O'Laoire v Jackel International Ltd (No. 2)
| Jurisdiction | England & Wales |
| Judge | THE VICE-CHANCELLOR,LORD JUSTICE STUART-SMITH,LORD JUSTICE LEGGATT |
| Judgment Date | 30 January 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J0130-2 |
| Docket Number | 91/0035 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 January 1991 |
[1991] EWCA Civ J0130-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR G. NEWMAN Q.C.
SITTING AS A DEPUTY HIGH COURT JUDGE)
Royal Courts of Justice
The Vice-Chancellor
(Sir Nicolas Browne-Wilkinson)
Lord Justice Stuart-Smith
Lord Justice Leggatt
91/0035
THE APPELLANT (Plaintiff) appeared in person.
MR MICHAEL SUPPERSTONE, instructed by Messrs Taylor Joynson Garrett, appeared for the Respondent (Defendant).
In this case, the plaintiff claims damages for wrongful dismissal against his former employers, the defendants. The wrongful dismissal is admitted. Mr Newman Q.C., sitting as a Deputy Judge of the Queen's Bench Division, awarded the plaintiff damages totalling £9,495.44. The plaintiff appeals to this court against that award of damages.
The basic facts of the case are comparatively simple. Unfortunately they have been much complicated by a tangled history of proceedings for unfair dismissal in the Industrial Tribunal which led to the Industrial Tribunal awarding him the maximum compensation of £8,000.
The plaintiff is a man of outstanding ability who has presented his case in many different courts and tribunals, earning from each testimonials to his skill and balance. His presentation of his case in this court has again come up to that high standard. It has been exceptional.
The plaintiff is aged 41 and has the highest professional and academic qualifications. The judge expressed great regard for his intelligence and ability. He had been made redundant in 1984. In January 1985 he received a copy of the job description for the post of Deputy Managing Director of the defendants. That job description contained two provisions which are material:
"Reporting to the Managing Director, this person will be expected to play a major role in the overall management and development of the business with the aim of assuming the Managing Director position within two years"
"The Group operates an incentive bonus scheme for Directors and Senior Executives and Managing Directors participate in an attractive share option scheme"
The plaintiff applied for the job and had discussions with the Employment Agency, with Mr Samuel (the Chairman of the company and Managing Director of the Group to which it belonged), and with Mr Kincaid the then Managing Director of the defendants. He received an offer of employment in a letter dated 12th March 1985 which included this passage:
"Following our recent meetings, we are delighted to offer you the position of Deputy Managing Director of [the defendant] with effect from 9th April 1985. Initially, your job will involve direct responsibility for the Sales and Marketing functions. However, it is envisaged that [within] the next two years you will progress to the position of Managing Director".
The offer also provided that six months' notice of termination was required. The plaintiff accepted the offer.
The plaintiff gave evidence of a continuing intention, both before and after his acceptance of the offer, that he was to succeed Mr Kincaid as Managing Director within two years. He was discouraged from asking for a full written contract since Mr Samuel was said not to like them. On a number of occasions after he had taken up his employment the defendants reiterated the understanding that he was the Managing Director designate. On 15th January 1986, when the plaintiff suggested that he should receive a larger pay rise, Mr Samuel replied that "the big money will come when I make you Managing Director". On 17th January 1986 the defendants' auditors prepared a report in which it was stated that it was intended that he would assume the position of Managing Director within two years of April 1985 in accordance with the terms of his offer of employment. Throughout the early part of 1986 there were a number of remarks which suggested that his appointment would be forthcoming shortly. On 1st July 1986 the plaintiff approached Mr Samuel about his appointment as Managing Director. Mr Samuel was reassuring and told him that he would come back to the plaintiff with a package within a few weeks.
