Skip to Content

Dag & Company International Limited v Dagny [2013] DIFC CA 001

Dag & Company International Limited v Dagny [2013] DIFC CA 001

August 21, 2014

image_pdfimage_print

Claim No: XXXX

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

 

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai 

IN THE COURT OF APPEAL

BEFORE THE DEPUTY CHIEF JUSTICE SIR JOHN CHADWICK, JUSTICE SIR DAVID STEEL AND H.E. JUSTICE OMAR AL MUHAIRI

BETWEEN

DAG & COMPANY INTERNATIONAL LIMITED

                                                                                                                        Claimant/Appellant

and

 

DAGNY

                                                                                                                        Defendant/Respondent

 

Hearing:            10 October 2013

Counsel:           xxxx for the Appellant.

xxxx for the Respondent.

Judgment:        10 October 2013


JUDGMENT OF THE DEPUTY CHIEF JUSTICE SIR JOHN CHADWICK, JUSTICE SIR DAVID STEEL AND H.E. JUSTICE OMAR AL MUHAIRI


Transcribe from the oral judgment delivered on 10 October 2013 and revised and approved by the judges.

Sir John Chadwick, Deputy Chief Justice:

1.This is an appeal from parts of an order made by His Excellency Justice Ali Al Madhani on 15 April 2013 in proceedings brought under reference CFI 007/2011 by DAG against his former employer, Dagny 

2. The Employer is an independent investment bank, incorporated and based in Scotland, specialising in the energy industry. It is a DIFC recognised company Dag, who has worked in Kuwait and elsewhere in the Gulf region for some time, is experienced in the field. The employment commenced on 17 August 2007 when Dag moved from Kuwait to Dubai. It was terminated by the Employer on six months’ notice with effect from 27 July 2010.

3. These proceedings were commenced by the issue of Part 8 Claim Form on 24 March 2011. So far as material, the relief claimed included payment of salary, bonus and gratuity for the first few weeks of the employment , a period from 17 August to 10 September 2007;payment of what was said to be an agreed minimum bonus in the sum of US$ 187,000 for the year-ended 30 June 2010;and payment in lieu of certain benefits in kind which were not in fact taken in kind. By a counterclaim in proceedings the employer sought repayment of US$ 67,308 said to represent an overpayment of bonus in respect of the period to 30 June 2008.

4. The proceedings came before His Excellency Justice Ali Al Madhani for trial on 30 and 1 November 2012. For the reasons given in his Judgment dated 15 April 2013 the judge upheld the claim to salary and bonus in respect of the short initial period from 17 August to 10 September 2007; and he upheld the claim to a minimum bonus of USD$ 187,000 for the year ended 30 June 2010. He dismissed the claims to payment in lieu of benefits in kind; and he dismissed the Employer’s counterclaim for repayments of part of the bonus paid in respect of the period to 30 June 2008. The Employer appeals to this Court from, first, that part of the Judge’s order as upheld the claim to minimum bonus for the year-ended 30 June 2010 (paragraph 105(a) of the judgement); and second, from the part of the judge’s order dismissing its counterclaim in respect of overpaid bonus in respect of the period 30 June 2008. The appeal is brought to this Court with the leave of the Chief Justice granted on 10 June 2013.

5The terms upon which Dag was employed was set out in a letter from the Employer dated 4 July 2007 which we were told was counter-signed by way of acceptance by the employee. The initial employment was as a Vice-President on a salary of US$200,000 per annum, payable monthly in arrears. The employment was for an indefinite term; but was determinable by either party of six months’ notice to the other. The contract included, as is not unusual, provision for an end of service gratuity benefit on termination.

6. The section of the letter headed, “Salary” contains the following provisions in relation to bonus:

“In your first year of employment only, you will be paid a total, “signing bonus” of US$175 payable in four quarterly installments as follows; August 60 percent, November 15 percent, February 15 percent and May 10 percent.

This is not a post which attracts overtime but you will be eligible for an annual bonus. The amount of bonus is discretionary and is based on the firm’s financial year-end of 30 June. To give you some comfort on this, and assuming your start date commences in [August/September], the company agrees to pay you a minimum bonus of not less than 175 percent of your gross salary in respect of the period to 30 June 2008. In accordance with the terms of the scheme, payments are made in September 60 percent, December 15, March 15 percent and June 10 percent following the year-end and you must continue as an employee to retain you entitlement to bonus. Thereafter, you would be part of the firm’s normal discretionary bonus award scheme. However, the company agrees to pay you a minimum bonus of not less that 85 percent of your gross salary in any one fiscal year. The award of a bonus in addition to your minimum bonus will be discretionary.

