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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Shaw v Hutton-Shaw  EWCA Civ 1235 (24 November 2006)
Cite as:  EWCA Civ 1235
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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM COLCHESTER COUNTY COURT
(HIS HONOUR JUDGE THOMPSON)
B e f o r e :
LADY JUSTICE ARDEN
LORD JUSTICE WALL
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MR N ELCOMBE (instructed by Messrs Budd Martin Burrett) appeared on behalf of the Respondent.
Crown Copyright ©
"My Lords, I will say at once that I prefer the approach of the learned judge. But I think I should preface my explanation of my reasons with some general remarks about the principles by which contractual documents are nowadays construed. I do not think that the fundamental change which has overtaken this branch of the law, particularly as a result of the speeches of Lord Wilberforce in Prenn v Simmonds  1 WLR 1381, 1384-1386 and Reardon Smith Line Ltd v Yngvar Hansen-Tangen  1 WLR 989, is always sufficiently appreciated. The result has been, subject to one important exception, to assimilate the way in which such documents are interpreted by judges to the common sense principles by which any serious utterance would be interpreted in ordinary life. Almost all the old intellectual baggage of 'legal' interpretation has been discarded. The principles may be summarised as follows:
(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.
(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.
(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax.
(see Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd  2 WLR 945)
(5) The 'rule' that words should be given their 'natural and ordinary meaning' reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in The Antaios Compania Neviera SA v Salen Rederierna AB 19851 AC 191, 201:
'…if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense.'"
"I propose to [examine] the way we interpret utterances in everyday life. It is a matter of constant experience that people can convey their meaning unambiguously although they have used the wrong words. We start with an assumption that people use words and grammar in a conventional way but quite often it becomes obvious that, for one reason or another, they are not doing so and we adjust our interpretation of what they are saying accordingly. We do so in order to make sense of their utterance: so that the different parts of the sentence fit together in a coherent way and also to enable the sentence to fit the background of the facts which plays an indispensable part in the way we interpret what anyone is saying. No-one, for example, has any difficulty in understanding Mrs Malaprop. When she says, 'she is as obstinate as an allegory on the banks of the Nile', we reject the conventional and literal meaning of allegory as making nonsense of the sentence and substitute 'alligator' by using our background knowledge of the things likely to be found on the banks of the Nile and choosing one which sounds rather like 'allegory'.
"Mrs Malaprop's problem was an imperfect understanding of conventional rule of English words. But the reason for the mistake does not really matter. We use the same process of adjustment when people [make] mistakes about names or descriptions or days or times because they have forgotten or become mixed up. If one meets an acquaintance and he says 'And how is Mary?' it may be obvious that he was referring to one's wife, even if she is in fact called Jane. One may even, to avoid an embarrassment, answer 'Very well, thank you' without drawing attention to his mistake. The message has been unambiguously received and understood."
"However, the real question to be determined is: Was the order resulting from the agreement reached between the parties an overall capital settlement? The judge found that it was, and in order to disturb a finding of that kind it is necessary for counsel for the wife to go so far as to show that there was no evidence upon which the judge could properly have made it. Counsel for the wife, very properly as I understand his submissions, has not contended on this appeal that if he fails to disturb that finding the wife can still pursue her claim for a lump sum. In my judgment this was a proper concession to make. It is clearly established on the authorities, to which it is not necessary for me to refer, that once a claim for a lump sum has been dismissed as the result of a court order, then it is not open to the party to reinstate an application of that kind, even if it was originally in the petition. The judge drew a distinction from the point that the notice of application from which the matter stemmed asked for a transfer of property order but not a lump sum order. But, rightly in my view, he found that that technical distinction was of little or minimal weight. In my judgment matters of this kind must be dealt with upon the general merits and meaning of the agreement leading to the order which is finally made by the court; it is not an area in which there is much room for technical objection or technical considerations of form; it is a matter of substance."
"These funds were loaned to me to deal with the purchase of a property in France in my own name.
I acknowledge a debt in the said sum and further acknowledge that this sum is repayable on demand from Tony Shaw..." (the appellant)
"With regard to the property in France I understand that all the funds were provided by Tony, at one stage it was proposed the property went into joint names of Jane and Alana, but because of Alana's age this was not possible, and in the event the property went into Jane's name.
I had explained that although I am not an expert on French Law, it was my understanding that the French Law of inheritance is entirely different, and you cannot leave your property separately by Will, and it effectively passes through the family, and in this case since Alana is Jane's only child that it would pass to her.
This would leave Tony totally unprotected.
In the circumstances you obviously cannot interfere with the French property, but we only deal with the original loan, and for that reason the loan from Tony to Jane has to be acknowledged in writing, and confirmation given that the loan is repayable on demand.
Effectively this cannot alter matters relating to French property, but it would then be a debt of the estate if Jane were to die, again I do not deal with French law, and the property would appear to be that Jane would not have an estate within the UK where enforcement proceedings can be brought to collect the money back from the house, and if Jane were to die owning the property in France then undoubtedly you would have to go to lawyers in France to take advice."
