In the Republic of Trinidad and...

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In the Republic of Trinidad and Tobago

In the High Court of Justice

HCA No. 3023 of 1995

Between

Edsel Reid

Plaintiff

And

Walter Marshall

Dr.Rollin Bertrand

Mervyn Assam

Arnold Mendes

Terrence Boswell-Inniss

And

Trinidad Aggregate Products Limited

Defendants

Before The Honourable Mr. Justice Devindra Rampersad

Appearances:

Mr. A. Fitzpatrick S.C. instructed by Mr. J. Mootoo and Mr. A. Byrne for the Plaintiff

Mr. A. Sinanan S.C. instructed by Mr. N. Bissoondatt and Ms. R. Jaggernauth for the Defendants

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Delivered on the 13th day of May 2010

TABLE OF CONTENTS

The Plaintiff’s Case: ................................................................................................3 The Statement of Claim (as amended on the 18th August 2002): ...................................4 The Defence (which was re-amended on the 9th April 2009): .......................................9 The Issues:............................................................................................................12 ISSUE 1: Whether the Plaintiff’s office as managing director of the sixth named Defendant could lawfully have been terminated by the majority vote taken by the Board of Directors on the 24th April 1995. .........................................................................12

Regulation 68 & the Law: ...................................................................................12 Conclusion: ..................................................................................................14

The Board’s power of dismissal pursuant to a draft agreement between the parties ...14 The factual matrix: .......................................................................................16 The 15th January 1975 meeting: ..................................................................17 The 27th May 1978 meeting and the draft contract: .....................................18 The draft contract and its terms: ..................................................................19 The 6th September 1988 meeting: ...............................................................23 The 28th June 1994 meeting: .......................................................................23 The 25th October 1994 meeting: ..................................................................25 The 6th December 1994 meeting: ................................................................25 The 21st February 1995 meeting:.................................................................25 The 21st March 1995 meeting: .....................................................................25 The 24th March 1995 meeting: .....................................................................26 Cross examination of the Plaintiff on “S.P.1”: ...................................................26 Conclusion on the draft contract:......................................................................27

Implied power to terminate resident in the Board of Directors? ...............................29 The resolution of issue 1: ....................................................................................30

ISSUE 2: Whether the Plaintiff was due to retire at age 65 as alleged by the Defendant?............................................................................................................................30 ISSUE 3: What, if any, is the extent of relief to which the Plaintiff is entitled?.............32

The Declarations sought: ................................................................................32 Analysis and conclusion ..............................................................................35

Damages.........................................................................................................36 Mitigation.............................................................................................................40 Taxes: ..................................................................................................................41 Interest: ................................................................................................................41 The order:.............................................................................................................41 APPENDIX A.......................................................................................................44 APPENDIX B .......................................................................................................49

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JUDGMENT

1) This is a claim for declaratory relief in relation to the 6th named Defendant's purported dismissal of the Plaintiff as its managing director and chief executive officer, along with damages for breach of contract, and wrongful dismissal in the alternative. This claim therefore necessarily concerns the circumstances under which the Plaintiff ceased to be in the employment of the sixth named Defendant on 24 April 1995. The Plaintiff claims that by a majority vote, the first through fifth named Defendants wrongly and without due authority terminated his office as managing director of the sixth named Defendant. The Defendant’s case is that the Board of Directors of the sixth named Defendant summarily dismissed the Plaintiff, but with cause. On the opening day of the trial, the case against the 1st, 2nd, 3rd, 4th and 5th named Defendants was dismissed so that the trial proceeded between the Plaintiff and the 6th named Defendant only.

The Plaintiff’s Case:

2) The Plaintiff’s case of wrongful dismissal is premised mainly on the application of Regulation 68 of the Companies Ordinance as it relates to his tenure as managing director of the sixth named Defendant. Pursuant to Regulation 68, the Plaintiff was appointed managing director of said Defendant on 15 January 1975. At the time of the Plaintiff’s appointment, but for certain aspects referable only to his remuneration and benefits package, the Plaintiff’s employment as managing director was on terms and conditions to be agreed.

3) In effect, the Plaintiff has denied the validity of a draft contract of employment between himself and the sixth named Defendant, and maintains that his appointment as managing director was governed on the basis and terms of Regulation 68, and that the only amplification thereof concerned his remuneration and benefits package. The issue of the Plaintiff’s duration of tenure having not been addressed at his appointment, the Plaintiff contends that this begs the only reasonable inference that said issue fell for consideration within the confines of Regulation 68, which states that short of ceasing for any cause to be a director, the Plaintiff’s office as managing director could only be determined by the company in general meeting. The purported dismissal of the Plaintiff pursuant to a meeting of the Board of Directors was therefore ultra vires the provisions of Regulation 68.

4) The Plaintiff maintains that since the termination of his employment was unlawful and of no effect, he remains the managing director of the sixth named Defendant unless and until the proper course for determination is adopted, that is, a decision taken by the company in general meeting that its members no longer desire him to act in that capacity. Further, as there is no evidence that evinces such a desire on the part of the company’s members, it cannot be said that the Plaintiff may be regarded as an employee imposed on an unwilling employer.

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5) Apart from the declarations which the Plaintiff seeks below, he claims to be entitled to fully recover his wages and other emoluments between the date of his purported dismissal and date of judgment. In his Amended Statement of Claim filed on 13 August 2002, the Plaintiff claimed against all Defendants:

5.1) A declaration that the purported decision of the first, second, third, fourth and fifth named Defendants made on 24 April 1995 terminating the Plaintiff’s office as the managing director of the sixth named Defendant is ultra vires, null, void and of no effect;

5.2) A declaration that the Plaintiff is and was at all material times and remains the managing director and chief executive officer of the sixth named Defendant, and as such is entitled to occupy all offices, and to perform all and any functions and duties, and assume all responsibilities consistent with the said offices of the managing director and chief executive officer, and is entitled to all privileges, remuneration, emoluments and perquisites commensurate with the said offices.

6) As against the sixth named Defendant:

6.1) Payment of all outstanding sums due and owing to him under his said contract of employment as managing director;

6.2) Damages for breach of the said contract;

6.3) Further and/or in the alternative to the relief sought at paragraphs 1 and 2, damages for wrongful and/or unlawful dismissal of the Plaintiff from his employment as managing director and chief executive officer;

6.4) Interest on the sums outstanding at items 4 and 6 claimed herein at the rate of 18% per annum or such rate as to the Court seems just and equitable.

7) As against all the Defendants:

7.1) Costs;

7.2) Such further and/or other relief as the Court may deem just.

The Statement of Claim (as amended on the 18th

August 2002):

8) The Plaintiff was appointed managing director of the sixth named Defendant at a meeting of the Board of Directors held on 15 January 1975. The Plaintiff’s appointment was effective from 1 February 1975 on terms and conditions to be agreed. Following a reorganization of the sixth named Defendant, the Plaintiff vacated his office as managing director of same, and was appointed Executive Director of the sixth named Defendant and, as well, managing director of one of that company’s subsidiaries (“The Trinidad Italian Tile Company Limited”) with effect from the 6th September 1988.

9) On 28 June 1994, at a Board of Directors’ meeting, the Plaintiff was reappointed as the managing director of the sixth named Defendant with immediate effect. He was thenceforth styled as the managing director and chief executive officer of the sixth named Defendant. It was a term of the Plaintiff’s reappointment as managing director of the

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sixth named Defendant that the said Defendant would provide the Plaintiff with the following emoluments and perquisites:

9.1) Base salary of $102 000.00 per annum.

9.2) A bonus consistent with the sixth named Defendant’s policy regarding the payment of same.

9.3) Entertainment allowance of $9,000.00 per annum.

9.4) Overseas Travelling allowance of $21,000.00 per annum.

9.5) Consultancy and professional fees of $34,500.00 per annum.

9.6) Premises upkeep allowance of $15,000.00 per annum.

9.7) A monthly allowance of $8,000.00 plus VAT in respect of a motor vehicle from 1st January 1995 with interest at 1½ per centum per month for late payment. This was considered part of the Plaintiff’s emolument package.

9.8) Reimbursement of running expenses of the motor vehicle referred to in the preceding sub-clause.

9.9) Annual membership fees for the American Ceramic Society, Institute of Materials and the BWIA Ibis Club.

9.10) Annual membership fees for the Plaintiff’s VISA credit and American Express charge cards.

9.11) Annual subscription to the Trinidadian Guardian, Trinidad Express and TIME Magazine.

9.12) A Gardener.

9.13) Reimbursement of 75 % of the cost of local telephone calls made from his home.

9.14) 12 weeks vacation every 2 years taken 5 weeks in the first year and 7 weeks in the second year with vacation leave not taken being accumulated.

10) Pursuant to a resolution passed at an extraordinary general meeting of the sixth named Defendant held on 15 July 1983, the Plaintiff was granted an option by the sixth named Defendant as part of his contract as managing director to subscribe for 26,000 ordinary shares of $10.00 in the company, subject to the proviso that if there was any change in the capital structure of the sixth named Defendant, the maximum number of shares which might be subscribed by the Plaintiff together with inter alia, the subscription price, would be adjusted by the sixth named Defendant in such manner as the auditors of the sixth named Defendant shall certify in their opinion fair and reasonable. (At the time of the grant of the option, the capital structure of the sixth named Defendant comprised 400,450 issued and fully paid ordinary shares of $10.00 each).

11) On or about 22 October 1986, the Plaintiff exercised the option referred to above in respect of 2,000 shares. It was a term of the Plaintiff’s reappointment as managing director of the sixth named Defendant that the Plaintiff would continue to enjoy the option referred to above with respect to those shares not previously subscribed for thereunder.

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12) As part of the Plaintiff’s contract, it was agreed that provided that the Plaintiff was alive at the date of maturity of the shares, the sixth named Defendant would pay to the Plaintiff the proceeds of the matured Key man Policy #05016167 which the sixth named Defendant had taken out on the Plaintiff’s life.

13) Another term of the Plaintiff’s contract of employment as managing director was that any general increase in emoluments and perquisites enjoyed by the management staff of the sixth named Defendant would apply to the Plaintiff by way of an increase in his emoluments and perquisites (other than reimbursements and the allowance in respect of a motor vehicle) by a percentage amount not less then the percentage increase enjoyed by the management staff. Following are the particulars of the management increase in management emoluments and perquisites from 1995 to 2002:

Year Increase

1995 20%

1996 7 ½ %

1997 5%

1998 5%

1999 5%

2000 5%

2001 5%

2002 5%

2003 [Not given]

2004 [Not given]

2005 5% - This information was not in the pleadings but was given subsequently by consent of the parties and was stated in exhibit “S.P.25”



14) In or about 1989, the sixth named Defendant agreed to provide the Plaintiff at age 65, and notwithstanding that he continued to be employed by the former, a pension equal to 2/3 of his final three year average salary prior to age 65 (inclusive of all perquisites and emoluments). In partial pursuance thereof, the Plaintiff and Colonial Life Insurance Company (Trinidad) Limited [CLICO] entered into an agreement dated 30 March 1989 whereby the sixth named Defendant purchased two annuity policies from CLICO in the name of the Plaintiff (the first, No. FPA 00010 and the second, No. FPA 00053).

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15) It was also a term of the Plaintiff’s reappointment as managing director that the sixth named Defendant would contribute the annual sum of $48,420.00 towards the said policies for approximately 19 years or for so long as was necessary for the Plaintiff to receive the agreed pension benefits, while the Plaintiff would contribute 7% of his full salary until age 65.

16) The sixth named Defendant’s Articles of Association was governed by, inter alia, Regulation 68 Table A (the First Schedule to the Companies Ordinance Ch. 31 No.1) at the relevant time, and also formed part of the Plaintiff’s terms and conditions of employment as managing director of the sixth named Defendant. This Regulation expressly provided that the Plaintiff, as managing director, could not be dismissed except by the sixth named Defendant in General Meeting.