It is, I think, common ground that the word, “that”, which appears in the penultimate sentence, should be read as “than”. 

7. On 29 August 2008 Dag received from the Employer a document described as a “Remuneration Announcement” bearing that date. It was in these terms:

“Firstly, I am delighted to announce that with effect from 1 September 2008, you are to be promoted to the position of Director.

With regard to your remuneration, I am pleased to announce that you have been awarded a bonus of US$350,000 for fiscal year ended 30 June 2008. This bonus payment will be made quarterly as part of our normal payroll runs as follows:

  • 60 percent – September 2008,
  • 15 percent – December 2008,
  • 15 percent – March 2009,
  • 10 percent – June 2009.

Therefore, together with your current salary of 200,000 your total indicative remuneration package for fiscal year ended 30 June 2008 was US$550,000.

With effect from 1 January 2009, your salary will be increased to US$220,000 and finally, I would like to congratulate you on your promotion and wish you continued success with the company.”

That document was sent and signed by Colin Welsh on behalf of the company.

8. It is common ground that Dag ws paid the US$350,000 pursuant to that Remuneration Announcement by way of bonus for the year ended 30 June 2008; and that the sum was paid by instalments over the period from September 2008 to June 2009. It is common ground, also, (i) that US$350,000 represents 175 percent of US$200,000, (ii) that the actual gross salary received by Dag in the period to 30 June 2008, representing salary from 10 September 2007 to 30 June 2008 at a rate of US$200,000 per annum, was US$161,538 and (iii) that the sum representing 175 percent of US$161,538 is US$282,692. The amount claimed as over-payment in respect of the period ended 30 June 2008 (US$67,308) represents the difference between the amount actually paid in respect of that period (US$350,000) and the amount (US$282,692) to which, under the bonus provisions in the letter of 4 July 2007, Dag would have been entitled if his employment had commenced on 10 September 2007. 

9. Dagny’s claim to a minimum agreed bonus in respect of the year to 30 June 2010 is founded on the second limb of the penultimate sentence of the bonus provisions in the letter of 4 July 2007 which I have already said out:

“However, the company agrees to pay you a minimum bonus of not less than 85 percent of your gross salary in any one fiscal year.”

The sum claimed (US$187,000) is 85 percent of the claimant’s gross salary (US$200,000) in respect of the year ended 30 June 2010. It is common ground that the claimant did not in fact receive any payments in the period 1 July 2010 to 30 June 2011 in respect of bonus, or at all, for the year ended 30 June 2010. Put shortly, the Employer’s position is that the entitlement to bonus in respect of the year to 30 June 2010 depended on continuing employment during the following year until the date upon which an instalment of bonus became payable. Given that Dag employment was terminated with effect from 27 July 2010, it is said that he ceased to be entitled to bonus in respect of the year to 30 June 2010 under the terms of the bonus provision in the letter of 4 July 2007.

10. The Judge addressed the claim for US$187,000 in respect of bonus for the year ended 30 June 2010 at paragraphs 44 to 55 of his Judgement of 15 April 2013. After setting out the relevant provision in the letter of 4 July 2007 he said this: 

“(45) It is quite obvious from the salary/bonus clause that the defendant’s contract provides for different ranges of bonuses. The first is the signing bonus which is not the subject of any kind of dispute. The second bonus given to the claimant is the annual bonus with the wording, “But you will be eligible for an annual bonus. The award of a bonus is discretionary and is based on the firm’s financial year end of 30 June. To give you some comfort on this and assuming you will start date commences in [August/September] the company agrees to pay you a bonus of not less than 175 percent of you gross salary in respect of the period to 30 June 2008. In accordance with the terms of the scheme, payments are made in September 60 per cent, December 15 per cent, March 15 per cent, and in June 10 per cent following the year-end and you must continue as an employee to retain your entitlement to bonus; describes the annual bonus, a quantum of which is 175 per cent and is discretionary is subject to a condition of continuity and the method of payment of that annual bonus per month and its percentage.

