“This appeal raises the familiar issue of whether an agreement for the settlement of "all and any claims" between the parties (whether or not known to them at the time), had the effect of compromising claims in fraud and dishonesty (and, in the present case, conspiracy), notwithstanding that claims of that nature were not expressly mentioned in the agreement.”
“I agree with the Judge's understanding, expressed at [94] and [97], that neither Moore-Bick LJ nor Lawrence Collins LJ was suggesting any departure from the application of the ordinary principles of contractual construction in the case of fraud claims. Rather, consistently with those principles, they recognised that part of the commercial context to be taken into account was that parties would generally proceed on the basis of honest dealing and would not readily release unknown claims in respect of the fraud of their counterparty. Both decisions reflect that the specific release under consideration did not demonstrate an intention to settle claims in fraud. As the claims in Satyam were based on the fact that assignments had been forged, the release would have only been effective in respect of such claims if express words had been used: that should not be read as support (even obiter) for the proposition that express words are always or even generally required to release a claim in fraud.”
"44. It was agreed that the 2014 Releases must be construed in accordance with the principles in Arnold v Britton[2015] AC 1619 . Those principles were endorsed by the Supreme Court in Wood v Capita Insurance Services Ltd[2017] AC 1173 . As Lord Hodge explained at [10] of his judgment, the court must ascertain the objective meaning of the language which the parties have used and in doing so 'must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning.' He also reiterated the principle that the interpretation of contracts is a unitary exercise, stated that the process is an iterative one and added at [12]: 'To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each.' … 49. It seems to me that the definition of 'Claims' in clause 2(a) viewed in the context of the Revised Redress Offer as a whole and clause 2(a) in particular, and in the light of its relevant factual context, is extremely wide and is sufficient to include the claim of unlawful means conspiracy. 'Claims' are defined to include 'all complaints, claims and causes of action in any way connected to the sale of the IRHPs' (emphasis added). The language used is broad and unambiguous and it seems to me to be inescapable that it is sufficiently wide to include the claim as pleaded in the proposed amended pleading which contains numerous references to the sale of the IRHPs and their effects upon the Appellants."
“The correct approach on applications by defendants is, in my judgment, as follows: i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman[2001] 2 All ER 91 ; ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8] iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10] v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550 ; vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd[2007] FSR 63 ; vii)On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd[2007] EWCA Civ 725 .” i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman[2001] 2 All ER 91 ; ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8] iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10] v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550 ; vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd[2007] FSR 63 ; vii)On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd[2007] EWCA Civ 725 .”
“7.1 The terms of this Deed and payment of the Settlement Sum are in full and final settlement of, and each Borrower hereby releases and forever discharges, any and/or all actions, claims, rights, demands, disputes and set-offs or other matters, whether in this jurisdiction or any other, whether or not presently known to the Parties or the law, and whether in law or equity, that it may have or hereafter can, shall or may haveagainst the Bank or any Connected Party of the Bank arising from, out of or in connection with (i) the Facility Agreements, the Personal Guarantee or the Legal Charge; (ii) NDA; or (iii) Riley Holdings and all properties owned or formerly owned by Riley Holdings (collectively the “Released Claims”). 7.2 The Borrowers agree that they will not bring or commence any proceedings whatsoever in any jurisdiction against the Bank or any Connected Party of the Bank arising out of or in any way connected with the Released Claims save for the purposes of enforcing their rights under this Deed.”
“Thus far I have been considering the case where both parties were unaware of a claim which subsequently came to light. Materially different is the case where the party to whom the release was given knew that the other party had or might have a claim and knew also that the other party was ignorant of this. In some circumstances seeking and taking a general release in such a case, without disclosing the existence of the claim or possible claim, could be unacceptable sharp practice. When this is so, the law would be defective if it did not provide a remedy.”
“70. …a person cannot be allowed to rely upon a release in general terms if he knew that the other party had a claim and knew that the other party was not aware that he had a claim. I do not propose any wider principle: there is obviously room in the dealings of the market for legitimately taking advantage of the known ignorance of the other party. But, both on principle and authority, I think that a release of rights is a situation in which the court should not allow a party to do so. On the other hand, if the context shows that the parties intended a general release for good consideration of rights unknown to both of them, I can see nothing unfair in such a transaction.”
“65. MRL argues on this appeal that the Judge's reasoning failed to recognise the (necessarily assumed) fact that the respondents knew that they had unlawfully conspired against MRL and that MRL was unaware of that conspiracy. MRL contends that several of the factors referenced by the Judge, such as MRL "freely" giving up the opportunity to learn more about the background, the substantial value obtained by MRL and the equality of bargaining power, are all undermined by the assumed fact that the respondents were taking advantage of the ignorance of their victim. MRL's submission is that the full background should properly be examined at a trial and that the application of the sharp practice principle (itself a developing area of law and equity) could then be considered in the light of the full facts. 66. In my judgment MRL's contention fails to address the core of the Judge's reasoning, namely, that it was not arguable that it was unconscionable for the respondents to rely on the release as having settled claims in fraud and conspiracy. This is not a case where the respondents knew that MRL had claims of which it was totally unaware and took advantage of that ignorance by obtaining a release which settled those claims surreptitiously. As the Judge explained in some detail, MRL was fully aware, and had alleged, that Bonhams had damaged MRL by acting (deliberately) in breach of its duties as agent, leveraging its connection with Lohomij to do so. MRL had chosen not to investigate the full background to that wrongdoing and the extent to which the respondents had acted together, but chose to settle those claims for very valuable consideration. Far from it being unconscionable for the respondents to rely on the release, it was obviously unconscionable for MRL to seek to avoid the release by re-asserting the very same factual contentions, but arguing that they were unlawful acts pursuant to a conspiracy. I see no basis for overturning the Judge's decision in that regard. 67. I would add that, where a release is construed as covering unknown claims in fraud, dishonesty and conspiracy relating to a defined subject matter (as in this case), such construction entails a finding that the parties mutually intended to settle such claims. That would seem to leave little scope for a finding that one of the parties was guilty of sharp practice in relation to the existence of such a claim.”