17) At a meeting of the sixth named Defendant’s Board of Directors held on 24 April 1995, the first, second, third, fourth and fifth named Defendants, by a majority vote, wrongly and without due authority, terminated the Plaintiff’s office as managing director of the sixth named Defendant. On or about 25 April 1995, the sixth named Defendant deposited into the Plaintiff’s bank account the sum of $99,466.64, purportedly in lieu of its liability to him as at the date of dismissal. The Plaintiff says that he has not agreed to this and will give credit for the said sum.

18) Notwithstanding letters from the Plaintiff’s attorneys-at-law dated 26 June 1995 and 19 July 1995 to the sixth named Defendant and first through fifth named Defendants respectively, indicating that said dismissal was ultra vires, the Defendants have since 25 April 1995 failed and/or refused to permit the Plaintiff to resume his office.

19) Further, following the Plaintiff’s dismissal, the sixth named Defendant has failed and/or refused to contribute the annual sum of $48,420.00 owed by it towards payment of the annuity policies between the Plaintiff and CLICO. At the time of the Plaintiff’s dismissal, there was due and owing from the sixth named Defendant to the Plaintiff, the sum of $14,843.79 in respect of outstanding emoluments to January 1995. The Plaintiff was also entitled to 36 weeks accrued vacation.

20) By reason of the matters aforesaid the Plaintiff has thereby suffered loss and damage.

Particulars of Special Damage:

20.1) Failure to be paid the yearly increases in emoluments and perquisites

20.2) Key Man Policy (which matured in 1996) $32,363.61

20.3) Entitlement to subscribe for 940,082 shares at $0.70 per share

20.4) Outstanding emoluments to January 1995 $14,843.79

20.5) Outstanding salary and allowances from January 1995 to April 1995 $12,100.00

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[Items 6 to 10 inclusive of increases referred to in paragraph 20.1 above]:

Period: May 1995 to April 2002 and continuing.

20.6) Outstanding base salary $1,035,372.28

20.7) Entertainment allowance $91,356.38

20.8) Outstanding travel allowances $213,164.88

20.9) Outstanding consulting and professional fees $350,199.45

20.10) Outstanding premises upkeep $152,260.62

20.11) Monthly allowance in respect of motor vehicle $772,800.00

20.12) Outstanding running expenses for motor vehicle $50,491.00

20.13) Outstanding subscription to American Ceramic Society to 2002 $3,990.00

20.14) Outstanding sums for provision of services by a gardener $81,900.00

Period: 1996-2002 and continuing

20.15) Outstanding Subscription to Institute of Materials $4,441.50

20.16) Outstanding subscription to BWIA Ibis Club $13,185.90

20.17) Annual Membership fee VISA Credit Card $5,320.00

20.18) Annual Membership fee for American Express Charge Card $5,292.00

20.19) Annual subscription to Trinidadian Guardian, Trinidad Express and TIME Magazine $10,312.75

20.20) 75 % cost of local telephone calls from May 1997 to April 2002 $11,130.00

20.21) Bonus payments due in accordance with the sixth named Defendant’s policies for the year ending 1994 to the year ending 2001 $610,198.56

20.22) Salary in lieu of 36 weeks accrued vacation $218,930.23

Sub-Total $3,689,055.95

Less 99,466.64

TOTAL 3,589,589.31

20.23) Inability of the Plaintiff to pay towards the said policies

20.24) Plaintiff attained 65 in June 1998 and was entitled to a monthly pension of $18,628.58 but has only

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been receiving $8,503.34 in breach of the agreement.

Particulars of Loss:

Outstanding monthly pension due from September 1998 to April 2002 and continuing $435,299.32

The Defence (which was re-amended on the 9th

April 2009):

21) In 1988, the 6th Defendant says that the Plaintiff was reassigned as managing director of the sixth named Defendant which included the discharge of the responsibilities of chief executive officer, with continuing responsibility for special projects which fell within his portfolio as Executive Director. There was never any special or separate employment of the Plaintiff as chief executive officer.

22) The full terms and conditions of the Plaintiff’s employment as managing director were never agreed upon. However at the date of termination of the Plaintiff’s employment as managing director, his emoluments and perquisites were those as set out in paragraph 9 above, save for the bonus referred to at subparagraph (aa) thereof, and were essentially the same as he enjoyed as executive director.

23) With respect to the shares option which the Plaintiff also claims, the sixth named Defendant contends that it did grant an option to the Plaintiff to subscribe for 26,000 ordinary shares in the company, but same did not form part of the Plaintiff’s contract of employment. At an Extraordinary General Meeting of the sixth named Defendant held on 15 July 1983, the decision was taken to institute a Share Option and Incentive Scheme for all Senior Managers (including the Plaintiff), but according to Company Circular dated 1 July 1983, it had already been decided that the duration of the option would be for a period of two years from the date of its grant and thereafter the same would lapse or expire. Alternatively, even if the Share Option and Incentive Scheme did form part of the Plaintiff’s contract of employment, the Defendant contends that it was a condition precedent to the exercise thereof that the Plaintiff be in the employ of the sixth named Defendant at the date of any purported exercise of same. In any event, the Defendant denies that the share option survived the reappointment of the Plaintiff as managing director in 1994 and stands firm by the assertion that the Plaintiff is no longer entitled to exercise the share option.

24) The Plaintiff’s allegations of being entitled to the payment of the Key Man policy upon maturity once he was alive and to general increases in emoluments and perquisites by a percentage not less than the percentage increases of management staff was denied and the Plaintiff put to strict proof thereof.

25) The pension arrangements referred to at paragraphs 24 and 25 above were admitted but the Defendant said that the Plaintiff was due to retire at 65 and insisted on the Plaintiff being reassigned rather than reappointed.

26) The Plaintiff was not employed for a fixed term and accordingly, the Board of Directors of the Sixth Defendant had the implied power to terminate the Plaintiff’s

employment as managing director at any time. Further or alternatively, the

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Defendants aver that by an agreement between the Plaintiff and the sixth named Defendant (as evidenced by an unsigned written draft but ratified by the Board of

Directors on 27 May 1978), the Plaintiff was appointed managing director on terms that the contract of service could be terminated inter alia, by 3 months notice, and

forthwith, for any material breach of the provisions of the agreement, or grave

misconduct or neglect in the discharge of his duties1.

27) The Defendant’s case is that pursuant to the relevant terms of said ratified draft, the Board of Directors did summarily dismiss the Plaintiff from his office as managing director on 24 April 1995, but for cause. The reasons are set down below:

27.1) The Plaintiff deliberately disobeyed the reasonable instructions and/or directives of the Board of Directors given to him in the course of his employment and neglected and/or failed to perform his duties as managing director.

Particulars:

27.1.1) The Plaintiff was requested by the Board of Directors to carry out certain tasks and provide reports thereon, but failed, refused and/or neglected to do so, with the result that the said tasks and reports remained undone and outstanding at the date of termination of the Plaintiff’s employment.

27.2) The Plaintiff was requested to prepare and present a comprehensive report on contractors’ performance as it related one Claymining Contractors performance, as it was perceived by the Board that there was inadequate supervision of that project which affected the sixth named Defendant adversely. This report was to be presented at certain Special Meetings of the Board of Directors, but the Plaintiff failed, refused and/or neglected to provide the said report in a timely manner or at all.

27.3) Despite repeated requests from the Board of Directors, the Plaintiff refused, failed and/or neglected to follow the Management Procedure for Capital Projects approved by the Board in respect of capital expenditure.

27.4) By July 1994, the Plaintiff willfully refused to account to the Board of Directors on several aspects of the sixth Defendant’s operations which were critical to the proper and efficient administration of the sixth Defendant. The Plaintiff developed an attitude of open hostility, insolence and abuse to other members of the Board of Directors, which together with his lack of accountability, frustrated and paralysed the Board in its legitimate efforts to properly manage and oversee the sixth Defendant in the interest of stockholders to whom it is ultimately accountable.

27.5) The Plaintiff displayed incompetence and lack of skill in performing his duties as managing director.

Particulars:

1 As provided by Clause 11 of the purported Director’s ratified agreement – exhibit “S.P.1”.

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27.5.1) Pursuant to the Plaintiff’s responsibility to initiate and implement commercial projects to enhance profitability, he sought and obtained approval from the Board of Directors for a $0.83M improvement on one Clay Paver Project.

27.5.2) The Board approved the Plaintiff’s proposal on the basis of the Plaintiff’s assurance that returns would have been of a certain quality which would make the project commercially viable. Such was not the case, and the Plaintiff’s proposal proved to be technically and commercially unsound.

27.5.3) Despite requests from the Board, the Plaintiff failed and/ or refused and/ or neglected to adequately report to the Board on the Project’s progress.

27.5.4) Eventually the Board was forced to appoint a sub-committee to review the said project which found that as a result of the Plaintiff’s incompetence in the formulation of the proposal for the project, its implementation and management, the profitability of the sixth named Defendant was eroded by about $1.6 M.

27.5.5) The Plaintiff refused to offer any satisfactory explanation for this loss.

27.6) The Plaintiff wrongly and dishonestly misappropriated and converted property of the sixth named Defendant for his own purposes; when in January 1994, the Plaintiff caused materials belonging to the sixth named Defendant to be removed from the latter’s premises and transported and used on a parcel of land owned by the Plaintiff for his own purposes.

28) Acting on the force of all the matters set out immediately above, a motion of no confidence in the Plaintiff was moved at a meeting of the Board of Directors on 21 March 1995. The Plaintiff was given the fullest opportunity to respond to the matters declared against him, but willfully refused to respond thereto.

29) The Defendant therefore contends that based on the foregoing, it was entitled to and did summarily dismiss the Plaintiff from his employment for cause.

30) The Plaintiff’s loss and damages were denied and the payment of the sum of $99,466.64 was supposed to have been in full satisfaction of the sums due to the Plaintiff at the time of his dismissal.

31) The Defendant stopped paying the contributions to the Key Man policy and annuity policies but claims justification for so doing as the payments were conditional upon the Plaintiff remaining in the sixth Defendant’s employ until the age of 65. The Key Man policy was eventually surrendered by the sixth named Defendant for the Surrender Value of $29,011.29.

32) Since the retirement of all employees is 65, the sixth named Defendant’s liability, if any, would extend only until that date in relation to the Plaintiff i.e. June 1998.

33) Further the Plaintiff was not paid any increases in emoluments due to his poor performance as a result of a Board of Directors resolution on the 21st March 1995.

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34) The Plaintiff has failed to mitigate his loss and/or damage by seeking alternative employment.

35) The Plaintiff failed and/or neglected and/or refused to deliver up possession of VOLVO motor vehicle PAZ 8045 upon the termination of his employment thereby exposing the sixth named Defendant to liability for lease rent.

36) For reasons which are examined with particularity later on in this judgment, the Defendant submits that the Plaintiff is not entitled to the reliefs sought.

The Issues:

37) The Court has identified the following issues for determination:

37.1) Whether the Plaintiff’s office as managing director of the sixth named Defendant could lawfully have been terminated by the majority vote taken by the Board of Directors on the 24th April 1995. Arising out of this is the necessary consideration of Regulation 68 and whether it applies to oust the Board’s power to dismiss the Plaintiff, or whether the Board rightly exercised its power of dismissal pursuant to a draft agreement between the parties or some implied power to terminate resident in the Board of Directors.

37.2) Whether the Plaintiff was due to retire at age 65 as alleged by the Defendant?

37.3) What, if any, is the extent of relief to which the Plaintiff is entitled?

ISSUE 1: Whether the Plaintiff’s office as managing director of the sixth named

Defendant could lawfully have been terminated by the majority vote taken by the

Board of Directors on the 24th

April 1995.

