England and Wales High Court (Chancery Division) Decisions

“8. The Company was incorporated in 2011. The respondent became sole shareholder and director in 2013. It aspired “to disrupt and enter the £15.9 billion lunch at work market, using technology and a national delivery network”. It grew rapidly, from a handful of employees at the outset to 200 employees and a market value estimated at £40 million before it crashed. The respondent was originally the 100% shareholder. But between 2015 and 2016 outside investors were brought in, so that by the time of the crash the respondent held only 80% of the equity.”

“2. The application [against Mr Anthony-Mike] is made in the context of winding up proceedings against the Company. The petition to wind up the Company was first presented to the High Court, Chancery Division, Bristol District Registry, on 26 October 2016. It was based on a statutory demand that had been served on 3 October 2016. I interpose here to say that, before the petition could be dealt with, the respondent was ousted as a director and executive chairman of the Company, on 20 December 2016. On 23 December 2016 an agreement (called a ‘settlement agreement’) was entered into between the Company and the respondent, governing certain claims or potential claims by each against the other. I shall return to these events in more detail.

3. Returning to the proceedings concerning the Company, on 8 February 2017 HH Judge Purle QC, in the Birmingham District Registry of the Chancery Division, heard an application for an administration order in relation to this company. He dismissed that application, ordered that the petition to wind up the Company be transferred to Birmingham District Registry and also appointed Mr Haskew and Mr Wood (now the liquidators) as the joint provisional liquidators of the Company. On 22 February 2017 the judge made a winding up order.

4. There then followed proceedings within the winding up. First, a without notice freezing injunction was granted against the respondent, on 20 March 2017, by Mr Justice Newey. Then on 31 March 2017 an on-notice freezing injunction was granted, limited to assets to the value of £535,477.31. I varied that freezing injunction very slightly on 21 April 2017.

5. On 25 April 2017 I made an order by consent that certain preliminary issues should be determined in this application before the application itself was dealt with. The preliminary issues as set out in the order are as follows:

“1. Whether section 127 of the Insolvency Act 1986 has rendered the entire settlement agreement dated 23 December 2016 void;

2. If and to the extent it is held that section 127 Insolvency Act 1986 has rendered the settlement agreement void, whether the settlement agreement should be validated by the court;

3. Whether all or any of the claims brought by the applicants against the respondent are barred pursuant to the terms of the settlement agreement;

4. If some, but not all the claims brought by the applicants against the respondent are so barred, which ones are so barred.”

6. These issues arose out of the “settlement agreement” dated 23 December 2016 between the Company and the respondent, which might govern the claims made in the application. Put briefly, the respondent’s case is that that agreement on its true construction bars all the claims. The Company says that it does not, but that in any event section 127 of the Insolvency Act 1986 renders the agreement void. The respondent says that in that case the court should validate the agreement as being in the interests of the Company’s creditors…”

Procedure

Positions of respondents

Facts

(1) Annabel's (Berkeley Square) Ltd                            £1,000

(2) Apple Retail UK Ltd                                              £4,357.20

(6) BUPA Insurance Ltd                                              £1,389.04

(11) COYA (Restaurant) Ltd                                       £4,173.13

(12) Dashle Ltd                                                            £12,500

(15) Elleven Orthodontics Ltd                                     £943

(19) George (Mount Street) Ltd                                   £2,672.61

(21) Hat-trick Design Consultants (London) Ltd        £9,750

(22) Hedonism Drinks Ltd                                           £2,850.80

(25) James Pimental Pinto                                            £10,000

(26) Lawson Conner Services Ltd                               £1,890

(29) Martin Stockman                                                  £1,000

(31) Monique Jayasuriya                                              £5,539.85

(34) Please Hold (UK) Ltd                                          £384

(38) Salesforce.com EMEA Ltd                                  £630.46

(41) Dorchester Clubs Ltd t/a The PA Club                £5,388

i)                    The first respondent is a members’ club in Mayfair, London. Mr Anthony-Mike used it to entertain business contacts. No receipt or invoice is available for the £1000 spent there on 5 December 2016.

