Be Careful What You Promise: The Court's Approach To An Alleged Oral Contract

• Published date: 16 November 2022
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Contracts and Commercial Law, Trials & Appeals & Compensation
• Law Firm: Norton Rose Fulbright
• Author: Claire Irwin

In Christie v Canaccord Genuity Ltd [2022] EWHC 1130 (QB), the High Court has dismissed a claim brought by a former employee for a £1 million "retention award" based on an alleged oral contract.

Background

A former investment banker, Mr Colin Christie, brought several claims against his former employer, Canaccord Genuity Limited ("Canaccord"), alleging that he should have been awarded higher discretionary bonuses and that Canaccord had promised him, by way of oral agreement, a £1 million retention award.

The discretionary bonus claims were dismissed following a summary judgment application. However the court held it could not decide on a summary judgment basis on the claim for payment of the retention award because of the factual nature of the allegations which would require witness evidence and disclosure. Following trial, the retention award claim was also dismissed.

Decision

Bruce Carr KC (sitting as a Deputy Judge of the High Court) considered the approach to be applied when determining the existence of an oral contract and followed the principles summarised in Blue v Ashley [2017] EWHC 1928 (Comm) when considering the reliability of oral evidence as to distant recollections: the best approach is for a judge "to place little if any reliance on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from documentary evidence and known or probable facts".

The judge recognised that wealth management is a document-heavy industry in which bonuses form a significant part of the payment of senior management. As such, commitments regarding bonuses would be expected to be made with care (in terms of both authority and the creation of binding commitments) and to be fully documented.

In his judgment, Bruce Carr KC considered five specific issues:

(1) What were the terms of any offer made?

Following Blue v Ashley the judge relied more on the documentary evidence than the recollections of the relevant parties as regards the 16 July 2015 conversation in which the retention bonus was discussed, concluding that the CEO's mention of the £1 million retention award amounted to no more than a "prospect of a 'tap on the shoulder' later on in the year". The judge also referenced a collection of emails which were inconsistent with Mr Christie's position that he had been awarded the £1 million in stock.

(2) Was what was said sufficiently certain to give rise to a contract?

No. Whether a contract is formed is...