Regulation 68 & the Law:

38) The Companies Ordinance Chapter 81 No. 1 of the laws of Trinidad and Tobago - Table A Regulation 68 provides that:

“The directors may from time to time appoint one or more of their body to the office of managing director or manager for such term and at such remuneration (whether by way of salary, or commission, or participation in profits, or partly in one way and partly in another) as they may think fit, and a director so appointed shall not, while holding that office, be subject to retirement by rotation, or taken into account in determining the rotation or retirement of directors; but his appointment shall be subject to determination ipso facto if he ceases from any cause to be a director, or if the company in general meeting resolve that his tenure of the office of managing director or manager be determined.”

39) The Plaintiff's contention is that in the absence of a contract between the parties, there is no ground for implying a term as to the determination of the Plaintiff's

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employment and that the only manner of determining his appointment was if he ceased to be a director or if the company in general meeting determined his tenure of office. In this case, the Plaintiff's contention is that there was never any executed agreement in respect of his employment and, as a result, there was never any contract in place between the 6th named Defendant and himself. Consequently, his dismissal as a result of a meeting of the Board of Directors held on 24 April 1995 was wrong and was without due authority. In the circumstances of this case, the Plaintiff claims that he could not have been dismissed by the Board of Directors.

40) It is necessary, in considering the meaning of Regulation 68, to come to an appreciation in respect of the following major points in the provision:

40.1) The managing director is appointed by the directors;

40.2) The term of the appointment and the amount of the remuneration is in the discretion of the directors – “as they may think fit”;

40.3) The appointment shall be subject to determination ipso facto if he ceases from any cause to be a director, or if the company in general meeting resolve that his tenure of the office of managing director or manager be determined.

41) In my view, there is no restriction against the managing director terminating his office for reasons such as voluntary resignation, an agreed retirement provision or for any other reason emanating from him voluntarily.

42) In support of his contention, the Plaintiff relied on the following authorities along with Regulation 68 mentioned above:

42.1) Nelson vs. James Nelson and Sons Ltd. (1914) 2 KB 770;

42.2) Read vs. Astoria Garage (Streatham) Ltd. (1952) 2 All ER 293;

42.3) Bainbridge vs. Smith (1889) 41 Ch. D 462

42.4) Newtherapeutics Ltd vs. Katz & or (1991) All ER 151

43) I have also considered the learning submitted by the Plaintiff from "Palmer's

Company Law" 24th edition, volume 1 at paragraphs 61-10 to 61-13 and "Halsbury’s

Laws of England” 4th edition, 2004 reissue, volume 7(2) at paragraph 1087.

44) The 6th named Defendant relied upon the following cases in opposition:

44.1) West Collieries Ltd. vs. McEwen [1925] 2 DLR 529;

44.2) Read vs. Astoria Garage (Streatham) Ltd. (1952) 2 All ER 293;

44.3) Foster v Foster [1916] 1 Ch 532;

44.4) Folami v Nigerline (U.K.) Ltd [1978] 1 ICR 277;

44.5) Shindler vs. Northern Raincoat Co. Ltd [1960] 1 W.L.R. 1038

44.6) Newtherapeutics Ltd vs. Katz & or (1991) All ER 151

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45) In the case of Foster v Foster, however, it was made clear that this was a situation in which the office was one for which no remuneration was being received and, in those circumstances, there was no contract. Rather, it was a mere delegation of the directors’ powers. To my mind however, there is an essential difference where there is more than just a gratuitous performance of the functions of the Board of Directors and I do not believe that this authority necessarily holds true in circumstances where the managing director receives remuneration for his services.

46) In Shindler vs. Northern Raincoat Co. Ltd, the Plaintiff was dismissed as a result of a resolution passed at an extraordinary general meeting notwithstanding the fact that he was supposed to have entered into a service agreement with the Defendant company. The Defendant company contended that the dismissal was not wrongful because the resolution was passed at an extraordinary general meeting in light of article 68. This was concluded against the Defendant company because of the authority of the House of Lords in Southern Foundries (1926) Ltd. v Shirlaw [1940] 2 All E.R. 445; [1940] A.C. 701. Diplock J, who found that the decision of their Lordships in Southern

Foundries was binding on him, said at 1042:

“It does, however, seem to me that all five of their Lordships in the Southern Foundries case n(5) were agreed on one principle of law which is vital to the Defendant company's contention in the present case. That principle of law is that laid down in Stirling v. Maitland n(6), where COCKBURN, C.J., said:

"... if a party enters into an arrangement which can only take effect by the continuance of a certain existing state of circumstances, there is an implied engagement on his part that he shall do nothing of his own motion to put an end to that state of circumstances, under which alone the arrangement can be operative."

Applying that respectable principle to the present case, there is an implied engagement on the part of the Defendant company that it will do nothing of its own motion to put an end to the state of circumstances which enables the Plaintiff to continue as managing director. That is to say, there is an implied undertaking that it will not revoke his appointment as a director, and will not resolve that his tenure of office be determined

Conclusion:

47) From a review of the authorities, it is clear to me that, in the absence of an express contract, the provisions of Regulation 68 would apply making it impossible for the Board of Directors to terminate the Plaintiff’s appointment. That power to terminate on behalf of the Company would reside with the 6th named Defendant in general meeting of the shareholders. I therefore must proceed to consider whether there was any express contract which removed the power to terminate from the company in general meeting and placed it in the hands of the Board of Directors.

The Board’s power of dismissal pursuant to a draft agreement between the parties

48) The Plaintiff was appointed as managing director at a meeting of the Board of Directors held on the 15th January 1975. According to the 6th named Defendant, the

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Plaintiff was appointed as managing director by an agreement between the Plaintiff and the 6th named Defendant “as evidenced by an unsigned written draft thereof ..... ratified by the Board of Directors on May 27th 1978 ....2.”. The terms of this agreement included, according to the 6th named Defendant, a term that the contract of service could be terminated, in circumstances set out at paragraph 11 thereof.3

49) The Plaintiff’s contention is that there was never any signed or completed agreement – PERIOD! The draft agreement relied upon by the Defendant as “S.P. 1” is not signed and bears several blanks on important matters such as the starting salary, the amount of the air fare allowance and the percentage of the profit sharing scheme (which was not apparently enforced).

50) On the other hand, the 6th named Defendant’s case is that the Board of Directors ratified an agreement between the Plaintiff and the 6th named Defendant and, by the conduct of the parties, that agreement ought to be inferred to be the prevailing agreement between the parties.

51) In support of this contention, the 6th named Defendant relied upon the following authorities:

51.1) Pagnan Spa vs. Feed Products Ltd [1987] 2 Lloyd’s Rep 601;

51.2) Percy Trentham Ltd vs. Archital Luxfer Ltd. [1993] 1 Lloyd’s Rep 25;

51.3) Birse Construction Ltd. vs. St. David Ltd. [1999] BLR 194;

51.4) Fitzpatrick Contractors Ltd. vs. Tycofire & Integrated Solutions (UK)

Ltd.[2008] EWCH 1301;

51.5) Brogden vs. Metropolitan Railway [1877] 1 AC 666;

51.6) Schiff Food Products Ltd. vs. Naber Seed & Grain Co. [1997] 1 WWR 124.

52) From these authorities, it seems to me that the propositions of law I must bear in mind in respect of matters where no contract was signed by the parties are as follows:

52.1) Parties may be contractually bound without signing documents.

52.2) The contract may be inferred from the conduct of the parties.

52.3) The onus of showing that both parties had acted on the terms of an agreement which had not been, in due form, executed by either, lies upon the party who rests his case on that circumstance.

52.4) The factual matrix should always be considered in any dispute as to construction of contractual terms, even if the wording could be regarded as unambiguous and sensible. However, it is important that a proper balance is retained between the factual background and the words used.

2 Paragraph 7A of the re-amended defence 3 See Appendix A

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52.5) If there are difficulties in the determination of whether or not an offer was made and accepted, then it may be necessary to consider all negotiations, including meetings where oral statements may have been made which were not referred to in the correspondence.

52.6) However different considerations will usually apply where the transaction has been fully performed. In those circumstances, the court will more readily conclude that there was a contract, even if it is impossible to identify the coincidence of offer and acceptance.

52.7) A failure to agree on a term may not invalidate an existing contract (by which further terms are to be agreed) unless thereby the contract becomes unworkable.

52.8) The question of whether a term is so necessary as to be essential whereby failure to agree on it precludes an agreement binding in law or makes a contract unworkable is for the parties to decide.

52.9) In most situations it will be clear that by the canons of offer and acceptance the parties must be taken to have reached an agreement and that it covered all the matters which they thought necessary to have made a contract in law. Occasionally where it proves impossible to discern a clear offer or a clear acceptance of an offer the judgment of Steyn LJ in G

Percy Trentham4 shows that objectively a contract may still be found to

have been made since the canons of offer and acceptance are not the last word and may be incapable of precise application. The decision is a mixed question of fact and law; whether there was an agreement is primarily a question of fact.

52.10) Where work is already being carried out, a contract is more readily found unless there are clear indicia that, for example, by the use of the term 'subject to contract', the parties did not intend to (and did not) enter into a binding legal relationship.

The factual matrix:

53) It is not in contention that the Plaintiff formed a company called Edken Limited in 1972, in which he and his friend Dr. Kenwyne Julien were the sole shareholders. At the time the company was formed, its Articles of Association incorporated Regulation 68. The name of the company was changed to Trinidad Aggregate Products Ltd. on 22 August 1973 and, from its formation, the Plaintiff was a shareholder and director. In 1974/1975, the Plaintiff decided to undertake the development of a brick business for which capital was sourced, a lease of land from government was obtained and the construction of a brick factory commenced in February 1975. The Plaintiff says without contradiction that he was responsible for the overall management of the project including

4 See para. 51 above.

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layout of buildings, plant and equipment, the commissioning of plant and the training of staff.

The 15th January 1975 meeting:

54. On 15 January 1975, a board of directors meeting of the 6th named Defendant was held amongst the Plaintiff [as chairman] and Dr. Kenwyne Julien [director] with 4 persons from another company – Easi Industrial Supplies Ltd. - being present namely, Carl Cabral, Kenneth Augier, Max Marshall and Geo. Bain. At that time, the Plaintiff was the majority shareholder owning more than 50% of the allocated shares. The minutes of that meeting were annexed to the Plaintiff's witness statement as exhibit “B”. Item 7 of those minutes was as follows:

“MANAGING DIRECTORS CONTRACT

The managing director's proposed contract which was previously circulated was discussed. It was eventually agreed that Mr. Marshall would undertake to review same together with Mr. Albert Knowles and make certain modifications. However, it was agreed that the eventual contract would be effective 1st Feb. 1975 when the managing director, Mr. E.V. Reid entered employment with Trinidad Aggregate Products Ltd.”

Those minutes bear the following on the 3rd page thereof:

“{Signature}

Edsel V. Reid, chairman

managing director/Project Engineer

26.3.75

Confirmed

K. Julien

E.V.Reid”

55. No explanation was given as to why or when the words “managing director/ Project Engineer” were struck out.

56. Nowhere in these minutes is there any indication of the appointment at that meeting of any managing director or the identification of the Plaintiff as the managing director. However, on the pleadings, the 6th named Defendant admitted that the Plaintiff was appointed its managing director with effect from 1st February 1975 at a meeting of the Board of Directors held on 15 January 1975, thereby confirming the Plaintiffs appointment on that date.

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The 27th May 1978 meeting and the draft contract:

57. On May 27, 1978, at a board of directors meeting of the 6th named Defendant, the Plaintiff [chairman], Mr. G. Pemberton [director], C. Cabral and R. Augier [alternate directors] and Mr. T. Boswell-Inniss [director/secretary] were present along with certain other invitees. The minutes of that meeting were annexed as exhibit "SP2" to the witness statement of Susan Pemberton. At item 7 of those minutes it was stated:

“managing director’s Contract:

The board ratified that the managing directors Contract as previously approved be executed by the Director/Secretary and the managing director but that consideration of the profit sharing clause be deferred.”