On 28th July the plaintiff was called to a meeting with Mr Samuel and Mr Kincaid only to be told that he would not be appointed Managing Director. Although this decision was never altered, there followed a confused period during which the defendants were suggesting that the plaintiff might stay with the company otherwise than as Managing Director. The plaintiff was unwilling to contemplate this course. The discussions terminated with an order prohibiting the plaintiff from returning to the defendants' premises. When he did so return on 2nd October 1986, he was summarily dismissed. It is admitted by the defendants that this summary dismissal was wrongful. There is no need in this judgment to go into the details of the matter: suffice it to say that both the Industrial Tribunal and the judge considered the matter to have been ineptly, and insensitively, handled by the defendant company.
One month after the plaintiff's dismissal a Mr Banerjee was appointed Managing Director, taking up his post on 3rd November 1986 on the retirement of Mr Kincaid.
The plaintiff has been unable to obtain alternative employment except for a short period and has engaged in running an enterprise of his own which, hitherto, has not proved to be successful.
In the action, the plaintiff claims that he had a contractual right to be appointed Managing Director and on that basis claims damages as follows:
1. Loss of salary during the six months period which would have elapsed if he had been given notice, such salary to be calculated at the rate of his salary as Deputy Managing Director (£30,000 per annum gross) for one month (i.e. 2nd October to 3rd November 1986) and five months at a higher salary as Managing Director from 3rd November onwards.
2. Loss of benefits including pension, use of company car, health insurance and life insurance, the figures for which are all agreed. In addition he claims the loss of the benefits he would have received from the stock option scheme run by the company.
3. Compensation for the increased difficulty in obtaining re-employment due to the manner and nature of his dismissal. The plaintiff claims that the circumstances of his dismissal render it more difficult for him to be re-employed.
4. The distress, inconvenience and injury to feelings of both himself and his family.
Apart from disputing certain of these heads of claim, the defendants sought to set off £8,000 being the maximum award made by the Industrial Tribunal for unfair dismissal.
Before the judge, the plaintiff claimed that the defendants were estopped, under the doctrine of issue estoppel, in disputing many matters which had been decided by the Industrial Tribunal in the course of its hearings. In particular, the plaintiff claimed there was an issue estoppel raised by the findings of the Industrial Tribunal (a) that he had a contractual right to be appointed Managing Director and (b) that he was entitled to damages for loss of the stock options, fixed by the Industrial Tribunal at a figure of £32,500.
The judge rejected the allegations that an issue estoppel operated against the defendants and proceeded to consider the case de novo. He held
1. That there was no contractual obligation on the defendant to appoint the plaintiff as Managing Director;
2. That the plaintiff was entitled to damages for loss of salary for a period of six months only at the rate appropriate to a Deputy Managing Director;
3. That the plaintiff had no right to the stock options and therefore had suffered no loss under that head;
4. The plaintiff had no right to damages for loss of his reputation or injury to his feelings;
5. That the £8,000 maximum award made by the Industrial Tribunal had to be brought into account and set against the damages recoverable at common law for loss of earnings during the six month notice period.
It will be apparent that the question whether or not the plaintiff had a legally enforceable right to be appointed Managing Director in succession to Mr Kincaid is central to the computation of damages. Moreover, since the plaintiff relies upon the decisions of the Industrial Tribunal as having conclusively decided this point in his favour, it is essential to identify exactly what the Industrial Tribunal did decide.
There were, in all, four decisions by the Industrial Tribunal, three of which are relevant. The first was given in June 1987. The plaintiff appeared in person: the defendants were not represented but had made written representations to the Tribunal. There were three questions then before the Tribunal: first, had the plaintiff been unfairly dismissed; second, should the plaintiff receive compensation or be reinstated; third, if the plaintiff were to be reinstated, what sum should be paid to him by the employers in respect of the intervening period. The Industrial Tribunal held that the dismissal was unfair and that the plaintiff should be reinstated. They then dealt with the terms of his reinstatement. For that purpose, it was necessary to decide whether or not the plaintiff's contract entitled him to be Managing Director as from the date of the retirement of Mr Kincaid on 3rd November 1986. After reviewing the circumstances of his engagement and the offer letter, the Tribunal held as follows:
"14. Taking all these considerations into account, and having regard to all the evidence, we are quite satisfied, on the balance of probabilities, that the intention of both parties...
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