Glover v BLN Ltd

• Jurisdiction: Ireland
• Court: Supreme Court
• Judgment Date: 18 December 1973
• Docket Number: [1966. No. 1844 P.]
• Date: 18 December 1973

Supreme Court

[1966. No. 1844 P.]

Glover v. B.L.N. Ltd.

DOUGLAS WILLIAM VICTOR GLOVER

Plaintiff

and

B.L.N. LIMITED, LINCOLN AND NOLAN LIMITED, LINCOLN AND NOLAN (SALES) LIMITED and LINCOLN AND NOLAN (PARTS) LIMITED

Defendants.

Master and servant - Misconduct - Company - Post of technical director held upon terms of contract - Appointment terminable by company in event of misconduct being established in opinion of board of directors - Misconduct established - Summary dismissal - No notice given of charges of misconduct - Natural justice - Breach of implied term - Damages for wrongful dismissal.

Witness Action.

By an agreement dated the 10th January, 1964, and made between a holding company and three subsidiaries and the plaintiff, the plaintiff was appointed to be technical director of the holding company and of the three subsidiaries, which were referred to as the operating company, the sales company and the factors company. The appointments were for a period of five years from the 1st April, 1963, until the 31st March, 1968, and thereafter from year to year unless terminated by the holding company or by the plaintiff by six months notice to expire on the 31st March, 1968, or on any day thereafter.

Clause 12 of the agreement provided:—"12. Mr. Glover's appointment as technical adviser of all the companies may be terminated without giving rise to any claim for compensation or damages upon the happening of any events following, namely . . . (c) if Mr. Glover shall be guilty of any serious misconduct or serious neglect in the performance of his duties or wilfully disobeys the reasonable orders directions or restrictions or regulations of the board of directors of any of the said companies which in the unanimous opinion of the board of directors for the time being of the holding company present and voting at the meeting injuriously affect the reputation business or property or management of either the holding company or the operating company or the sales company or the factors company . . ." At the trial and at the hearing of the appeal, the reference to "technical adviser" at the start of clause 12 was treated as being a reference to "technical director."

A meeting of the board of directors of the holding company was held on the 5th July, 1966, and the following persons were present at the meeting:—Mr. J. W. Freeman (Chairman); Mr. G. C. V. Brittain (Vice-Chairman); Mr. T. P. Hogan; Mr. P. A. Duggan and Mr. G. A. Brittain (Directors); and Mr. W. Meates (Secretary). The minutes of the meeting, having recited the attendances, continued:—"The minutes of the previous meeting were not produced. The Board having received from Mr. G. C. V. Brittain, Executive Vice-Chairman, a detailed report into the workings of the assembly plant of Lincoln and Nolan Limited it was unanimously resolved that Mr. Douglas William Victor Glover has been guilty of serious misconduct and serious neglect in the performance of his duties which in the unanimous opinion of the Board injuriously affect the business property and management of Lincoln and Nolan Limited. It was further resolved that Mr. Glover's service agreement dated 10th January 1964 with this company be terminated forthwith pursuant to clause 12 thereof. There being no further business the meeting concluded."

By letter dated the 8th July, 1966, the holding company wrote to the plaintiff as follows:—"At its meeting on 5th July 1966 the board of directors of B.L.N. Limited unanimously passed the following resolution:—'It was unanimously resolved that Mr. Douglas William Victor Glover has been guilty of serious misconduct and serious neglect in the performance of his duties which in the unanimous opinion of the board injuriously affect the business property and management of Lincoln and Nolan Limited.' On the instructions of the board of B.L.N. Limited I hereby formally give you notice terminating your service agreement dated 10th January 1964 pursuant to clause 12 thereof. Termination is to be effective forthwith, but as you are at present on holidays with pay your salary will be paid up to and including the 31st instant."

On the 13th July, 1966, at a board meeting of the operating company attended by Mr. J. W. Freeman, Mr. G. C. V. Brittain, Mr. H. M. Brierley and Mr. P. A. Duggan, a resolution was passed stating that, in view of the resolution passed by the board of the holding company on the 5th July, 1966, in respect of the plaintiff, the board of the operating company "hereby terminates his service agreement dated 10th January, 1964, forthwith pursuant to clause 12 thereof," and the secretary of the operating company was directed to convey that decision by letter to the plaintiff. Identical resolutions were passed at board meetings of the sales company and of the factors company held on the same day and attended by the same individuals. By letters dated the 13th July, 1966, from the operating company, the sales company and the factors company the plaintiff was informed of the decisions of those companies.