58. The 6th named Defendant's witness - Susan Pemberton - said that:

“The Plaintiff never executed a formal contract but I have searched the official records of the Sixth Defendant and have found a draft contract which is now produced showed to me and is hereto annexed and marked”S.P.1”5 [emphasis mine].

“According to the records of the Sixth Defendant then the said contract "S.P.1" as approved and ratified by the board of directors formed the Plaintiff's basic or core terms of employment.”6

59. In cross examination, Ms. Pemberton was far from convincing as to the circumstances involving the discovery of “S.P.1”. This was a crucial part of the 6th named Defendant's case since, from the authorities, the onus of showing that both parties had acted on the terms of an agreement which had not, in due form, been executed by either, lies upon the party who rests his case on that circumstance. She admitted that her knowledge came from the record and not from her personal knowledge. At first, when asked if the previously agreed contract referred to in paragraph 5 was the same as “S.P.1” her response was that she was not the author of the minutes (of the meeting held on 27 May 1978) so she did not know but the draft contract was attached to the minutes. Later on in cross examination she admitted that she had done the search herself which was referred to at paragraph 4 of her witness statement and she agreed that she did not say in her witness statement that the draft contract she found was annexed to the minutes. When asked why not, she said that she did not find it to be pertinent. Pausing there for a moment, I found this to be extremely extraordinary in light of the fact that it was the 6th named Defendant's burden to prove that “S.P.1” was a true copy of the agreement ratified by the board on the 27th of May 1978. It therefore would have been extremely pertinent to the issue which this court has to decide. She then went on in cross examination to say that “S.P.1” was not stapled to the minutes but it was in the same file next to the minutes along with other documents. Those other documents were not produced in court nor were they identified. She agreed with counsel for the Plaintiff that “S.P. 1” did not have several fundamental terms such as the amount of the salary, the amount of the air fare allowance or the percentage of the Company’s pre-tax profits to be paid as a bonus

5 The last sentence of paragraph 4 of her witness statement filed on 1 March 2007 6 The last sentence of paragraph 5 of her witness statement.

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incentive. In fact, she agreed in cross examination that “S.P.1” did not contain the core terms of the contract.

60. It is noteworthy that Mr. Walter Marshall, whose evidence by way of affidavit deposed to on the 8th May 1996 was relied upon for the 6th named Defendant via a hearsay notice filed on the 29th November 2006 and who was, at the time of the deposition of his affidavit the 6th named Defendant’s Chairman and a director thereof, never mentioned anything about any draft contract nor did he identify “S.P.1” as being a document upon which the 6th named Defendant would rely in support of any allegation in relation to the Plaintiff’s employment. The 6th named Defendant submitted that his affidavit was deposed to at a time when summary judgment was being applied for and therefore did not contain ALL of Mr. Marshall’s evidence. I cannot accept this submission in respect of this crucial aspect of the 6th named Defendant’s case. The 6th named Defendant pins its power to determine the Plaintiff’s employment upon the draft contract. To me, that would have been or ought to have been foremost in the mind of any deponent in this matter seeking to defend the 6th named Defendant’s position and to justify the alleged exercise of a contractual term. His failure to mention or refer to “S.P.1” raises red flags in my mind especially because of the privileged position he held in the company and on the Board, and his presence as part of the working mind of the 6th named Defendant.

The draft contract and its terms:

61. Exhibit "S.P.1" is the draft contract that was relied upon by the 6th named Defendant. It is reproduced in the appendix to this judgment in its entirety as Appendix A as it is crucial to the 6th named Defendant's case.

62. Certain observations must be made at this point of this draft agreement.

62.1. Its 1st paragraph refers to the fact that "this letter ..... will be executed on behalf of the company by a director and the secretary in accordance with the resolution of the board ....". This draft therefore envisages that the resolution of the board would be the necessary step for the execution of the contract on behalf of the company -- not on behalf of the Plaintiff. The penultimate paragraph provides for the confirmation of the Plaintiff’s "acceptance of the foregoing terms by signing in the space provided below". It is therefore clear that the intention of the parties was for the passing of a resolution empowering a director and the secretary of the company to execute the "letter" on behalf of the company. A separate act also provided for in this draft is the execution of the draft contract by the Plaintiff confirming his acceptance of the terms set out therein.

62.2. Paragraph 1 of the document specifically and expressly makes the contract "subject to the provisions in the Company's Articles of Association in regard to Directors and any managing director appointed thereunder." To me, this is a very telling provision in this draft contract as it stipulates the precedence of the Articles of Association over the draft contract. It therefore suggests that the intention of the parties, and in particular the draftsman of this contract, was that the Articles of Association -- including

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Regulation 68 -- would be the prevailing beacon upon which the parties to the contract would rely for guidance in the event of any doubt or conflict.

62.3. Paragraph 2 provides that the period of the Plaintiff’s employment commenced on the 1st of February 1975 for an initial term of 5 years and continuing thereafter until determined by either party giving 3 months notice in writing subject to paragraph 11 -- the power to terminate reserved to the 6th named Defendant.

62.4. Paragraph 3 dealt with:

62.4.1. His duties in relation to the day-to-day administration of the company which were to be faithfully undertaken and discharged;

62.4.2. the requirement for him to observe and comply with all regulations and directions issued by the board;

62.4.3. the requirement for him to perform services for subsidiary and/ or associated companies as the Board may stipulate from time to time;

62.4.4. the requirement not to engage in matters which would create a conflict of interest with the operations of the company;

62.4.5. the requirement of confidentiality in relation to the company and its affairs and finances and business.

62.5. Paragraph 4 deals with the Plaintiff's intellectual property in relation to discoveries, inventions, processes and improvements developed while in the service of the company which were to have been disclosed and assigned to the company at a price. No mention is made of this in the pleadings by either party as an actual term or condition of the Plaintiff's employment.

62.6. The amount of the annual salary at paragraph 5 is left blank. The amount of the airfare allowance at paragraph 7 is left blank. The percentage of the company's pretax profits to which the Plaintiff supposedly would have been entitled as a bonus incentive is left blank.

62.7. None of the 14 terms and conditions referred to in the statement of

claim, and admitted in the defence, is mentioned anywhere in the

draft contract save as mentioned below. Those terms and conditions are as follows:

62.7.1. Base salary of $102 000.00 per annum - this is not mentioned in the document;

62.7.2. A bonus consistent with the sixth named Defendant’s policy regarding the payment of same - the document refers to a bonus incentive at the conclusion of each fiscal year as a percentage of the company's pretax profits and it was not established by the 6th named Defendant that this bonus

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incentive was consistent with the 6th named Defendant's policy.

62.7.3. Entertainment allowance of $9,000.00 per annum -- there is no mention of this in the document at all;

62.7.4. Overseas Travelling allowance of $21,000.00 per annum -- the document, however, provides for an unspecified air fare allowance equivalent to an economy return air passage to Copenhagen for one person, his wife and 2 minors below the age of 21;

62.7.5. Consultancy and professional fees of $34,500.00 per annum -- there is no mention whatsoever of this in the document;

62.7.6. Premises upkeep allowance of $15,000.00 per annum -- the document provides for a totally different benefit of a fixed housing allowance of $650.00 per month [amounting to a total of $7,800.00 per year] towards the provision of suitably furnished accommodation for his family residence;

62.7.7. A monthly allowance of $8,000.00 plus VAT in respect of a motor vehicle from 1st January 1995 with interest at 1½ per centum per month for late payment -- such an allowance does not appear in the document. Instead, the document provides for the exclusive use of a motor vehicle selected by the Board;

62.7.8. Reimbursement of running expenses of the motor vehicle referred to in the preceding sub-clause -- the document provides for the reimbursement of all running expenses and

repairs without being limited to running expenses only;

62.7.9. Annual membership fees for the American Ceramic Society, Institute of Materials and the BWIA Ibis Club -- this does not appear in the document;

62.7.10. Annual membership fees for the Plaintiff’s VISA credit and American Express charge cards -- this does not appear in the document;

62.7.11. Annual subscription to the Trinidadian Guardian, Trinidad Express and TIME Magazine -- this does not appear in the document;

62.7.12. A Gardener -- this does not appear in the document;

62.7.13. Reimbursement of 75 % of the cost of local telephone calls made from his home -- this does not appear in the document;

62.7.14. 12 weeks vacation every 2 years taken 5 weeks in the first year and 7 weeks in the second year with vacation leave not taken being accumulated -- the document provides for 20 working days in each year to be scheduled at the convenience of the

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Board which may be accumulated in whole or in part for a period of 2 consecutive years.

62.8. The point in relation to the foregoing paragraph is not that the process of fine-tuning the Plaintiff’s remuneration package was expected to be a static exercise. The court accepts the dynamic nature involved in the constant review of a senior employee’s remuneration. What strikes me however is that the basic remuneration / perquisite framework upon which his last package was built seems to be missing in “S.P.1”.

62.9. Paragraph 11 provides for the termination by either party by giving not less than 3 months notice in writing. In addition, the company was given a right to forthwith terminate the Plaintiff’s employment without notice, should he:

62.9.1. commit any material breach of any of the provisions contained in the document;

62.9.2. be found guilty of any grave misconduct, neglect in the discharge of his duties under the document;

62.9.3. become bankrupt or made any arrangements or compositions with his creditors;

62.9.4. be convicted of any criminal offence other than an offence which in the reasonable opinion of the board did not affect his position as director.

62.10. Paragraph 12 provides for the resignation of the Plaintiff as a director of the company upon the determination of the agreement and, in the event of failure to do so, the company was irrevocably authorized to appoint someone to execute any document and to do things to give effect to that section -- there is no evidence whatsoever that this clause was relied upon by the 6th named Defendant or was at all brought to the attention of the Plaintiff subsequent to the meeting of the 24th of March or at all. In fact, the evidence is that the Plaintiff has continued to be a director of the company from 1995 to date -- over 14 years without objection or contention.

62.11. The last paragraph says that: “The original of this letter which is sent you in duplicate should be returned for the personnel files.” Provision is then made for the signature by a director and the secretary of the 6th named Defendant with a space provided for signature by the Plaintiff indicating his agreement and acceptance. None of those signatures appears on the document. The intention seems to be that the document was supposed to have been signed by the director and secretary aforesaid and then forwarded to the Plaintiff for his signature thereby confirming his acceptance of his contract. This was not done.

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The 6th September 1988 meeting:

63. The minutes7 described this meeting as being minutes of the adjourned board of directors meeting held on 19 August and reconvened on 6th of September 1988. Present were Mr. G. Montes de Oca (chairman), the Plaintiff (managing director), Mr. WM Marshall, Mr. AG Mendes, Mr. C. A. Beaubrun and Mr. L. Howai along with Mr. Clyde Thorpe (secretary).

64. Even though it was not specifically referred to in the minutes from September 1988, the Plaintiff was appointed as Executive Director of the 6th named Defendant instead of managing director and one Mr. S.K. Maharaj was appointed General Manager with the responsibilities of a chief executive officer. According to Walter Marshall, as Executive Director, the Plaintiff was entrusted with responsibility for certain special but unidentified projects8.

65. Those minutes reported at page 5 in paragraph 545(i) that a committee was set up to make recommendations to the board of directors to:

"(i) Study and consider the best utilization of E.V. Reid's services, bearing in mind that he is now relieved of CEO role of TAP's day-to-day operations. In so doing the committee would recognize he has some continuing role to play particularly in the development stage of TAP Ltd. and the need to give fresh and more vigorous impetus to TITCO promotion in the shortest possible time.

(ii) With this in mind, the committee would recommend the allocation of time between the two companies bearing in mind that they must be equitable to the both parties concerned i.e. TAP and TITCO. “

66. This suggests to me that the Plaintiff was required to give up being the day-to-day manager of the 6th named Defendant but was kept on in a manner in which he could serve both parties i.e. 6th named Defendant and TITCO. According to the Plaintiff’s unchallenged evidence at paragraph 16 of his witness statement, he did assume the title of executive director of the 6th named Defendant and continued to receive from the 6th named Defendant the remuneration and benefits and enjoy the same terms and conditions to which he had been entitled as its managing director.