(46) The third range of bonus then given is, “Thereafter, you will be part of the firm’s normal discretionary bonus award scheme”. Where reference to, “Discretion” and “Scheme” is made, then as the clause continues, the fourth type of bonus is provided, “However, the company agrees to pay you a minimum bonus of not less than 85 per cent of your gross salary in any one fiscal year”. This bonus is called, “The Minimum Bonus” and the word, “However” suggests that in contrast to the types of bonus mentioned before, it is yet to come or just a different arrangement.

(47) The court’s interpretation of the term, “Minimum Bonus” following the word, “However” is that it is not subject to either the company’s discretion or the company’s discretion or the company’s bonus scheme or the continuity and timing conditions attached to the annual bonus which is referred to as the second type of bonus available in the above mentioned analysis.”

That analysis led the judge to the conclusion, expressed at paragraph 55 of his judgement, that Dag was entitled to the minimum bonus in the sum on US$187,000 for the financial year ending 30 June 2010.

11. The Employer submits on this appeal that, in adopting the approach, the judge fell into error in failing to appreciate that, properly understood, the bonus provisions (other than those in respect of the signing-on bonus payable in the first year or employment) were based upon and had to be construed in conjunction with, “the firm’s normal discretionary bonus award scheme” to which reference was made in the penultimate sentence of the text which I have set out. It said that the Employer had adduced evidence as to the existence of a single scheme subject to the obligation of continued employment; and that there was no contrary evidence before the court relative to any other scheme. 

12.The evidence adduced, to which reference is made in the submissions on behalf of the Employer, is found at paragraph 18 of the first witness statement (dated 31 August 2012) of Colin Donald, the then chief financial officer at Dagny. Sam had said this:

“Dagny operates a discretionary bonus scheme for staff. There is no separate document setting out this bonus scheme of describing its terms. Rather, it is included in an individual’s employment contract. All Dagny members of staff are eligible for bonuses. Bonuses are awarded based on a combination of the individuals and the firms’ performance. The more senior a member of staff it becomes, then potentially a much larger percentage of their remuneration can be earned as a discretionary bonus. Junior members of staff being those below associates receive their bonus payments in a single payment in September following the end of the applicable financial year, providing that they remain in employment with Dagny on the payment date. Senior members of staff being associate level and above  receive their bonus in differed tranches. In particular, it is necessary to be in employment on the following months to achieve the following percentages namely, September 60 per cent, December 15 per cent, March 15 per cent and June 10 per cent. The bonus has always been paid out on this basis. The bonus scheme has always operated on the basis that to secure payment it is necessary to be in employment with Dagny on certain specified dates in the financial year following a financial year for which the bonus is awarded. 

13. The judge took little or no account of that evidence. At paragraph 51 of this judgment he observed that two of the defendant’s witnesses knew nothing about the bonus entitlement of the claimant as it was confidential to them; whereas Dagny representation said that the minimum bonus was subject to the company bonus scheme and therefore, it was discretionary. He went on, at paragraph 52, to say that the defendant had put forward no written evidence of any bonus scheme and neither had the other two of the defendant’s witnesses expressed any awareness of any written bonus scheme on which the court could reply in support of the defendant’s contention in this regard. At 53 he said this:

“Furthermore, it is for the court to interpret the understanding between the claimant and the defendant at the time of contracting as to whether the minimum bonus was conditional. Dagny has given no evidence that what he is alleging was expressly communicated to the claimant and had become a certain term of the contract. Consequently, Dagny’s assertions are too vague and insufficiently uncertain to be bringing on all the parties. 

14. In expressing those views it seems to me the judge paid insufficient regard to the terms of the bonus provisions which were set out in the letter if 4 July 2007. Those terms referred to the firm’s “normal discretionary bonus award scheme”. In the context of the minimum bonus guarantee for the year-ending 30 June it was said that:

“In accordance with the terms of the scheme, payments are made in September 60 percent, December 15 percent, March 15 percent and June 10 percent following the year-end and you must continue as an employee to retain your entitlement to bonus”.

And the letter went on:

“Thereafter, you would be part of the firm’s normal discretionary bonus award scheme”.

