Biscoe and Baxter v Milner [2021]
Share
Biscoe and Baxter v Milner [2021] EWHC 763 (Ch) examined the impact of a settlement agreement between liquidators and certain respondents on the continuation of claims against other respondents in the context of an alleged fraudulent investment scheme.
Equitable Law Capital (ELC) collapsed, leading to insolvency proceedings. The joint liquidators, Biscoe and Baxter, sought various orders against respondents involved in the scheme. Claims included dishonest assistance, knowing receipt, conspiracy, transactions at an undervalue, and wrongful trading. Before the trial, claims against the Milners were settled for £190,000.
The Settlement Agreement stated the settlement amount as "full and final settlement of the claims". The claims included those against the Milners detailed in the Application Notice. Clauses 3.1.2 and 3.1.3 required the Milners to provide information and evidence concerning the third respondent. Clause 5.1 contained an "Agreement not to sue", barring actions concerning the claims.
The liquidators argued that the Settlement Agreement didn't affect claims against other respondents. They emphasised the common law rule on joint tortfeasors and highlighted clauses implying continued pursuit of claims against the remaining respondents.
The Milners contended that the Settlement Agreement barred remaining claims. They asserted the release of liability, emphasised the agreement not to sue, and argued against implied terms for pursuing other respondents.
The High Court ruled in favour of the liquidators. The judge considered the common law rule regarding joint tortfeasors but found clauses 3.1.2 and 3.1.3 to be powerful indicators of the intention to continue claims. The court emphasised the context, including the means-based settlement and the small proportion of the settlement amount compared to total claims. A term was implied, allowing the liquidators to pursue all claims against the remaining respondents.
The judgment highlights the possibility of implying terms into settlement agreements regarding the continuation of claims, especially in scenarios involving joint and concurrent tortfeasors. The court will consider surrounding circumstances, including settlement amount and means-based settlement, in determining the agreement's scope. As clear clauses addressing the continuation of claims against other parties can be powerful factors in assessing the parties' intentions, settlement agreements should be carefully drafted to explicitly state the impact on claims not covered by the settlement, avoiding ambiguities and potential disputes.
Equitable Law Capital (ELC) collapsed, leading to insolvency proceedings. The joint liquidators, Biscoe and Baxter, sought various orders against respondents involved in the scheme. Claims included dishonest assistance, knowing receipt, conspiracy, transactions at an undervalue, and wrongful trading. Before the trial, claims against the Milners were settled for £190,000.
The Settlement Agreement stated the settlement amount as "full and final settlement of the claims". The claims included those against the Milners detailed in the Application Notice. Clauses 3.1.2 and 3.1.3 required the Milners to provide information and evidence concerning the third respondent. Clause 5.1 contained an "Agreement not to sue", barring actions concerning the claims.
The liquidators argued that the Settlement Agreement didn't affect claims against other respondents. They emphasised the common law rule on joint tortfeasors and highlighted clauses implying continued pursuit of claims against the remaining respondents.
The Milners contended that the Settlement Agreement barred remaining claims. They asserted the release of liability, emphasised the agreement not to sue, and argued against implied terms for pursuing other respondents.
The High Court ruled in favour of the liquidators. The judge considered the common law rule regarding joint tortfeasors but found clauses 3.1.2 and 3.1.3 to be powerful indicators of the intention to continue claims. The court emphasised the context, including the means-based settlement and the small proportion of the settlement amount compared to total claims. A term was implied, allowing the liquidators to pursue all claims against the remaining respondents.
The judgment highlights the possibility of implying terms into settlement agreements regarding the continuation of claims, especially in scenarios involving joint and concurrent tortfeasors. The court will consider surrounding circumstances, including settlement amount and means-based settlement, in determining the agreement's scope. As clear clauses addressing the continuation of claims against other parties can be powerful factors in assessing the parties' intentions, settlement agreements should be carefully drafted to explicitly state the impact on claims not covered by the settlement, avoiding ambiguities and potential disputes.
