Thompson v Abaco Markets Ltd
| Jurisdiction | Bahamas |
| Judge | Isaacs, J. |
| Judgment Date | 13 February 2004 |
| Court | Supreme Court (Bahamas) |
| Docket Number | FP/CLS/62/2003 |
| Date | 13 February 2004 |
Supreme Court
Isaacs, J.
FP/CLS/62/2003
Mr. Gregory Moss for the plaintiff.
Mr. Stephen Turnquest for the defendant.
Damages - Plaintiff claimed special and general damages as a result of the breach of two agreements — First agreement made between the parties for the purchase of the plaintiff's 60% shareholding in Thompson Wholesale Ltd — By Second agreement defendant employed the plaintiff as general manager for a period of 3 years — Whether the plaintiff could be removed from the Board of Directors of the defendant and his employment terminated — Rectification of agreement — Declaration that agreement was null and void as begin non est factum or otherwise — Loss of wages — Loss of benefits — Loss of cash and stock bonus allocation — Damages for breach of contract — Loss of customary compensation — Damages for defamation — Judgment that the various claims made by the plaintiff could not be maintained and they must fail.
This action was commenced by Writ of Summons filed 21 March 2003 by which the plaintiff has claimed special and general damages as a result of the breach of two agreements. The first dated 12 November 1998 (the purchase agreement) was made between the parties for the purchase by the defendant of the plaintiffs 60% shareholding in Thompson Wholesale Ltd. (the Company).
By the second agreement dated 8 January 1999 (the employment agreement) the defendant employed the plaintiff as a general manager for a period of 3 years.
This employment agreement sprang from the purchase agreement, and it details an offer contained in the purchase agreement.
It is noted here that notwithstanding the case pleaded, and submissions made by both sides, the purchase agreement offers, at its opening sentence, to purchase 100% of the issued shares in the Company. It is accepted that the defendant offered to purchase the plaintiffs 60% shareholding as well as the remaining 40% held by other shareholders.
With regard to the purchase agreement, under the caption “other terms” at page 3, the plaintiff was offered a seat on the Board of Directors of the defendant effective on the date of completion, which date would be the date that the purchase agreement was executed.
Further, at page 4 of the purchase agreement, the plaintiff was to be retained on a salary of $85,000.00 per year, with normal management working hours and benefits with a car for his use subject to a 3 year contract, which clause gave rise to the employment agreement.
The employment agreement designates the plaintiff as general manager of the Company, to commence on 8 January 1999 through 8 January 2002.
The substratum of the claim in this action is the removal of the plaintiff from the Board of Directors of the defendant, and the termination of his employment.
The various reliefs sought in the prayer of the Statement of Claim are as follows:
“(1) Rectification of the 1999 Agreement as per the terms of the 1998 Agreement by deletion of the alleged notice period.
(2) A Declaration that the 2002 Agreement is null and void as being non est factum or otherwise;
(3) Loss of Wages @ $122,980.00 per annum from 30th September, 2002 to 7th January, 2005 - $226,704.99
(4) Loss of use of Company car from 30th September, 2002 to 7th January, 2005 @ $700.00 per month - $18,900.00
(5) Loss of benefit of health insurance coverage at $389.00 per month - $7,935.60
(6) Loss of benefit of gasoline allowance coverage from 30th September, 2002 to 7th January, 2005.
(7) Loss of benefit of licensing and inspection fees and insurance coverage from 30th September, 2002 to 7th January, 2005.
(8) Loss of benefit of participation in the defendant's profit sharing benefit for the period 30th September, 2002 to 7th January, 2005.
(9) Loss of cash and stock bonus allocation for the period 30th September, 2002 to 7th January, 2005.
(10) Damage for breach of contract in removing the plaintiff from the Board of Directors.
(11) Loss of customary compensation for non-executive Directors for the period 30th September, 2002 to 7th January, 2005.
(12) Damages for breach of Contract upon the default of the defendant in repurchasing the plaintiff shares in the defendant in the amount of 376,000 shares as at 30th September, 2002.
