Cere Needed Releasing Future Claims
A compromise agreement which appeared to claim to settle all outstanding claims between the employee and employer, did not prevent the employee later claiming for stigma losses where, at the time of the agreement, the circumstances which might lead to a claim were unknown to either party, and such losses were not contemplated by either of them. Whilst a party may release even future claims, courts should be reluctant to say that he released claims of which he could not have known. ‘To ascertain the intention of the parties the court reads the terms of the contract as a whole giving the words used their natural and ordinary meaning in the context of the agreement, the parties’ relationship and all the relevant facts surrounding the transaction so far as is known to the parties.’ and ‘the primary source for understanding what the parties meant is their language interpreted in accordance with conventional usage’.
The relevant surrounding circumstances were those which a reasonable man would have regarded as relevant, and the court was not ‘encouraging a trawl through ‘background’ which could not have made a reasonable person think that the parties must have departed from conventional usage’.
Lord Bingham said: ‘In construing this provision, as any other contractual provision, the object of the court is to give effect to what the contracting parties intended. To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties’ relationship and all the relevant facts surrounding the transaction so far as known to the parties. To ascertain the parties’ intentions the court does not of course inquire into the parties’ subjective states of mind but makes an objective judgment based on the materials already identified.’
Lord Bingham, Lord Hoffmann
Times 06-Mar-2001, Gazette 12-Apr-2001, [2001] UKHL 8, [2001] 1 All ER 961, [2001] 2 WLR 735, [2002] 1 AC 251, [2001] ICR 337, [2001] IRLR 292, [2001] Emp LR 359
House of Lords, Bailii
England and Wales
Citing:
Cited – Associated Deliveries Ltd v Harrison CA 1984
A landlord, having forfeited the lease could not recover for damage to the property caused by third parties before possession was finally given. The election to forfeit was unequivocal, and damages were irrecoverable from the date of service of the . .
Cited – Malik v Bank of Credit and Commerce International (BCCI); Mahmud v Bank of Credit and Commerce International HL 12-Jun-1997
Allowance of Stigma Damages
The employees claimed damages, saying that the way in which their employer had behaved during their employment had led to continuing losses, ‘stigma damages’ after the termination.
Held: It is an implied term of any contract of employment that . .
At First Instance – Bank of Credit and Commerce International Sa (In Liquidation) v Ali and Another ChD 17-Feb-1999
A compromise of a claim involved a settlement with the value given, and a release did not import requirement for any consideration. A compromised claim could not be set aside for lack of knowledge, and no duty of disclosure of any wrongdoing . .
Appeal from – Bank of Credit and Commerce International Sa (In Liquidation) v Ali and Others (No 4) CA 2-Mar-2000
The claimant and his former employers had compromised the employee’s claim for damages, but the claimant then sought to sue for stigma damages after these were awarded elsewhere. The general language of the release was sufficiently comprehensive to . .
Cited – Salkeld v Vernon 1758
A party may, at any rate in a compromise agreement supported by valuable consideration, agree to release claims or rights of which he is unaware and of which he could not be aware, even claims which could not on the facts known to the parties have . .
Cited – Grant v John Grant and Sons Pty Ltd 1-Jun-1954
(High Court of Australia) Contract – Deed of release – Recitals – Limitation – Claims not in contemplation unaffected – Equitable considerations affecting release – General words.
Dixon CJ said: ‘No doubt it is possible a priori that the . .
Cited – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Cited – Antaios Compania Naviera SA v Salen Rederierna AB (‘the Antaios’) HL 1984
A ship charterer discovered that the bills of lading were incorrect, but delayed withdrawal from the charter for 13 days. They now sought leave to appeal the arbitration award against them.
Held: Though he deprecated extending the use of the . .
Cited by:
Cited – Capital Trust Investment Limited v Radio Design AB and others CA 15-Feb-2002
The claimant appealed an order staying its action on the basis that the agreement between the parties provided for arbitration in Sweden. Shares had been purchased, and the claimant said that because of misrepresentations by the respondent, they had . .
Cited – JIS (1974) Ltd v MCP Investment Nominees I Ltd CA 9-Apr-2003
The parties agreed for a lease to be granted of a new building. Part had been intended to be excluded for shops, but permission was not obtained, the shops area was included and leased back. When the tenants sought to determine the lease, the . .
Cited – Portsmouth City Football Club v Sellar Properties (Portsmouth) Limited, Singer and Friedlander Properties Plc ChD 17-Sep-2003
Various contracts were entered into for the sale of land, with compensation being paid in certain circumstances. One contract required a calculation of consideration as a set figure less a sum to be calculated as the cost of acquiring land. The sum . .
Cited – Chagos Islanders v The Attorney General, Her Majesty’s British Indian Ocean Territory Commissioner QBD 9-Oct-2003
The Chagos Islands had been a British dependent territory since 1814. The British government repatriated the islanders in the 1960s, and the Ilois now sought damages for their wrongful displacement, misfeasance, deceit, negligence and to establish a . .
Cited – Warborough Investments Ltd v Berry and others ChD 18-Dec-2003
The landlord sought to recover arrears of rent after forfeiting the lease. The lease had been held by trustees for a youth centre.
Held: The lease clearly intended that the liability of the trustee’s did not extend beyond those assets they . .
Cited – Sirius International Insurance Company (Publ) v FAI General Insurance Limited and others HL 2-Dec-2004
The appellant had taken certain insurance risks on behalf of the respondents, subject to banking indemnities. Disputes arose and were settled under a Tomlin order, which was now itself subject to challenge.
Held: The appeal was allowed. The . .
Cited – Morshead Mansions Ltd v Mactra Properties Ltd CA 3-Apr-2006
Tenants of a block of flats were in dispute with their management company. Some tenants had ceased paying rent, and forfeiture proceedings had begun. There had been a compromise of the forfeiture proceedings. The parties now disputed the extent to . .