ii)                  The second respondent sells Apple technology equipment in the UK. There is an invoice to the Company for £789.60, dated 25 October 2016 and paid 2 December 2016, for a laptop computer. There are no invoices available for the payments of £2168.40, made on 28 October 2016 and £1399.20, made on 11 November 2016.

iii)                The sixth respondent provides healthcare insurance. The 2 payments of £694.52 made on 2 November 2016 and 1 December 2016 were made by direct debit, suggesting that they were regular monthly payments, although there are no other documents to support this. The 31 ^st respondent, Ms Jayasuriya, refers in her submissions to private health insurance being paid for her. She started her employment on 17 October 2016 and was not paid for December 2016. It is possible that these two payments to the 6th respondent were (in part, at least) in respect of her private health insurance.

iv)                The 11 ^th respondent is a members’ club and Peruvian restaurant in Mayfair, London. The liquidators believe that this was a venue used by Mr Anthony-Mike when entertaining business clients. There are receipts for the sums of £1869.21 and £2303.92 in respect of the payments on 7 ^th November and 28 November 2016. They relate to food and alcohol supplied.

v)                  The 12 ^th respondent appears to be related to a Swedish company running a beauty business. The sum of £12,500 paid on 14 November 2016 appears to have been paid under the terms of a secured convertible loan note entered into by the Company with the 12 ^th respondent on 9 September 2016.

vi)                The 15 ^th respondent runs a dental practice in the Harley Street area of London. There are no receipts or invoices available in relation to the payments of £125 and £488 made on 11 November 2016 or the payment of £330 made on 18 November 2016. However, the applicant’s solicitors were informed by an employee of the 15 ^th respondent in March 2018 that those payments were linked to Mr Anthony-Mike and someone called “Julie”. The latter person has not been identified.

vii)              The 19 ^th respondent runs a private members’ club in Mayfair, London. Again, it appears that this was a venue used to entertain business contacts. Receipts, relating to food and drink supplied, are available in respect of the following payments: £69.58 (27 October 2016), £123.05 (7 November 2016), £63.25 (14 November 2016), £925.75 (15 November 2016), £280.60 (18 November 2016), £73.60 (21 November 2016), £115.58 (21 November 2016), £64.40 (21 November 2016), £123.05 (23 November 2016).

viii)            The 21 ^st respondent appears to be a design company founded in 2001 and based at London Bridge. However, no invoices are available and there is no further information as to what (if any) services were provided to the Company.

ix)                The 22 ^nd respondent is a company running an off-licence in Mayfair. The receipt for £2401.90, paid on 28 November 2016, shows the purchase of 6 bottles of wine or spirits.

x)                  The 25 ^th respondent was a consultant retained by IDEASE LLP, but whose remuneration for his services was paid by the Company. It is that payment which is the subject of this claim. His position is considered in more detail later.

xi)                The 26 ^th respondent provides regulatory infrastructure and managed compliance services and software. They informed the liquidators that they had invoiced and provided services in accordance with their service agreement dated 10 November 2016. That agreement has not been made available to the court. It is clear from a statement filed very recently that the services were provided to ValCap Ventures LLP, although paid for by the Company.

xii)              The 29 ^th respondent was employed by ValCap Ventures LLP as a consultant, although paid by the Company. The payment the subject of this claim appears to have been his fee for consultancy services in November 2016.

xiii)            The 31 ^st respondent was an employee of Valentina Capital Holdings UK Ltd, starting employment on 17 October 2016. But she was paid by the Company, and it is the payment of her remuneration which is the subject of this claim. I deal with her position in more detail later.

xiv)            The 34 ^th respondent provides “on hold” and voicemail telephone services. There are no invoices, contracts or receipts available in respect of the two payments of £192 made on 4 November and 2 December 2016. But they were paid by direct debit, suggesting that they were regular payments.

xv)              The 38 ^th respondent is a customer relationship management platform with applications for sales, services and marketing. No invoices or contract are available to explain the payment of £630.46 on 28 October 2016.

xvi)            The 41 ^st respondent trades as “the PA Club”, offering services to senior PAs and EA’s in London. The sums of £3594 and £1794 paid on 11 ^th November and 2 December 2016, were, according to the invoices available, for a year’s membership and for attendance at an event.

