Elliston v Glencore Services (UK) Ltd

A gratuitous unilateral offer may be amended before payment or acceptance. Once the offeror clearly communicates that a bonus is conditional on surrendering another contractual entitlement, the recipient cannot accept the payment while rejecting that condition. Retaining the payment is unequivocal acceptance of the revised offer where no unconditional offer remains available.

An appellate court should reverse findings of primary fact only where the trial judge was plainly wrong. That exceptional threshold may be met where the judge misunderstood the pleaded case, omitted important evidence, relied on a finding unsupported by evidence and failed to assess the evidence in its material context.

An employer promised its company secretary a gratuitous transaction bonus. Before paying it, the employer allegedly stated that accepting the bonus would preclude a later claim to a prescribed sum payable under the employment contract following a change of control. The employee retained the bonus and subsequently claimed the prescribed sum after his dismissal.

HHJ Richard Seymour QC, sitting in the High Court, accepted the employee’s evidence and awarded him £418,774. The employer appealed, challenging the judge’s understanding of its pleaded case, his factual findings, his treatment of the objective meaning of the communication and his conclusion about acceptance by conduct.

The central issues were whether the trial judge was plainly wrong about what the employee had been told and whether retention of the bonus accepted the revised, conditional offer.

1. Appeal allowed unanimously. The totality of the evidence established that the employer’s representative had made clear before payment that acceptance of the transaction bonus was conditional on the employee not also claiming the prescribed sum. The trial judge was plainly wrong to find otherwise. Judgment was entered for the employer.

2. An appellate court should reverse a trial judge’s findings of primary fact only in the rare case where the findings are plainly wrong. A judgment must be read as a whole, particularly where credibility is important, and should not be examined as though it were legislation or a commercial contract. Nor must a trial judge mention every item of evidence. Those restraints did not prevent intervention here.

3. The trial judge fundamentally misunderstood the pleaded defence. The employer’s case was that, before payment, it amended a gratuitous promise by imposing a condition that the bonus replaced the prescribed sum. The employee then accepted that revised offer by retaining the payment. No express agreement deleting particular clauses of the employment contract was required.

4. The judge failed to address a material admission in cross-examination, omitted significant evidence about the source and timing of the employee’s knowledge, and made an unsupported finding that a different colleague had first communicated the condition. He also failed to assess the communication against the relevant background, including earlier proposals linking an identical payment to surrender of the prescribed sum. These errors, together with the employee’s shifting account, displaced the usual deference to findings of fact.

5. The alternative argument based only on the words expressing a preference against “double dipping” would not itself have succeeded. If “prefer” alone were used, it would not convey a requirement, even in context. The wider evidence instead established the employer’s primary case that the communication objectively imposed a condition.

6. The original offer was unilateral and gratuitous. It could be amended at any time before payment or acceptance. Once the condition had been communicated, no unconditional offer remained. The employee’s retention of the payment was therefore unequivocally referable to, and accepted, the revised offer.

1. Court of Appeal (Civil Division): Allowed the employer’s appeal unanimously and entered judgment for the employer: [2016] EWCA Civ 407.

2. High Court, Queen’s Bench Division: HHJ Richard Seymour QC gave judgment for the employee in the sum of £418,774 on 24 October 2014. The judgment’s neutral citation was not stated in the supplied judgment.