Sybron Corporation v Rochem Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STEPHENSON,LORD JUSTICE FOX,LORD JUSTICE KERR |
| Judgment Date | 23 February 1983 |
| Judgment citation (vLex) | [1983] EWCA Civ J0223-3 |
| Docket Number | 83/0085 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 February 1983 |
and
[1983] EWCA Civ J0223-3
Lord Justice Stephenson
Lord Justice Fox
and
Lord Justice Kerr
83/0085
1974 G No. 3313
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION GROUP A
(MR. JUSTICE WALTON)
Royal Courts of Justice
MR. JAMES MUNBY (instructed by Messrs. Douglas Goldberg & Co, Solicitors, London W1R 7LD) appeared on behalf of the Fourth and Twelfth Defendants (Appellants)
MR. C.A. BRODIE QC and MR. IAN GEERING (instructed by Messrs. Herbert Smith & Co, Solicitors, London EC4M 5SD) appeared on behalf of the Plaintiffs (Respondents)
This is an appeal by two out of thirteen defendants against three parts of an order made by Mr. Justice Walton on 27th March 1981 and entered on 26th August 1981. That order provided for three things by the only relevant part of it for the purposes of this appeal: The first was a declaration that the second plaintiffs, Gamlen Chemical Co (UK) Ltd "stand possessed of two policies of assurance referred to in paragraph 23 (D) of the re-re-re-amended statement of claim and the monies payable thereunder respectively, and the full benefit thereof, free and discharged from any trust in favour of the appellants of either of them". The second was an order that the appellant Wilfred Seynour Roques, the fourth defendant, "do pay to the company on the 5th February 1981 the sum of £13,208.10 with interest thereon at ten per centum per annum from the 31st October 1973 until payment". The third was an order that the appellants—that is, Mr. Roques and his wife, who is the twelfth defendant—"do pay to the plaintiffs"—that is, Sybron Corporation as well as the Gamlen Chemical Co (UK) Ltd—"such of the costs of the plaintiffs of the action taxed if not agreed as are properly attributable to the issues raised by paragraph 23 of the said re-re-re-amended statement of claim".
That paragraph is in these terms; it is on p.52 of our bundle:
"(A) Roques was employed by Gamlen UK from 2nd October 1952 until 30th September 1973. During the period of his said employment both Roques as employee and Gamlen UK as employer made payments to the Scottish Widows Fund and Life Assurance Society ('the Society') under a Pension and Life Assurance Scheme ('the Scheme') administered by Gamlen UK. Roques paid contributions to the Scheme amounting in the aggregate to £4,641.90. Under the rules of the Scheme (to which Gamlen UK will at the trial refer for their full terms and true effect) on the retirement of a member such member becomes entitled to a pension payable by the Society or under Rule 11 Gamlen UK may take part or the whole of the benefits for the member in the form of a cash payment to be applied in purchasing an annuity for that member from an insurance company or the member may request Gamlen UK to arrange for a lump sum to be paid to him in lieu of the annuity or part thereof and Gamlen UK may at its discretion arrange accordingly. Under the Scheme the normal retirement age of any member is that member's 65th birthday. Under Rule 8 (b) if before his normal retirement date a member leaves the service of Gamlen UK voluntarily or is dismissed for fraud or serious misconduct in connection with the affairs of Gamlen UK he is entitled to the benefit secured by his own contributions towards the premiums due and in respect of his membership of the Scheme and the balance of the benefit secured by such premiums will be dealt with at the discretion of Gamlen UK.
(B) Roques was 62 years of age on the 20th January 1973 and from about February 1973 was desirous of retiring from the service of Gamlen UK before reaching his normal retiring age of 65 under the Scheme.
(C) By virtue of the said Rule 11 of the Scheme in the event of Roques retiring on the 30th September 1973 there would be payable to Gamlen UK by the Society the sum of £49,672.
(D) By an agreement between Gamlen UK and Roques in or about July August and September 1973 it was agreed:—
(i) that Roques should retire on the 30th September 1973;
(ii) that Gamlen UK would exercise the option conferred by Rule 11 of the Scheme and claim the sum of £49,672.
