“must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest.”
“53. It is, of course, likely that the strength of the misselling claims which different Non-GAR policy-holders might put forward would differ, according to the particular facts of each case. However, the misselling claims cannot possibly be valued on an individual basis for the purposes of the scheme. The time taken and the cost of such an exercise would be enormous. If the scheme had included such a provision, no single Non-GAR policy-holder could receive any uplift by way of compensation until all claims had been quantified. It seems to me that the consequent delay in settling the compensation to be given to individual policy-holders would be altogether unacceptable. That is a compelling reason for a flat-rate distribution… 54. The submission to the effect that late joiners are in a separate class, however, depends on establishing that the class proposed, whatever it may be, is in a fundamentally different position from all other members of the overall Non-GAR class. It is not sufficient to say that all those who took out policies after1 January 1997 , or1 September 1998 , or whatever date is chosen, have a strong case for compensation for misselling; it would have to be the case that they had an essentially and fundamentally different, and conflicting, claim from all others, including those who took out a policy a day or a week before whatever cut-off date is chosen. None of those putting forward this objection sought to do that, nor could they do so, so far as I can see… The fact (if it be the case) that their misselling claims should be regarded as stronger than those of others is a matter of degree, not of the nature of the right.”
“CCS will in the first instance be funded with a sum of£40 million , which will represent what is considered to be a sufficient sum to discharge CCS’s liabilities to Scheme Creditors which become payable over at least the next eight years (commencing on1 January 2006 ).”
“(i) both Scheme Directors (or, if there is only one, the Scheme Director) shall have certified in writing to LDTC that they (or he) have (has) consented to such variation or termination and are (is) of the opinion that such variation or termination is: A. in the interests of the Scheme Creditors taken as a whole; and B. not materially prejudicial to the interests of each category of Recourse Scheme Creditors, General Scheme Creditors, Earlier Scheme Creditors and Later Scheme Creditors (each category taken as a whole); and (ii) LDTC considers that such variation or termination is: (A) in the interests of the Scheme Creditors taken as a whole; and (B) not materially prejudicial to the interests of each category of Recourse Scheme Creditors, General Scheme Creditors, Earlier Scheme Creditors and Later Scheme Creditors (each category taken as a whole).
“Paragraph 13.3 of the scheme allows for modifications of or additions to the scheme, and for conditions which the court may approve or impose. One such condition is the giving of an undertaking which I will mention below. Some objectors picked up the idea of a modification and suggested that in this way the scheme could be transformed into something materially different. That is not a permissible approach. The provision is salutary, because there may be some immaterial error or oversight, or change of circumstances, that needs to be corrected or covered. But it would be quite wrong to use the provision so as to foist on a class of creditors something substantially different to what has been approved at the relevant meetings. It is not possible, as one person suggested, for example, to sanction the scheme on terms that the uplifts be treated as being in escrow pending further litigation to clarify the effect of the House of Lords ruling, being released if that litigation showed that the Society’s present understanding is correct, but otherwise remaining in escrow pending new arrangements for a ‘fairer’ distribution.”
“The Special Manager and the Management Committee shall at all times and from time to time comply with any directions which may be given by the creditors of the Company in meeting where such directions are agreed to by a special resolution at any meeting of creditors held in accordance with the provisions of this scheme.”
“Amendment to Scheme. Subject always to the Company first obtaining such order of the Court as may be appropriate in the circumstances at a meeting of the creditors of the Company called under this Scheme an amendment or amendments of the conditions of the Scheme may be made if agreed to by a majority in number representing three-fourths in value of the creditors of the Company present personally or by proxy and voting at the meeting and in any such case such amendment shall as soon as practicable thereafter be submitted for the sanction and approval of the Court…”
“Clause 14: This clause is the subject of a major objection, namely, that within its terms it may well be open to the creditors of the company to give directions which could override provisions of the scheme itself. The special manager and management committee are set up under the scheme with specific powers and authorities. The extent of these powers and authorities is determinable from the scheme itself. No scheme compulsorily imposed under the authority of the court under s 181 should be capable of amendment by machinery internal to the scheme itself. Clause 20: This clause appears to contemplate a procedure very similar to an independent application under s 181. I have already stated my view that any provision for amendment of the scheme by means internal to the scheme is unacceptable. If an amending or subsequent scheme is at any time to be brought forward, that can be considered and dealt with by a separate application under s 181. It may be that this is what is contemplated by cl 20. If so, cl 20 is unnecessary – s 181 is always available. If, on the other hand, cl 20 purports to permit amendment in some way other than by strict compliance with s 181 in a fresh application, then cl 20 is objectionable, and should be deleted. Whichever be the case, the clause should go out.”
