Stephen Gledhill v Bentley Designs (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Hh Judge Simon Brown |
| Judgment Date | 02 June 2010 |
| Neutral Citation | [2010] EWHC B8 (Mercantile) |
| Docket Number | CLAIM NO 0BM40003 |
| Court | Mercantile Court |
| Date | 02 June 2010 |
[2010] EWHC B8 (Mercantile)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
MERCANTILE COURT
HH Judge Simon Brown QC
CLAIM NO 0BM40003
Representation
Andrew McGee (Counsel) instructed by EAD solicitors LLP of Liverpool on behalf of the Claimant;
Michael Duggan (Counsel) instructed by Matthew Arnold & Baldwin of Watford on behalf of Defendant.
This is claim by a manufacturer's agent against his principal for unlawful termination on 25 th September 2008 of his agency agreement dated 2 nd December 2005.
There is little relevant factual or legal dispute between the parties and the issue to be determined is whether the termination of the Agreement by the Principal was lawful or not.
The Claimant alleges that it was unlawfully terminated when the Defendant terminated the Agreement with immediate effect on 25 th September 2008 on the basis of the Claimant's admittedly abusive behaviour over the telephone at 10.30am (voicemail) and repeated at 2.30pm (direct speech) on 12 th September 2008 towards the Claimant's Managing Director, Mr Lalani, that the Claimant contends he openly repented in a faxed letter 6 days later.
The Defendant contends that it was entitled to terminate the Agreement because:
a. The conduct of the Claimant amounted to a fundamental breach of contract. It was a breach of trust and confidence, such that Mr Lalani could not be expected to tolerate such conduct and was entitled to terminate the Agreement with immediate effect.
b. The breach was incapable of remedy. Even if it was, the Claimant did not remedy the breach by a letter dated 18 th September 2008 that he sent which purported to be an apology but which was in reality a letter of mere regret, excuse and endorsement for the Claimant's conduct.
The message on Mr Lalani's personal mobile telephone on 12 th September 2008 that was subsequently repeated was recorded was:
"I see you have taken the money out of my account which I have asked you and told you not to do.
I just can't believe you. You are at your happiest when you are always causing grief for people and just try to sort of upset people, people that support you, and I just think you are a horrible, despicable little man. I really do. I just think you are absolutely gutless. You have just taken £195 from me which covers the hotel, fair enough, and £100 twice plus the VAT. You just seem more intent on sort of…as opposed to getting the business, the nitty gritty part, you seem more intent on causing trouble to people. I think you are an absolute shit, I really do. You are a despicable, horrible little excuse for a human being.
It was a pity that you were not available to speak to."
The relevant extracts of the letter of 18 th September 2008 state:
"I write further to our discussion on Monday regarding the continuing frustrations I am feeling as a result of various isolated charges for not restricting communications with your company to EMAIL only.
Whilst I feel that in the cold light of day my allowing the pent up frustration to boil over when speaking to Rif on the telephone was not to well demonstrated business professionalism shown through our dealings and is regretted.
I do feel however that there was a fair degree of justification in my actions when looking at the circumstances from my perspective.
for the above reasons when I did speak to him almost immediately after, I felt so incensed that I felt it necessary to explain my frustrations and annoyance.
After having received your assurances last Friday that you were not seeking to terminate my contract, I believe we still need to look at how we operate in the future …".
Law
As a matter of law, abusive language by an employee towards his or her employer may amount to a repudiatory breach of contract depending on the circumstances. Words spoken in the heat of the moment may be not always lead to a conclusion that they are such that the relationship cannot continue: Wilson v Racher [1974] ICR 428); but in the content and the context of what is said and done may amount to a repudiatory breach: Pepper v Webb [1969] 1 WLR 514).
An apology may lead to the conclusion that the conduct is not repudiatory but this is likely to be only the position where the words were spoken in heat and haste and the apology is heartfelt and sincere: Charles Letts & Co v Howard [1976] IRLR 248.
In this case, as in any like employment contract, the Agent was under an express duty under Clause 3.1 "to act towards the Principal conscientiously and in good faith" and "any serious breach" of such a term would entitled the Principal to terminate "with immediate effect" under Clause 9.2.1.
The relationship of Principal and Agent here is that there is necessarily an implied reciprocal terms that neither would " without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee": Mahmud v. B.C.C.I [1997] ICR 621 per Lord Steyn.
Context
The Defendant is a company which trades with over 800 retail stores in the supply of dining and bedroom furniture. Like many companies, in recent years this has expanded into servicing clients via the internet and such accounts have been dealt with from Head Office.
The Claimant was one of 10 national agents of the Defendant from 1991 uniquely servicing two areas: Yorkshire and the North East. He was an effective agent with a large turnover earning on average about £85,000 pa in commission.
By 2006, there was a move to a 'paperless environment' as part of administrative rationalisation and modernisation....
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