Mr Venu Parmeshwaran Nair v Lagardère Sports and Entertainment UK Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 06 October 2020 |
| Neutral Citation | [2020] EWHC 2608 (QB) |
| Date | 06 October 2020 |
| Docket Number | QB-2019-002255 |
| Court | Queen's Bench Division |
[2020] EWHC 2608 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
QB-2019-002255
Representation:
Mr Ian Mill QC for the claimant (C) instructed by Mishcon de Reya LLP, Solicitors
Mr Andrew Hunter QC for the defendant (D) instructed by Squire Patton Boggs (UK) LLP, Solicitors
Authorities referred to in judgment:
Malik v Bank of Credit and Commerce International SA [1998] AC 20
Hagen and others v ICI and others [2001] EWHC 548 (QB)
Crossley v Faithful & Gould Holdings Ltd [2004] EWCA Civ 293
Greenway and others v Johnson Matthey Plc [2016] EWCA Civ 408
James-Bowen v Chief Commissioner of the Metropolitan Police [2018] UKSC 40
Authorities referred to in submissions but not referred to in judgment:
BP Refinery v Shire of Hasting (1977) CLR 266, 283
Philips Electronique Grand Public SA v British Shy Broadcasting Ltd (1995) EMLR 472, 481
Swain v Hillman [2001] 1 All ER 91
Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550
Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1
ED&F Man Liquid Products v Patel [2003] EWCA Civ 472
Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63
ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725
Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)
AC Ward & Sons v Catlin (Five) Ltd (2009) EWCA Civ 1098
Dellal v Dellal [2015] EWHC 907 (Fam)
Bournemouth University v Buckland (2010) EWCA Civ 121, (2011) QB 323
Marks and Spencer plc v BNP Paribas [2016] AC 742
Keywords — contract law — employment law — implied terms — trust and confidence — scope of term — financial wellbeing — corporate structure — bonus payments
This judgment relates to the applicability of the ‘implied term as to trust and confidence’ (‘ITTC’) in contracts of employment, and in particular where the alleged context is a breach of that term by way of the conduct of an employer which (depending on how one looks at the facts) consisted of a failure to secure payment of bonuses due from other companies in the broad group of companies in which C was employed and over which it is argued D had sufficient de facto control, or where the conduct is a positive ‘stringing along’ and avoiding honouring the bonus payment, leading to a breakdown in trust and confidence. Among other things the question is whether the claim must fail on the basis that appellate courts have in the past rejected the notion of an implied duty on an employer to take steps to protect the financial welfare of employees. In this instance the sum involved is enormous, being a bonus of at least $25 million USD.
The claimant's case is that for 11 years or so from 2006 until he resigned from D in 2017, he was employed within the World Sport Group of companies, (WSG) and in particular latterly from October 2015 by the defendant, Lagardère Sports and Entertainment UK Ltd (LSE). He alleges that in 2008 he was a part of a team which was instrumental in securing the media rights to the Indian Premier League (IPL), which at that time was a new league created by the relevant cricket board of control (the Board of Cricket Control for India, or BCCI). He alleges that due to various acts and omissions of WSG, the BCCI and a broadcasting partner of WSG terminated contracts and that WSG was exposed to investigation by Indian authorities, causing him personally a loss of reputation and other losses.
His former employer is LSE, pleaded as a member of the WSG group to which he transferred by mutual agreement in 2015, is said to be liable to pay damages for breach of the ITTC based on what he says is a failure by it to respect his express contractual bonus entitlement and compensation for the loss to his reputation while at WSG; he also says that it has failed to reimburse some contractually due expenses of £125,000.
I use the nontechnical term ‘respect’ at this stage since there is argument over how the case was put – said to differ as between the Particulars of Claim and the skeleton argument of C, and hence over the legal basis for claiming against D albeit that on any basis D's position was that no claim against D is sustainable.
LSE's parent company (actually a partnership limited by shares under French law) is pleaded to be LSE SCA in France but the claimant worked at the LSE division headquarters in London, for the UK company, and did so since a reorganisation of the company management in September 2015. I will not set out in detail the corporate structure about which I had some information notably in the form of a chart provided by an HR officer on behalf of D, but there is no agreement between the parties as to the extent of control which D had or has over other companies in the broad corporate framework. This application takes place before disclosure or exchange of evidence and hence material was limited to the evidence put in for the application and in response to it.