The 28th June 1994 meeting:

67. At a meeting held on the 28th June 19949 at which Mr. W.M.M. Marshall [chairman], the Plaintiff [Executive Director], Mr. TB Inniss, Mr. K. Augier, Mr. M. Assam and Mr. R. Bertrand [Directors] were present along with Mr. S.K. Maharaj [General Manager – by invitation] and Mrs. Susan Pemberton [Secretary], the following points are worthy of note:

67.1. At page 5 paragraph 925 (5) (c) of the Executive Director’s Report – May 1994 - new Articles of Association were referred to as having been circulated for comment with a proposal being noted to commend the same to the Shareholders for adoption at the Annual General Meeting. To me, this was a very significant

7 Exhibit “G” to the Plaintiff’s witness statement 8 See paragraph 10 of his affidavit 9 See Minutes at “S.P.3”

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event since, prior to the purported reassignment of the Plaintiff to the role of managing director, the Articles of Association were focused upon with a view to amendment. It therefore means that the terms of the Articles of Association, including the term relating to the managing director as contained in Regulation

68, would have been fresh in the minds of the Board of Directors and, therefore, the need to terminate the managing director in the manner prescribed by regulations 68 would have been most apparent at that time. The “new Articles of Association” referred to were not provided to this court for consideration.

67.2. At page 7 paragraph 928(b), under the rubric "proposal for the Restructuring of Company's Management", one of the items agreed by the board for the immediate effect was that the job title "Executive Director" would be discontinued and the Plaintiff would resume the position and function of "managing director".

68. Mr. Walter Marshall, in his affidavit deposed to on the 8th May 1996, said 10:

“In July 1994 the Plaintiff was appointed managing director and as hereinbefore deposed to this included the discharge of the responsibilities of chief executive officer. The full terms of the Plaintiffs contract of employment as managing director were never comprehensively worked out and agreed upon with the Sixth Defendant at the outset of his employment but a number of the items set out in paragraph 6 of the statement of claim were agreed upon as a result of discussion and negotiation from time to time, always with the proviso and on the understanding that the Sixth Defendant reserved the right to review the same. In

particular no term was agreed upon as to the duration of the Plaintiff's service

as managing director.” [Emphasis mine]

69. This suggests to me that up to the date of this meeting when the Plaintiff was once again appointed as managing director, no contract was settled, no term was agreed upon as to how long the Plaintiff would serve as managing director, the draft contract referred to as "S.P.1" was not referred to or relied upon as forming the basis or even the skeleton of the Plaintiff's employment as managing director and there had been no amendment of the Articles of Association to alter the effect of Regulation 68, which as I have said before would have been on the minds of the directors at that meeting having been referred to and discussed under paragraph 925.

70. Neither of the 6th named Defendant's witnesses – Susan Pemberton and Dr. Rollin Bertrand -- gave evidence in relation to this issue or, in particular, what happened at that meeting (even though they were both present at that meeting) other than for the former to annex the copies of the minutes of the meeting to her witness statement and to say “...on June 28th 1994 he resumed the position and function of managing director only.”

71. In his witness statement, the Plaintiff said that his reappointment as managing director was made on the same terms and conditions which applied in September 1988 and which he continued to enjoy during his tenure as executive director. Those terms and conditions were set out at paragraphs 18 and 19 of his witness statement and were not cross-examined upon by the 6th named Defendant's attorney at law and are therefore uncontroverted.

10 See paragraph 10 thereof

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The 25th October 1994 meeting:

72. At this meeting11, Mr. WMM Marshall (chairman), the Plaintiff (managing director), Mr. T.B. Inniss (director), Mr. K. A. Augier (director) and Mr. M. Assam were present when again the issue of the “new Articles of Association” was raised. There is no mention at this meeting – or, for that matter, in any of the previous minutes provided in evidence - of any dissatisfaction with the Plaintiff's performance as managing director.

The 6th December 1994 meeting:

73. At this meeting12, Mr. WMM Marshall (chairman), Mr. T.B. Inniss (director), Mr. K. A. Augier (director), Mr. A. Mendes (director), Mr. R. Bertrand (director) and Mr. M. Assam were present. The Plaintiff did not attend. Complaints were then raised in respect of the performance and behavior of the Plaintiff as managing director. It was then suggested that the Plaintiff, who was about proceed on 4 weeks annual vacation, take the rest of his accumulated vacation leave of 44 weeks to provide a "cooling off period" which would be useful for the Plaintiff to reassess his relationship with the Board and for the Board to reassess the executive capabilities of the managing director's support

team.

The 21st February 1995 meeting:

74. At this meeting13, Mr. WMM Marshall (chairman), the Plaintiff (managing director), Mr. T.B. Inniss (director), Mr. A, Mendes (director), Mr. R. Bertrand (director), Mr. C. Dinanath (director) and Mr. M. Assam were present. Minutes of a meeting of 23rd January 1995 were discussed and confirmed subject to corrections and, apparently, one of the headings under minute number 968 was entitled "proposal for reconciliation". The minutes of that meeting of 23 January 1995 were not exhibited to any of the witness statements. The minutes for the February 1995 meeting referred to the exchange of 6 letters with the 6th named Defendant and a named firm of attorneys but those letters were not exhibited to any witness statement. Complaints of the Plaintiff's performance were again raised and a vote of no confidence was moved by Mr. A. Mendes which was not put to a vote by the chairman on the ground that it was untimely in light of the reconciliation with the managing director less than one month before.

The 21st March 1995 meeting:

75. At this meeting14, Mr. WMM Marshall (chairman), the Plaintiff (managing director), Mr. T.B. Inniss (director), Mr. A. Mendes (director), Mr. K. A. Augier (director), Dr. R. Bertrand (director), Mr. P. Dhanrajh (alternate director) and Mr. M. Assam were present. Mr. SK. Maharaj and Mrs. Susan Pemberton were also present.

11 Exhibit “I” to the Plaintiff’s witness statement 12 Exhibit “S.P.5” to the witness statement of Susan Pemberton 13 Exhibit “S.P.6” to the witness statement of Susan Pemberton 14 Exhibit “S.P.8” to the witness statement of Susan Pemberton

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The minutes of the meeting on 21 February 1995 were read and confirmed with certain corrections. The “new Articles of Association” were again referred to. A no-confidence motion in the Plaintiff as managing director was dealt with in the absence of Mr. SK. Maharaj and Mrs. Susan Pemberton. Mr. A. Mendes moved the motion and Dr. R. Bertrand seconded the motion and presented a supporting document. A vote was taken resulting in 4 in favor and 4 against. with the chairman giving his casting vote in favor of the motion thereby passing the motion of no-confidence.

The 24th March 1995 meeting:

76. At this meeting15, Mr. WMM Marshall (chairman), the Plaintiff (managing director), Mr. T.B. Inniss (director), Mr. A. Mendes (director), Mr. K. A. Augier (director), Dr. R. Bertrand (director) and Mr. M. Assam were present. Mr. SK. Maharaj and Mrs. Susan Pemberton were also present. The minutes of the meeting held on 21 March 1995 were approved and confirmed subject to the correction mentioned therein. At the meeting, the chairman invited the Plaintiff to consider taking an early retirement rather than being terminated and an optimization package was suggested. It was finally decided that the Board had no option but to terminate the Plaintiff’s services with cause and immediate effect as a result of the Plaintiff's unwillingness to accept the early retirement proposal.

Cross examination of the Plaintiff on “S.P.1”:

77. The Plaintiff, when shown "S.P.1", said that it looked familiar but could not say with confidence that it was a document that he had seen on the 15 January 1975. He was not sure that he had ever seen that particular document before although he did admit that he had seen draft documents around 1975 - none of which was produced by him.

78. When it was put to him that the document which was unsigned [i.e. “S.P.1”] and which was shown to him formed the basis of his agreement with the board in January 1975, his response was:

"Generally speaking, yes"

79. He did go on to say, however that he did not recognize "S.P.1" as the primary document used. The document he said that he dealt with was on foolscap paper and was in “legalese” and “contained some of these same terms”.

80. He was, later on, asked by counsel for the 6th named Defendant whether he agreed with him that the draft contract -- "S.P.1" -- formed the essential terms of his contract, to which his response was:

“Yes”

81. The Plaintiff was asked about item 7 in the minutes of the meeting of the 27th of May 197816 which dealt with the ratification of the contract by the board. The Plaintiff said that this was not correct and that, in fact, it was never approved by the board and

15 Exhibit “K” to the Plaintiff’s witness statement 16 See paragraph 51 above

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him, and that it was a non sequitur 17 so he "passed it over". He admits that he signed those minutes as the chairman to form a part of the company's records and he said that subsequent minutes would reflect the true position in respect of that item 7 which was the only item in the minutes which was inaccurate. He insisted that item 7 was a non-issue. He then went on to say that the 1983 minutes shows that the draft contract was still being discussed but those minutes were not provided for the court's attention.

82. Counsel for the 6th named Defendant then put to the Plaintiff that a number of the terms set out in the draft contract were in fact agreed upon and the Plaintiff's response was:

“That would be correct.”

83. The draft document was then put to the Plaintiff seriatim to which the Plaintiff's responses were as follows:-

83.1. paragraph 2 -- not agreed;

83.2. paragraph 3 -- essentially, agreed;

83.3. paragraph 4 -- agreed with in principle but not in quantum;

83.4. paragraph 5 -- the salary was fixed in January 1975 but the Plaintiff was unable to remember what it was;

83.5. paragraph 6 -- agreed but the Plaintiff ended up providing his own vehicle;

83.6. paragraph 7 -- the 1st sentence was agreed and the 2nd sentence was not agreed. It was agreed to be extended vacation which was practiced but not documented;

83.7. paragraph 8 -- not agreed as the quantum had to be discussed. The principle of the provision of housing allowance, however, was agreed;

83.8. paragraph 9 -- agreed to in principle;

83.9. paragraph 10 -- agreed to;

83.10. paragraph 11 -- this was not agreed to and no letters were sent by him objecting to this paragraph because it was still being discussed;

83.11. paragraph 12 – this was not agreed to.

Conclusion on the draft contract:

84. Having reviewed the evidence and seen the factual matrix and borne the law in mind, I am not satisfied on a balance of probabilities that the 6th named Defendant has discharged the burden of proof required of it in relation to the draft contract which it propounds.

17 Defined in Merriam-Webster’s Online Dictionary as follows: 1 : an inference that does not follow from the premises; specifically : a fallacy resulting from a simple conversion of a universal affirmative proposition or from the transposition of a condition and its consequent 2 : a statement (as a response) that does not follow logically from or is not clearly related to anything previously said

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85. I have taken into account that the Plaintiff was the original founder of the 6th named Defendant as referred to in his uncontroverted evidence. The company was formed in 1972 with the other shareholder being his friend Dr. Kenwyn Julien. The tenor of his evidence illustrated a person who had a close "hands on approach" in respect of the company -- at least until 1988 when he was reassigned to the subsidiary company - and, even during the period that he was reassigned and up to 1994, there is evidence that he was very much in touch with the management as executive director of the 6th named company. In fact, at the meeting in 1988 when he was reassigned, a committee was set up to

“(i) Study and consider the best utilization of E.V. Reid's services, bearing in mind that he is now relieved of CEO role of TAP's day-to-day operations. In so doing the committee would recognize he has some continuing role to play particularly in the development stage of TAP Ltd. and the need to give fresh and more vigorous impetus to TITCO promotion in the shortest possible time.

(ii) With this in mind, the committee would recommend the allocation of time between the two companies bearing in mind that they must be equitable to the both parties concerned i.e. TAP and TITCO. “

This suggests to me that he was highly regarded in the company.

