Mr. Michael Alexander Bishara v. Asiamedia Co Ltd

HCA000346/1987

1987, No. A346

IN THE COURT OF HONG KONG

HIGH COURT

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BETWEEN

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Coram: The Hon. Mr. Justice Nazareth in Court

Dates of Hearing: 10 - 11 February 1988

Date of Delivery of Judgment: 12 February 1988

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JUDGMENT

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1. The Plaintiff, Mr. Bishara, claims $100,000 which he says the Defendant, his former employer, promised in return for his resignation on the 19th May 1986. The Defendant says that the promise to pay was gratuitous and not in consideration of the resignation. That, in the event, remains the dispute between the parties.

2. The material facts are shortly these. Mr. Bishara worked for the Defendant between 1983 and 1985 for about 20 months as features editor of the latter's publication Asia Banking. He did not have a formal service agreement, but only a letter of appointment apparently determinable by a month's notice on either side. He then left and joined the Far Eastern Economic Review as Deputy Editor. About three and a half months later he rejoined the Defendant as a result of an approach made on behalf of the Defendant.

3. This time a formal contract of service dated the 30th April 1985 (the service agreement) was entered into by the parties. It provided, inter alia, for

4. On the 19th May 1986, shortly after returning from an overseas trip, Mr. Bishara was invited to a coffee shop near the Defendant's office, by Mr. Wilde, the Defendant's Managing Director, who was a good friend of his. Over a cup of coffee Mr. Wilde told him of allegations made by a substantial number of the Defendant's Chinese staff and that they had threatened to leave if Mr. Bishara did not go. The two then discussed the options.

5. At this point their versions of what transpired diverge somewhat.  Mr. Wilde says that he wanted Mr. Bishara to speak to the Chinese staff and sort out the problem, which was of Mr. Bishara's own making.  But Mr. Bishara declined and insisted on resigning.   Mr. Wilde was caught on the horns of a dilemma. On the one hand he would lose his Chinese staff, or on the other, his Editor. He did not want either. He tried 2 or 3 times to dissuade Mr. Bishara but the latter was insistent. Eventually, and reluctantly on his part, both of them made their minds up and accepted the situation. They were very quiet on the way back to the office and in the lift he told Mr. Bishara he would prepare the documents. He then telephoned his solicitor. In the course of their discussion, his solicitor asked if he wanted to make any payment to Mr. Bishara. He replied that that was not discussed with Mr. Bishara but he thought he would rather do that as he was upset and felt Mr. Bishara was being done out of a livelihood. Between him and the solicitor they came up with a figure of $120,000; air tickets were also mentioned. The solicitor dictated and he later himself typed and read back letters that provided for Mr. Bishara's resignation and the payment of $120,000.

6. Three of the letters (we are not concerned with a fourth) were in the following terms.

7. The first is to the Defendant from Mr. Bishara and is in the following terms:

"Dear Sirs,

I hearby tender my resignation from the Board of Directors of the Company with immediate effect."

8. The second was also to the Defendant Co. from Mr. Bishara and it was in these terms:

"Due to personal reasons please consent to accept my resignation from the Company with immediate effect, and I would be grateful if you will agree to such an early termination of my employment Contract."

9. The third was headed Asiamedia Company Limited, the Defendant, and noted "Mr. Bishara-present".

It was in these terms:

"Dear Michael,

The Company agrees to accent your resignation and to the early termination of your contract. You agree to waive whatever rights you may have against the Company in connection with or arising out of the employment contract dated 30th April, 1985 or your employment with the Company. The Company agrees, in view of your past services to the Company, to offer you an ex gratia amount of HK$120,000 00. payable by six equal monthly instalments."

10. It is not disputed that Mr. Wilde and Mr. Bishara later that afternoon had a further meeting after the letters were typed at which Mr. Bishara read, discussed and signed the letters.

