Thinc Group Ltd v Armstrong & Anor [2012] EWCA Civ 1227
Published on: 05/10/2012
Issues Covered:
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Background
Mr and Mrs Armstrong were both experienced financial advisors who were headhunted by Thinc Group Ltd. Thinc offered the Armstrong‟s a payment of £243,052.00. They were told this payment would only be available if they remained with the company for 3 years. The Armstrong‟s entered into 3 contracts with Thinc. There was 2 principal contracts which set out their individual employment and which enabled the Armstrong‟s to end their contract after giving 3 months notice without the need for cause. The supplementary contract dealt with the introductory payment and stated that the payment must be repaid immediately if any of the specified “repayment events” occurred including termination of principal contracts (either by the claimants or Thinc). Thinc terminated their contracts in June 2009. The Armstrong‟s sought to recover the supplementary payment arguing it wasn‟t repayable. Thinc brought proceedings to recover the payment. The High Court dismissed he claim as the assurance provided during negotiations by Thinc formed collateral warranty which prevented Thinc reclaiming the payment. Thinc appealed the decision. The court rejected Thinc‟s claim that the Armstrong‟s did not rely on the assurance. The court held that the evidence showed the Armstrong‟s relied on the fact that the payment could only be recovered if they left within 3 years. The court a lso rejected Thinc‟s argument that there was no intention for the assurance to have contractual effect. The supplementary payment was a key feature in enticing the Armstrong‟s into entering the deal. Subjective intention was found to be plainly apparent. Prior to signing the Supplementary contract the Armstrong‟s were already bound by their principal contracts. The termination provisions were found in the principal contract not the supplemental contract and the supplemental contract contained no reference t the principal contracts, this led to an unnecessarily complex situation which protected the interest of Thinc. In certain circumstances the courts are prepared to find that pre-contractual assurances can supersede contrary provisions found within the contract. http://bit.ly/Vb1cji
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The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.
This article is correct at 05/10/2012
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