In 2015 D acquired a corporate services role (at the London HQ, where D ‘transferred’ in a general contractual sense rather than a formal TUPE sense) as part of a reorganisation of the various related companies within and connected with the WSG group. The POC pleads that at the time of employment of C by D (‘2015 UK agreement’) there were termination agreements with two of the WSG companies for which C worked (WSG Hong Kong and WSG Singapore which I refer to as WSG HK and WSG SG). The termination agreements are said not to have ended those companies' obligations to pay him bonuses due, or to terminate WSG SG's alleged liability to compensate C for certain other claims also.
The employment contract between C and D was an ‘executive services agreement’, and by clause 3.1 the employment began 1/10/15 and continued to 2018. It was a 3 year contract. Remuneration was provided for (at cl. 6), there being no mention of liability for historical bonuses, there was provision at cl. 7.1 to pay expenses upon production of satisfactory proofs of incurring the expenses, cl. 20 included a grievance procedure (it was not claimed that this was ever used) and cl. 23 was an entire agreement clause.
The employment contract with the Singapore company subsisted until December 2018 and hence existed for a period alongside the contract with D, and indeed continued ultimately for longer than did the contract with D.
It was pleaded by C that it was an implied term (the ITTC) of the 2015 UK agreement by which D employed C that D would not conduct itself so as to ‘destroy or seriously damage the relationship of trust and confidence’ between it and C, and that the ITTC operated so as to require D to take reasonable steps to secure that the two WSG companies paid bonuses and compensation due from them to C. In other words the pleaded obligation to take reasonable steps to secure payments was not said to be a separate contractual term but rather that fulfilling that obligation was part and parcel of adhering to the ITTC in the contract between D and C. Whether that is a claim doomed to fail as either fanciful or not arguable in law is the matter in issue here.
D applies to strike out the claim and/or for summary judgment. Its case consisted of three essential elements namely: first that there is no real prospect of C establishing there was a positive contractual requirement that D had to use reasonable steps to procure repayment of sums due from the former employer of C within the WSG group; second that the pleaded case on breach (failure to take those steps) stands no real prospect of success in any case, and third that there is no reasonable prospect of establishing causation of loss.
D's application
It was accepted for purposes of this application that I could assume that C had an arguable case as against the two WSG companies, and the issue here was whether the claim against D was sustainable.
Mr Hunter argued that D is a different legal entity from WSG SG and WSG HK. This was not a claim on the basis of piercing the corporate veil or that D assumed, acquired or guaranteed the debts of the other companies. C only worked for D for 16 months. The two WSG companies, different entities, pre-dated the C's work at D by some time: and C's contract with WSG HK ran from 2006–2015 and with WSG SG from 2012–2018, continuing until after C's contract with D had ended (and overlapping with it).
It was elementary, it was said, that, absent piercing the veil, these were separate entities and must not be conflated. Yet C's approach amounted to treating them as inseparable: ‘C was employed in the group of companies known as ….’ and suchlike in the skeleton for C was a glossing-over of the fact that these were separate legal entities. D (per the corporate structure diagram in the bundle) sat in amongst various companies which were also indirectly owned by the same entities who indirectly owned the two WSG companies. The WSG companies were operating companies and still exist under different names, and D was a corporate services company. D did not control the two relevant WSG companies, it was said.
Prior to 2015, D's employment per the statement of Mr Guet for D was under employment or consultancy contracts and variations thereof, the earliest being from 9/2/06 with the HK company, later terminated on 30/9/15. It was averred that there was a fundamental difference between the pleaded case, and the evidence now put in for this application by Mr Nair the claimant namely that, whereas the pleaded case was solely concerned with D failing to take steps to procure other entitles to act by compensating him, the skeleton argument and evidence now forming the basis of argument by C were said to pursue a different basis of claim by which the argument in C's skeleton was that D refused, itself, to...
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