11. To turn to Mr. Bishara's version, he testified that at the coffee shop there was a problem to resolve and that the options discussed ranged from his addressing the staff, to his resignation. But no "finite decision" was made in the coffee shop. They continued discussing on the way back and in Mr. Wilde's office to which they went. He thought it was in Mr. Wilde's office that they resolved that his resignation was the most viable option. That was expressed before he left the office, although he was not sure there was any great emphasis upon it. Asked by Mr. Hatton, his counsel, how he expressed his view of the option he said "I suppose I said I was prepared to resign subject to the terms of my contract".

12. After that Mr. Bishara says Mr. Wilde said he would like to think about the matter and he, Mr. Bishara returned to his own room. Later that afternoon Mr. Wilde asked him back to his office and showed him the letters which he said he had typed up following advice from the Company's solicitor. They went through the letters and there was some discussion. There was a fourth letter offering instead of the $120,000, 2 air tickets and $100,000. He took the $120,000.

13. It is common ground that Mr. Bishara left the office that same afternoon and that of the $120,000 he received one instalment of $20,000 by a cheque dated 2nd July 1986.  Mr. wilde testified that thereafter he stopped payment because Mr. Bishara "bad mouthed" the Defendant and also because Mr. Bishara almost immediately approached the Far Eastern Economic Review and subsequently went to work for it, without even informing him. I ought to mention that by its Defence the Defendant originally pleaded that in July 1986 Mr. Bishara spread unfavourable rumours about Asia Banking and also that it became aware that Mr. Bishara was going to work for the Far Eastern Economic Review, a competitor, in breach of a covenant in his service agreement. At the trial of this action, Mr. Joseph Tse for the Defendant abandoned that plea.

14. So the dispute boils down to this: Was the $120,000 promised to Mr. Bishara in return for foregoing his benefits under the service agreement? Or was it gratuitously offered by Mr. Wilde on behalf of the Defendant because of past services, because Mr. Wilde was upset and because he felt Mr. Bishara was being done out of his livelihood because he was put into an impossible situation and had to resign, to paraphrase Mr. Wilde's own words.

15. A convenient starting point seems to me to be the prima facie consideration that a person is unlikely to throw away a contractual appointment that has another 2 years or so to run for nothing. But although Mr. Bishara referred more than once to his resignation being subject to the terms of his contract, meaning I think subject to the benefits to which he was entitled under the contract, he was hesitant about what those benefits were. When he specified them he placed emphasis upon the annual bonus of 10% of the Defendant's profits. Yet I am satisfied that he must have known that there was nothing like $1.2 million of profit for the financial year immediately before his resignation i.e. ending 31st March 1986, and no indication of profits for the following 2 years; and that, on the contrary, there was probably a loss for the year ending 31st March 1986. Surprisingly he was also slow to advance his security of job tenure of future earnings for that period as benefits.

16. For the Defendant on the other hand it was suggested that Mr. Bishara's insistence on resigning probably arose out of a wish to get out of the service agreement which he could not terminate for another 2 years, or because of the allegations made against him. I will say at once that there was no evidence whatever that Mr. Bishara had any wish to get out of his service agreement. I do not think that, as suggested by Mr. Tse, Mr. Bishara's former employment with the Far Eastern Economic Review raises any probability that he intended to go back to it. Likewise, the nature of the allegations made by the Chinese staff was not canvassed by the Defendant although it was invited to do so. True Mr. Bishara admitted that their nature was such that they would have constituted a breach of obligation under the service agreement, but he denied their truth. Mr. Tse elected not to challenge that denial.

17. Proceeding then to the direct evidence, I consider it is not without significance that Mr. Bishara did not postively say he was prepared to resign subject to being compensated for loss of benefits, but used the rather vague expression "subject to the terms of my contract" and even as to that he was not sure initially, as I have recorded, how he expressed it, in saying "I suppose I said I was prepared to resign subject to the terms of my contract", I was struck by that quality of vagueness or uncertainty upon this crucial part of his evidence. It is also reflected in his pleadings. Paragraphs 3 and 4 of his Statement of Claim provide as follows:

The evidence on the other hand, including the unequivocal evidence of Mr. Bishara on the point clearly shows that no agreement was reached prior to the preparation of the letters of resignation. Indeed Mr. Bishara's case was ultimately presented and can only succeed upon the basis that the agreement was concluded after Mr. Bishara read and discussed the letters, since he himself conceded that before that Mr. Wilde said he would think about the matter. Furthermore in the context of the reasons why he was prepared to resign, be said if there were no benefits "most likely" he would not have resigned.

