Jonathan Charles Minter Julius Baer Investment Management Inc. London v Julius Baer Investments Ltd
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Rimer,MR JUSTICE RIMER |
| Judgment Date | 05 November 2004 |
| Neutral Citation | [2004] EWHC 2472 (Ch) |
| Docket Number | Case No: H003C2898 |
| Court | Chancery Division |
| Date | 05 November 2004 |
[2004] EWHC 2472 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Rimer
Case No: H003C2898
Mr Nigel Inglis-Jones QC (instructed by Maclay Murray & Spens) for the Claimant
Mr David Reade (instructed by CMS Cameron McKenna) for the Defendants
Hearing dates: 21, 22, 23, 24, 25 June 2004
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
The claimant is Mr Jonathan Minter. The defendants are Julius Baer Investment Management Inc. London ("JBIM") and Julius Baer Investments Limited ("JBIL"). JBIM is incorporated in Delaware, JBIL in England and Wales. Mr Minter is a former employee of JBIM. He took up that employment in 1989 but it ceased on 31 December 2001, when he was 52 years of age. Before his employment with JBIM Mr Minter had been an employee of Baring Brothers & Co Limited ("Barings") and a member of the Barings Pension Trust Fund ("the Barings Scheme") but he ceased to be such a member upon leaving Barings and joining JBIM. He claims that upon leaving JBIM's employment in December 2001 he became entitled to an immediate pension from the defendants equal to the pension he would then have been entitled to under the terms of the Barings Scheme had its terms continued to apply to him. The defendants dispute his entitlement to such a pension and have declined to pay it. Mr Minter claims they have thereby broken a contractual promise given to him by JBIM in July 1989. By his action, commenced by a claim form dated 8 August 2003, Mr Minter claims damages against both defendants for breach of contract. The only issue tried before me was as to liability. Mr Nigel Inglis-Jones QC appeared for Mr Minter and Mr David Reade appeared for both defendants.
The issue of liability raises four sub-issues. The first is whether JBIM made the claimed contractual promise to Mr Minter in 1989. If it did, the second issue is whether the promise was subsequently discharged by performance by the putting in place by the defendants of the various pension arrangements established for Mr Minter during his employment by JBIM. The third is whether, in the circumstances in which Mr Minter left JBIM in December 2001, he "retired" with JBIM's consent: only if he did so would he have become entitled to the immediate pension which he claims. The fourth is whether Mr Minter anyway gave up his right to sue the defendants by the terms of a Compromise Agreement he entered into with JBIM on 17 December 2001. To succeed on liability Mr Minter needs the answers "yes, no, yes and no" respectively to those four sub-issues. I turn now to the facts. In relating them I will refer to other companies in the Julius Baer group and will at times refer to that group, or to one or more of the companies in it, simply as "the bank." For the most part, it is not necessary to be more precise than that.
Mr Minter leaves Barings and joins JBIM
Mr Minter was born in July 1949. He graduated in 1971 and became employed by Barings. He built a career with them. By June 1989, he was a director of Barings International Investments Limited, was responsible for its North American fixed income client base and had a salary of £85,000 a year. He was also a member of the Barings Scheme, which he had joined in 1972. The Barings Scheme was, by 1989, governed by a definitive deed dated 23 July 1982 and by rules ("the Rules") adopted in 1989. Under the Rules, the normal retirement date for male members was their 60 th birthday and Rule 6 entitled a member retiring at that age to a pension based on 1/60 of his final salary for each year of pensionable service. Rule 7 contained provisions relating to a member's pension entitlement on early retirement. That provision is of central relevance to Mr Minter's claim and I must set out its material terms. They are:
" Pension on early retirement
With the consent of Barings an Employed Member who has completed 5 or more years of Qualifying Service and
(a) …
(b) has attained the age of 50 years, or
(c) …
may retire before Normal Retirement Date in which event such Employed Member shall be entitled to an immediate pension calculated in accordance with Rule 6 hereof but based upon the Pensionable Service of such Employed Member to and his Final Pensionable Salary at the date of his actual retirement under this Rule. …"
One of the portfolios Mr Minter oversaw at Barings was for Swiss Bank Corporation, whose manager was Peter Widmer. Mr Minter and Mr Widmer worked together and became friends. By the spring of 1989, Mr Widmer had moved to JBIM and become its Chairman. He and Mr Minter found themselves together at a conference in New York and dined together. Mr Widmer told Mr Minter that JBIM's senior portfolio manager in London had resigned and asked him if he knew of a suitable candidate to fill the position. Mr Minter responded that, if the terms were right, he would be interested in filling it himself since he was finding that his Barings job involved too much overseas travel. Mr Widmer encouraged Mr Minter to apply for the post.