(13) Damages for defamation of the plaintiff by removing the plaintiff from the Board of Director's of the defendant Company contrary to the provisions of the Share Purchase Agreement and in circumstances where such removal could only have been effect pursuant to the provisions of Act 80 of the defendant's Articles of Association.
(14) Interest on the aforesaid sums pursuant to the provisions of the Civil Procedure (Rate of Interest) Act.
(15) Such further or other reliefs as to this Court appears just.
(16) Costs.”
Considering the various reliefs claimed, it is a prerequisite that reliefs (1) and (2) be determined in favour of the plaintiff for reliefs (3) through (9) inclusive to become live issues for adjudication.
Reliefs (10) through (13) have to be determined separately, and on evidence and law uniquely relative to them.
There was only one witness called by each side, the plaintiff on his own behalf, and Reginald Sands who was Chief Executive Officer of the defendant at the time this cause of action arose, on behalf of the defendant.
The plaintiff, by his evidence, was offered a seat on the Board of Directors of the defendant under the purchase agreement at page 3, a term important to him so that he could oversee his investment. The plaintiff's appointment as a director was made by a resolution of the defendant under Article 75 of its Articles of Association on 8 January 1999, the date of the employment agreement.
The plaintiff was also offered a 3 year management contract, at page 4 of the purchase agreement, subject to a contract to be executed immediately prior to the closing of the purchase agreement.
The employment agreement contained at paragraph 6 a mutual termination clause with a proviso for a three month notice by either party, a clause that the plaintiff claims was not brought to his attention.
The plaintiff's title was changed, and his salary was increased, by an agreement presented in the form of a letter, dated 10 April 2002, and signed by the Chief Executive Officer of the defendant, Reginald Sands, and the plaintiff.
Although the plaintiff described this letter as a renewal of his employment agreement, the letter states at its first line that, “it was in connection with recent changes in the terms of the original employment contract”. The original employment agreement had expired on 8 January 2002, which made this letter a new employment agreement as explained in paragraph 3 of the letter.
This letter also contained a mutual 3 month termination clause by either party with a 3 month notice. The plaintiff claims that he, along with the other managers attached no meaning to the termination clause.
By letter of 30 August 2002 the plaintiff was effectively given a 3 month notice of termination of his employment. It was also spelled out in that letter that the plaintiff would retain his directorship with the defendant. It also appears from that letter that as a part of the defendant's re-organization, only the President of the defendant would retain a management role as well as a directorship
On 30 September 2002, however, the plaintiff received a letter terminating his employment immediately with a financial settlement. He stated that he did not accept the settlement because he saw no reason for his termination.
The plaintiff was also removed as a Director, but he seemed unsure of the date, as he stated that he was told by the new Chief Executive Officer, David Thurlow, that he had been removed. His removal, however, was effected by a resolution of the defendant dated 4 October 2002.
He maintained in cross-examination that he could not be terminated without cause, although the employment letter of 10 April 2002 does not state that he could only be terminated for cause.
He also stated that he and his wife had perused the purchase agreement, and he had taken advice from his accountants, before he signed it.
Further he expected the clause in the purchase agreement to be reproduced as a full employment agreement, notwithstanding that the employment agreement was a 12 paragraph document enscripted on 5 pages of print.
With regard to his directorship he stated that he was told that he would remain on the board of directors as long as he was with the defendant.
He also expressed a belief that the original members of the board were permanent, although this was not stated in the purchase agreement.
As a term of the purchase agreement, the plaintiff received $2M in cash and $2M worth of and shares in the defendant. He also stated that his shares with the defendant would be purchased by the defendant if he were to vacate his directorship. This, however, is not contained in the purchase agreement.
The plaintiff claims that the permanency of his directorship and the offer to purchase his shares in the defendant if his directorship came to an end, were communicated to him verbally.
He acknowledged that he signed a letter dated 10 April 2002 which represented a new contract through 7 January 2005 and that it contained a termination clause whereby either party could terminate the contract with a notice of 3 months.
The plaintiff was questioned in re-examination with regard to a pension plan of the defendant which states the date of employment of the plaintiff as 13 February 1986....
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