Alexander James Woolgar v Newport Capital & Guarantee Limited

Signed directors’ minutes are important evidence of proceedings, but they are not conclusive proof of what was agreed. Their weight must be assessed with the evidence as a whole, including contemporaneous communications, witness reliability, motive, memory and inherent probabilities.

A pleaded denial that an oral variation was agreed is sufficient to put the issue in dispute. It is unnecessary separately to plead that minutes recording the alleged agreement are inauthentic before challenging their accuracy and evidential weight. Adverse inferences from a party’s failure to call witnesses remain discretionary and are unnecessary where the existing evidence permits a sound conclusion.

The claimant, a co-founder, director and chief executive of the defendant, claimed accrued salary, severance pay and holiday pay under a five-year Employment and/or Service Agreement. The defendant contended that the claimant had agreed orally to reduce his salary from £250,000 to £60,000 per annum at board meetings on 22 July and 5 August 2019.

The defendant relied principally on board minutes, a letter and witness evidence. The claimant denied agreeing to the reduction and challenged the accuracy and weight of the minutes. The court tried the salary-reduction issue and determined the resulting contractual claims.

1. Disposition. The claimant had not agreed to reduce his salary from £250,000 to £60,000 per annum. Judgment was entered for accrued salary of £412,328.77, severance pay of £1,170,547.95 and holiday pay of £9,995.89. The defendant was also liable for the agreed Bramdean claim of £17,600. Interest was payable in accordance with the earlier order, and costs were left for agreement or a consequentials hearing.
2. Assessment of evidence. The court assessed oral evidence against reliably established facts, particularly informal contemporaneous communications, the motives of the principal participants, the possible unreliability of memory and the inherent probabilities. That approach was informed by Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm).
3. Board minutes. Under sections 248(1) and 249(1) of the Companies Act 2006, properly recorded and authenticated minutes are evidence of proceedings. Their statutory status is important, but their weight is not conclusive where their accuracy is challenged. The minutes had to be evaluated in the light of the evidence as a whole. The defendant’s practice of recording resolutions as agreed by all directors when a director abstained or voted against them materially undermined their reliability.
4. Pleading. The claimant’s pleaded denial that he agreed to the salary reduction sufficiently identified the issue. The accuracy and weight of the minutes and related letter were evidential matters; a separate plea disputing their authenticity was unnecessary.
5. Adverse inferences. Although the claimant invited the court to draw adverse inferences from the defendant’s failure to call certain directors and employees, the court declined to do so. Applying the approach summarised in Ahuja Investments Ltd v Victorygame Ltd [2021] EWHC 2382 (Ch), the existing documentary and oral evidence was sufficient to reach a sound conclusion.

not stated in the judgment.