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Naeem v Bank Of Credit & Commerce, Court of Appeal - Administrative Court, April 19, 2000, [2000] EWHC Admin 335



Case Number: CHANF 1999/0176/3
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION



Royal Courts of Justice
Strand
London, WC2A 2LL

Wednesday 19th April 2000


Before:

THE VICE-CHANCELLOR:
The Rt. Hon. Sir Richard Scott
-and-
Lord Justice buxton

B E T W E E N

International S.A.

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(Transcript of the Handed Down Judgment of
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Mr Robin Allen QC & Mr Isaac Jacob (instructed by Messrs Bweale & Co for the Appellant)
Mr Christopher Jeans QC & Mr D Stilitz (instructed by Messrs Lovells for the Respondent)

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Judgment
As Approved by the Court

Crown Copyright ©
The Vice-Chancellor:-
1. Two claimants gave notice of appeal against the order of Lightman J of 30 December 1998. They were Mr Khawaja Mohammad Naeem and Mr Abdul Naim Mohammad. We were told that since then, Mr Mohammad has agreed terms of settlement with BCCI. Mr Naeem is now, therefore, the sole appellant. But the issues raised on this appeal do not depend to any significant, extent, if at all, on facts peculiar to Mr Naeem's case. They are issues which affect the cases of every BCCI ex-employee who, like Mr Naeem and Mr Mohammad, signed an ACAS COT3 form and thereby purported to accept the terms that BCCI were offering -
"... in full and final settlement of all or any claims whether under, Statute, Common Law or in Equity of whatever nature that exist or may exist and, in particular, all or any claims rights or applications of whatsoever nature that the [ex-employee] has or may have or has made or could make in or to the Industrial Tribunal, except the [ex-employee's] rights under [BCCI's] pension scheme".
2. The question for decision is whether Mr Naeem, who signed a COT3 form on 4 July 1990, thereby barred himself from subsequently bringing a "stigma" claim against BCCI. In Malik -v- BCCI [1998] AC 20 the House of Lords, reversing a unanimous Court of Appeal who had dismissed an appeal from Mr Justice Evans-Lombe, held that breach of contract "stigma" claims by ex-employees of BCCI could, if the requisite facts could be proved, succeed.
3. It is accepted that, at the time Mr Naeem signed the COT3 agreement, he did not know that he could bring a breach of contract "stigma" claim against BCCI. It is to be assumed, for present purposes, that he was unaware of the Bank's illegal and dishonest conduct of its banking business; conduct that led to its collapse in the summer of 1991 and that, as the House of Lords held, may have constituted a breach by BCCI of the contractual obligation of trust and confidence that it owed to its employees.
4. The main argument for Mr Naeem, presented very clearly by his counsel, Mr Robin Allen Q.C., is that since Mr Naeem did not know that he had a "stigma" claim, the COT3 agreement should not be construed so as to release that claim. There is, however, also a subsidiary argument. The illegal and dishonest nature of the business being carried on by BCCI, which is the foundation stone of the "stigma" claim, was something of which Mr Naeem was unaware but, obviously, was known to BCCI through the medium of one or more of its corrupt officers. Since BCCI did not, at the time the COT3 agreement was signed, make any disclosure to Mr Naeem of the facts, known to itself but not to Mr Naeem, giving rise to the "stigma" claim, the COT3 agreement cannot be enforced against Mr Naeem, at least so far as the release of the "stigma" claim is concerned.
5. These two arguments are, or at least ought to be, distinct from one another. The first raises an issue of construction. The principles of construction of written documents should be applied to resolve it. The second argument involves a principle of equity. Should a beneficiary of a general release, who at the time of the release knows of some claim that the releasor can make against him but of which, to his knowledge, the releasor is ignorant, be permitted to rely on the general release in order to prevent that claim being made? In Taylor Fashions Ltd -v- Liverpool Trustees Ltd [1982] QB 133 Oliver J. was considering whether, in order to establish an estoppel by acquiescence, each and every one of the five "probanda" set out by Fry J. in Willmott -v- Barber (1880) 15 Ch.D. 96 had to be shown to be present. He rejected that rigid approach. He concluded that:- "... principle requires a very much broader approach which is directed at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to deny that which, knowingly or unknowingly, he has allowed or encouraged an...
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