It seems to me plain that the reference to the terms of the scheme in the sentence which begins with the words “In accordance” must be a reference to “the firm’s normal discretionary bonus award scheme” in the sentence which begins, “Thereafter”; and plain and that the reader is told, in the letter of 4 July 2007, that the terms of the normal discretionary bonus award scheme include, first, terms as to the payment dates and the proportions to be paid on those dates and, second, of the requirement that the employee must continue as an employee in order to retain entitlement to bonus. Therefore, whatever other terms the firm’s normal discretionary bonus award scheme may or may not have contained, Dag entered into his employment on the basis that the scheme did contain, at least, the terms to which I have just refereed: that is to say, terms as to (i) the dates upon which payments were to be made in the year following the year in respect of which bonus was being paid, (ii) the proportion of the bonus which to be paid on those dates and (iii) the condition of continuing employment, as at those dates of payment, in order to receive the bonus. The provisions as it seems to me have to be interpreted with that in mind. The terms of the discretionary bonus award scheme as spelt out are plainly part of the provisions as to bonus.

15. Had the judge appreciated that, he would, as it seems to me, have appreciated hat the second paragraph in the letter of 4 July 2007 provided for an annual bonus payable not only in respect of the year to 30 June 2008 but also in respect of the years thereafter. The annual bonus paid in respect of a year of employment is to be paid in the year following that year of employment. That annual bonus was separate and didstinct from the signing bonus, which was payable during the first period of employment up to 30 June 2008. The bonus payable in (as distinct from in respect of) that first year had to be the subject of a separate provision because it could not be based upon the gross salary in a previous year: there was no previous year. But once past the end of the first fiscal year, 30 June 2008, the normal discretionary bonus award scheme took over. The second paragraph provided that the operation of the normal discretionary bonus scheme was qualified in respect of the year to 30 June 2008 by the minimum guaranteed bonus of 175 per cent (to which reference is made in the sentence which begins, (“To give you some comfort”);and is further qualified in respect of future years (after the year to 30 June 2008) by the reference to a minimum bonus of not less than 85 per cent of gross salary to which reference is made in the sentence which begins: “Thereafter”. The structure of the bonus provisions as set out in the letter of 4 July 2007 is that (in addition to “signing on” bonus) the normal discretionary bonus award scheme operates subject, first, to the requirement that, in respect of the year to 30 June 2008, the bonus must not be less than a minimum equal to 175 per cent of the gross salary in respect of the period 30 June 2008 and, second, to the requirement that in respect of subsequent years (including, in particular, the year to 30 June 2010) the bonus payable under the normal discretionary bonus award scheme must not be less than 85 per cent of the gross salary in the previous fiscal year. So understood, the requirements as to the dates on which the bonus payments are to be made under the scheme, the proportion of bonus to be paid on those dates and the need for continuation of employment as at the relevant bonus payment date remain part of the bonus provisions. It is for that reason, as it seems to me, that the entitlement to receive a bonus payment in, say, September 2010 depends upon continuation of employment as at the date when that payment falls to be made.

16. It is said on behalf of Dag that that approach is inconsistent both with the order in which the words in the bonus provision appear and with the words themselves which are used in that provision; that it ignores the distinction between, “minimum bonus” and “discretionary bonus”; that it takes no account of the final sentence in the provision (“The award of a bonus in addition to your minimum bonus will be discretionary”) and that it gives rise to a result in which is inconsistent with the factual matrix and commercial purpose of the bonus provision. 

17. It can be said that the language of the bonus provision is not such as might have emerged from the pen of a skilled draftsman. But this is a commercial document; and it must be constructed in a way that makes sense. In my view, it is impossible to ignore the requirement – emphasized, first, in relation to the bonus payable in respect of the year ending 30 June 2008 and, second, in respect of the bonus payable in years thereafter – that the payments are to be made in accordance with the normal discretionary bonus award scheme; or to ignore the three terms of that scheme (as to payment date, proportion of payment and continuity of employment) which are spelt out to in letter of 4 July 2007. The last sentence of the bonus provision simply reaffirms that the bonus is discretionary as to amount and as to award: save for the requirement that a minimum bonus equal to 175 percent of gross salary or 85 per cent of gross salary in the previous year (as may be the case), must be paid in the exercise of the discretion. In my view, it is impossible to read the last sentence as indicating that there are two separate elements in each bonus award: a mandatory element and a discretionary element. The true interpretation of the provision is that payment is made under the discretionary bonus award scheme; but requirements as to the way in which the discretion will be exercised have been agreed between the parties.

