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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Boyd & Hutchinson (a firm) v Foenander [2003] EWCA Civ 1516 (23 October 2003) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2003/1516.html Cite as: [2003] EWCA Civ 1516 |
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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE BUCKLEY)
Strand London, WC2 |
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B e f o r e :
LORD JUSTICE CHADWICK
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BOYD & HUTCHINSON (A FIRM) | Claimant/Respondent | |
- v- | ||
JOHAN MICHAEL RICHARD FOENANDER | Defendant/Appellant |
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Smith Bernal Wordwave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
MR JOSHUA MUNRO (instructed by Messrs Boyd Hutchinson, London SE1 2TZ appeared on behalf of the Respondent
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Crown Copyright ©
"In cases in which the bankrupt is a defendant, there is of course usually no question of the cause of action having vested in the trustee. Unless the defence is set- off ... the bankrupt will not be asserting by way of defence any cause of action of his own. But in cases in which the plaintiff is claiming an interest in some property of the bankrupt, that property will have vested in the trustee. And in claims for debt or damages, the only assets out of which the claim can be satisfied will have likewise vested. It will therefore be equally true to say that the bankrupt has no interest in the proceedings. As we have seen, section 285(3) [of the Insolvency Act 1986] deprives the plaintiff of any remedy against the bankrupt's person or property and confines him to his right to prove."
"(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."
But it is important to keep in mind the exception to which Lord Hoffmann there refers. He spelt it out in the next paragraph:
"(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them."
"It may be said that previous documents may be looked at to explain the aims of the parties. In a limited sense this is true: the commercial, or business object, of the transaction, objectively ascertained, may be a surrounding fact. Cardozo J thought so in the Utica Bank case. And if it can be shown that one interpretation completely frustrates that object, to the extent of rendering the contract futile, that may be a strong argument for an alternative interpretation, if that can reasonably be found. But beyond that it may be difficult to go: it may be a matter of degree, or of judgment, how far one interpretation, or another, gives effect to a common intention: the parties, indeed, may be pursuing that intention with differing emphasis, and hoping to achieve it to an extent which may differ, and in different ways. The words used may, and often do, represent a formula which means different things to each side, yet may be accepted because that is the only way to get 'agreement' and in the hope that disputes will not arise. The only course then can be to try to ascertain the 'natural' meaning. Far more, and indeed totally, dangerous is it to admit evidence of one party's objective — even if this is known to the other party. However strongly pursued this may be, the other party may only be willing to give it partial recognition, and in a world of give and take, men often have to be satisfied with less than they want. So, again, it would be a matter of speculation how far the common intention was that the particular objective should be realised."
Lord Wilberforce summarises his conclusion in a short paragraph at 1385H:
"... evidence of negotiation or of the parties' intentions, ... ought not to be received, and evidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract, including evidence of the 'genesis' and objectively the 'aim' of the transaction."
The House of Lords took the opportunity to confirm that those principles were as applicable to compromise agreements as they were to other contracts in Bank of Credit and Commerce International SA v Ali and others [2001] UKHL 8, reported at [2001] 1 All ER 961.
"The telephone conversations resulted in a deal being done which is contained in the terms of my letter of the same date."
Save, therefore, to notice that in neither the attendance note of Mr de Cruz, nor in the attendance note of Mr Firdose, was there any reference to the outstanding amount of £5,333.57 under the taxation of 7th September 1998, it is unnecessary to examine those notes further. Whatever agreement was reached, it is the agreement set out in the letter of 22nd November 1999 which Mr de Cruz wrote to Mr Firdose.
"We write further to our various telephone conversations today to confirm that agreement has been reached in settling the outstanding amount owed to you on the following basis. Upon such agreement being reached, we agree to an adjournment of the hearing tomorrow with liberty to restore. The agreement is based on the amount said to be due today under the terms of a Charging Order Absolute obtained by you against our client on 17th December 1997."
There are then set out, under four sub- paragraphs, a schedule of payments to be made, beginning with £4,000 in the post "tomorrow", ending with a final sum of £900 to be paid by post on 23rd February 2000, and amounting in aggregate to £6,900 - - a figure which is, of course, close to the amount secured by the charging order of 17th December 1997.
"In the event our client defaults on payment any accrued interest due on the sum indicated on the Charging Order Absolute dated 17th December 1997 will become payable."
And the final paragraph is in these terms:
"Therefore, by payment of the total sum of £6900 as indicated above, our client will discharge all liabilities due to you, including any orders for costs and interest in the above- mentioned proceedings. We are grateful that you will attend Court tomorrow to indicate to the District Judge that agreement has been reached on this basis."
There is then a post scriptum, written in manuscript by the author of the letter, Mr de Cruz. It reads:
"P.S. This agreement is made on the assumption that no monies have been paid to you since 17 December 1997 and therefore that at that date the sum of £6928.78 plus interest was due and owing.
You also agreed to secure the removal of the caution registered in your favour upon payment of the £6900."
ORDER: Appeal dismissed with costs on an indemnity basis; application for permission to appeal to the House of Lords refused.