Micklefield v SAC Technology Ltd

JurisdictionEngland & Wales
CourtChancery Division
Judgment Date21 March 1990

Chancery Division

Before Mr W J Mowbray QC

S. A. C. Technology Ltd

Contract of employment - share option scheme

Dismissal bars company director from share option

An exemption clause in the contract of employment of a company director barred him from taking advantage of a share option following his dismissal, notwithstanding that his dismissal might have been wrongful and in breach of contract.

Section 3 of the Unfair Contract Terms Act 1977 did not apply to the contract of employment so far as it related to the share option, being specifically excluded by paragraph 1(e) of Schedule 1 to that Act.

Mr W J Mowbray, QC, sitting as a deputy judge of the Chancery Division at Bristol, so held on a preliminary issue in an action for breach of contract brought against the defendant company, SAC Technology Ltd, by the plaintiff, Mr Neil Anthony Micklefield.

Mr Malcolm Cotterill for Mr Micklefield; Mr Michael Brindle for the company.

HIS LORDSHIP said that Mr Micklefield was employed under a service agreement which entitled him to apply twice a year for share options at the subscription price.

Paragraph 4.3B of the agreement provided: "If an option holder ceases to be employed within the S A C Technology group for any reason whatsoever, then the option granted to him, shall … lapse and not be exercisable."

Paragraph 9 provided: "If any option holder ceases to be an executive for any reason he shall not be entitled, and by applying for an option an executive shall be deemed irrevocably to have waived any entitlement by way of compensation for loss of office or otherwise how so ever to any sum or other benefit to compensate him for the loss of any rights under the scheme."

Mr Micklefield had written to the company on February 3, 1988 stating that he wished to exercise his option to purchase shares on February 19. In the event, he was dismissed on February 12 and the company had refused to allow him to buy the shares.

The preliminary issue before the court was whether on the true construction of the contract of employment and of the share option scheme, and on the assumption made for the purposes of the preliminary issue that he had been dismissed wrongfully and in breach of contract, the plaintiff could recover damages for loss of his option resulting from what was to be assumed to be wrongful dismissal.

Mr Cotterill had cited a passage from Gunton v Richmond upon Thames London Borough CouncilELR ((1981) Ch 448) in which Lord Brightman had said...

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8 cases
  • Giovanni Mallone v BPB Industries Plc
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 19 February 2002
    ...if it were in breach of its own contract of employment, and in this respect he referred to a decision of Mr John Mowbray QC in Micklefield v. SAC Technology Ltd [1990] 1 WLR 1002. It is unnecessary for the purpose of this appeal for this court to consider whether that submission was correct......
  • Tesco Stores Ltd v Simon Pook and Others
    • United Kingdom
    • Chancery Division
    • 14 April 2003
    ...their obligations unless the party was in breach of a duty owed to the other contracting party. This decision was considered in Micklefield –v—SAC Technology Ltd. [1990] IRLR 218 (John Mowbray QC). This too involved a Share Option Scheme which provided that the option could not be exercised......
  • John McCarthy v McCarthy & Stone Plc
    • United Kingdom
    • Chancery Division
    • 20 July 2006
    ...employee by virtue of being wrongfully dismissed by the Defendant: see for example Thompson v Asda-MFI Group [1988] Ch 241 and Micklefield v SAC Technology Ltd [1990] 1 WLR 1002 and compare Levett v Biotrace [1999] ICR 818. 21 Thus he submits that if the Remuneration Committee exercise thei......
  • Electricity Supply Nominees Ltd v I.A.F. Group Ltd
    • United Kingdom
    • Queen's Bench Division
    • 21 January 1993
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