Cited – Barrett v Universal-Island Records Ltd and others ChD 15-May-2006
The claimant was entitled to share in the copyright royalties of Bob Marley and the Wailers, and claimed payment from the defendants. The defendants said that the matters had already been settled and that the claim was an abuse of process, and also . .
Cited – Great Hill Equity Partners Ii Lp v Novator One Lp and others ComC 22-May-2007
The parties disputed whether oral statements had been incorporated into an option agreement.
Held: Evidence of negotiations before the written contract was signed were inadmissible, because it is only on the signing of the first document that . .
Cited – Oxonica Energy Ltd v Neuftec Ltd PatC 5-Sep-2008
The parties disputed the meaning of an patent and know how licence. The parties disputed whether the agreement referred to IP rights before formal patents had been granted despite the terms of the agreement.
Held: ‘The secret of drafting legal . .
Cited – Trygort (Number 2) Ltd v UK Home Finance Ltd and Another SCS 29-Oct-2008
The landlords claimed that the tenants remained bound under the lease to occupy and use the premises and pay rent. The tenant said that it had exercised a break option. The landlord said that the break was not exercisable because it had otherwise . .
Cited – Persimmon Homes (South Coast) Ltd v Hall Aggregates (South Coast) Ltd and Another TCC 10-Oct-2008
The parties had agreed for the sale of land under an option agreement. The builder purchasers now sought to exercise rights to adjust the price downwards.
Held: The provisions had been intended and had achieved a prompt and binding settlement . .
Cited – Pratt v Aigaion Insurance Company SA (‘the Resolute’) CA 27-Nov-2008
The court considered the interpretation of a term in a contract of insurance to the effect that ‘Warranted Owner and/or Owner’s experienced skipper on board and in charge at all times and one experienced crew member.’, asking whether ‘at all times’ . .
Cited – Chopra v Bindra CA 19-Mar-2009
The parties sought to have declared the effect of a deed of trust under which the on the death of either co-owner, the survivor became entitled to the entirety of the proceeds of sale absolutely. The gift was defective as self defeating. The judge . .
Cited – Norwich City Council v Marshall LT 23-Oct-2008
LT LANDLORD AND TENANT – service charges – liability – whether lessee liable for management costs – held lessee liable for costs incurred in providing specified services under lease but not otherwise – Landlord . .
Cited – Chartbrook Ltd v Persimmon Homes Ltd and Others HL 1-Jul-2009
Mutual Knowledge admissible to construe contract
The parties had entered into a development contract in respect of a site in Wandsworth, under which balancing compensation was to be paid. They disagreed as to its calculation. Persimmon sought rectification to reflect the negotiations.
Held: . .
Cited – Horwood and Others v Land of Leather Ltd and Others ComC 18-Mar-2010
The claimants sought to claim for personal injuries against the defendant company, now in administration, and their insurers using the 1930 Act. The insurers said they were not liable to indemnify the company. The parties disputed the standing of an . .
Cited – Margerison v Bates and Another ChD 30-May-2008
The court considered the construction of a restrictive covenant after the disappearance of the covenantee. The covenant required no additional building without the consent of the covenantee, such consent not to be unreasonably withheld. The term . .
Cited – Pink Floyd Music Ltd and Another v EMI Records Ltd ChD 11-Mar-2010
The claimant sought summary judgment for a claim under Licensing agreements under which the defendants had marketed and sold the claimant’s products. The remaining disputes concerned differences as to royalties from digital downloads sold through . .
Cited – Serious Organised Crime Agency v Szepietowski and Others ChD 15-Oct-2010
The court was asked whether, as second mortgagee on the defendant’s properties, the claimant agency had the equitable power of marshalling of prior charges. The first chargee had charges over two properties, and sold the first, satisfying it debt, . .
Cited – Quirkco Investments Ltd v Aspray Transport Ltd ChD 23-Nov-2011
The defendant tenant said that it had exercised a break clause in the lease held of the claimant. The claimant said the break notice was ineffective because the defendant was in breach of the lease, not having paid an iinsurance service charge, and . .
Cited – Lloyds TSB Foundation for Scotland v Lloyds Banking Group Plc SC 23-Jan-2013
A predecessor bank had created a trust into which it paid a small proportion of its profits. The parties now disputed the calculation of profits when the Bank declared a loss which allowed for an unrealised gain on the acquisition of HBOS. . .
Cited – Marley v Rawlings and Another SC 22-Jan-2014
A husband and wife had each executed the will which had been prepared for the other, owing to an oversight on the part of their solicitor; the question which arose was whether the will of the husband, who died after his wife, was valid. The parties . .
Cited – Arnold v Britton and Others SC 10-Jun-2015
Absurdity did not defeat a clear clause
A standard lease of plots on a caravan park, contained a provision which appeared to increase the rent by 10% in each year. The tenants argued that such a substantial increase could not have been intended.
Held: The tenants’ appeal failed . .
Cited – Foster v McNicol and Another QBD 28-Jul-2016
Incumbent Labour leader did not need nominations
The claimant challenged a decision of the National Executive Committee of the Labour Party to allow its present Leader to stand in the leadership election challenging his position without the need for him to submit first the otherwise standard . .
Cited – Lehman Brothers International (Europe) v Exotix Partners Llp ChD 9-Sep-2019
The parties had contracted to trade global depository notes issued by the Peruvian government. Each made mistakes as to their true value, thinking them scraps worth a few thousand dollars, whereas their true value was over $8m. On the defendant . .
Lists of cited by and citing cases may be incomplete.
Employment, Contract
Leading Case
Updated: 11 November 2021; Ref: scu.159110