Blyth v Scottish Liberal Club
| Jurisdiction | Scotland |
| Judgment Date | 19 March 1982 |
| Docket Number | No. 20. |
| Date | 19 March 1982 |
| Court | Court of Session (Inner House - Second Division) |
SECOND DIVISION.
Lord Ross.
Master and servantContractBreach of contractWhether employee's conduct amounted to material breachRelevance of employee's belief that his contract did not bind him to carry out duties which he was requested to carry out by his employers.
DamagesContractBreach of contractWhether expenses of application to industrial tribunal and Employment Appeal Tribunal a relevant head of damageWhether such expense could reasonably be supposed to have been in contemplation of both parties.
The pursuer entered into a contract of employment with a club in terms of which he was employed as their managing secretary. He admitted having breached the contract in two respects, namely, by failing to attend a meeting of the club's review committee on 8th August 1977 although he had been instructed to do so, and by refusing to take the minutes of a meeting of the club's management committee on 12th September 1977 although he had been instructed to do so by the club chairman. He was dismissed on the ground of these two breaches. He claimed that he had had a genuine belief that under his contract he was not required to carry out either of the two duties. He claimed damages from the club, averring that they were in breach of contract by dismissing him. His claim for damages included a sum to reflect the expenses incurred by him in connection with an application to the industrial tribunal and an appeal to the Employment Appeal Tribunal. The Lord Ordinary assoilzied the club. The pursuer reclaimed.
Held, refusing the reclaiming motion, (1) that the pursuer's failure to carry out the duties in question went to the root of the contract, and was accordingly a material breach of contract.
(2) That the pursuer's bona fide belief that he was not bound to obey the defenders' requests to carry out his duties did not debar the club from treating his disobedience as a material breach of contract.
(3) That any damages which had been awarded would not have included the pursuer's expenses incurred in his application to the industrial tribunal and the respondents' appeal to the Employment Appeal Tribunal since the employee's pursuance of a claim before an industrial tribunal was not something which could reasonably be supposed to have been in the contemplation of both parties at the time the contract of employment was made.
Wade v. Waldon 1909 S.C. 571 followed.
David G. Blyth brought an action against the Scottish Liberal Club in which he claimed the sum of 35,000 as damages due to him as a result of the club's breach of contract in dismissing him from their employment.
The following narrative of the facts is taken from the opinion of Lord Dunpark:"The reclaimer was engaged by the respondents in 1976 as their managing secretary on a contract which did not terminate until 7th May 1982, his 65th birthday. He raised an action of damages for breach of contract on 9th June 1977 in which he averred that the respondents had wrongfully terminated this contract. The club premises in Princes Street had been closed on 31st March 1977 and the contents sold on 20th April 1977 so that his managerial duties of the club operating in club premises had come to an end. Notwithstanding his claim that the respondents had terminated his contract, he nevertheless continued to draw his full contractual salary until the respondents terminated his contract on 20th September 1977.
The pursuer was instructed to attend a meeting of the club's review committee on 8th August 1977 and he refused to do so. He was further instructed to take minutes of a meeting of the club's management committee on 12th September 1977, which instructions he also refused to obey. The Lord Ordinary held that these two instances were cases of wilful disobedience in an important and material respect which entitled the defenders to terminate the pursuer's contract. The pursuer had acted in the bona fide belief that the duties which he was being required to carry out on said two occasions were not duties which under his said contract he was required to fulfil."
On 10th December 1980, after a proof before answer, the Lord Ordinary (Ross) assoilzied the defenders.
The pursuer appealed to the Second Division and the appeal was heard on 23rd February 1982 and following days.