86. The draft contract -- "S.P.1" -- has not been identified as the draft contract which the parties had in mind in 1975 and 1978. It is similar but not the same according to the Plaintiff. This is a crucial part of the 6th named Defendant's case. None of the witnesses for the 6th named Defendant spoke about this draft contract on a firsthand basis as being representative of the Plaintiff's actual terms and conditions of employment. The only person identifying this as the draft contract upon which the 6th named Defendant seeks to rely is Susan Pemberton who was employed with the 6th named Defendant in 1977 but who had no personal knowledge of this draft contract. In essence, she relies on what she found in a file to be indicative of this being the draft contract but fails to provide the file and the other documents or to even identify the nature of the file or to give details about what the file was about. I would have thought it more than just desirable to have presented the entire file along with all of the documents found in it to substantiate the bona fides of this witness.

87. The draft contract upon which the 6th named Defendant relies would have had to come into existence since January of 1975 at least. That is over 34 years ago. The ratification by the board took place in May of 1978. That is over 31 years ago. To expect any party to remember in detail what would have been expressed in a document so long ago would be most unreasonable because of the inordinately long period of time involved. However, I would have expected that a crucial term of the contract such as a termination clause in terms of paragraph 11 of "S.P.1" would have been a clause that any party involved in the negotiation and settlement of that contract would have remembered. In fact, I would have expected such a clause to have reverberated in the minds of Mr. Marshall and Dr. Bertrand - the latter being present on 28 June 1994 when the Plaintiff once again assumed the position of managing director after a 5 ¾ year hiatus. Neither of them referred to the contract as being prominent in their minds as to the Plaintiff's terms of employment or as containing a termination clause in terms of paragraph 11 of "S.P.1". I would have expected also that in June 1994, when the Plaintiff resumed his position as

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managing director of the company, the company’s Board of Directors would have focused their minds on the terms and conditions upon which the Plaintiff would have taken up his post and the question of the existence of any draft contract or document in writing evidencing such an important aspect must have arisen in the minds of the directors. However, there is no mention whatsoever about this draft contract. Consequently, I do not feel that the 6th named Defendant has crossed the threshold of the evidential burden required of it to show that at the time when the Plaintiff took up his initial position as managing director in 1975, or at any time thereafter, it was the intention of the parties that the draft contract -- "S.P.1" -- would form the basis of his employment. Therefore I cannot move on to consider the Plaintiff’s position on this issue as the burden is the 6th named Defendant’s in the first instance. Even looking at the case law provided by the 6th named Defendant, there is no evidence in this matter that contracts or letters were going back and forth between the parties negotiating the terms or even showing agreement on some or all of the matters referred to in "S.P.1".

88. Counsel for the 6th named Defendant submitted that the proximity of "S.P.1" in the file with the minutes of the 1978 meeting shows a clear contemplation that there was to be a term affording termination by directors. Maybe there was such a contemplation. But did it materialize into a crystallized agreement? To me, the evidence points to the negative. It was suggested by counsel for the 6th named Defendant that the Plaintiff was exploiting the lack of a signed document. However, in the clear face of the provisions of Regulation 68, I feel that the board would have been constrained to abide by the requirements of the regulation – which the very document “S.P.1” placed in a position of precedence - and, if they felt it necessary to remove the Plaintiff, resort would have had to be made to the shareholders in general meeting.

89. In any event, and even if I am wrong on that point, it is clear that the draft contract "S.P.1" intended to give way to the Articles of Association as referred to at paragraph 1 thereof. To me, there seems to be no intention expressed in that document to oust the applicability of Regulation 68, as the draft contract states that the Plaintiff’s terms of service are expressly subject to the provisions of the Articles of Association. A conflict, therefore, between the draft contract and the articles of Association would necessarily, according to the terms of "S.P.1", have to be resolved in favor of the articles of Association.

90. Consequently, I can find no power of dismissal being reposed in the Board of Directors but, rather, that such a power remains in the hands of the shareholders to be exercised in general meeting.

Implied power to terminate resident in the Board of Directors?

91. For a term to be implied it has to fulfill a number of rules as set out in the judgment of the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of

Hastings (1977) 52 ALJR 20:

91.1. It must be reasonable and equitable;

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91.2. It must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;

91.3. It must be so obvious that "it goes without saying";

91.4. It must be capable of clear expression;

91.5. It must not contradict any express term of the contract.

92. In the face of the clear provisions of the Articles of Association and Regulation

68 and in the light of the authorities mentioned above, I can see no way in which such a power can be implied in these circumstances. As I have mentioned, even if the draft contract stands, the parties intended that contract to be subject to the Articles of Association thereby overriding the necessity for any implication in the light of the express term of the draft contract.

93. Consequently, I hold that there was no implied power to terminate the Plaintiff’s employment resident in the board of directors.

The resolution of issue 1:

94. Having made the findings aforementioned, I am therefore prepared to hold and I do so hold that “S.P.1” is not the draft contract upon which the Plaintiff was appointed and that, in the circumstances, Regulation 68 was never ousted by any contract or contractual position agreed to between the parties.

ISSUE 2: Whether the Plaintiff was due to retire at age 65 as alleged by the

Defendant?

95. Having determined that "S.P.1" has not been proven to be the draft contract referred to in the 1975 and 1978 minutes, I find that at the time when the Plaintiff was appointed as managing director in 1975, there was no agreement with him for him to retire at the age of 65. There is the subsequent evidence of the Plaintiff placing himself on record when he made inquiries in relation to the insurance and the retirement age of 65. I do not accept his explanation as to that age being a "notional age". On the balance of probabilities, I do not believe that such a concept - i.e. a “notional age” - existed especially having heard the Plaintiff in cross examination. I say this because I agree with the submissions of the 6th named Defendant's attorney that the Plaintiff's evidence did not stand up to scrutiny in cross-examination and that his credibility was significantly challenged. The Plaintiff, in the box, exuded an air of confidence which, at times, bordered on arrogance. His explanations for the failure of the minutes to accurately reflect what had transpired at the meetings raised doubts in my mind as several significant questions raised in relation thereto were brushed off by responses suggesting that the answers were irrelevant or too trivial to really matter. This even occurred on occasion when the Plaintiff himself was in charge of the meetings and would have signed the minutes agreeing to the contents. I was not impressed with the Plaintiff as a witness of truth and I felt that he was very difficult in the witness box. He never relaxed into a state such as to have convinced the court that he was comfortable even with his own evidence. The witness box is a harrowing experience for many but that does not account

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for his constant state of vigil as if making a constant effort to not slip up. He always seemed to want to have the last word on matters and his attempts to marginalize crucial matters put to him was further evidence of his being comfortable with the story he came to tell. I need not go through each and every instance of his evidence which caused me concern since they were aptly described by the 6th named Defendant’s attorney in his submissions.

96. I accept that the intention of the parties was that he was scheduled to retire at age I also accept that he himself accepted the age of 65 to be the retirement age that he was working towards.

97. The case of Foster v Foster supra did not, to my mind, assist the 6th named Defendant in its contention. In that case, the articles of Association provided at clause 99 that:

"The directors may, subject to the preceding clauses, from time to time appoint any one or more of their body to be managing director or directors, for such period, at such remuneration, and upon such terms as the directors think fit.”

98. There was no requirement in the Articles of Association in Foster v Foster for the removal of the managing director by the company in general meeting as in the case before me where Regulation 68 applies. As a result, I agree with Peterson J. when he said at page 542:

“It is argued that, inasmuch as there has been no express determination of the period for which he is to hold office, it follows that he is to hold office for the whole of the period during which he remains a director. I am unable to accept that argument. When the directors appoint a chairman they appoint him for such time as they think fit, and there is no contract with the person appointed as chairman that he should remain chairman until he ceases to be a director, but it is open to the directors at any time to substitute another chairman in his place. Therefore I think that argument cannot succeed."

99. I do not accept that the age of 65 is an age which is universally accepted as the retirement age in private business enterprise. Nor do I accept the evidence of Mrs. Pemberton that it was the policy of the 6th named Defendant that all employees must retire at the age of 65. On the other hand, I do not accept that the Plaintiff envisioned that he would remain managing director for the rest of his life or until he decided to retire. The insurance policy arrangements quite clearly, to my mind, show an intention that the Plaintiff would in fact retire at 65 thereby providing an income for him upon retirement. I find it very difficult to accept the proposition that the intention of the parties was that, upon reaching the age of 65, the Plaintiff would remain as managing director of the 6th named Defendant, receive his full salary as such, and also receive a retirement benefit. The double enrichment arising in such a scheme and scenario does not seem to me to be a realistic reflection of good business management by the 6th named Defendant nor does it make any practical sense to me. Why would the 6th named Defendant have intended the Plaintiff to receive what amounts to remuneration on 2 different levels simultaneously -- one as a salary and the other as a pension? As a result, I can see no other option - on the balance of probabilities and bearing in mind the Plaintiff’s inconsistencies in the witness

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box - but to hold that retirement at the age of 65 was a term of the employment which was subsequently and mutually agreed to by the parties on both sides.

ISSUE 3: What, if any, is the extent of relief to which the Plaintiff is entitled?

The Declarations sought:

100. The declarations sought in the statement of claim were as follows:

100.1. A declaration that the purported decision of the first, second, third, fourth and fifth named Defendants made on 24 April 1995 terminating the Plaintiff’s office as the managing director of the sixth named Defendant is ultra vires, null, void and of no effect;

100.2. A declaration that the Plaintiff is and was at all material times and remains the managing director and chief executive officer of the sixth named Defendant, and as such is entitled to occupy all offices, and to perform all and any functions and duties, and assume all responsibilities consistent with the said offices of the managing director and chief executive officer, and is entitled to all privileges, remuneration, emoluments and perquisites commensurate with the said offices.

101. The Plaintiff’s attorney at law says that the Plaintiff is entitled to the declaration at paragraph 112.2 above and makes no mention in his submissions about the preceding declaration at paragraph 112.1. The Plaintiff relied upon:-

101.1. Bainbridge v Smith (1889) 41 Ch. 462;

101.2. Francis v Municipal Councillors of Kuala Lumpur[1962] 1 W.L.R. 1411

101.3. Gunton v Richmond upon Thames LBC [1981] 1 Ch 448

102. Essentially, what the Plaintiff says is that a court would refuse specific performance based on the proposition that there has been a total repudiation of the contract of service and the court would not therefore impose an employee upon an unwilling employer but there was no evidence of any undesirability of the Plaintiff by the shareholders who, at the end of the day, were the material decision makers.

103. The 6th named Defendant submits that the declarations sought ought not to be granted and relies on:

103.1. The learning from Zamir & Woolf –“The Declaratory Judgment” (3rd Edn) at pages 123 to 135 and pages 163 to 169

103.2. Gunton v Richmond upon Thames LBC [1981] 1 Ch 448.

104. In essence, what the 6th named Defendant is saying is that the grant of a declaration, which is a discretionary relief and which is not granted as a matter of course, in a breach of contract of service situation is generally regarded as a wholly inappropriate remedy. The court also has to look at the utility and practical importance of granting the declaration.

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105. The court has also looked at the case of Vine v National Dock Labour Board [1957] AC 488 where the dismissal was held to be a void dismissal because the Board had no power to dismiss Mr. Vine and any dismissal in the purported manner would negative his ability to practice his trade due to the closed shop employment policy in that particular industry.

106. In order to come to a finding in respect of this issue, it would be necessary to consider the authorities raised in some detail.

