Currencies Direct Ltd v Ellis

A payment may constitute remuneration even where no specific agreement fixes its amount or provides a formula for calculating it. Remuneration is consideration for work done or to be done and may take the form of payments to third parties, commissions, fees, bonuses or a lump sum. Where the circumstances show a common intention that work should be paid for, reasonable remuneration may arise under an implied contract. The character of payments depends on the evidence. Payments made for work are not repayable loans unless they were advanced subject to an express or implied obligation of repayment.

Currencies Direct Ltd claimed repayment of sums paid to or for the benefit of Peter Ellis, a former director and shareholder, alleging that they represented a director’s loan account. The Queen’s Bench Division, before Gage J, ordered repayment of £43,117 but held that the balance of the payments represented remuneration. The Company appealed, seeking recovery of the larger sum. Mr Ellis cross-appealed against the judgment for £43,117, but did not pursue that cross-appeal at the hearing. The central issue was whether the post-April 1998 payments were remuneration or repayable loans.

1. Appeal and cross-appeal dismissed. The Company failed to establish that the disputed payments were advances made subject to an express or implied term of repayment.
2. A payment does not require a specific agreement fixing the level or rate of remuneration, or a formula for determining it, to qualify as remuneration. Remuneration is consideration for work done or to be done and may take different forms.
3. The obligation to pay remuneration need not arise from an express contract. Where work is done in circumstances showing a common intention that it should be paid for, the worker may recover reasonable remuneration under an implied contract to pay a quantum meruit.
4. The judge was entitled to infer from the evidence that the payments were consideration for Mr Ellis’s work and services. The directors, and the Company’s accountant, treated the payments as remuneration with potential tax consequences rather than as repayable loans.
5. The separate written acknowledgement of £43,117 created an agreed liability to repay that sum. The cross-appeal challenging that liability was not pursued.
6. Lord Justice Mummery delivered the principal judgment. Mr Justice Hart agreed with it, and Lord Justice Simon Brown agreed that both appeals should be dismissed. The Company was ordered to pay the costs of its appeal, and Mr Ellis the costs of the cross-appeal.

• Court of Appeal (Civil Division): dismissed the Company’s appeal against the order of Gage J and dismissed Mr Ellis’s limited cross-appeal.
• Queen’s Bench Division: Gage J ordered judgment for the Company for £46,679.76, comprising £43,117 and interest, while treating the balance of the claimed payments as irrecoverable remuneration.