1. The goods or services in question were provided to the Company and the payments made were received in good faith;

2. The respondents were not aware of the petition at the time of supplying the goods or services or receiving the payments in question;

3. The respondents have changed their position since receipt of the payments and it would now be inequitable to require the recipients to repay;

4. The transactions concerned were in the best interests of, or for the benefit of, the creditors as a whole and would therefore be retrospectively validated by the court if any application were to be made.

1. The fact that goods or services were supplied in good faith does not affect the operation of section 127 in making the disposition of the Company’s property void. There is no exception in the section for receipt in good faith. (I deal with this further below.)

2. The same applies to the fact of the absence of knowledge of the existence of the petition. The disposition is nevertheless void, because Parliament has said it is, and once again there is no exception for transacting without knowing of the petition. The legislature has chosen to make a policy decision that prefers the interests of the Company and its creditors to those of the innocent third parties who deal with it. The court has no power to ignore that policy decision. Indeed, so far as carried into execution by the words of the statute, it is its duty to enforce it.

3. Unless respondents provide admissible evidence of the change of position, the court is in no position to judge whether this can make any difference or not. As I say later, the burden is on the recipients to prove that they have a defence to the claim made against them. It is not for the applicants, having made out a prima facie case, to prove that they have not.

4. Whether the transaction would or would not be retrospectively validated by the court is irrelevant, if no application is ever made by the recipient for such validation. In the absence of such an application, the court must proceed on the basis that the disposition of the Company’s property is void, as the statute says it is. In this connection, I accept the evidence filed on behalf of the applicants, that the recipients have been invited to make any applications which they wished for the validation of the payments they received, and yet none of them has done so.

Law

“ 127. Avoidance of property dispositions, etc.

(1) In a winding up by the court, any disposition of the Company's property, and any transfer of shares, or alteration in the status of the Company's members, made after the commencement of the winding up is, unless the court otherwise orders, void.

[ … ]. ”

“29. In the respondent’s notice, the respondents submitted that the judge ought to have concluded that s 284 of the Insolvency Act 1986 provides a free-standing right to recover the compensation ordered by the judge. I disagree. In my judgment s 284 only operates to avoid relevant dispositions. The section is silent as to the remedy available to the bankruptcy estate when a disposition has been avoided, and the appropriate remedy is, accordingly, governed by the general law. This is a point which was decided by this court in Hollicourt (Contracts) Ltd …

[ … ]

33. Hollicourt clearly shows that the right to recovery is ‘restitutionary’. Here the appellants (correctly) accepted that, as well as having a right to the return of the shares, the trustees in bankruptcy were, in addition, entitled to claim equitable compensation in respect of any loss that the estate had suffered as a result of the wrongful retention.  At trial there was some argument as to the meaning of that term in the context of s 284. Again, it is somewhat unclear what the judge precisely decided on this point, but it appears that Proudman J accepted Mr Moraes’ submission that ‘restitutionary’ simply meant that

‘the bankrupt’s estate is entitled to be restored to the position it would have been in had the [first appellant] not retained the Shares, as if the trustees in bankruptcy had only had them they would have realised them in accordance with their duties.’

34. But I cannot agree that that is the right approach. The word ‘restitutionary’ as used in the authorities is used in the sense of restoring trust property actually lost as a result of a breach of trust. The trustees in bankruptcy have chosen to make a case for compensation based on breach of trust. The cases clearly establish that compensatory relief, in addition to the restoration of trust property, is available where the claimant beneficiary can establish a loss to the estate caused by the trustee’s breach of trust. Such relief may be awarded in appropriate cases in addition to the restoration of property and is compensatory in nature. That was made clear by Lord Toulson in his judgment in AIB at [64]-[66]…”

“45. In my judgment, the effect of sections 278, 283, 284 and 306 of the Insolvency Act 1986 was that, in the present case, as from the transfer date, the first appellant held the legal title to the shares on the following trusts:

i)                    contingently for the bankrupt, in the event that a bankruptcy order was indeed made against him; and

ii)                  subject thereto (i.e. in the event that no such order was made), for himself as absolute owner of both the legal and beneficial title.

