Bell v Lever Bros Ltd

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Blanesburgh,Lord Warrington of Clyffe,Lord Atkin,Lord Thankerton
Judgment Date15 Dec 1931
Judgment citation (vLex)[1931] UKHL J1215-1

[1931] UKHL J1215-1

House of Lords

Viscount Hailsham.

Lord Blanesburgh.

Lord Warrington of Clyffe.

Lord Atkin.

Lord Thankerton.

Bell and Another
and
Lever Brothers, Ltd., and Others.

After hearing Counsel, as well on Tuesday the 23d, Thursday the 25th, Friday the 26th, Monday the 29th, and Tuesday the 30th, days of June last, as on Thursday the 2d, Friday the 3d and Monday the 6th, days of July last, upon the Petition and Appeal of Ernest Hyslop Bell, of Granby Hotel, Harrogate, in the County of York, and Walter Edward Snelling, of St. Ronans, Putney Heath, in the County of Surrey, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 17th of November, 1930, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of Lever Brothers, Limited and the Niger Company, Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 17th day of November, 1930, complained of in the said Appeal, be, and the same is hereby, Reversed; And it is further Ordered, That the Order of the Honourable Mr. Justice Wright, of the 5th day of June 1930, and the Judgment entered thereunder, be Varied by directing that judgment be entered for the Plaintiffs, the Niger Company, Limited, for the sum of £5 damages awarded by the jury in their answer to question 3 (B) on the issue raised by paragraph 17 of the amended points of claim, without costs; And it, is further Ordered that so much of the said Order of the Honourable Mr. Justice Wright as directed that the sum of £1,360 should be paid out to the Plaintiffs, the Niger Company, Limited, be, and the same is hereby, Affirmed; And it is further Ordered that, save as aforesaid, the Order of the Honourable Mr. Justice Wright and the Judgment entered thereunder be set aside, and that Judgment be entered for the Defendants with costs: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants, the Costs incurred by them in the Courts below, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the King's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.

Lord Blanesburgh .

My Lords,

1

I understand that my noble and learned friend Viscount Hailsham has read the judgment about to be delivered by my noble and learned friend Lord Warrington of Clyffe and agrees with it. This is my own opinion which I now proceed to express.

2

This is an Appeal by the Defendants from an order of the Court of Appeal of the 17th of November, 1930, which affirmed a judgment of Mr. Justice Wright of the previous 5th of June pronounced after the trial of the action before himself and a City of London Special Jury. By his judgment the learned Judge, amongst other things, ordered that two several agreements�I propose to refer to them as the agreements of settlement�made on the 19th March, 1929, with each of the Appellants by the Respondents Lever Brothers, Ltd., should be set aside and that the moneys received under them should be repaid to Levers. The sum which the Appellant Mr. Bell had thus to repay included premiums amounting to £1,224 2s. 3d. on an endowment policy, later to be mentioned, which under the agreement of settlement with him had been paid by Levers on his behalf.

3

The facts of the case and the course of the litigation make a long story, even if, in detail, those incidents only are dwelt upon which have a bearing upon the issues remaining to be dealt with on the Appeal.

4

In Niger Co., Ltd., a company of large resources, with a paid-up capital of £4,750,000 and issues of debenture stock aggregating £5,500,000, Levers had as shareholders a controlling interest. They held in and after 1925 99.5 per cent. of the issued share capital. The business of Niger was to deal in West African products, including cocoa. It is with its cocoa business alone, extensive enough in itself, but only a portion of its total activities, that this case is immediately concerned. For several years before 1923 Niger had been meeting with heavy losses, and Levers, for the protection of their then large investment in it, had themselves been financing or bearing these losses. Confronted in 1923 with the urgent problem of securing less unfavourable results, Levers approached the Appellants with an invitation to undertake between them the reorganisation and management of Niger.

5

At that time Mr. Bell was joint manager of one of the great London banks. He had had a long experience of banking, with some knowledge of trade on the West Coast. Mr. Snelling's selection was due to the fact that he was an accountant of exceptional ability who had just rendered notable service to Levers in bringing about a favourable adjustment of Inland Revenue demands upon them.

6

Under Mr. Bell's engagement with his bank he was entitled on retirement after a few further years' service to substantial pension rights. As he would forfeit these if he were to leave the bank to take up other work, some substituted provision on this head, operative without reference to the duration of the new service, was for him of essential importance. It does not appear that any similar sacrifice was involved in Mr. Snelling's acceptance of the offer made him, and this difference of circumstance in the two cases is reflected in the final agreements reached. In the result Levers' invitation was favourably entertained by both Appellants, and in due course the conditions of their employment were embodied in letters passing between Levers, or the late Lord Leverhulme on Levers' behalf, and the Appellants respectively. These letters and the formal agreements referentially embodying their terms�separate agreements with each Appellant�were to the following effect.

7

For Mr. Bell, Levers were to take out and pay all premiums upon an endowment policy on his life, but maturing at sixty or previous death for an amount which on death before maturity would provide £16,200, and on maturity would provide £1,500 per annum or £16,200 at his option. The policy was to belong to Mr. Bell and the premiums were to be paid by Levers, notwithstanding the termination of his engagement, unless it was terminated by himself. To this obligation on Levers' part, I must return later. I pause now only to observe that Mr. Bell's secession from the service of his bank to undertake his new employment�an act at once complete�was the entire consideration for this particular promise on Levers' part and stands out separate from the other provisions of the agreement.

8

For the rest Mr. Bell was to be appointed and maintained by Levers as Chairman of Niger for five years from the 1st of November, 1923, at a salary of £8,000 a year, during which time he was to devote the whole of his time and attention during business hours "to the business" of Levers. Thus was it expressed in the formal agreement of 9th August, 1923. As to Mr. Snelling he was to serve "in regard to the West African interests" of Levers (note the phrase) for five years from the 1st October, 1923, at a salary of £10,000 per annum to the 31st March, 1925, and of £6,000 per annum for the rest of the term. There was in the formal agreement with him the same provision as to his time and attention that was contained in the agreement with Mr. Bell.

9

In July, 1926, by further agreements then entered into the service of the Appellants was continued. The earlier contract with Mr. Bell was replaced by a fresh agreement for five years from the 1st of July, 1926, at the same salary and insurance premium with the addition of a commission in certain events which never in fact became either actual or prospective. Mr. Bell was to be Chairman of Niger for the whole term.

10

The new agreement with Mr. Snelling was for the same extended period, at his same salary of £6,000 per annum, with the same commission as in Mr. Bell's case. Mr. Snelling was to be Vice-Chairman of Niger for the whole term.

11

On the 14th September, 1923, Niger formally appointed both Appellants to be Directors of the Company and the Appellant Bell to be its Chairman. On the 8th of April, 1924, Mr. Snelling was formally by Niger appointed Vice-Chairman of the Company. From the autumn of 1923 until the end of April, 1929, when their service ceased under the agreements of settlement now in question the joint management of the Appellants continued through the exercise by them of the duties attached to these two offices and to the Directorate of Niger's Associated Companies, to which also they were appointed. With reference to that joint management, it is convenient at once to observe that although in the letters of appointment it was to the "business" or to "the West African interests" of Levers that the Appellants were respectively apparently to attend yet from the beginning to the end of their engagement as probably always intended, it was in the business of Niger that they were exclusively employed. It was by their appointment to the Chairmanship and Vice-Chairmanship of Niger and to the directorate of its many associated companies with all attendant responsibilities as such that they were clothed with the necessary and only powers of...

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