingly made an application for her release. On 9 December 2002 Axholme Limited gave its consent to the release of the yacht back to Mr Weston. On 17 December 2002 the receiver asserted a lien over the assets in receivership and said that she could not release funds until the question of her costs was dealt with.
There was then discussion in correspondence, and perhaps directly, between the receiver and Mr Weston's solicitors and that discussion was mainly about the costs and expenses of the receivership, the distribution of cash held by the receiver, and the release of some other assets including flats in Spain, and the discharge of a potential liability to capital gains tax. In the course of this correspondence, so far as this court has seen, there was no suggestion of any claim arising out of the management of the yacht. However, I should say that for security purposes the receiver had taken the yacht to a destination in the United Kingdom which was not revealed to Mr Weston, and accordingly Mr Weston did not have sight of the yacht until early February 2004. On 15 January 2003 the receiver asked for a consent to the release of the yacht from Abstract Holdings. In fact that consent had already been given, but nothing seems to turn on that. In the course of asking for that release the receiver made a point about the insurance of the yacht, saying that it was to expire on 15 February and that the...
To continue reading
Request your trial
-
Community Care North East v Durham County Council
...or varied by the court in the same circumstances as any other order that is made by the court without the consent of the parties.” 21 In Weston v Dayman [2006] EWCA Civ 1165 the Court of Appeal had to deal with the meaning of a consent order and an application to vary the terms of that orde......
-
Log Book Loans Ltd & Nine Regions Ltd GC 1048 2011
...Neuberger J (as he then was) in Ropac Ltd v Inntrepeneur Pub Co (CPC) Ltd [2001] CP Rep 31 and the Court of Appeal in Weston v Dayman [2006] EWCA Civ 1165 held that there is power under the Civil Procedure Rules (CPR) to extend time “where it is just to do so”. (d) In any event, any agreeme......
-
R v Aidan Grew and Hilary Patrick McLaughlin and R v Patrick Mackle, Plunkett Mackle and Benedict Mackle
...they agreed that they had obtained. [21] The confiscation orders had the status of the contract between the parties (Weston v Dayton [2006] EWCA Civ. 1165). In R v Hirani [2008] EWCA the court made clear that consent orders would only be set aside in exceptional circumstances. There would h......
-
Pannone LLP v Aardvark Digital Ltd
...Gorman and a genuine settlement of a substantive dispute as to the parties' rights, such as was under consideration by this court in Weston v Dayman 2006 EWCA Civ 1165. There a receivership was discharged pursuant to an overall settlement of disputes which dealt with all aspects of the rece......