HAMPTON, WINTER & GLYNN v. UWE MEFFERT

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JUDGMENT

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Cons, V. -P.:

1. This is an appeal against a summary judgment given under Order 14. The Appellant has appeared in person throughout the whole of the proceedings and the papers that we have are not in quite as good order as could be desired. In particular, there is no affidavit in support by the Defendant, either before the Master or before the judge. But no point having been taken below on that I am content to deal with the appeal on the papers that we do have.

2. The position would seem to be this. The Appellant, Mr. Meffert gives his occupation as an inventor. In connection with his inventions he has established four companies: Pricewell (Far East) Ltd., Re Foundation, Re Institute Ltd. and Re (Foundation) Electronics Ltd. The companies were apparently in need of legal advice or legal services and over a period of some four years the companies have consulted and instructed, through Mr. Meffert, a Mr. Scott who is said to have been a partner in Charles Russell & Co. It would seem also that, at least financially speaking, Mr. Meffert's inventions were not a success, and amongst other debts, by March 1985 legal fees in respect of those companies were outstanding in a sum of over $150,000. Messrs. Hampton, Winter & Glynn, the Respondents to this appeal, having apparently some connection with the firm of Charles Russell & Co. became concerned at the non payment of the fees and on the 15th of that month they procured fir. Meffert to sign a letter to the effect that in consideration of their not suing him or the companies for the period of three months then next ensuing, Mr. Meffert guaranteed the payment of the legal fees in question. There is however, a very curious addendum to the letter. After the legal fees are particularized there appear the simple words "As soon as I am able to do so". There is some dispute as to how those words actually came to be on the letter, but even on the Respondents' own case, the Respondents must have accepted their presence.

3. Some of the $150,000 has since been paid and there is some dispute as to the correct amount for which the guarantee, if it is valid at all, remains outstanding. But that came later on. Before then, some 8 months after the letter was signed, the Respondents wrote to Mr. Meffert asking him to pay. Then a writ was issued and application made under Order 14.

4. Master O'Donnell gave unconditional leave to defend. His decision was reversed by Macdougall J. who felt that the operation of the curious addendum was in some way limited to the three months' period, and that Mr. Meffert was necessarily bound thereafter by the rest of what he had signed.

5. Mr. Payne, who now appears for the Respondents, seeks to support the judge's decision with alternative submissions. The first, as I understand it, follows largely the view of the judge, and suggests the proper construction to be that if Mr. Meffert were able to pay within the 3 months, then he was under a duty to do so immediately. That seems to me to have a radical effect on the consideration expressed which would become, if the contention be correct, a promise to forbear for 3 months or until Mr. Meffert were able to pay, whichever was the sooner. I have some doubt that that is the true construction.

6. The alternative is simply that the words "as soon as I am able" are repugnant to other words in the guarantee which provide for it to be 'personal' and 'unconditional'. It is suggested that the phrase is so vague as to be incapable of any meaning, and must therefore be rejected.

7. Without a great deal of argument I would be very reluctant to reject as complete nonsense words which had been accepted quite deliberately by the Respondents. As I understand the law, where there is a contract or a term of a contract which is ambiguous, it is permissible, and indeed often very helpful to the Court, to look at what is often referred to as "the matrix of events" in which the contract came to be signed. In the present instance, as I have already mentioned, the circumstances in which the words were added, and indeed why the letter came to be signed at all, are very much in dispute. I accept, as the judge said, that it is not a matter of what Mr. Meffert thought he was signing, it is what the words themselves mean. However without going into the circumstances I do not find it possible to decide their true construction. And without having a trial it is not possible to know what the circumstances were.

8. A subsidiary ground of appeal is raised in the Notice. The payment that was made after the writ was issued was in the sum of $40,000. As far as the principal debtor - Re (Foundation) Electronics Ltd. -was concerned, it was accepted in full and final settlement of approximately $57,000 worth of particular legal fees. The letter of acceptance by the Respondents expressly reserved their right to take action against Mr. Meffert for what they called the "outstanding balance of legal fees ... pursuant to (his guarantee which was) to cover inter alia the legal fees of (the principal debtor)". It is claimed that nevertheless the judgment should have made allowance for the extra $17,000 odd.

9. The wording of that letter is not as clear as it might be, but in view of the conclusion I have come to on the main ground of appeal I prefer to express no opinion on the subsidiary. For the reasons I have first given I would allow the appeal.

10. Two courses are then open to this Court, either to dismiss the application under Order 14 or to give unconditional leave to defend. As I understand both my brothers are in favour of the former course, and as it seems to me that both in fact lead to the same position I am content to agree with them and would make that order.

Kempster, J. A.:

11. I agree with the order proposed by my Lord the Vice-President and with the reasons he gives for it. I have nothing to add.

Nazareth, J.:

12. I too agree and have nothing to add.

Cons, V. -P.:

13. The appeal is allowed and the summons under Order 14 is dismissed.