Reid v Marshall et Al

• Jurisdiction: Trinidad & Tobago
• Judge: Rampersad, J.
• Judgment Date: 13 May 2010
• Neutral Citation: TT 2010 HC 133
• Docket Number: 3023 of 1995
• Court: High Court (Trinidad and Tobago)
• Date: 13 May 2010

High Court

Rampersad, J.

3023 of 1995

Reid

and

Marshall et al

Appearances:

Mr. A. Fitzpatrick S.C. instructed by Mr. J. Mootoo and Mr. A. Byrne for the plaintiff.

Mr. A. Sinanan S.C. instructed by Mr. N. Bissoondatt and Ms. R. Jaggernauth for the defendants

Damages - Wrongful dismissal — Breach of contract — Plaintiff claimed his dismissal was unlawful and of no effect — Plaintiff was managing director of 6 ^th Defendant whose employment was purportedly terminated by a majority vote taken by the Board of Directors — Finding that Plaintiff could only be removed by the shareholders of the 6 ^th defendant — No implied power to terminate resident in the board of directors — No order for plaintiff to be reinstated but a significant award of damages made.

Rampersad, J.

1 ) This is a claim for declaratory relief in relation to the 6th named defendant's purported dismissal of the plaintiff as its managing director and chief executive officer, along with damages for breach of contract, and wrongful dismissal in the alternative. This claim therefore necessarily concerns the circumstances under which the plaintiff ceased to be in the employment of the sixth named defendant on 24 April 1995. The plaintiff claims that by a majority vote, the first through fifth named defendants wrongly and without due authority terminated his office as managing director of the sixth named defendant. The defendant's case is that the Board of Directors of the sixth named defendant summarily dismissed the plaintiff, but with cause. On the opening day of the trial, the case against the 1st, 2nd, 3rd, 4th and 5th named defendants was dismissed so that the trial proceeded between the plaintiff and the 6th named defendant only.

THE PLAINTIFFS CASE:

2 ) The plaintiff's case of wrongful dismissal is premised mainly on the application of Regulation 68 of the Companies Ordinance as it relates to his tenure as managing director of the sixth named defendant. Pursuant to Regulation 68, the plaintiff was appointed managing director of said defendant on 15 January 1975. At the time of the plaintiffs appointment, but for certain aspects referable only to his remuneration and benefits package, the plaintiffs employment as managing director was on terms and conditions to be agreed.

3 ) In effect, the plaintiff has denied the validity of a draft contract of employment between himself and the sixth named defendant, and maintains that his appointment as managing director was governed on the basis and terms of Regulation 68, and that the only amplification thereof concerned his remuneration and benefits-package. The issue of the plaintiffs duration of tenure having not been addressed at his appointment, the plaintiff contends that this begs the only reasonable inference that said issue fell for consideration within the confines of Regulation 68, which states that short-of ceasing for any cause to be a director, the plaintiffs office as managing director could only be determined by the company in general meeting. The purported dismissal of the plaintiff pursuant to a meeting of the Board of Directors was therefore ultra vires the provisions of Regulation 68.

4 ) The plaintiff maintains that since the termination of his employment was unlawful and of no effect, he remains the managing director of the sixth named defendant unless and until the proper course for determination is adopted, that is, a decision taken by the company in general meeting that its members no longer desire him to act in that capacity. Further, as there is no evidence that evinces such a desire on the part of the company's members, it cannot be said that the plaintiff may be regarded as an employee imposed on an unwilling employer.

5 ) Apart from the declarations which the plaintiff seeks below, he claims to be entitled to fully recover his wages and other emoluments between the date of his purported dismissal and date of judgment. In his Amended Statement of Claim filed on 13 August 2002, the plaintiff claimed against all defendants:

5.1

) A declaration that the purported decision of the first, second, third, fourth and fifth named defendants made on 24 April 1995 terminating the plaintiff's office as the managing director of the sixth named defendant is ultra vires, null, void and of no effect; 5.2) A declaration that the plaintiff is and was at all material times and remains the managing director and chief executive officer of the sixth named defendant, and as such is entitled to occupy all offices, and to perform all and any functions and duties, and assume all responsibilities consistent with the said offices of the managing director and chief executive officer, and is entitled to all privileges, remuneration, emoluments and perquisites commensurate with the said offices.