“Another problem is that the matters complained of, and actually pleaded in paragraph 60, if proved to have taken place, must have taken place in 2007-2008, some five or six years before the settlement agreement was entered into. Yet the settlement agreement was entered into in order to compromise the claims arising out of the events of 2007 and 2008. As I have already held, on the true construction of the release of 2013, all claims arising out of or relating to those events were given up, even if they were not then known to the defendant. In my judgment, it is not possible to rely on claims which are being given up by a particular settlement agreement as a basis for rescinding that settlement agreement. It would be like pulling yourself up with your own bootstraps.”
“where a party to a contract was faced with the choice whether to affirm or rescind the contract, in order to render his election irrevocable he had to have knowledge not only of the facts which gave rise to the election but also of the right of election itself; that a person could not be treated as having elected to affirm a contract unless he had unequivocally demonstrated to the other party that he intended to proceed with it; that the issue of election was a question of fact to be decided on the evidence”
“(1) …where in the case of any action for which a period of limitation is prescribed by this Act, either - (a) the action is based upon the fraud of the defendant; or (b) any fact relevant to the [claimant’s] right of action has been deliberately concealed from him by the defendant; or (c) the action is for relief from the consequences of a mistake; the period of limitation shall not begin to run until the [claimant] has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it. (2) For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.”
“…although the question what reasonable diligence requires may have to be asked at two different stages, (1) whether there is anything to put the claimant on notice of a need to investigate and (2) what a reasonably diligent investigation would then reveal, there is a single statutory issue, which is whether the claimant could with reasonable diligence have discovered (in this case) the concealment. Although some of the cases have spoken in terms of reasonable diligence only being required once the claimant is on notice that there is something to investigate (the "trigger"), it is more accurate to say that the requirement of reasonable diligence applies throughout. At the first stage the claimant must be reasonably attentive so that he becomes aware (or is treated as becoming aware) of the things which a reasonably attentive person in his position would learn. At the second stage, he is taken to know those things which a reasonably diligent investigation would then reveal. Both questions are questions of fact and will depend on the evidence. To that extent, an element of uncertainty is inherent in the section.” (v) The words “could with reasonable diligence” in Section 32 connote an objective standard. Accordingly, the subjective knowledge of the claimant is irrelevant. However, it was decided in OT Computers (this being the key ratio of that appeal) that the objective standard is informed by the position of the actual claimant – i.e. the question is whether the actual claimant (and not a hypothetical claimant) could objectively have discovered the fraud or concealment, save that certain (potential) characteristics of the particular claimant such as slothfulness, naivety or incuriousness are ignored: see OT at paras. 38 and 48. (vi) So far as the ‘statement of claim’ test is concerned, in terms of what the claimant must be in a position to plead: (a) What is required is an ability on the part of the claimant to plead a complete cause of action; that is to say, a viable claim. In a fraud case, that means that the claimant must be able (in the sense of having the necessary actual or constructive knowledge) to plead the precise case that is ultimately alleged at least as regards the critical allegations which comprise the tort of deceit, namely that a representation has been made, that it was false and that the representor knew it was false: see Barnstaple Boat Co, v Jones[2007] EWCA Civ 727 at [34]. (b) This does not require the claimant to have been able to plead all of the evidence which it later decides to plead; it must merely know (or have been objectively capable of discovering) each of the facts without which the cause of action is incomplete: see LIA v Credit Suisse[2021] EWHC 2684 (Comm) at para. 33, in which HHJ Pelling QC referred to the following statement by Bryan J in LIA v JP Morgan Markets[2019] EWHC 1452 (comm) at para. 34: “at the point at which the claimant can plead the complete cause of action, however weak or strong, time starts to run. Not every detail needs to be known and a realistic view must be taken by the court.” (c) The authorities suggest that regard must be had to the professional obligations on counsel when it comes to pleading allegations of fraud. In particular, the claimant (and counsel in particular) must have material before them which makes it professionally proper for a plea of fraud to be advanced (see Sephton at para.44), described in the Bar Code of Conduct at rC9.2.c as “reasonably credible material which establishes an arguable case of fraud”
“…I would however agree with Wilson J that at the preparatory stage the requirement is not that counsel should necessarily have before him evidence in admissible form but that he should have material of such a character as to lead responsible counsel to conclude that serious allegations could properly be based upon it. I could not think, for example, that it would be professionally improper for counsel to plead allegations, however serious, based on the documented conclusions of a DTI inspector or public inquiry, even though counsel had no access to the documents referred to and the findings were inadmissible hearsay.”
“If the Bank wins on the settlement issue (whether or not it also wins on the limitation issue) it appears to be common ground that the Rileys cannot pursue their set off as a defence to the Counterclaim.”