As from the date when the bankruptcy order was made on 21 April 2009, the first appellant and/or the sisters (if they had had some of the shares transferred to them by this date, as to which see below) held the legal title on trust for the bankrupt and title to them was vested in Mr Hosking, on the latter’s appointment as trustee in bankruptcy on 22 July 2009. An alternative analysis would be that the first appellant and/or the sisters held a defeasible or voidable title from the transfer date until the bankruptcy order and thereafter no title to the shares at all, since the transfer was, retrospectively, void. However, the claim for equitable compensation was premised on the trust analysis and I see no reason to depart from it as it makes little difference to the ultimate outcome.”

“accept the main submission of counsel that the only action at law which was available to the trustee was an action against the defendant for money had and received” (at 164G-H).

He held that, in the events that had happened, the trustee in bankruptcy had a statutory legal title to the debt owed by the bank to its customer, as represented by the call deposit account (at 166H-167B, 170F-G). Thus the trustee in bankruptcy, rather than the wife, was the real creditor of the bank, even at law. He could therefore sue in debt , rather than money had and received. (He also held that the trustee in bankruptcy had title to the profits made, by means of tracing at common law. I am not concerned with this part of the decision, since there is no question in the present case of any claim to profits being made with the money that was paid to the respondents.)

“49.  I tentatively conclude from the foregoing that Mr Curl is probably right in saying that we are not in Goff and Jones territory because we are not dealing with unjust enrichment generally but a particular statutory regime which gives rise to an obligation to account for money had and received to which there are limited defences .”

The burden of proof

Defences

Good faith for value

“54. It seems plain to me that it would be wholly unjust to allow any of the parties who has been paid by the bankrupt or on his behalf out of his estate to retain the sums they have received to the detriment of other creditors. To do so would be to prefer those persons over the creditors in the bankruptcy (or other creditors in the bankruptcy) and would defeat the statutory purposes to which I have alluded.”

On the contrary, what the insolvency policy requires is that payments made which are avoided by the statute should be repaid to the estate as soon as possible. As one would expect, this is a defence: Pettit v Novakovic [2007] BPIR 1643, [16].

Change of position

“41. Attractively as the argument was presented by Mr Prentis, I do not consider that change of position can be entirely ruled out as a possible way of resisting a claim for repayment by a liquidator. It seems to me that the question of validation of a disposition is distinct from the question of actual recovery if the disposition is not validated. I do not see why the defence should not be available where, for instance, a creditor did not know and could not have known (because it had not yet been advertised) of the existence of the petition. After all, in other cases where payments can be treated as void or ultra vires, it is commonplace that restitution is available subject to restitutionary defences. The purpose behind the discretion conferred on the court to validate a disposition is not the same as the purpose of the change of position defence, albeit that both are based on an overarching concept of fairness. The former is directed principally at achieving a pari passu distribution of assets whilst permitting transactions which are, or are likely to be, of benefit to the Company to take place; the latter is an inherent qualification to the right of restitution and which, in its very nature, will be detrimental to the Company and distort the pari passu distribution of assets.

42. I do not consider that the comparison with sections 238 and 239 improves the argument that section 127 excludes a change of position defence in all cases. Those sections provide express remedies to which the liquidator is entitled if certain conditions are satisfied; in the case of section 127, in contrast, no remedy at all is provided for recovery (where a validation order is not made) and the matter is left to the general law. The result is not incongruous because a liquidator must establish something more under sections 238 and 239 if he wishes to take advantage of the express statutory remedies.

43. However, whether the change of position defence succeeds will then depend on the individual facts. It is clear, for instance, that a payee cannot rely on a change of position defence if he knows, when he changes his position, that the payment to him was invalid. It might be said that this is because he is not acting in ‘good faith’ or not acting on ‘the faith of the receipt’.”

“55. … In my judgment, the change of position in releasing the charge was not made in reliance upon the initial validity of the credits to the overdrawn accounts, but was made in reliance on an assumption that no claim would be made to assert that initial invalidity. Without reliance on the initial validity, there is no change of position defence to the restitutionary claim.”

