England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
(MR JUSTICE GRAY)

		Royal Courts of Justice Strand London, WC2 Thursday, 10th October 2002

1. LORD JUSTICE LAWS: This is an application for permission to appeal against the decision of Mr Justice Gray given on 16th May 2002 when he allowed the respondent's appeal against a decision of Master Rose, who had dismissed the respondent's application for an order striking out the applicant's claim for damages for defamation.
2. The respondent's principal case was that the defamation claim had been compromised. That claim related to words said to have been spoken and written by the second defendant, who was the chairman of Commercial Union Capital Limited, the first defendant. In addition the applicant had a claim in contract against the company only. The firm of solicitors, Messrs Bindman & Partners, acted on the record on the applicant's behalf in the contract claim, but were not on the record in the defamation claim. The defendants were represented in both actions by Messrs Linklaters.
3. In 1998 Linklaters raised a question of a settlement. They envisaged a settlement of both actions. After negotiations, certain offers were made in letters of 4th November 1999 and 15th November 1999. The letters are in the bundle. The applicant, through what he says, I think, in a witness statement, appreciated, so it is said, that those offers related to the disposal of both the contract and the defamation claims. There was evidence before the judge -- and I will come to the detail in just a moment -- that the applicant reluctantly agreed to accept the offer. His reluctance seems to have stemmed from the pressure that his legal representative had put on him to accept the offer, in threatening to take his firm off the record, thereby putting an end to his legal aid. He wishes to contend, therefore, that he was in effect subject to economic duress and forced to accept a settlement which included the defamation claim.
4. It is also unfortunately the case -- and I must record it because it is of some importance to Mr Witham's contentions -- that he has suffered from ill health. He had a stroke in 1997, which has left him with a degree of disability, and amongst other things he suffers from aphasia, which, as is well known, is a difficulty in forming words coherently and in articulating them. I have seen some documents he has put in about the condition of a stroke, and a little card relating to himself that refers to his aphasia.
5. There is no transcript of Master Rose's judgment. Mr Justice Gray for his part described the course of events leading to the actual or putative settlement, and the applicant's reaction to them in this way, starting at page 3 of the transcript.

"The question of settlement first arose in 1998. At that time, a letter was written by Linklaters, which included these words: 'We are writing to you to propose settlement in this matter and also the current defamation matter. Our clients' (I interpolate, in the plural) 'feel that both of these matters must be resolved together as part of one settlement agreement.' An offer was then made."

6. The judge continues:

"The question of settlement came up again in the autumn of 1999. It is apparant from Mr Witham's letter of 9 September 1999 that at that stage the Defendants were still seeking to have a 'broad brush settlement' of both actions. An offer was made to settle 'both matters' for £120,000 on 4 November 1999. Bindman replied they were considering that offer. On 15 November 1999 Linklaters sent a fax to Bindman which purported to confirm terms of settlement, which included £140,000 in full and final settlement of 'both of the cases involving our respective clients'. Linklaters were jumping the gun in writing that fax, as Bindman's pointed out later the same day, since no anterior argument had been concluded.

"However on 16 November 1999, which is the date when, according to the Defendants, a binding compromise of the defamation claim was arrived at, Linklaters wrote again, confirming settlement of 'all matters between our respective clients on the terms set out below.' Those terms included 'our client' (I interpolate, in the singular) 'will pay the sum of £140,000 to your client in full and final settlement of all outstanding claims between our clients.' There followed a number of other bullet points which I need not recite. The letter concludes that Tomlin orders are expected to be needed in both of the matters.

"What thereafter followed is set out in a witness statement of the Claimant, Mr Witham. What he says in paragraphs 12-24 of that witness statement comes to this: the parties discussed the offer in the fax of 15 November; a discussion took place; Mr Bindman became involved and told Mr Witham that he had to accept the offer. Mr Witham said that he regarded the offer as premature, under-valued and without allowance for interest. He goes on: 'Even more importantly CU's offer and instruction from Mr Bindman purported to include a demand on the separate defamation claim beyond the control of legal aid and Bindmans. There was no apology included in the proposed settlement, and the £140,000 was said to represent CU's estimation of the value of the contract claim only. There was no sum which went towards showing and accepting the damage to my reputation.' That passage alone makes it abundantly plain that Mr Witham appreciated that the offer was one which, if accepted, would dispose of both the contract and the defamation claims."