18. It is said that the factual matrix requires an appreciation that the purpose of the bonus provision was to provide an incentive to the employee to remain in employment for the whole of the year after which his bonus entitlement accrues; because if he does not, he loses that entitlement. And, further, it is said that that purpose must be regarded as contrary to public policy because it fetters the mobility of labour. So, it is submitted, the provision must be construed, so far as possible, in a manner which does not lead to the contraventions of public policy.

19. Plainly, the purpose of the bonus provisions (other than the initial signing-on bonus) is two-fold. The first purpose is to provide to the employee an incentive to work for the benefit of the company; so as to maximise its profit and the likely exercise of discretion in relation to the size of the pool of available bonus for distribution. Second, it plainly is intended to encourage the employee to remain in employment, at least for the period until September of the new fiscal year, in order to collect the bonus in respect of the previous year. It would be strange, for example, if an employee, who was contemplating leaving employment, would choose to give a notice period which terminated in August; in circumstances where, by delaying the giving of notice for a month or so, he would become entitled to his 60 per cent share payable in September. But it is not at all plain to me that in the conditions which existed in Dubai in 2007 (where expatriate employees in professional or senior management posts were frequently (indeed, usually) employed on terms which included bonus arrangements), that purpose could be regarded as so obviously contrary to public policy that the clause must be constructed in a way which avoids any incentive to remain in employment after the year end of 30 June.

20. For those reasons, it seems to me that the answer to the short question, “Was Dag entitled to a bonus in respect of the year ended 30 June 2010 in circumstances in which he had not continued in employment past 27 July 2010?” must be, “No”. He was not entitled to the bonus because he did not satisfy the continuity of employment condition which was part of the Employer’s discretionary bonus award scheme; and the provisions as to minimum bonus do not have the effect of superseding that requirement. For those reason I would allow the appeal against that part of the judge’s order which awarded Dag the US$ 187,000 claimed in respect of the year-ended 30 June 2010.

21. I turn then to the counterclaim. The counterclaim is based on the contention that the US$350,000 paid under the terms of the Remuneration Announcement of 29 August 2008 was paid by mistake. The first question is whether such a mistake was made out. The only evidence of mistake appears in the witness statements of Dagny Representative. In his first witness statement (at paragraph 61) it is said that:

“The respondents have lodged a counterclaim in these proceedings seeking recovery of the claimant’s bonus paid in respect of the year to 30 June 2008 in respect of that the bonus was based on a percentage of salary. In error, the respondent’s made payment on the basis that the claimant’s salary for a full calendar year, although the claimant only in fact worked from 10 September to 30 June in the financial year in question.”

The error alleged is that the Employer made payment on the basis of a 12-month salary; whereas in fact, it was only required to make payment on the basis of the salary actually received in the relevant period. That is elaborated in Dagny Representative second witness statement dated 20 September 2012 at paragraph 33 where he says this:

“The claimant was paid in the period to 30 June 2009 a full minimum bonus of 175 percent of the gross salary as if he had in fact been employed for a full year to 30 June 2008. The claimant had no reason therefore to be pleased or indeed displeased with his bonus which was in line with the contract other than Dagny in error paid in respect of a full year rather than 10   months or thereby of the claimant’s employment to 30 June 2008. I have been unable to find any suggestion that any discretion was exercised in favor of the claimant to allow the claimant to be paid a sum over and above his minimum bonus and I am quite clear that the figure of £350,000 referred to in my appendix represents a full calendar year minimum bonus as set out.”

Had Dagny Representative read the statement which he signed with the care that might be expected of a Chief Financial Officer and qualified accountant who was going to depose on oath to its truth, he would have appreciated the relevant payment figure was not £350,000 but US$350,000. But that lack of care is illustrative of the approach which he seems to have taken in relation to this payment of the 2008 bonus.