“a party who, as a result of being able to rely on an estoppel, succeeds on a cause of action on which, without being able to rely on it, he would necessarily have failed, may be able to recover more than the actual damage suffered by him as a result of the representation which gave rise to it. Thus if a bank’s customer is estopped from asserting that a cheque with which he has been debited is a forgery, because of his failure to inform the bank in due time, so that it could have had recourse to the forger, the debit will stand for the whole amount and not merely that which could have been recovered from the forger…

So far as they go, the authorities suggest that in cases where estoppel by representation is available as a defence to a claim for money had and received, the courts similarly do not treat the operation of the estoppel as being restricted to the precise amount of the detriment which the representee proves he has suffered in reliance on the representation.” (See also Eveleigh LJ at 611C-D. Cumming-Bruce LJ allowed the appeal by way of a pleading point: see at 609E-G.)

“I recognise that in some circumstances the doctrine of estoppel could be said to give rise to injustice if it operated so as to defeat in its entirety an action which would otherwise lie for money had not received. This might be the case for example where the sums sought to be recovered was so large as to bear no relation to any detriment which the recipient could possibly have suffered” (see also Eveleigh LJ at 611-2, and Cumming-Bruce LJ at 608G-H).

The example given in the last sentence of this extract is usually referred to in subsequent authorities as the “exception” to the estoppel principle recognised in that case. I will return to this later.

“In our view, however, the two defences are different and estoppel has a role to play that is not performed by change of position. Change of position is about the fair allocation of loss where the value transferred from the claimant to the defendant has been dissipated through no fault of the defendants, while estoppel is about holding the claimant to his undertakings where these have been detrimentally relied upon by the defendant. Before brushing the estoppel defence to one side on the basis that it always produces the same outcome as the change of position defence, one would need to be certain that it would never be appropriate to fulfil the defendant’s expectations rather than merely reversing his detriment, or to achieve some combination of the two. There is an unspoken assumption in recent judicial discussions of the estoppel defence that this would never be appropriate, but no explanation has been offered of why this should be so. Furthermore, if a court were to take the view that the point of estoppel was to prevent the claimant from leading evidence to establish that the defendant’s enrichment was unjust, then that would suggest that the argument does not work as a ‘defence’ at all, but rather as a denial that the claimant has established all the necessary ingredients of his cause of action.”

“In any event, as I read the relevant authorities, the law has now developed to the point where a defence of estoppel by representation is no longer apt in restitutionary claims where the most flexible defence of change of position is in principle available…”

“the two defences will remain distinct, unless or until the House of Lords rules otherwise.”

Peter Gibson LJ (at [66]) called the decision in Avon County Council v Howlett a “procedural oddity”. He went on in the same paragraph to say that

“It was decided at a time when the defence of change of position was not recognised. But it was not expressly overruled by the House of Lords in the Lipkin Gorman case. … I doubt if this court is free to treat the Howlett case as overruled.”

The court held that this case fell within the “exception” in Avon County Council v Howlett , where the payment sought to be recovered was so large as to bear no relation to any detriment incurred, so that it was unconscionable for the recipient to retain the balance, and that therefore the estoppel defence extended only to the value of the goods shipped.

The impact of the settlement with the directors

Background

“21. On 23 March 2017, the Liquidators issued a claim against Mr Anthony-Mike for equitable compensation for the losses suffered by the Company as a result of his breaches of fiduciary duty. These breaches included causing or permitting the Company to make payments after the presentation of the Petition. The Liquidators asserted that Mr Anthony-Mike was liable to compensate the Company to the extent that the Company was unable to recover monies from the recipients of the void payments.

22. On 27 April 2017, the Liquidators reached a global settlement with Mr Anthony-Mike and the other de jure directors of the Company (against whom claims had been threatened in relation to both the Company and Officeserve Direct Ltd) on confidential terms.

23. The court has expressed concerns as to whether the settlement precludes the Liquidators from recovering any sums from the respondents. This would only be the case if by the settlement the Company’s losses were recouped in full, such that the principle of full satisfaction would operate to prevent double recovery.