7. I interpolate that it appears that the witness statement referred to there by the judge is not in the bundle, but I have no reason to suppose that the judge had done other than summarise it accurately, indeed he has directly quoted part of it, as I have just demonstrated. The judgment continues, and I am now on page 5:

"According to Mr Witham, what thereafter happened was that Mr Bindman effectively gave him an ultimatum that, unless he accepted the offer, Bindmans would come off the record, with the dire consequences that for Mr Witham which would entail. Mr Witham continues: 'I reluctantly agreed, which is something I almost immediately bitterly regretted, and I know that if I had not been subjected to the amount of duress that I was, I would not have agreed.' He goes on to say he was forced to authorise acceptance of a settlement which had to include the defamation claim which was not covered by legal aid. Again, it seems to me plain beyond argument that the agreement into which Mr Witham reluctantly entered was to settle both the contract and the defamation claims on the terms of Linklater's fax of 16th November."

8. I may break off there. The learned judge proceeded to reject arguments which were advanced on the applicant's behalf: (a) to the effect that the offer of £140,000 was made on behalf of the company only; (b) that there was no offer and acceptance by both defendants, and in that context reference was made to Linklaters' references to their client in the singular; (c) the agreement was unenforceable in any event for want of consideration; (d) that it was not shown that the applicant had authorised Bindmans to settle the defamation action as well as the contract claim; and (e) that the applicant insisted there should be an apology, but none was provided for.
9. The learned judge dealt with all those matters, and I have to say that he was plainly right, in my judgment, to reject the contentions as they were put forward for the reasons he gave. In this court the applicant has put in somewhat diffuse grounds of appeal, if he will allow me to say so, but in essence the complaint may be summarised in this way. He contends that his counsel limited the arguments so as not to present everything that he, the applicant, desired should be put forward. In particular, the argument that he would have wished to pursue was that the existence of duress in relation to the alleged compromise of the defamation action vitiated the compromise of that action, so that the defendants should not be allowed to rely on a defence of accord and satisfaction, even if on the surface a compromise agreement appeared to have been entered into.
10. That is the essence of the case, and I think, if he will allow me to say so, the applicant would perhaps pray in aid his medical difficulties as tending, at any rate, to heighten the possibility that he was affected by duress. It is important, first, to bear in mind the terms of section 55(1) of the Access to Justice Act 1999, effectively replicated in part 52.13 of the Civil Procedure Rules. The statute provides:

"Where an appeal is made to a County Court or the High Court in relation to any matter, and on hearing the appeal the Court makes a decision in relation to that matter, no appeal may be made to the Court of Appeal from that decision unless the Court of Appeal considers that:(a) the appeal would raise an important point of principle or practice, or; (b) there is some other compelling reason for the Court of Appeal to hear it."

11. Bearing that in mind, I have this to say about the putative allegation of duress. That allegation was not distinctly made at any point in the proceedings before Mr Justice Gray's decision. The applicant contends essentially that Mr Bindman's consultation with him following the offers contained in the correspondence of 15th and 16th November, culminating in a threat to take themselves off the record, constituted duress as a matter of law. The allegation is, I fear, not capable of falling within any of the traditional categories of duress, such as the threat of physical violence or a direct threat to property. The only possible form of duress into which it might fall is the developing area of economic duress. Sometimes a contract is challenged on the grounds of duress exerted by a third party, which would be the position here if the applicant's case is right. Then the party seeking to avoid the contract has generally to prove that the other party knew of the duress, see Kesarmal [1954] 1 Weekly Law Reports, 380. Alternatively, it has to be shown that the parties seeking to enforce the agreement against, so to speak, the victim of the duress had constructive notice of the duress, or had procured the making of the contract through the agency of the party who exerted the duress.
12. The position is, I fear, that even assuming that the applicant could make out against his own then legal representatives duress sufficient to vitiate a contract, though I have to say it is very doubtful, he cannot, as I understand the papers, realistically expect to be able to prove that CUC had any actual or constructive knowledge of the duress exercised.
13. The truth is that Mr Justice Gray dealt properly with all the matters before him. I have looked at what the applicant now wishes to say in relation to duress, and it does not seem to me that a properly arguable case is made out. Even if there was some possibility of an argument, this is not a case within section 55 and part 52 of the Rules where there is an important point of principle or practice, or another compelling reason why the court should hear the appeal. Accordingly, it is my duty to dismiss the application.
ORDER: Application for permission to appeal dismissed.