At advising on 19th March 1982,
LORD JUSTICE-CLERK (Wheatley).Despite the extensive controversies canvassed in the pleadings and in the evidence the issue in the reclaiming motion was simply this: It being conceded by the pursuer that the Lord Ordinary's finding that he had been in breach of his contract of service with the defenders in two respects could not be impugned, were these material breaches of the contract sufficient to warrant his dismissal from his job and thus negate his action of damages for breach of contract? In these circumstances I do not consider it necessary to rehearse the history of events leading up to and surrounding this limited issue, since that history has been fully set out by the Lord Ordinary in his opinion for the purpose of the wider issues with which he had to deal. I accordingly content myself with the Lord Ordinary's narration thereof, most of which can be culled from the agreed documents contained in the Appendix. Insofar as the Lord Ordinary's opinion deals with other matters, these are of significance principally in relation to questions of credibility and impressions and inferences which he drew from the evidence and the documents.
The two instances of admitted breach of contract on the part of the pursuer were (1) despite an express instruction to attend a meeting of the review committee on 8th August 1977 he refused to do so; and (2) despite express instructions from the chairman of the club to take minutes of a meeting of the management committee on 12th September 1977 which he was attending he refused to do so. The Lord Ordinary has held that these were cases of wilful disobedience in important and material respects which entitled the defenders to terminate the pursuer's contract. He accordingly found in favour of the defenders. In order to assess properly the extent of the materiality of these refusals it is necessary to go deeper into their significance than a view of them taken in isolation might suggest. Despite the fact that the defenders had made it abundantly plain that in their view it was part of his contract of service that he was obliged to carry out these duties he steadfastly maintained that these duties were not comprehended in his contract as managing secretary. I do not require to go into this matter because it is now accepted that they were comprehended in his contract. As events had materialised they were virtually the only duties which were left for him to perform in return for the salary which the defenders were obliged to pay to him under the contract. When asked what other tasks the pursuer might then have to perform under his contract, his senior counsel could only suggest forwarding members' mail and seeing to the security of the club premises. As matters stood, the club was still in existence and its affairs were being run by the management committee. How the future of the club could be best determined was the function of the review committee, and it is perhaps not without significance that at an earlier stage in the club's crisis a similar review committee for development had been serviced by the pursuer without question.
In the course of the debate under reference to selected cases various concepts and various phrases were developed to provide a test for materiality of the breach in this context. It seemed to me at times that there was a danger of getting bogged down in a mire of semantics. For present purposes I take the view that the well known test expounded by Lord President Dunedin in Wade v. Waldon 1909 S.C. 571 at p. 576 and cited in Gloag on Contract (2nd ed.) at p. 602 is the apposite one: "It is familiar law, and quite well settled by decisions, that in any contract which contains multifarious stipulations there are some which go so to the root of the contract that a breach of those stipulations entitles the party pleading the breach to declare that the contract is at an end. There are others which do not go to the root of the contract, but which are part of the contract and which would give rise, if broken, to an action of damages."
In the state of affairs of the club at the time when the breaches took place I can think of nothing which would strike more at the root of the contract than the refusal by the pursuer to service the review committee and to carry out orders in connection with the affairs of the management committee. Once it is accepted that those were duties which the pursuer was obliged to carry out under his contract, and were virtually the only ones at the time, the Lord Ordinary's finding on the materiality of the breaches is prima facie clearly confirmed.
Pursuer's counsel maintained, however, that the question of materiality had to be considered in the light of all the circumstances of the case. On that approach, it was said, the breaches took on a lesser significance, tapered from major to minor and were insufficient to warrant the pursuer's dismissal. In the very forefront of this line of approach was the contention that the pursuer, albeit mistakenly as it turned out, had proceeded in the bona fide belief that the said work which he was instructed to do did not fall within the four corners of his contract. Reference was made to the cases of Spettabile Consorzio Veneziano de Armamento di Navigazione v. Northumberland Shipbuilding Co. Ltd. 1919 88 L.J. K.B. 1194, Rubel Bronze and Metal Co. v. VosELR [1918] 1 K.B. 315, Sweet & Maxwell v. Universal NewsELR [1964] 2 Q.B. 699, andWoodar Investment Development Limited v. Wimpey Construction U.K. LimitedWLR [1980] 1 W.L.R. 277 (in selected passages) which were claimed to buttress the proposition that in view of...
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