22. It is not at all clear from Dagny Representative Witness statements what the error is alleged to be. On the face of the Remuneration Announcement of 29 August 2008 the payment was not linked to the minimum guarantee in the bonus provisions of the letter of 4 July 2007: there is no mention of that minimum guarantee in the Remuneration Announcement. It is only when it is appreciated that US$350,000 is 175 percent of US$200,000 that the link can be made. If that link can be made. If that link is made, it is not a link with what Dag was entitled to have under the minimum guarantee (which was 175 percent of his actual salary rather than his annual salary). On the face of the Remuneration Announcement, it is records a decision by Sam, on behalf of the Employer, to award a bonus of US$350,000: it does not explain the basis for that decision. It is not suggested that Mr Welsh made a mistake. It is said that, in reaching his decision to award a bonus of US$350,000, he replied on information provided to him by Dagny Represent which was itself based on the mistaken assumption that Dag had been in employment for 12 months rather than for 10 ½ months. But that is advanced by counsel by way of submission: there is no evidence from Sam to support that assertion. The evidence in the witness statements of Dagny Representative simply refers to an error: without indicating what the error was, who made it or when it was made.

23. The judge made no finding as to whether there was an error not. At paragraph 93 of his Judgment he said this:

“The claimant made reference to the bonus term which was stated in clause 3 to be a minimum of 175 per cent of salary and not capped at 175 percent. The defendant awarded the claimant a sum of US$350,000 by way of bonus in June 2008. That is entirely consistent with the terms of the contract and the amount is consistent with the congratulations on his promotion to director and the defendant’s argument that they had overpaid the claimant was therefore not true.”

It may be said that the last limb of second sentence of that passage – “the defendant’s argument that they had overpaid the claimant was therefore not true” – represents the finding by the judge on this point. My own view is that the more natural reading of those words in context is that the judge is reciting the arguments which were being put to him on behalf of the claimant, rather than expressing his own conclusion. However, I accept that the meaning is equivocal. The principle reason why I take the view that the judge did not intend, in paragraph 93 of his judgment, to express a conclusion on the point is that he observed, in paragraph 99, that “even on the assumption that the company made an error in paying to the claimant more than he should have been paid”, the court took the view that Dag was “still innocent in receiving that money as it was never brought to his attention otherwise and whatever he spent that money on was in nothing but good faith”.

24. The submission made on behalf of the Employer is that the Judge ought to have decided that there was an error: that he ought to have made that finding of fact on the basis of the evidence that was before him. But the only evidence put before the Judge (or before this Court)was that in the witness statements of Dagny Representative to which I have referred. On the basis of that evidence, taking it alone, it seems to me impossible to reach the conclusion that the decision to pay US$350,000 was the result of an error made by Sam. Sam was the person who made the relevant decision. He does not say that he made an error; nor does he say what the error was. In my view therefore, if it be said the judge ought to have made a finding, the finding which was open to him – and the only finding open to him – was that the necessary mistake had not been established on the evidence.

25. The Judge dealt with the matter on the basis that even if error had been established, then, in accordance with the principles set out by Lord Goff of Chieveley in Lipkin Gorman v Karpnale Limited [1991] 2 A.C 548, this was a case in which the claim to resitituation failed on the balance of equity: in the sense that the equity in requiring restitution was outweighed by the inequity in obliging the claimant who had received the money in good faith in a year to 30 June 2009 and spent it in circumstances in which there was nothing to put him on notice that he would be required to pay it back to make restitution. The relevant passage appears Lipkin Gorman at [1991] 2 A.C 548, 579(f) to 580(h). In particular, Lord Goff L said this, at page 579(f):

“In these circumstances, it is right that we should ask ourselves why do we feel that it would be unjust to allow restitution in cases such as these. The answer must be that where an innocent defendant’s position is so changed that he will suffer an injustice if called upon to repay or to repay in full, the injustice of requiring him to repay outweighs the injustice of denying the plaintiff restitution.”

Sam then went on to give a number of examples in which a person receiving money in good faith may have laid it out in circumstances in which it would be unjust to require him to make restitution. But, at page 580(f) to (g), he said this:

“I wish to stress however that the mere fact that a defendant has spent the money in whole or in part does not itself render it inequitable that he should be called upon to repay because the expenditure might in any event have been incurred by him in the ordinary course of things.”

26. It is plain that the approach of the court in cases of this nature must be on a case by case basis. The factors which were before the Judge – and to which he was entitled to have regard – included, first, that Dag had been told that he had been awarded US$350,000; second, that that was an award which could have been made to him consistently with the terms of the bonus provisions in the letter of 4 July 2007; third, that there was nothing in the Remuneration Announcement of 29 August 2008 to put him on notice that he was being paid more than the minimum amount to which he was entitled because of a mistake; and, forth, that he was allowed to retain the money from the period when it was paid in the year to 30 June 2009 until the claim for repayment was made in the counterclaim filed in May 2011. In the course of that period his position had changed: he had continued in service of the company in Dubai through the period until 27 July 2010; his employment had then been terminated; and he had, no doubt, relocation expenses to meet. In my view, the judge was entitiled to come to the conclusion that, even if an error had been established – which, as I have said, I am not persuaded that it was – this is not a case in which restitution should be ordered on the grounds of mistake.

