Dawson v Bell

Commercial pressure does not establish economic duress or support a related intimidation claim unless its practical effect is to compel the claimant’s will or leave no practical choice. A party who negotiated material concessions, understood available remedies and obtained a reasonable bargain was not so compelled.

An appellate court will not ordinarily interfere with case-management decisions where no timely objection was made and the party had a fair opportunity to respond. A statutory contribution claim also fails where contribution would not be just and equitable having regard to the parties’ respective responsibility for the loss.

Following the breakdown of their personal and business relationship, the claimant sold his shares in Adwelsh Media Ltd to the defendant under a share purchase agreement. He later sought to set aside that agreement for economic duress and claimed damages for intimidation. The defendant counterclaimed, as assignee of the company, for misuse of company money.

HH Judge Havelock-Allan QC rejected the duress and intimidation claims, upheld the relevant counterclaim, and entered judgment for the defendant after an addendum judgment. The claimant appealed on the alleged intimidation and duress, the enforceability of a shareholders’ agreement term, procedural unfairness in the counterclaim, and contribution under the Civil Liability (Contribution) Act 1978.

1. The appeal was dismissed unanimously. The judge’s findings were inconsistent with any conclusion that the claimant’s will had been coerced when he executed the share purchase agreement. Commercial pressure is not the same as submission to pressure. The claimant had legal advice, understood that removal as a director could be contested, negotiated material improvements to the bargain, and retained practical choices. The intimidation claim merely recast the same facts and therefore also failed. It was unnecessary to decide whether two-party intimidation requires a threat of unlawful conduct.
2. The challenge to clause 4.1.5 of the shareholders’ agreement was untenable. The clause was not unusual. The claimant had sufficient time to read the agreement, obtain advice and raise concerns before signing it. Its potential operation would in any event have required an agreed price or an accountant’s valuation.
3. There was no procedural unfairness in the treatment of the counterclaim. The claimant had not objected at trial to the judge’s approach, could have sought time or adduced further evidence, and was given the opportunity to respond to the post-judgment evidence and submissions. The addendum was a logical working-out of issues already tried.
4. As to contribution, the court was prepared to assume that the defendant knew of, and failed to prevent, some misuse of company funds. Applying section 2(1) of the Civil Liability (Contribution) Act 1978, it was nevertheless not just and equitable for her to contribute. The relevant payments were for the claimant’s exclusive benefit, and her responsibility did not justify transferring any part of his liability to the company.

• Court of Appeal (Civil Division) — In [2016] EWCA Civ 96, the court dismissed the claimant’s appeal and upheld the net judgment for the defendant.
• High Court, Queen’s Bench Division, Bristol District Registry, Mercantile Court — HH Judge Havelock-Allan QC dismissed the claims based on duress and intimidation, allowed the defendant’s counterclaim in part, and issued an addendum judgment. After set-off and interest, judgment was entered for the defendant.