107. Bainbridge v Smith (1889) 41 Ch. 462;

This action was brought by Herbert William Bainbrige against five directors of a joint stock company registered as Henry Mitchell & Co., Limited, for specific performance of an agreement, and for an injunction to restrain the Defendants from excluding the Plaintiff from acting as managing director of the company. The agreement concerned the sale of a brewery to the company which was to be formed for working the brewery under the name of Henry Mitchell & Co., Limited, for the consideration and upon the terms therein mentioned. The agreement contained a clause providing inter alia, that the Plaintiff should succeed one Herbert Gelendenning Bainbridge (upon his retirement or death) and act as a managing director for the unexpired period of the said term of ten years. This was an appeal from a decision of Mr. Justice Stirling granting an injunction to restrain the Defendants from preventing the Plaintiff from acting as a managing director of the company. The court of Appeal stood over the hearing to allow the Defendants to call an extraordinary general meeting and submit to it this question: Whether, if the Plaintiff has the necessary qualification, the meeting desire him to act as one of the managing directors? An extraordinary meeting of the company was then held on the 15th of April, at which a resolution was passed by the shareholders that they did not desire the Plaintiff to act as a managing director of the company. Cotton LJ said in the course of his judgment:

“But I think it right to say that in my opinion, and I believe that my learned Brother agrees with me, if the company says that even if the Plaintiff has the qualification they do not desire him to act as one of their managing directors, we should not grant any injunction, because it would be contrary to the principles on which this Court acts to grant specific performance of this contract by compelling this company to take this gentleman as managing director, although he was qualified so to act, when they do not desire him to act as such.”

108. Francis v Municipal Councillors of Kuala Lumpur [1962] 1 W.L.R. 1411

108.1. In the ordinary case of master and servant a declaration that the contract of service still subsists will not be made on a repudiation of the service contract or wrongful dismissal of the servant: the remedy is damages. The appellant sought a declaratory judgment that he had the right to continue in the employment of the Kuala Lumpur Municipal Council after he had been wrongfully dismissed on

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October 1, 1957, by its president. It was held that as there were no special circumstances and as such a judgment would amount to specific performance of his service agreement, no declaration should be made but only an award of damages.

Lord Morris said at page 1417-18:

“In their Lordships' view, when there has been a purported termination of a contract of service a declaration to the effect that the contract of service still subsists will rarely be made. This is a consequence of the general principle of law that the courts will not grant specific performance of contracts of service. Special circumstances will be required before such a declaration is made and its making will normally be in the discretion of the court. In their Lordships' view there are no circumstances in the present case which would make it either just or proper to make such a declaration. In Vine v. National Dock Labour Board n(1) ORMEROD, J., had in his discretion made such a declaration and the House of Lords, adopting the view expressed by JENKINS, L.J., in his dissenting judgment in the Court of Appeal n(2), were of opinion that the declaration had been rightly made. In that case, however, the circumstances were very special. The Plaintiff was and had been for some thirty years a dock labourer. As a result of legislation designed to remove the objection of those so employed that theirs was a purely casual occupation, so that their right to work depended on the accident of its availability at the docks, all dock labourers were registered as employed by the National Dock Labour Board -- though they never in fact worked for the board. In the circumstances of that case it was held to be right that the Plaintiff -- whose dismissal was shown to have been without proper authority -- should have the benefit of a declaration that he was still in the employment of the National Board, since, unless he was, he would be disabled from carrying on at all his chosen trade of a dock labourer.”

108.2) Their Lordships therefore distinguished Vine on the ground that without the declaration the appellant in that matter would have been deprived of his means of livelihood thereby making out a case for special circumstances.

108.3) In the case before me, I find a fundamental difference with the case of Francis since in the case at bar, there has been no ratification of the Board’s decision by the shareholders to date. Their Lordships were careful to say on more than one occasion that the person empowered to dismiss the appellant in Francis was a part of the decision making process and also confirmed the dismissal. I therefore am not minded to follow this very persuasive authority on the basis of the distinguishing factor referred to.

109. Gunton v Richmond upon Thames LBC [1981] 1 Ch 448

109.1) In this 1980 decision, the English Court of Appeal considered the case of the Plaintiff who was appointed by the Defendant council as a college registrar under a contract of service terminable by one month’s notice. Regulations, which prescribed a procedure for the dismissal of employees on disciplinary grounds,

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were subsequently adopted by the council and formed part of the Plaintiff's contract. On January 14, 1976, the council gave the Plaintiff notice that his contract would terminate on February 14, 1976, and that he was not required to attend work meanwhile. Although the reason for the Plaintiff's dismissal was disciplinary the procedure prescribed by the regulations had not been fully complied with. Accordingly, the Plaintiff brought an action for a declaration that the council's purported termination of his appointment was void and that he remained registrar to the college. It was held that the effect of incorporation of the disciplinary regulations into the Plaintiffs contract of service was that the Plaintiff could not be lawfully dismissed on a disciplinary ground until the procedure prescribed by the regulations had been carried out. The Court of Appeal went on to state that an unlawful repudiation of the contract of service which was not accepted by the innocent party did not result in the automatic termination of the contract although, in this particular matter, the Plaintiff accepted the council's repudiation of his contract of service at the trial if not earlier.

109.2) It was noted in the case that the regulations as to staff discipline were not designed to deprive the council of their contractual power to determine the Plaintiff’s contract of service by one month’s notice.

109.3) Shaw LJ said at page 459:

“It has long been recognised that an order for specific performance will not be made in relation to a contract of service.”

He went on at page 460:

“To return to the facts of the present case, how could it profit the Plaintiff to get the declaration he claimed? It might be a salve to his amour propre, but it is not the function of the courts to provide this. He cannot remain idle and demand his salary for he has not earned it. If he claims damages he must, by implication, treat his contract of service as at an end for the court will not also reinstate him by an order for specific performance; and if he is reduced to claiming damages he must show that he has taken reasonable steps to mitigate his loss.”

109.4). In my respectful view, the facts of the Gunton case present a matter in which the dismissing party had the power to so dismiss the Plaintiff but failed to follow the correct procedure as opposed to the case at bar which is one where the dismissing party had no power to dismiss the Plaintiff.

Analysis and conclusion

110). The facts of this case have raised some very difficult issues for determination. I know that the Board, in passing their motion of no confidence, have expressed their lack of confidence in the Plaintiff hence his termination but there was no evidence as to the state of mind of the shareholders who are the important decision makers in this matter. It seems to me that it would have been more expedient for the shareholders to ratify a

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change of the managing director if the rest of the Board had no confidence in him but that is mere speculation at this time since there is no evidence of the shareholder’s lack of confidence in the Plaintiff who was founding father of the company. It must however be recognized, as I do, that a vital ingredient in the success of the claim for specific performance or even for the declaration sought, which is tantamount to the reinstatement of the Plaintiff, is the existence at the date of trial of a sufficient degree of mutual confidence. I have no evidence of that.

111). At the end of the day, however, having found that the intention of the parties was for the retirement of the Plaintiff at the age of 65, I find it unnecessary to adopt the approach set out in Bainbridge v Smith supra to have a general meeting held to determine the Plaintiff’s status as managing director. Having accepted that there was the mutual intention for the retirement of the Plaintiff at age 65 -- which would have by June 1998 -- it is not unnecessary for me to make any declaration in this matter as that date has long passed and the court would not make an empty declaration. I therefore exercise my discretion accordingly and refuse the declaration in light of the fact of the agreed date of retirement.

Damages

112). The 6th named Defendant submitted that, because there was no endorsement on the Plaintiff's writ for damages as against the 6th named Defendant, the Plaintiff could not rely on that remedy which was sought in the statement of claim and, as a result, that claim was unsustainable and ought not to be entertained.

113). Having regard to the fact that, after the filing of the writ and the statement of claim, the 6th named Defendant filed an unconditional appearance and defence without mention whatsoever of the variance in the remedies sought on the writ and on the statement of claim, and the fact that the 6th named Defendant has never taken this point over the years until the submissions in this case were delivered and having regard to the authority of Brickfield Properties Ltd v Newton, Rosebell Holdings Ltd v Newton CA, Civil Division [1971] 3 All ER 328, [1971] 1 WLR 862, 219 EG 583, [1971] EGD 650, I find for a fact that the variance was a mere irregularity which the 6th named Defendant may have been entitled to raise and to have had struck out after the service of the Plaintiff’s pleadings. The 6th named Defendant has waived the irregularity between the remedies claimed and I therefore reject the objection raised by the 6th named Defendant in relation to the failure of the Plaintiff to claim damages in his writ as against them.

114). In respect of the quantum of damages, I have set out hereunder the applicable damages payable from the Plaintiff’s witness statement. The headings set out below relate to the claims referred to in the witness statement.

115). Outstanding emoluments and salary as at the 24th

April 1995:

127.1) This was not made an issue by the 6th named Defendant and I accept the same as set out at paragraphs 47 (i) and (ii) of the Plaintiff’s witness statement.

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116). The Share Option18

-

116.1) At paragraph 7B of the amended statement of claim, the Plaintiff alleged that he was granted an option as part of his contract as managing director to subscribe to 26,000 ordinary shares of $10.00 in the company subject to proviso that if there was any change in the capital structure of the 6th named Defendant, the maximum number of shares which might be subscribed by the Plaintiff would be adjusted by the 6th named Defendant in such manner as the auditors of the 6th named Defendant shall certify in their opinion fair and reasonable. At paragraph 7D of the amended statement of claim, the Plaintiff went on to allege that when he was reappointed as managing director on 28 June 1994, one of the included terms of his reappointment was that he would continue to enjoy the option referred to in paragraph 7B with respect to those shares not previously subscribed for thereunder. The 6th named Defendant alleged at paragraph 6B of the defence that even though the option referred to was admitted, it was decided that the duration of the option would be for a period of 2 years from the date of its grant on 15 July 1983 and that thereafter, the same would lapse or expire. Alternatively, the Defendants say that if the share option formed a part of the Plaintiff’s contract of employment, a condition precedent to the exercise of it would be that the Plaintiff be in the employ of the 6th named Defendant at the date of any purported exercise of the same.

116.2) From the evidence, the share option was granted at an extraordinary general meeting held on 15 July 1983. This was in keeping with a circular dated 1 July 1983 signed by the chairman. In fact in the circular it was specifically stated that no option shall remain alive for more than 2 years after it was granted. However, the Plaintiff’s uncontroverted evidence at paragraph 12 of his witness statement was that on or about 22 October 1986, he subscribed for 2000 shares out of the 26,000 which was allotted to him under the option. This was over a year after the purported expiry of the option which was allegedly only open for 2 years. That year period would have expired by July of 1985 yet the Plaintiff was allowed to draw down on that option in October 1986. Very importantly, the minutes of the Board meeting held on the 6th December 199419 clearly indicates that the Board considered the 15th July 1983 resolution and were of the view that there was already in existence an incentive scheme for the managing director i.e. the Plaintiff at that time. There was no mention in those minutes that the share incentive had lapsed. The words used were in the present tense indicating the continued existence of the scheme. I therefore accept the Plaintiff’s submissions in relation to the share option and the cross examination of Mrs. Pemberton. In those circumstances, I am of the view that notwithstanding the circular in July of 1983, the parties allowed the option to extend beyond the two-year deadline and that the option was still alive when it was exercised on 12 November 1997 as referred to at paragraph 58 of the Plaintiff’s witness statement -- which evidence was uncontroverted. As a result, and bearing in mind that there is evidence before me that there has been a change in the capital structure of the 6th named

18 Paragraphs 11, 12, 38 and 39 of the witness statement 19 See Minutes annexed at “S.P.22” – page 5

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Defendant, I direct that the company's auditors certify the maximum number of shares which might be subscribed to by the Plaintiff as at 17 November 1996 within 90 days of the date thereof and that the Plaintiff be allowed to exercise his option and subscribe to the same within 30 days thereafter.

117). Car Allowance, Car expenses and interest on car payments:

I am not prepared to allow the Plaintiff’s claim for a monthly car allowance of $8,000.00 per month or for the interest payments in respect thereof since the Plaintiff admitted in evidence that he retained possession of the company vehicle which was rented for him and has had the use of the same since April 1995. With respect to the motor vehicular expenses, I am only prepared to allow those expenses incurred up to June 1998 but I am not in a position to make any award since I do not have the receipts for the same and am unable to assess the expenses for the period allowed. I was not asked to make any order for the return of the vehicle to the 6th named Defendant and I therefore do not.

