JLT Specialty Ltd v Craven

Where a contract provides that a bonus advance is repayable if employment ends on or before a specified date, the words chosen must be given their ordinary contractual effect unless it is clear that the language has gone wrong and what the parties meant can safely be identified. A court should not rewrite an apparently harsh bargain merely because a sliding scale or different cut-off would have been more reasonable. The existence of a cliff edge is not, by itself, evidence of drafting error. On a summary judgment application, the court should determine a short point of law or construction where the necessary evidence is before it and the parties have had a proper opportunity to argue the issue.

An insurance broker sought repayment of a £500,000 bonus advance paid to an employee under an addendum to his employment agreement. The addendum made the advance repayable in full if the employee was a bad leaver or resigned on or before 31 December 2016. The employee gave notice of resignation in September 2015, remained on garden leave, and his employment ended on 31 December 2016.

The High Court, on an application for summary judgment, dismissed the application because it considered that the employee had a real prospect of succeeding on the argument that the repayment provisions had not been triggered. The Court of Appeal considered whether the employment ended on 31 December 2016 and whether the phrase “on or before 31 December 2016” should be read as excluding that date.

1. Appeal allowed. The employee’s employment ended on 31 December 2016. There was no real prospect of a court finding at trial that it continued until 1 January 2017.
2. The employer’s letter referring to employment ending on 1 January 2017 was not an offer to vary the termination date. Viewed objectively, it confirmed acceptance of the resignation and indicated that employment would not end earlier than permitted by the agreement.
3. Even if the letter had contained an offer, there was no real prospect of establishing acceptance. Silence ordinarily cannot amount to acceptance, and conduct constitutes acceptance only where it objectively demonstrates an intention to accept. Receipt of payments was equally consistent with the parties’ existing contractual rights and obligations. The Court applied the principles stated in The Aramis [1989] 1 Lloyd's Rep 213.
4. The words “on or” in point 2.3 of the Addendum could not be ignored. The provision deliberately created a cliff edge under which the whole advance was repayable on one day and none on the next. The possibility that a sliding scale would have been more reasonable did not justify rewriting the bargain. The stringent approach to correcting an apparent linguistic error in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101, was not satisfied.
5. Since employment ended on 31 December 2016, the repayment condition was met even without deciding the proper construction of “resigns”. The court therefore entered summary judgment for JLT. In deciding the short construction issue at this stage, it followed the guidance in ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725, while recognising the general limitation on summary judgment stated in Swain v Hillman [2001] 1 All ER 91.

• Court of Appeal (Civil Division): [2018] EWCA Civ 2487. Appeal allowed; summary judgment entered for JLT Specialty Ltd.
• High Court of Justice, Queen’s Bench Division: [2017] EWHC 2117 (QB). Mr Philip Mott QC, sitting as a Deputy High Court Judge, dismissed JLT’s summary judgment application.