27. For those reasons I would dismiss the appeal against the order made by the Judge on the counterclaim.

Justice Sir David Steel:

28. I agree, I would just add a short word of my own on the appeal in regards to the bonus.

29. In my judgement, the bonus provisions in the contract of employment are clean and entirely consistent with commercial good sense. By virtue of the terms of that contract, the claimant was made part of the normal discretionary bonus scheme as from June 2008. The use of the word, “Normal” merely emphasised the more generous arrangements that applied at the time he signed on for the first year of his employment. The scheme had two conditions of eligibility. First, that the payments would be made in four tranches at variable percentages and secondly, that the claimant had to remain an employee at all material times.

30. Whilst the bonus was discretionary it was subject to a minimum of 85 percent of the gross salary. It is fair to say that the last sentence of the relevant contractual provision was unnecessary or at least repetitive because in my judgement, that surplus is of no significance at all. For those reasons I would just add to what my Lord has said and this appeal in relation to the bonus should be allowed.

H.E. Justice Omar Al Muhairi:

31. I agree and have nothing to add to what my Lords have said.

Sir John Chadwick, Deputy Chief Justice:

32. The court, therefore, allows the appeal against the order made in paragraph 105(c) of the Judgement of 15 April 2013; and dismisses the appeal against the order on the counterclaim set out in paragraph 107 of that Judgment.

Issued by:

Mark Beer

Registrar

Date of issue: 21 August 2014

At: 4pm

 

X

Privacy Policy

The Dubai International Financial Centre and all its affiliates are committed to preserve the confidentiality, integrity and availability of client data and personal information.

Dubai International Financial Centre and all its affiliates employees, vendors, contract workers, shall follow Information Security Management System in all the processes and technology.

  1. DIFC Courts's Top Management is committed to secure information of all our interested parties.
  2. Information security controls the policies, processes, and measures that are implemented by DIFC Courts in order to mitigate risks to an acceptable level, and to maximize opportunities in order to achieve its information security objectives.
  3. DIFC Courts and all its affiliates shall adopt a systematic approach to risk assessment and risk treatment.
  4. DIFC Courts is committed to provide information security awareness among team members and evaluate the competency of all its employees.
  5. DIFC Courts and all its affiliates shall protect personal information held by them in all its form.
  6. DIFC Courts and all its affiliates shall comply with all regulatory, legal and contractual requirements.
  7. DIFC Courts and all its affiliates shall provide a comprehensive Business Continuity Plan encompassing the locations within the scope of the ISMS.
  8. Information shall be made available to authorised persons as and when required.
  9. DIFC Courts’s Top Management is committed towards continual improvement in information security in all our processes through regular review of our information security management system.
X

Disclaimer

The content of the DIFC Courts website is provided for information purposes only and should be disregarded when making decisions on inheritance and any other matters. Whilst every reasonable effort is made to make the information and commentary accurate and up to date, the DIFC Courts makes no warranties or representations to you as to the accuracy, authenticity or completeness of the content on this website, which is subject to change at any time without notice. The information and commentary does not, and is not intended to, constitute legal advice by the DIFC Courts or any person employed or connected with it or formerly so employed or connected, to any person on any matter, be it in relation to inheritance, succession planning or otherwise. You are strongly advised to obtain specific, personal advice from a suitably qualified lawyer in relation to your personal circumstances and your objectives. The DIFC Courts does not assume any liability and shall not be liable to you for any damages, including but not limited to, direct or indirect, special, incidental or consequential damages, losses or expenses arising in connection with this website, its administration and any content or lack thereof found on it. The information on this web site is not to be displayed except in full screen format. Although care has been taken to provide links to suitable material from this site, no guarantee can be given about the suitability, completeness or accuracy of any of the material that this site may be linked to or other material on the internet. The DIFC Courts cannot accept any responsibility for the content of material that may be encountered therein.