6 ) As against the sixth named defendant:

6.1

) Payment of all outstanding sums due and owing to him under his said contract of employment as managing director; 6.2) Damages for breach of the said contract; 6.3) Further and/or in the alternative to the relief sought at paragraphs 1 and 2, damages for wrongful and/or unlawful dismissal of the plaintiff from his employment as managing director and chief executive officer; 6.4) Interest on the sums outstanding at items 4 and 6 claimed herein at the rate of 18% per annum or such rate as to the Court seems just and equitable.

7 ) As against all the defendants:

7.1

) Costs; 7.2) Such further and/or other relief as the Court may deem just. The Statement of Claim (as amended on the 18th August 2002):

8 ) The plaintiff was appointed managing director of the sixth named defendant at a meeting of the Board of Directors held on 15 January 1975. The plaintiff's appointment was effective from 1 February 1975 on terms and conditions to be agreed. Following a reorganization of the sixth named defendant, the plaintiff vacated his office as managing director of same, and was appointed Executive Director of the sixth named defendant and, as well, managing director of one of that company's subsidiaries (“The Trinidad Italian Tile Company Limited”) with effect from the 6th September 1988.

9 ) On 28 June 1994, at a Board of Directors' meeting, the plaintiff was reappointed as the managing director of the sixth named defendant with immediate effect. He was thenceforth styled as the managing director and chief executive officer of the sixth named defendant. It was a term of the plaintiff's reappointment as managing director of the sixth named defendant that the said defendant would provide the plaintiff with the following emoluments and perquisites:

9.1

) Base salary of $102 000.00 per annum. 9.2) A bonus consistent with the sixth named defendant's policy regarding the payment of same. 9.3) Entertainment allowance of $9,000.00 per annum. 9.4) Overseas Travelling allowance of $21,000.00 per annum. 9.5) Consultancy and professional fees of $34,500.00 per annum. 9.6) Premises upkeep allowance of $15,000.00 per annum. 9.7) A monthly allowance of $8,000.00 plus VAT in respect of a motor vehicle from 1st January 1995 with interest at 112 per centum per month for late payment. This was considered part of the plaintiff's emolument package. 9.8) Reimbursement of running expenses of the motor vehicle referred to in the preceding sub-clause. 9.9) Annual membership fees for the American Ceramic Society, Institute of Materials and the BWIA Ibis Club. 9.10) Annual membership fees for the plaintiff's VISA credit and American Express charge cards. 9.11) Annual subscription to the Trinidadian Guardian, Trinidad Express and TIME Magazine. 9.12) A Gardener. 9.13) Reimbursement of 75 % of the cost of local telephone calls made from his home. 9.14) 12 weeks vacation every 2 years taken 5 weeks in the first year and 7 weeks in the second year with vacation leave not taken being accumulated.

10 ) Pursuant to a resolution passed at an extraordinary general meeting of the sixth named defendant held on 15 July 1983, the plaintiff was granted an option by the sixth named defendant as part of his contract as managing director to subscribe for 26,000 ordinary shares of $10.00 in the company, subject to the proviso that if there was any change in the capital structure of the sixth named defendant, the maximum number of shares which might be subscribed by the plaintiff together with inter cilia, the subscription price, would be adjusted by the sixth named defendant in such manner as the auditors of the sixth named defendant shall certify in their opinion fair and reasonable. (At the time of the grant of the option, the capital structure of the sixth named defendant comprised 400,450 issued and fully paid ordinary shares of $10.00 each).

11 ) On or about 22 October 1986, the plaintiff exercised the option referred to above in respect of 2,000 shares. It was a term of the plaintiff's reappointment as managing director of the sixth named defendant that the plaintiff would continue to enjoy the option referred to above with respect to those shares not previously subscribed for thereunder.

12 ) As part of the plaintiffs contract, it was agreed that provided that the plaintiff was alive at the date of maturity of the shares, the sixth named defendant would pay to the plaintiff the proceeds of the matured Key man Policy #05016167 which the sixth named defendant had taken out on the plaintiffs life.

13 ) Another term of the plaintiffs contract of employment as managing director was that any general increase in emoluments and perquisites enjoyed by the management staff of the sixth named defendant would apply to the plaintiff by way of an increase in his emoluments and perquisites (other than reimbursements and the allowance in respect of a motor vehicle) by a percentage amount not less then the percentage increase enjoyed by the management staff. Following are the particulars of the management increase in management emoluments and...