Worldspreads v Foley

A judge’s sceptical questioning of counsel does not establish apparent bias or predetermination where it is directed to understanding an uncertain case. An agreement to reconcile accounts creates no entitlement unless the parties also agree what is to happen after reconciliation. Estoppel by convention cannot provide a result unavailable by contract. A restitutionary claim requires a real unjust enrichment, and a claim by one company arising from unpaid remuneration owed by another company does not, without more, establish enrichment of the first company. Separate corporate personality must be respected. Permission to appeal should be refused where the lower court’s conclusions were findings of fact supported by the evidence and no real appealable argument is shown.

Worldspreads v Foley concerned payments made by an English subsidiary to its former chief executive, whose employment contract was with its Irish parent. The subsidiary sought recovery of the net payments. The respondent contended that sums owed to him by the Irish company could be set off against the subsidiary’s claim, relying on alleged reconciliation arrangements, estoppel by convention, unjust enrichment and a severance agreement. He also alleged apparent bias by the trial judge.

The High Court, before His Honour Judge Seymour QC, rejected those contentions and effectively gave judgment for the subsidiary. The Court of Appeal considered a renewed application for permission to appeal after an earlier paper refusal. The central issues were whether any proposed ground disclosed an arguable error of law or a basis for interfering with the trial judge’s findings.

1. Application refused. The renewed application for permission to appeal was dismissed. There was no real argument for an appeal.
2. The trial judge’s scepticism did not amount to apparent bias or predetermination. A judge is entitled to question counsel in order to understand a case, particularly where numerous alternative defences are advanced and the legal position appears uncertain. The transcript, read as a whole, disclosed no appearance of bias.
3. The alleged agreement to reconcile the sums was primarily a question of fact. The trial judge was entitled to rely on the respondent’s repeated statements that he would repay the money. Reconciliation, even in an accountancy sense, is not itself a legal concept producing a liability or entitlement. The parties would still need an agreement as to what was to happen after reconciliation. No such agreement or common assumption was found, and the Court of Appeal would not interfere with that conclusion.
4. The estoppel by convention argument could not succeed. Estoppel does not enable a party to obtain by estoppel what could not be obtained by contract. There was also no sufficient basis for saying that the English company had been unjustly enriched merely because the respondent had not received all remuneration allegedly due from the Irish company.
5. The alleged severance agreement was likewise a factual matter. Discussions showing the respondent’s aspirations did not establish an agreement. The negotiations remained subject to authority from the Irish company, which was never produced. The proposed defences sought, in substance, to avoid the consequences of the separate corporate personality of the English and Irish companies. The trial judge had correctly dealt with the legal position formally required by the companies’ insolvency circumstances.

• Court of Appeal (Civil Division): On a renewed application following an earlier paper refusal by Hallett LJ, permission to appeal was refused: [2015] EWCA Civ 697.
• High Court of Justice, Queen’s Bench Division: His Honour Judge Seymour QC rejected the respondent’s arguments and effectively gave judgment for the English company.