18. There was no rancour in the evidence of either Mr. Bishara or Mr. Wilde, the only 2 witnesses who gave evidence. Both gave evidence in moderate terms and both seemed in general honest and credible witnesses. But in contrast to the degree of hesitancy and uncertainty in Mr. Bishara's evidence on the crucial point I have mentioned, Mr. Wilde was quite positive and unequivocal that there was no mention of Mr. Bishara's offer to resign being subject to the terms of his contract.  I accept his evidence which was not disputed that the letters in question were dictated to him by the Defendant's solicitor after he had explained and discussed the matter with the solicitor,'and that he read the letters back to the solicitor after they were typed. The third letter, which I have already read, in my view is consistent with and supports Mr. Wilde's version. Had he believed that Mr. Bishara's agreement to resign was subject to the terms of Mr. Bishara's service agreement on the probabilities he would not have failed to inform the Company's solicitor; moreover the letter recording the offer of the "ex gratia" payment of $120,000 would have been framed in different terms. It seems to me in the circumstances that clearly the lst sentence of that letter reflects the request by Mr. Bishara for early termination of his employment contract (he not being entitled to that under the contract); that the second sentence records the waiver by Mr. Bishara of his rights against the Company in return for early termination; and that the third sentence stands on its own and with its specific reference to "past services" and to the "ex gratia" amount is intended to displace any risk or suggestion of contractual obligation to pay the $120,000. The letters, particularly the last, in my view provide powerful support of Mr. Wilde's version.

19. In the result, and notwithstanding the general considerations to the contrary, I accept Mr. Wilde's evidence. I am not satisfied on the probabilities that Mr. Bishara has established that his agreement to resign or that his actual resignation was subject to the terms or benefits of his contract, or that he communicated such a condition or reservation to Mr. Wilde, or that Mr. Wilde was aware of such a condition or reservation. On the contrary upon the evidence in my view the probability is that no such reservation or condition was made, and even more so, that Mr. Wilde was not aware of any such reservation or condition. The two therefore could not have been ad idem. The $120,000 was not promised in consideration of Mr. Bishara foregoing his rights or benefits.

20. Mr. Hatton in reliance upon the judgment of Megaw J., as he then was, in Edwards v. Skyways Ltd. (1964) 1 All ER 494 submits that where the subject of agreement relates to business affairs, the onus of establishing that the agreement was not intended to create legal relations is a heavy onus. I accept that dictum but I do not find that case of assistance. The parties there had clearly come to a very definite agreement or consensus. As Megaw J. said there was a meeting of minds (see p.500A). Incidentally there was also consideration. In this action the evidence shows that there was no meeting of minds and no consideration in respect of the $120,000. In any case, in my finding, the Defendant has discharged any such onus that might be upon it.

21. For the foregoing reasons the Plaintiff's claim must fail. While I have no hesitation in reaching that conclusion upon the facts and the law, I do so with some regret. Regret because it may be that Mr. Bishara did expect some compensation for resigning. Indeed it may be that he had no desire to resign, or that the Company was not in a position to terminate his contract prematurely under clause 6. It may also be that because of the amicable circumstances in which he was dealing with his friend Mr. Wilde, Mr. Bishara thought it unnecessary to make that patent. However all those possibilities may be, the evidence clearly shows on the probabilities that he did not offer or make his resignation subject to receipt of benefits under the contract, and for that reason his claim fails and is dismissed.

22. Unless counsel wish to address me on the matter, I will make the usual order that costs follow the event and will be to the Defendant.

Representation:

Mr. Tony Hatton instructed by Messrs. Howell & Co. for Plaintiff.

Mr. Joseph Tse instructed by Messrs. Leonard K. L. Heung & Co. for Defendant.