There had been a settlement of proceedings for libel brought by Lord Aldington against Mr Nigel Watts and Count Nikolai Tolstoy. Lord Aldington had obtained judgment for andpound;1.5 million in damages against both defendants following a trial. Bankruptcy orders were made against both Mr Watts and Count Tolstoy. By early 1991 Lord Aldington was faced with appeals or applications to appeal in four sets of proceedings. By a written agreement a compromise was reached that third parties would pay andpound;10,000 to Lord Aldington on behalf of Mr Watts. In consequence of the agreement Mr Watts sought a declaration against Lord Aldington that the settlement of 20 March 1991 constituted a release of all rights which Lord Aldington had against both himself and Count Tolstoy. Count Tolstoy sought an order directing his trustee in bankruptcy to reject Lord Aldington’s proof in respect of the original judgment debt. Paragraph 6 of the letter was in these terms: ‘That Lord Aldington undertakes to accept the said sum in full and final settlement of the judgment and orders referred to above and any liability howsoever arising before today’s date which could involve any payment by you directly or indirectly to Lord Aldington.’ A consent order was made annulling the bankruptcy order which had been made against Mr Watts. Lord Aldington had sought to prove in the bankruptcy of Count Tolstoy. The trustee in that bankruptcy claimed contribution against Mr Watts under section 1 of the Civil Liability (Contribution) Act 1978. Mr Watts sought a declaration against Lord Aldington that the settlement of 20 March 1991 constituted a release of all rights which Lord Aldington had against himself and Count Tolstoy; and Count Tolstoy sought an order directing his trustee in bankruptcy to reject Lord Aldington’s proof in respect of the original judgment debt. At first instance the question was whether paragraph 6 of the settlement letter was a release of the judgment debt so relieving Count Tolstoy, as well as Mr Watts, from any further liability and extinguishing the right of contribution which Count Tolstoy, through his trustee in bankruptcy, would otherwise have had against Mr Watts or whether the settlement should be construed merely as an agreement by Lord Aldington not to sue Mr Watts. The Judge held that the agreement of 20 March 1991 was an agreement not to sue on or enforce the original judgment debt, not an agreement for the discharge of the liability under it.
Held: A settlement at a reduced level with one defendant does not release a co-defendant in a joint libel action.
The Court had difficulty in adopting the Judge’s view that, as a matter of construction, the letter of 20 March 1991 evidenced an agreement not to sue rather than a release. Two members of the court (Lord Justice Steyn and Lord Justice Simon Brown held that paragraph 6 of that letter did contain a release of Lord Aldington’s claim against Mr Watts. Lord Justice Neill did not find it necessary to decide that point. But the view that the agreement contained a release of Lord Aldington’s claim against Mr Watts did not lead to the conclusion that there was a release Lord Aldington’s claim against Count Tolstoy. Each member of the court held that the appeal should be dismissed. Lord Justice Neill rejected the traditional dichotomy between release and agreement not to sue. He said: ‘I have come to the conclusion, however, that in trying to fit the agreement into a particular category one may lose sight of the true enquiry: what is the meaning and effect of the agreement having regard to the surrounding circumstances and taking into account not only the express words used in the document but also any terms which can properly be implied.’ On the facts: ‘the agreement of 20 March 1991 was plainly subject to an implied term that Lord Aldington’s rights against Count Tolstoy would be reserved. I consider that any other result would offend common sense.’ and ‘Accordingly, though the result may be the same, in my opinion it will often be more satisfactory to consider whether the relevant document is an absolute release or release with a reservation rather than to consider whether the document can be fitted into the straitjacket of the covenant for agreement not to sue.’
Lord Justice Steyn, who had expressed the view that although the rule that the release of one of two joint and several tortfeasors was absurd and required re-examination nevertheless the court was bound to follow it, approached the matter in the same way: ‘In my judgment the right question is the following: is Lord Aldington reserving the right under his agreement [with Mr Watts] to sue Count Tolstoy? In my judgment the objective setting of the contract convincingly shows that the answer of both parties to that question would have been ‘Yes, of course’.
Lord Justice Simon Brown rejected the ‘technicality and intrinsic artificiality’ of the conventional approach to the rule as to the release of co-debtors – a rule which he described as a ‘juridical relic’. He defined the central question before the court as being ‘whether it is proper here to imply a reservation by Lord Aldington of his rights against Count Tolstoy’. That question admitted of only one answer: ‘On the facts known to both parties it was perfectly obvious that Lord Aldington was not prepared to abandon his judgment against Count Tolstoy. ‘
Judges:
Neill, Steyn, Simon Brown LJJ
Citations:
Times 16-Dec-1993, Independent 25-Jan-1994, CA Transcript 1578 of 1993, [1999] LTR 578
Statutes:
Civil Liability (Contribution) Act 1978
Jurisdiction:
England and Wales
Citing:
See Also – Tolstoy-Miloslavsky v Aldington CA 27-Dec-1995
Solicitors who unreasonably commence proceedings may be subject to a wasted costs order, but there should be no award of costs against a solicitor solely because he acted without a fee. An award of costs should not be made against a solicitor who . .
See Also – Tolstoy Miloslavsky v United Kingdom ECHR 19-Jul-1995
The applicant had been required to pay andpound;124,900 as security for the respondent’s costs as a condition of his appeal against an award of damages in a defamation case.
Held: It followed from established case law that article 6(1) did not . .
Appeal from – Lord Aldington v Tolstoy, Watts QBD 30-Nov-1989
The plaintiff sought damages after the article published by the defendants falsely accused him of complicity in war crimes.
Held: As to damages the jury awarded one and a half million pounds after being directed inter alia: ‘Let us now, . .
Cited by:
Cited – Nail v Jones, Harper Collins Publications Ltd; Nail v News Group Newspapers Ltd, Wade etc QBD 26-Mar-2004
The claimant was upset by an article published by the defendant making false allegations that he had behaved in a sexually profligate manner many years earlier. When it was substantially repeated he sued.
Held: The words were defamatory. An . .
See Also – Tolstoy Miloslavsky v United Kingdom ECHR 19-Jul-1995
The applicant had been required to pay andpound;124,900 as security for the respondent’s costs as a condition of his appeal against an award of damages in a defamation case.
Held: It followed from established case law that article 6(1) did not . .
See Also – Tolstoy-Miloslavsky v Aldington CA 27-Dec-1995
Solicitors who unreasonably commence proceedings may be subject to a wasted costs order, but there should be no award of costs against a solicitor solely because he acted without a fee. An award of costs should not be made against a solicitor who . .
Cited – Chelsea Building Society v Nash CA 19-Oct-2010
The defendant customer of the Society appealed against an order as to the sum due under a joint mortgage. She said that the ‘full and final settlement’ of the debt with Ms Nash’s former husband and joint mortgagor had the effect of releasing Ms Nash . .
Applied – Johnson and Another v Davis and Another CA 18-Mar-1998
The court was asked: ‘whether or not the appellants were released from their obligation under a covenant to indemnify the respondents against claims arising under a lease by reason of the terms of an individual voluntary arrangement made under part . .
Cited – Gladman Commercial Properties v Fisher Hargreaves Proctor and Others CA 14-Nov-2013
The claimant appealed against the striking out of his claims for fraudulent or negligent misrepresentation as to the suitability for deveopment of two former fire service properties. The court had said that a settlement with co-tortfeasors operated . .
Lists of cited by and citing cases may be incomplete.
Defamation, Damages
Updated: 26 October 2022; Ref: scu.90331