An advertisement for the post appeared in the Financial Times on 3 May 1989. It said that JBIM was seeking a "highly qualified and experienced professional to be Head of International Fixed Income Portfolio Management" who would be based in London but would also be required to travel, primarily in the US. Mr Minter applied for the post by a letter of 4 May 1989 to Mr Iain Jenkins, JBIM's Vice-President and the manager of its human resources department. His letter enclosed his CV, which also summarised the terms of his employment with Barings, including the fact that he was a member of its non-contributory pension scheme. It explained that his salary at Barings was £80,000 (plus a percentage of pre-tax profits) and was due for a review in June 1989 (when it was increased to £85,000).
Mr Jenkins acknowledged Mr Minter's letter on 12 May 1989 and Mr Minter had an interview with Mr Widmer on 22 May 1989. This led to a meeting in New York on 6 June 1989 between Mr Minter and Mr Dirnberger, JBIM's managing director. That was followed by a meeting between Mr Minter and the Julius Baer Group Executive Board in Zurich on 23 June 1989. That meeting was a positive one and the Board made it clear that JBIM wanted to engage Mr Minter. JBIM was at that stage relatively small in the US market place and was interested in Mr Minter's London experience and his knowledge of the US market.
Following this, Mr Widmer telephoned Mr Minter to offer him the position of managing director (London) and a seat on the JBIM board. The offered role was to direct and develop what was at that stage a small institutional asset management business. The offered terms included a minimum annual salary of £100,000, performance related bonuses and phantom stock to the value of 5% of JBIM. Mr Dirnberger also telephoned Mr Minter and encouraged him to accept the offer.
Mr Minter thought about the offer and took advice from his accountant, Mr Keith Senior, who was then with Coopers & Lybrand Deloitte but was later to form his own firm, Seniors. He had looked after Mr Minter's affairs for a number of years. One matter Mr Minter discussed with him, which he regarded as important, was his pension. He had built up 17 years of benefits with the Barings Scheme. This gave him the defined benefit pension entitlement at 60 to which I have referred and Mr Minter also had in mind the provisions of clause 35 of the Barings Scheme trust deed under which, with Barings' consent, the trustees could augment any pension up to the permitted Inland Revenue maximum, or two-thirds of final remuneration. Mr Minter's pension package was an attractive one and he recognised this.
Mr Minter was in particular also aware that if he were to remain a member of the Barings Scheme he would have a better pension package than (subject to the making of special arrangements) he could enjoy under JBIM's pension scheme, even though that similarly provided a defined benefit pension at 60 based on 1/60 of pensionable salary for each year of pensionable service. The reason for that was because the then recent Finance Act 1989 had introduced the so-called "earnings cap". That would not have applied to his pension if he had stayed at Barings; but it would apply to his pension entitlement under any new occupational pension scheme he joined. The effect of the "earnings cap" was to introduce a limit on the amount of an individual's remuneration that may be taken into account when calculating the pension receivable from an approved pension scheme. The limit at the time of the introduction of the cap in 1989 was £60,000 but it has since usually been increased in line with the annual increase in RPI (for the tax year 2004/05 it is £102,000). The cap applies to anyone in a pension scheme established after 14 March 1989 or (subject to exceptions not applicable to Mr Minter) to anyone joining an existing scheme after 1 June 1989. In summary, were Mr Minter to remain with Barings he would, on retirement, enjoy a pension based on 1/60 of an uncapped final salary for each year of pensionable service. If, however, he were to leave Barings, join JBIM and become a member of its occupational scheme, he could only enjoy a JBIM pension based on a percentage (also 1/60) of a capped final salary for each year of pensionable service.
This point was obviously important to Mr Minter and, following advice from Mr Senior, he decided he could not accept the JBIM offer unless...
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