The plaintiff did not receive any prior notice of the charges of serious misconduct and of serious neglect.

The plaintiff's action for damages for wrongful dismissal and breach of contract was commenced by plenary summons on the 27th July, 1966, and his statement of claim was delivered on the 15th December. A joint defence was delivered by the four defendant companies on the 9th March, 1967, in which they alleged that the plaintiff had been lawfully dismissed from his employment, as having been guilty of serious misconduct and serious neglect in the performance of his duties which, in the unanimous opinion of the board of directors of the first defendant present and voting at the meeting, had injuriously affected the business, property and management of the second defendant. The misconduct and neglect alleged was not specified by the defendants in their defence, and particulars of such misconduct and neglect were first given in a letter written by the defendants' solicitors a month after the defence had been delivered. Further allegations of misconduct and neglect were made by the defendants' solicitors in further letters written on dates from ten to thirteen months after the delivery of the defence.

On the 25th November, 1968, damages were assessed25 at £9,694. This sum, as to £4,701 thereof, represented the surrender value of a policy of assurance issued for the plaintiff under the second defendants' retirement benefit scheme, for which the plaintiff had had to make no payment. The remaining £4,993 was in respect of the plaintiff's loss of salary, director's fees and commission, and of his

loss of use of the car which had been made available to him under his contract of employment.

The defendants appealed to the Supreme Court against the judgment of Mr. Justice Kenny, while the plaintiff cross-appealed against so much of that judgment as found that the plaintiff had been guilty of serious neglect of duty or of serious misconduct and that such neglect of duty and misconduct were of a nature which the directors of the first defendants could reasonably have considered to have injuriously affected the business, property or management of the second defendants.

The first paragraph in the grounds of appeal stated in the defendants' notice of appeal was in the following terms:—

"1. The learned trial judge misdirected himself in law and on the facts (a) in holding that someone who has a contract of service may successfully invoke the principle of natural justice if his position under the contract resembles that of the holder of an office; (b) in holding that the plaintiff's position should be regarded as that of the holder of an office (or as resembling that of the holder of an office) and not that of an employee only; (c) in holding that the principle of natural justice applied to the termination of the plaintiff's employment under clause 12(c) of his contract of employment; (d) in holding that as the plaintiff did not get notice of the charges against him and as he was not given an opportunity to make his defence the termination of the plaintiff's contract was invalid; (e) in holding that he had no jurisdiction to substitute a conclusion which he might have arrived at for that which the directors might have reached if they had given the plaintiff an opportunity to make his case; (f) in holding that the plaintiff was entitled to damages by reason of the failure of the defendants to give the plaintiff notice of the charges against him and the failure of the directors of the holding company to give him an opportunity to make his defence; (g) having decided that the plaintiff was guilty of serious misconduct and serious neglect of duty and that these injuriously affected the business, property and management of the operating company in holding that the plaintiff was entitled to damages; (h) in holding that the plaintiff was entitled to damages in the absence of any or any sufficient proof that the directors of the holding company would or would probably have dealt with the plaintiff otherwise than as they did in the event of its directors having given the plaintiff an opportunity to be heard."

By an order dated the 13th March, 1970, the Supreme Court ( Ó Dálaigh ó dálaigh C.J., Budd and FitzGerald JJ.) directed with the consent of the parties that the hearing of the appeal be confined in the first instance to the issues raised by para. 1 of the defendants' grounds of appeal (supra).

At the hearing of the defendants' appeal to the Supreme Court, the title of the action was altered by the substitution of Brittain Smith & Co. Ltd., Smith Manufacturing Ltd., Lincoln and Nolan Ltd. and Brittain Smith (Service) Ltd. as defendants in place of B.L.N. Ltd., Lincoln and Nolan Ltd., Lincoln and Nolan (Sales) Ltd. and Lincoln and Nolan (Parts) Ltd. respectively.

By an agreement dated the 10th January, 1964, a holding company and its three subsidiaries...