24. The Liquidators are prevented by the confidentiality provisions of the settlement from disclosing its terms without the consent of the other parties or a court order. However, as part of that settlement, the other parties permitted the Liquidators to report to creditors on the broad terms of the settlement. Accordingly, in their report to creditors dated 20 April 2018 pursuant to Insolvency Rule 18.8 and filed at Companies House on 3 May 2018, the Liquidators reported:

“Settlement Agreement

At a mediation meeting on 28 March 2018 we settled all claims against the directors of the Company. Whilst we have signed a confidentiality agreement over the detailed terms of the agreement we can confirm the following: –

– the insurers have agreed to pay £1.55 million within 28 days of the signing of the agreement

– this will be split between both OTL (£1.1 million) and ODL (£450,000) when received by our lawyers

– all claims against the directors and from the directors are extinguished

– the sum of £34,107 currently held by  can be used to cover legal fees as ordered by the court”.

25. It is therefore clear from this report that the Liquidators have not recouped the whole of the Company’s losses, such that the rule against double recovery is not engaged.

26. The Liquidators will ensure that a copy of the settlement agreement is available at court in the event that the court considers it appropriate to order them to disclose its contents to the court. Further submissions will be made at the hearing as to the terms on which any such disclosure should be ordered.”

“in consideration of the terms of this Deed and in particular the Applicants [meaning the Company, its subsidiary ODL and the applicants in this proceeding] complying with and/or procuring the performance of the obligations and undertakings contained in this Deed and in particular clause 4”.

“is in full and final settlement of, and each Party hereby releases and forever discharges, all and/or any actions, claims, rights, demands and set offs, whether in this jurisdiction or any other, whether or not presently known to the Parties or to the law, and whether in law or equity, that they or any of them ever had, may have or hereafter can, shall or may have against any other Party arising out of or connected with or which relate in any manner to [the dispute between the Parties and various other matters connected with that dispute] and/or … any other matter arising out of or connected with the relationship between any of the Parties”.

I add that none of the present respondents is within the definition of “Party” for the purposes of the agreement.

(1) The claims against the directors of the Company arose from alleged breaches of duty which included causing or permitting the Company to make payments after the presentation of the petition.

(2) As part of the global settlement agreement all claims against the directors and from the directors are extinguished.

On the face of it, that logically means that all claims against the directors in respect of causing or permitting the Company to make payments after presentation of the petition have now been extinguished.

The authorities

“The agreed sum is a liquidated amount which replaces the claim for an illiquid sum. The effect of the compromise is to fix the amount of his claim in just the same way as if the case had gone to trial and he had obtained judgment. Once the agreed sum has been paid, his claim against the defendant will have been satisfied. Satisfaction discharges the tort and is a bar to any further action in respect of it… I think that it follows that, if the claim was for the whole amount of the loss for which the defendant as one of the concurrent tortfeasors is liable to him in damages, satisfaction of the claim against him will have the effect of extinguishing the claim against the other concurrent tortfeasors.

There may be cases where the terms of the settlement, or the extent of the claim made against the tortfeasor with whom the plaintiff has entered into the settlement, will show the parties have not treated the settlement as satisfaction for the full amount of the claim of damages. In the same way a judge, in awarding damages to the plaintiff in his action against one concurrent tortfeasor, may make it clear that he has restricted his award to a part only of the full value of the claim.”

Lord Clyde gave a speech to similar effect (see in particular at 483D-484C). Lord Lloyd of Berwick dissented.

“3. A brings an action against B claiming damages for negligence in tort. The claim goes to trial, and judgment is given for A for £x. There is no appeal and the judgment sum is paid by B to A. £x will thereafter be taken, in the ordinary way, to represent the full value of A's claim against B. A cannot thereafter maintain an action for damages for negligence in tort against C as a concurrent tortfeasor liable in respect of the same damage for two reasons: first, such a claim will amount to a collateral attack on the judgment already given; and secondly, A will be unable to allege or prove any damage, and damage is a necessary ingredient for a cause of action based on tortious negligence. A cannot maintain an action against C in contract either, in respect of the same damage, for the first reason which bars his tortious claim. There is however no reason of principle, in either case, on the assumptions made in this example, why B should not recover a contribution from C under the Civil Liability (Contribution) Act 1978 as a party liable with him for the same damage suffered by A.