"25. They both ran up debts. The claimant says that the defendant fell under the influence of Mrs Byrne and that, together, the women trumped up charges against him, and she reported him to the local police. She sought an order for his eviction [but] because they were not married and because the house was in her sole name and because they had both run out of money, he was left in a very vulnerable position. Furthermore, she, on her own evidence, speaks fluent French, [whereas] he speaks no French at all.
"26. Eventually, after some friction between them, which is described in the statements of the two male witnesses I have mentioned and in the witness statements of both of them and which I need not explore, the defendant drafted a document with the help of Vera Byrne, which is at p.99 [of] the court bundle. It begins as an English draft which the defendant said she had used Mrs Byrne to help with because Mrs Byrne was good [at] writing language, although it must be said, in my judgment, Ms Hutton-Shaw was perfectly capable herself but indeed she offered the evidence it was she and Mrs Byrne who drafted it together. That document was signed and witnesses on 29th September 2004. The English version [begins] with a blank at the last paragraph, which says: 'Jane Hutton Shaw agrees to pay Anthony Shaw the sum of €17,500,' followed by the same figure written in text. It is witnessed in French style, 'Fait a Galanchat le 29 Septembre 2004', and witnessed by some English neighbours."
"- to vacate [the French property] on 14 October 2004 and never to set foot in it again
- to cease all legal actions whatsoever against Jane Hutton-Shaw in France or in England.
- All furniture and contents of the house and the Land Rover 4x4 to go to Jane Hutton-Shaw.
- To have no contact with Jane Hutton Shaw or her daughter either in England or France.
- To retract any accusations made about Jane Hutton-Shaw or Mrs Vera Byrne whomsoever it may be and to cease making any verbal vindictive remarks."
"Jane Hutton-Shaw agrees to pay all the outstanding debts in France and in England out of the proceeds of sale of the house in Galanchat.
In return for Mr Anthony Shaw accepting the overpage terms and conditions Jane Hutton-Shaw agrees to pay Anthony Shaw the sum of 17,500 euros (seventeen thousand five hundred euros)."
" The Court of First Instance of Saintes
Emergency Interim Procedures Judge: Mrs Jeanpierre-Cleva, President
Clerk of Court: Mrs Soumagnac
Plaintiff: Mrs Jane Hutton
Born on 2 December 1951 in London, resident at 32 Rue Centrale,
Galanchat, 1 7170 Loire-Sur-Nie
Represented by Maitre Laurence Germain, Lawyer at the Bar of Saintes.
Defendant: Mr Anthony Shaw
Born on 5 March 1915 in Loughborough, resident at 42 Rue Centrale, Galanchat, 17470 Loire-Sur-Nie
Represented by Maitre Laurence Leblond, Lawyer at the Bar of Saintes.
Debate held at hearing on: 26 October 2004
Date of deliberations indicated by President: 9 November 2004
Order issued at hearing held on: 9 November 2004
Further to an emergency interim summons issued on 24 September 2004 by Mrs Jane Hutton against Mr Anthony Shaw, the Parties appeared at the hearing on 12 October 2004 and the case was adjourned to the hearing on 26 October 2006, where a joint request was made for approval of the agreement signed on 29 September 2004.
This request should therefore be granted.
FOR THIS REASON
Ruling publicly and in an emergency procedure, in a joint order and as a first resort.
WE APPROVE the draft agreement signed by Mrs Jane Hutton and Mr Anthony Shaw on 29 September 2004, which provides, among other things, for:
- The liberation of the premises at 32 Rue Centrale, Galanchat, 17470 Loire-Sur-Nie, by Mr Shaw on 14 October 3004.
- Payment by Mrs Hutton to Mr Shaw of a total of €17,500 (that is, Fr114.793.18) in return for Mr Shaw's share in the acquisition by Mrs Hutton of the property mentioned above.
In accordance with the Parties' agreement, WE STATE that each party shall retain their expenses not included in the costs, and that the costs of the proceedings shall be borne in equal portions."
"The defendant then presented me with a document, a copy of which I exhibit as 'AJS3'. I was told that if I did not agree to what was set out in that document I would get nothing and the Defendant would continue to prosecute me for the alleged assault and attempted murder. However, if I did agree to what was set out in the agreement she would drop the charges and pay me €17,500.00 in respect of my share of the house, the contents and the motor cars. I was clearly being blackmailed by the Defendant. However I had no option in those circumstances but to sign the agreement."
"With respect to the sale of our house I would like the following settlement. I feel that my share to be €30,000. You keep all the furniture, the Land Rover and the remainder of the money from the house sale. House being sold for approximately €115,000."
"That Mr Shaw did not in fact agree to accept €17,500 in respect of all those matters. He knew, and indeed she knew, that he had his half-share in the house, which was still preserved, and, in my judgment, despite him saying so in his witness statement and despite the French court order reciting that matter, that was not what he agreed."
Order: Appeal allowed.