Chamonix Private Equity LLP v Caledonia Investments Plc

On Tuesday 27 October 2015, after a period of pre-trial reading, I was due to commence the hearing of the trial in this litigation.

In the event, immediately after I entered Court I was informed by Counsel for the Claimant that “in the last five minutes the parties have come to terms.” Further discussion revealed that, although terms were agreed, the form of Order to be made had not.

Not surprisingly, a Tomlin form of Order was raised by the Claimant’s Solicitor, through Counsel for the Claimant, as a potentially suitable form of Order. In response to this I asked that a draft Order come to my Clerk when ready. I added: “For the avoidance of doubt, do let me have sight of the agreement. I appreciate that will be confidential, but I just need to be happy that it is something that is suitable should the stay need to be lifted and its terms need to be enforced. I will obviously treat it in confidence.”

Counsel for the Defendant indicated he had nothing to add.

After I had commended the parties and the teams assisting them for achieving a compromise as “possibly always one of the better outcomes in a case like this”, the short hearing concluded.

There was then disagreement between the parties over some details of the agreement and over the form of Order. This disagreement has been referred to me in writing and both parties agree that I should resolve the disagreement and do so in writing. In the circumstances of the case I am happy to do so.

I have been provided with contemporaneous documents and with written argument. I approach the task keeping in mind that the parties are commercially experienced parties, each a private equity house, and that the parties have had the assistance throughout of very experienced commercial Solicitors and Counsel.

It transpires that the evening before the hearing there was an email exchange between Solicitors to try to settle the case after previous unsuccessful efforts. The exchange ended with a counter-offer from the Defendant. Just before I entered Court on 27 October the counter-offer was accepted orally by the Claimant. It appears that there had been, moments before, a further exchange about settlement, but it is sufficiently apparent that, in the circumstances of this case, the original counter-offer remained open for acceptance at the point it was accepted.

After the hearing the Claimant sent a draft Order to the Defendant. The draft Order provided for payment of a stated sum within 14 days and for the release of certain security held in Court. The Defendant responded with amendments proposing confidentiality and a release of claims (including against employees and others). A later point was then raised by the Claimant, proposing that the payment be referred to in the Order as “in respect of the Claimant’s claim for damages”. This attracted a response from the Defendant that “[t]he claims on the proceedings were for damages, restitution and interest, and the agreed payment settling the case is to compromise all of those claims”. (In a further response, the Claimant states that it would be content for an Order to state that it is full and final settlement of all of the Claimant’s claims in these proceedings but the payment should be referred to as a payment in respect of damages claimed.)

The subject of whether the payment was in respect of damages can be traced back from the counter-offer to an earlier email from the Defendant which referred to payment of the same sum “in full and final settlement of your client[‘]s claims”. I am quite satisfied that the counter-offer is to be read in the same way.

The subjects of time for payment, release of security, confidentiality and release of claims had not been addressed expressly in the email counter-offer of the evening before. The subject of confidentiality had been referred to in the short hearing, in the manner described above.

On time for payment, I conclude that a reasonable time for payment is implicit in the agreement reached, and that 14 days is a reasonable time.

On release of security, I conclude that this follows administratively from the agreement reached and should, for reasons of clarity, be set out in any Order.

On confidentiality, although this was not expressly agreed when the counter-offer was accepted, the brief hearing before me confirmed to me that both parties acknowledged that, even if an Order in Tomlin form was not ultimately used, their agreement was to have the degree of confidentiality that would regularly be found in an Order in that form. That is, that the agreement between the parties would be in the form of a confidential Annex to an Order of the Court. If necessary, I would conclude that that acknowledgement amounts to a further agreement simply on the subject of confidentiality.

On release of claims, the Defendant (through Freshfields) urges as follows:

“… the Claimant has brought very serious allegations of deceit against our client on the basis of statements (allegedly) made by its employees. In these circumstances we have sought confirmation from the Claimant that it will not seek to pursue our client’s employees personally for claims arising out of the same facts as the litigation.”

That position is a reasonable one, but it is not one that I can conclude formed part of the agreement when the counter-offer was accepted. It is not unreasonable for the Claimant (through Quinn Emanuel) to insist that, as it was not agreed, so it should not be recorded in an Order of the Court.

However, it may be that in practice little will turn on this. The Defendant (through Freshfields) has made clear that should further proceedings be commenced it will apply to strike out those proceedings as an abuse of process. In that connection it may be useful to bear in mind the question whether, had proceedings against employees been envisaged, that is a matter that would have required to be raised as a case management issue in the current proceedings, but was not (see Aldi Stores Ltd v WSP Group plc [2007] EWCA Civ 1260; [2008] 1 WLR 748, and Otkritie Capital International Ltd v Threadneedle Asset Management Ltd [2015] EWHC 2329 (Comm)).

In the result the Order will be in the form provided to the parties with this Judgment.