“…in my opinion it is not appropriate, at least in this case, to give approval in advance for a composition where one cannot predict with reasonable precision what sum will be received by the creditors nor what will be the financial position of the company at the time the composition or arrangement is proposed. That would be giving to a majority of creditors a power to override the minority by a procedure which does not have the added protection of any requirement for court approval. For better or for worse, the provisions of the Code are designed to protect scheme creditors in these circumstances, and they are designed to protect them by means of the formal procedures laid down under Pt VIII. The authorities to which I have been referred indicate a general reluctance on the part of the court to empower the creditors to vary a scheme by machinery internal to the scheme. It was argued that this was not a variation or amendment of the scheme. I do not agree. In my opinion no arrangement or composition is presently put forward as one which will be agreed to by the creditors of the company. Moreover I do not think that it is possible at the moment for the creditors to express an informed opinion on a variation or amendment by means of an uncertain arrangement or composition which may be put to them after two or perhaps three years. An arrangement of this kind is very different from the moratorium which in the first place is sought by the scheme, and however clearly it is put to the creditors I do not believe that at present their consent can be on an informed basis. For these reasons I believe the decision in Re Telford Inns Pty Ltd, supra, is more consistent with the policy of the Act than some of the observations in; Re WJ McGarth & Co Pty Ltd, supra,. It may be that the full facts of the latter case justified the order made but for present purposes I do not propose to follow it.”
“(28) The use of conditions subsequent to bring about termination of a scheme of arrangement needs to be distinguished from a scheme containing machinery which could lead to variation of its terms. Courts will generally not approve schemes which carry within themselves machinery for variation of their own terms: see, eg, Re RM Eastmond Pty Ltd (1972) 4 ACLR 801; Re Telford Inns Pty Ltd (1985) 10 ACLR 312 3 ACLC 660; Re Leamon Consolidated (Vic) Pty Ltd (1985) 10 ACLR 263. The reason for that is stated in Leamon (at 265): In my opinion, a scheme … ought not to be approved unless the creditors and the court can see very clearly at the time that the scheme is proposed what it is that they are being asked to accept, and, in the case of the court, what it is that it is being asked to approve. (29) Clarity and certainty are thus the touchstones. Provided that clarity and certainty are present on the face of the scheme and no new decision making process intrudes after court approval, it does not matter that different results may emerge in different (but clearly identified) eventualities. A key question is whether the scheme is, according to its own term, self-executing in the sense that certain results follow in certain defined events.”
“However, here this is not an amendment in any way reliant upon those statutory provisions. Nor is it instigated or approved by the court, should those statutory provisions cover such a field. Here, rather, the scheme approved itself contemplates that very flexibility outside of further court discretion. It does so in a manner which could not be said to be inimical to the interests of members, given the safeguards that attend any post-approval variation and the fact that this is to be made clear in the scheme booklet.”
“13. But the clause 7.6 proposed in this case would have gone far beyond any “slip rule”
“Those cases appear to me to be concerned more with the question whether the inclusion of such a clause in a court-approved scheme is a desirable course than with the question whether such a clause if so included would be void ab initio.”
“A provision purporting to allow a company to vary a scheme of arrangement after it had been approved by the court will not usually be approved as it would compromise the need for “clarity and certainty” for members in scheme arrangements as emphasised by Santow J in [NRMA]”
“A person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence.”