(iii) that Gamlen UK would add to the sum of £49,672 a further sum of £7,177.14 making an aggregate of £56,849.14;
(iv) that Gamlen UK would apply the said sum of £56,849.14 as follows:—
(a) by paying £17,850 thereof to Roques;
(b) by purchasing in the name of Gamlen UK from the Society a policy of assurance under which the sum of £3,360.12 per annum would be paid to Gamlen UK during the joint lives of Roques and Mrs. Roques and the life of the survivor of them and Gamlen UK would hold such sum upon trust for Roques and Mrs. Roques as in the policy mentioned;
(c) by purchasing from the Society a further policy under which the annual sum of £756.36 would be payable to Gamlen UK for the same period and be held on the same trusts as affected the said annual sum of £3,360.12.
(v) that Roques would enter into a Consultancy Agreement with Gamlen UK for a period of three years (such Consultancy Agreement to include a covenant against competition with Gamlen UK for a period of three years from the 31st August 1976) in consideration of the sum of £7,500 to be paid in 12 quarterly instalments of £625. each;
(E) Roques retired on the 30th September 1973.
(F) Pursuant to the said Agreement Gamlen UK (1) in or about October 1973 paid to Roques the said sum of £17,850 and (2) effected the said two policies at a total cost of £38,999.14.
(G) Gamlen UK effected the said policies and each of them and made the said payment under or pursuant to a mistake of fact namely that
(i) Roques was entitled to his pension rights under the Scheme and that Gamlen UK had no good cause to invoke the provisions of Rule 8 (b) on the ground that Roques was liable to be dismissed for serious misconduct in connection with the affairs of Gamlen UK and
(ii) that Roques had faithfully and diligently carried out his duties as an employee of Gamlen UK prior to his said retirement.
(H) Gamlen UK had good cause to invoke the provisions of Rule 8 (b) on the ground that Roques could have been summarily dismissed for serious misconduct in connection with the affairs of Gamlen UK and Gamlen UK repeats the particulars given under paragraphs 6,15 (1), (2), (3), (4) and 20 hereof. Further or alternatively Roques did not faithfully or diligently carry out his duties as an employee of Gamlen UK prior to his said retirement and Gamlen UK repeats the said particulars.
(I) In the premises the said payment of £17,850 was made under a mistake of fact and Gamlen UK effected the said policies and created the trusts thereof under the same mistake. As regards the sum of £17,850 Gamlen UK is willing to give credit for the sum of £4,641.90 to which Roques would have been entitled under the provisions of Rule 8 (b)".
I need read no more of that document.
So the claim to £13,208.10 is a claim for the balance of £17,850 after deducting the £4,641.90 contributed by Mr. Roques himself to the Scheme. This claim, to be repaid £13,208.10, is a very small part of a very much larger claim for many millions of dollars as damages for conspiracy; it is a claim by two companies for conspiracy against three companies with the name Rochem, and nine others, including Mr. Roques, a Mr. Bove and other employees; I say nine others and not ten, because Mrs. Roques was not a conspirator but simply a beneficiary under the policy and throughout no allegations whatever have been made against that lady and it is her misfortune that the learned judge has found her husband guilty of the conspiracy to which I shall shortly come.
Mr. Roques and all the other defendants, companies and individuals except Mrs. Roques, and three other defendants against whom the plaintiffs discontinued, were found by the judge guilty of a conspiracy amounting to a massive commercial fraud, after a trial lasting more than 90 days, in a judgment given on 3rd and 4th December 1980, of which the transcript runs to 240 pages.
The plaintiff Sybron was described by the judge as "an American financial conglomerate". It acquired another American company called Gamlen Chemical Co Ltd, which specialised in chemicals and equipment for cleaning ships and industrial sludge. On the merger of Gamlen Chemical Co Ltd with Sybron all the subsidiaries of Gamlen Chemical Co Ltd became subsidiaries of Sybron, and those subsidiaries included the second plaintiffs, Gamlen Chemical Co (UK) Ltd, who were responsible for the activities of the company in the United Kingdom, and also for its activities in Norway and in the Middle East and the Gulf area. Included in those subsidiaries were a French subsidiary, an Italian subsidiary, a German subsidiary and a Dutch subsidiary with a branch in Belgium.
The French subsidiary took an independent line to a considerable extent. At p.4 of the transcript of his judgment the learned judge said this:
"Leaving, therefore, Gamlen France completely out of the picture for present purposes, the manner in which the Gamlen Division of Sybron, through the former subsidiaries of the Gamlen Chemical Company and the Gamlen Division of Sybron Italia, operated was...
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