4. In a second example the facts are varied. A brings an action against B claiming damages for negligence in tort. The action does not proceed to judgment because B compromises A's claim by an agreement providing that he will pay A damages of £x, which he duly does. If £x is agreed or taken to represent the full value of A's claim against B, A cannot thereafter maintain an action against C in tort in respect of the same damage for the second reason given in the last paragraph, and although he is not precluded from pursuing a claim against C in contract in respect of the same damage he cannot claim or recover more than nominal damages. There is again, in the ordinary way, no reason of principle in either case, on the assumptions made in this example, why B should not recover a contribution from C under the 1978 Act as a party liable with him for the damage suffered by A.

5. There is, however, an obvious difference between the action which culminates in judgment and the action which culminates in compromise: that whereas, save in an exceptional case (such as Crawford v Springfield Steel Co Ltd (unreported) 18 July 1958, Lord Cameron), a judgment will conclusively decide the full measure of damage for which B is liable to A, a sum agreed to be paid under a compromise may or may not represent the full measure of B's liability to A. Where a sum is agreed which makes a discount for the risk of failure or for a possible finding of contributory negligence or for any other hazard of litigation, the compromise sum may nevertheless be regarded as the full measure of B's liability. But A may agree to settle with B for £x not because either party regards that sum as the full measure of A's loss but for many other reasons: it may be known that B is uninsured and £x represents the limit of his ability to pay; or A may wish to pocket a small sum in order to finance litigation against other parties; or it may be that A is old and ill and prefers to accept a small sum now rather than a larger sum years later; or it may be that there is a contractual or other limitation on B's liability to A. While it is just that A should be precluded from recovering substantial damages against C in a case where he has accepted a sum representing the full measure of his estimated loss, it is unjust that A should be so precluded where he has not.

“by no means obvious that the claim against the solicitors, if proved, might not exceed the pleaded claim in the section 212 proceedings” (at 657B).

“Although in Jameson Lord Hope seems to have been careful to restrict his observations to the case of concurrent tortfeasors liable for the same damage, I would not exclude the possibility of the principle being extended to closely analogous situations (although where the two actual or potential defendants are not liable in respect of precisely the same damage, abuse of process may be a safer foundation for the court to restrict further proceedings, as Laddie J seems to have thought in Heaton ).”

“48. It seems to me that the real question is whether the settlement with Mr Meerson falls within the Jameson v CEGB principle so as to bar the claim against Mrs Meerson. I do not think that it does. It is not a case which is ‘closely analogous’ to the position of the concurrent tortfeasors in Jameson . The claim against Mr Meerson, as put in the correspondence leading to the settlement, was different from the claim as it is now put against Mrs Meerson. The claim against Mr Meerson was put on the basis that he caused or allowed the payments to be made in breach of his duties to the Company. It was essentially a claim that he account to compensate the Company for the loss said to have been caused. That against Mrs Meerson is for recovery of the allegedly void payments themselves. In such cases the restitutionary remedies may be proprietary. Those are separate causes of action potentially leading to different forms of relief. Nor did the Liquidator’s offer of settlement to Mr Meerson purport to be in full satisfaction of his claims in relation to the Alleged Dividend Payments. It was expressed to be a settlement of the whole of the claim against Mr Meerson, not the separate claim against Mrs Meerson.

49. I do not see that the mere fact of a settlement of a claim against Mr Meerson as director for breach of duty in allowing allegedly void dispositions of company property to be made can have the effect of barring a claim to recover the property from its recipient.”

“separate causes of action potentially leading to different forms of relief”.

Application of law to facts

“Sadly I will not be able to attend, as I have several meetings that I cannot postpone”.

She also explained that before losing her job she

“had already booked 4 holidays of which I still had to go on and wanted to enjoy as I was suffering with depression from the stress of having no income, routine and stability.

– December 23 – Cape Verde

– Jan 12 Bali

– Jan 20 Dubai

– February 1 Dubai”.

She also said that this was a

“very unfair situation as I was employed by a company and was not to know the Company structure and that Mr Anthony-Mike was dealing with the situation incorrectly as I was oblivious to all the facts.”

Conclusion