118). The Key Man Policy20

:

The Key Man Policy was referred to at paragraph 7F of the statement of claim. It was stated therein that the 6th named Defendant would pay to the Plaintiff the proceeds of the matured Key Man Policy number 05016167 which the 6th named Defendant had taken out on the Plaintiff's life. This was denied by the 6th named Defendant in the defence but no mention was made of it in the 6th named Defendant’s witness statements. At paragraph 19 (iii) of the Plaintiff’s witness statement, the Plaintiff said that one of the terms of his reappointment as managing director was that so long as he was alive at age 65, the 6th named Defendant would pay him, on his attaining that age, the cash surrender value of the said Key Man Policy. The 6th named Defendant gave no evidence in relation to this and I therefore accept the Plaintiff's version as it was not challenged in cross examination and remains uncontroverted evidence.

119). Salary and increases:

I also accept the Plaintiff's allegation that he would have expected an increase in his salary over the course of the years following his purported termination. This seems to me only to be expected despite the suggestion that this would not have been applicable to the Plaintiff in light of his inefficient and poor performance. I note, however, that the Plaintiff’s performance record only became an issue on the minutes of the Board meetings late in the day. I accept the figures given by Mrs. Pemberton in her witness statement. In this regard, and in respect of all the other claims made by the Plaintiff, I have calculated and awarded damages for the period 1st June 1995 -- the date submitted by the Plaintiff’s attorneys in submissions -- and 11 June 1998 -- the date of the Plaintiff's due retirement. I used the base salary of $102,000.00 per annum21 and applied the increases supplied by Mrs. Pemberton at paragraph 19 of her witness statement of 21.8% increase in 1995, 0% in 1996, 14.5% in 1997 and 0% in 1998.

120). Subscriptions:

20 Paragraphs 19(iii) and 37 of the witness statement 21 Paragraph 18 (i) of the Plaintiff’s witness statement

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These figures are accepted for the period mentioned above up to the 11th June 1998. I have used the figures set out at paragraphs 47 (vii) to (xii) of the Plaintiff’s witness statement and prorated them for 2½ years for ease of calculation upon the assumption that the subscriptions for 1995 had already been paid.

121). Gardener:

The figures for the gardener referred to at paragraph 43 of the Plaintiff’s witness statement are accepted.

122). Entertainment Allowance22

:

Allowed to 11th June 1998 at $9,000.00 per year.

123). Overseas Travelling Allowance23

:


124). Consultancy and Professional Fee Allowance24

:


125). Residential Upkeep Allowance 25

:


126). Local Telephone Reimbursement:

The reimbursement of 75% of the bill coming in on average at $440.00 per month for 36 months – May 1995 to June 1998 – is allowed.

127). Salary in lieu of vacation leave26

:

I have decided to award the total of 12 weeks vacation for the 3 years from April 1995 to June 1998 at the rate of 5 weeks at $2,354.00 per week [worked out at a salary of $122,400.00 for the year 1996 divided by 52] for the year 1996 and 7 weeks at $2,695.00 per week [worked out at a salary of $140,148.00 for the year 1997 divided by 52] for the year 1997 doing the best I can in the circumstances. This is because, according to the witness statement of the Plaintiff at paragraph 19, he was entitled to 12 weeks vacation every 2 years taken 5 weeks in the 1st year and 7 weeks in the 2nd year. He said in his witness statement that vacation leave not taken was accumulated but I have no evidence as to how much vacation leave, if any, had accumulated prior to June 1998. In the circumstances, and bearing in mind that the Plaintiff was released in April of 1995, I have calculated the vacation leave for the period May 1995 to June 1998 not including the year 1995 or the year 1998.

128.) The pension shortfall27

:

22 Paragraph 18 of the Plaintiff’s witness statement 23 Paragraph 18 of the Plaintiff’s witness statement 24 Paragraph 18 of the Plaintiff’s witness statement 25 Paragraph 18 of the Plaintiff’s witness statement 26 Paragraph 19 (i) of the Plaintiff’s witness statement 27 Paragraphs 41 and 42 of the Plaintiffs witness statement and the calculations set out in the appendix referred to at the Paragraph 41.

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There is no evidence to controvert the calculations set out in the appendix to the Plaintiff’s witness statement and I therefore accept that there was a monthly shortfall in the Plaintiff's pension of $7,531.87 between that which was actually paid and that which should have been paid based on the Plaintiff's salary on the date of retirement. This would have continued to date and the Plaintiff would therefore be entitled to that shortfall in a lump sum figure representing the 151 months from June 1998 to the end of March 2010 as set out in the Plaintiff’s witness statement. The Plaintiff’s pension ought to continue as per his evidence.

Mitigation

129). There is a duty upon the 6th named Defendant to prove that the Plaintiff ought to have mitigated his loss28. The question of whether the Plaintiff has taken reasonable steps to mitigate his loss is a question of fact and not of law, see Payzu Limited v Saunders [1919] 2 KB 581, 89 LJKB 17, CA per Bankes LJ at 588-9 of the former report

130). In Fyfe v Scientific Furnishings [1989] ICR 648, [1989] IRLR 331, EAT, it was said at page 650 of the former report:

"the plaintiff must take all reasonable steps to mitigate the loss. . .and cannot recover damages or any. . . loss which he could have . . . avoided but has failed through unreasonable action or inaction to avoid. It is important to emphasise that the duty is only to act reasonable and the standard reasonableness is not high in view of the fact that the defendant was the wrong-doer".

131). In Banco de Portugal v Waterlows [1932] AC 452, 101 LJKB 417, at 506 of the former report, HL it was said "the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the party whose breach of contract has occasioned the difficulty". Reference is also made to Ministry of

Defence v Hunt [1996] ICR 554, [1996] IRLR 139, for the proposition that those charged with the duty of finding the facts in relation to an assertion of failure to mitigate must not be too stringent in their expectations of the injured party, and to Woods v WM

Car Services (Peterborough) Ltd [1981] ICR 666, [1981] IRLR 347 and in particular the observation of Browne-Wilkinson LJ at 670G-671A of the former report: "that there is implied in a contract of employment that there is a term that the employers will not, without reasonable or proper cause, conduct themselves in the manner calculated or likely to destroy or seriously damage the relationship of competence and trust between employer and employee. . . the Tribunal's function is to look at the employer's conduct as a whole to determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot expect to put up with it."

132). The Defendant has provided no evidence of ways in which the Plaintiff, bearing in mind his age and area of expertise and his involvement in the 6th named Defendant and its predecessor since the early 1970’s, could have mitigated his losses. As such, the 6th named Defendant has not displaced the burden on it in relation to mitigation. In any

28 See McGregor on Damages, 14th Edn @ pg 635 and 636 and Lavarack v Woods of Colchester Limited (1967) 1 QB 278 per Lord Denning MR @ 287

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event, bearing in mind that the Plaintiff was close to age 65 at the time of the purported dismissal and his exclusion from the company, I am not sure how reasonable it would have been for the Plaintiff to have obtained alternate employment at that age especially since his field of expertise is a specialized one without wide scale market applicability as far as this court is aware. As a result, I do not consider it apt to reduce the award for failure to mitigate especially in light of the dearth of evidence in this regard.

Taxes:

133). The total quantum of damages for breach of contract amounts to the sum of $1,886,239.05. A summary of the applicable amounts is attached as appendix B to this judgment. There ought to be the proper deduction of taxes29 as per the applicable rate on those aspects of the award which are taxable. The court is not in a position at this time to calculate the amount of the taxes so I direct such taxation figure to be ascertained by the parties within 30 days of the date hereof for which purpose a stay of execution has been granted.

Interest:

134). Interest ought to accrue on the damages as per the decision in Caribbean

Molasses Company (Trinidad and Tobago) Ltd. -v- Gunpat Gunness (Unreported) C.A. Civ No. 7 of 1989 and Battoo Bros Ltd v Kassie and Leavitt (Unreported) C.A. Civ. No. 93 of 1978 approving and applying the principle enunciated in the case of Jefford -v- Gee (1970) 2 QB 130 and discussed in the case of Angel Baldeo v Prestige

Car Rentals Limited and ors (unreported) HCA No. 442 of 2000 (bearing in mind the Supreme Court of Judicature (Amendment) Act 2000 which increased the rate of interest on judgment debts on general damages from 6% to 12% with effect from the 28th September 2000). Such interest is at my discretion. I award interest on the damages allowed at the rate of 3% per annum from the 11th June 1998 to the 27th September 2000 and 6% from the 28th September 2000 to date.

The order:

135). In the circumstances, I make the following orders in this matter.

136). I direct that the company's auditors certify the maximum number of shares which might be subscribed to by the Plaintiff as at 17 November 1996 within 90 days of the date thereof and that the Plaintiff be allowed to exercise his option and subscribe to the same within 30 days thereafter.

29 See CA Civ 239/1998 – Dennis Harrinanan v Vidya Pariag & ors

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137). I award damages in the sum of $1,886,239.05 together with interest thereon at the rate of 3% per annum from the 11th June 1998 to the 27th September 2000 and thereafter at the rate of 6% until the date of judgment less the applicable taxes.

138). I award a stay of execution until the 24h June 2010 to allow the figures on the tax liability to be assessed.

139). The issue of the cost of the preliminary point and of the action will be dealt with by way of written submissions to be filed and exchanged by 16th June 2010 and the decision on cost is fixed for 24th June 2010 in POS 16 at 9:30 am.

Devindra Rampersad Judge (Ag.)

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APPENDIX A

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APPENDIX B

Outstanding emoluments 14,843.79

Outstanding gross salary 31,913.75

Key man policy proceeds 28,796.66

Salary

1/6/95 - 31/12/95 71,400.00

1/1/96 - 31/12/96 122,400.00

1/1/97 - 31/12/97 140,148.00

1/1/98 - 11/6/98 64,234.50

Total Salary 398,182.50

Subscriptions

American Ceramic Society 1,606.50

British Institute of Materials 1,350.00

BWIA Ibis Club 6,868.25

VISA Credit Card 720.00

Master Card 720.00

Newspapers 5,880.00

Total Subscriptions 17,144.75

Gardener 1/6/95 - 31/12/95 9,375.00

1/1/96 - 31/12/96 20,800.00

1/1/97 - 31/12/97 20,800.00

1/1/98 - 11/6/98 11,200.00

Total - Gardener 62,175.00

Entertainment allowance 1/6/95 - 31/12/95 5,250.00

1/1/96 - 31/12/96 9,000.00

1/1/97 - 31/12/97 9,000.00

1/1/98 - 11/6/98 4,500.00

Total - Entertainment Allowance 27,750.00

Overseas Travelling Allowance 1/6/95 - 31/12/95 12,250.00

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1/1/96 - 31/12/96 21,000.00

1/1/97 - 31/12/97 21,000.00

1/1/98 - 11/6/98 10,500.00

Total - Overseas Travelling Allowance 64,750.00

Consultancy and professional fee allowance 1/6/95 - 31/12/95 20,125.00

1/1/96 - 31/12/96 34,500.00

1/1/97 - 31/12/97 34,500.00

1/1/98 - 11/6/98 17,250.00

Total 106,375.00

Residential upkeep allowance 1/6/95 - 31/12/95 8,750.00

1/1/96 - 31/12/96 15,000.00

1/1/97 - 31/12/97 15,000.00

1/1/98 - 11/6/98 7,500.00

Total 46,250.00

Local telephone reimbursement 1/6/95 - 31/12/95 2,310.00

1/1/96 - 31/12/96 3,960.00

1/1/97 - 31/12/97 3,960.00

1/1/98 - 11/6/98 1,815.00

Total Telephone 12,045.00

Salary in lieu of 12 weeks accrued vacation

1996 - 5 weeks at $2,354.00 per week 11,770.00

1997 - 7 weeks at $2,695.00 per week 18,865.00

Total 30,635.00

Outstanding pension payments

152 months at $7,531.87 1,144,844.24 1,144,844.24

Less - paid on account -99,466.64

TOTAL 1,886,239.05

In the Republic of Trinidad and...

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