“(1) To the extent that this Part of this Act prevents the exclusion or restriction of any liability it also prevents – (a) … (b) excluding or restricting any right or remedy in respect of the liability, or subjecting a person to any prejudice in consequence of his pursuing any such right or remedy; (c) … And (to that extent) sections 2 and 5 to 7 also prevent excluding or restricting liability by reference to terms and notices which exclude or restrict the relevant obligation or duty.”
“all claims, demands and causes of action whether or not presently known or suspected (‘the claims’) that such releasor ever had, may now have, or hereafter can, shall or may have against the releasees or any of them based upon, arising out of or related to any and all acts or omissions of the bank or any other person prior to the date hereof. Each of the releasors understands and agrees that the nature, extent and result of the claims hereby released may not now all be known or anticipated and declares that it nevertheless desires and hereby agrees to settle compromise and release in full all possible claims against the releasees arising from any and all acts or omissions of any releasee or any person or entity prior to the date hereof.”
“A person is not bound by any contract term prejudicing or taking away rights of his which arise under, or in connection with the performance of, another contract, so far as those rights extend to the enforcement of another’s liability which this Part of the Act prevents that other from excluding or restricting.”
“This argument that section 10 of the Act may apply to compromises or settlement of existing disputes has been foreseen by a number of textbook writers as an unfortunate possibility. They are unanimous in their hope that the courts will be robust in resisting it. If Mr. Sheridan’s construction is correct, the impact will be very considerable. The Act of 1977 is normally regarded as being aimed at exemption clauses in the strict sense, that is to say, clauses in a contract which aim to cut down prospective liability arising in the course of the performance of the contract in which the exemption clause is contained. If Mr. Sheridan’s argument is correct, the Act will apply to all compromises or waivers of existing claims arising from past actions. Any subsequent agreement to compromise contractual disputes falling within sections 2 or 3 of the Act will itself be capable of being put in question on the grounds that the compromise or waiver is not reasonable. Even an action settled at the door of the court on the advice of solicitors and counsel could be reopened on the grounds that the settlement was not reasonable within the meaning of the Act. If I am forced to that conclusion by the words of section 10 properly construed, so be it. But, in my judgment, it is improbable that Parliament intended that result: it would be an end to finality in seeking to resolve disputes. The starting point in construing section 10 is, in my judgment, to determine the mischief aimed at by the Act itself. For this purpose, it is legitimate to look at the second report on exemption clauses of the Law Commission on Exemption Clauses (1975) (Law Com. No. 69): see Smith v Eric S. Bush[1990] 1 AC 831 857E, per Lord Griffiths. This report was the genesis of the Act of 1977. The report is wholly concerned with remedying injustices which are caused by exemption clauses in the strict sense. So far as I can see, the report makes no reference of any kind to any mischief relating to agreements to settle disputes.”
“In my judgment, the Act is dealing solely with exemption clauses in the strict sense (i.e. clauses in a contract modifying prospective liability) and does not affect retrospective compromises of existing claims.”
“does not affect the validity of any discharge or indemnity given by a person in consideration of the receipt by him of compensation in settlement of any claim which he has.”
“My Lords, may I speak to Amendments Nos. 2 and 3 at the same time. The real purpose of these Amendments is to avoid doubt – to make it clear, in other words, that the validity of any discharge or indemnity granted in settlement of any claim is not affected by any of the provisions in Part II of the Bill. Part II of the Bill contains several provisions which render void or no effect a term of contract which purports to exclude or restrict liability for breach of duty or breach of contract. One finds an example in Clause 16(1) and, indeed, in other clauses. It is not, of course, intended that controls should apply to any contractual provision which discharges any claim a person may have in respect of any liability which some other person may have incurred in the past. I understand that the problem which we visualise and have sought to cover by this avoidance of doubt provision does not arise in England. In England, the view is taken that what is termed in English Law accord and satisfaction does not include [in context, this must be “exclude”] or restrict any liability arising in future and that it merely operates to discharge a pre-existing liability.”