MR COLIN CHRISTIE v CANACCORD GENUITY LIMITED

An oral agreement is assessed objectively. Evidence of the parties’ subjective understanding and subsequent conduct may assist in determining what was communicated, whether agreement was reached and whether legal relations were intended. In commercial disputes involving undocumented conversations, contemporaneous documents and known or probable facts may be more reliable than recollection.

Unfinalised matters do not necessarily prevent contract formation, but the more important the term, the less likely it is that the parties intended to defer it. Proprietary estoppel requires an assurance sufficiently clear in its context, reasonable reliance and detriment. Mere indications of a possible future award, with its amount and timing unresolved, do not create a contract or sufficiently clear representation.

The claimant, an investment banker, pursued claims against his former employer for a promised £1 million retention award in shares of its parent company. He alleged that the award arose from an oral agreement made with the defendant’s chief executive on 16 July 2015, or was confirmed by a subsequent email. Alternatively, he relied on proprietary estoppel.

The defendant contended that the discussions contemplated only a possible future award, subject to further consideration and approval. The court determined whether the discussions and subsequent correspondence created contractual obligations or sufficiently clear representations, and whether the claimant had relied on them to his detriment.

1. Contractual principles. The formation of an oral contract was an objective question. The claimant’s and chief executive’s subjective understanding, together with subsequent conduct, was admissible as evidence of how the communications would objectively have been understood. The approach in Blue v Ashley [2017] EWHC 1928 (Comm) and Gestmin SGPS SA v Credit Suisse UK Limited [2013] EWCH 3650 (Comm) was applicable to this commercial employment dispute. Limited weight was placed on recollections of an undocumented meeting held nearly seven years earlier.
2. Although unresolved matters may be left for later agreement, as recognised in RTS v Flexible Systems Limited v Molkerei Alois Muller GmbH [2010] 1 WLR 753 and Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd’s Rep 601, the evidence showed no concluded agreement. The July discussion offered only the prospect of a future stock award, possibly of a seven-figure amount. Its quantum, timing and necessary corporate approvals remained unresolved. Objectively, the parties contemplated further confirmation and did not yet intend to create legal relations.
3. The September email did not confirm or ratify an earlier agreement. Its prospective language and reference to quantum as still being worked on were inconsistent with an already agreed £1 million award.
4. The proprietary-estoppel claim also failed. The statements made in July and in later correspondence were indications of what the defendant hoped to offer in the future, rather than sufficiently clear assurances that a £1 million award would be made. The requirements of reliance and detriment were therefore not established. The court also observed that, subject to the existing proprietary limitation, an estoppel could potentially operate where a defendant represented that an award in shares of its parent company would be made.
5. The claims in contract and proprietary estoppel were dismissed.

The judgment records that the claimant’s separate bonus claims were disposed of at an earlier summary judgment stage, while the retention-award claims proceeded to this liability trial. The Employment Tribunal had previously declared the claimant’s dismissal unfair by consent, but that decision did not determine the issues before the High Court.