Eustace Potter v Port Services Ltd
| Jurisdiction | UK Non-devolved |
| Judge | Lord Hoffmann |
| Judgment Date | 06 February 2003 |
| Neutral Citation | [2003] UKPC 14 |
| Court | Privy Council |
| Docket Number | Appeal No. 48 of 2001 |
| Date | 06 February 2003 |
[2003] UKPC 14
Privy Council
Present at the hearing:-
Lord Hoffmann
Lord Browne-Wilkinson
Lord Hope of Craighead
Lord Scott of Foscote
Sir Andrew Leggatt
[Delivered by Lord Hoffmann]
Port Services Ltd is a company controlled by Miss Makeda Mikael which carries on the business of managing aircraft and handling cargo and passengers. In December 1993 it was in financial difficulties. One day at the airport Miss Mikael met the appellant Mr Potter, who was on his way to Miami. He had experience of the airline industry, having recently retired after 23 years service with Eastern Airlines. Miss Mikael asked Mr Potter whether he would take over the management of the company. After brief consideration Mr Potter agreed and began work just before Christmas 1993.
A draft agreement between the company and Mr Potter was drawn up. It provided that Mr Potter was engaged as consultant for two years from 22 December 1993. Clause 4 dealt with remuneration:
"In consideration of the services to be rendered by the consultant hereunder the company shall pay to the consultant a fee equivalent to 40% of the net annual profits of the company or EC$60,000 per annum whichever is greater. PROVIDED ALWAYS that payment of the said fee shall be contingent upon the company's ability to pay. If the company is unable to pay the fee in full it shall pay to the consultant an amount to be agreed between the consultant and the company. The balance shall be carried over to the following year and credited to the consultant."
This agreement was never signed but on 12 May 1994 Miss Makael and Mr Potter made an agreement for a joint venture with a new company which, as of 1 June 1994, would take over the business of the old. It provided that Mr Potter would provide EC$100,000 and take a 35% shareholding. Clause 6 said that an employment contract should be entered into between Mr Potter and the new company and clause 7 provided that "The Company shall turn over to the new company … the outstanding monies owed Eustace Potter for services January-May 1994 …".
Nothing came of this joint venture. Mr Potter did not produce the EC$100,000 and relations between him and Miss Mikael deteriorated until eventually he left the company just before Christmas 1994, almost exactly a year after he had joined. Up to then he had been paid just EC$2,000 by way of salary.
On 2 October 1995 Mr Potter issued a writ claiming a year's salary at the contractual rate of EC$60,000 a year. The defence was that there was no contract of services between Mr Potter and the company. It had no contractual obligation to pay anything. In paragraph 6 it pleaded that he took over the day-to-day management of the company with full knowledge that he would not be paid any money as the company was not in a position to pay him anything. The company then pleaded the agreement of May 1994 between Mr Potter and Miss Mikael and said that in breach of that agreement. Mr Potter never provided the money he was required to invest.
At the trial before Allen J. the submission of Miss Henry for the company was that the unsigned employment agreement was "simply a collection of ideas for discussions which were never agreed". There was, she said, no agreement for EC$5,000 a month salary. But the judge found as a fact that "it was always agreed and understood by and between the plaintiff and the defendant that the plaintiff would be paid $5,000 a month." The...
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Potter v. Port Services Ltd., [2003] N.R. Uned. 32 (PC)
...} .span0 { color: #000000; font-size: 12.0000pt; font-weight: bold; font-family: 'Times New Roman'; } Potter v. Port Services Ltd., [2003] N.R. Uned. 32 (PC) MLB unedited judgment Eustace Potter (appellant) v. Port Services Limited (respondent) (Privy Council Appeal No. 48 of 2001) ([2003] ......