Strand, London, WC2A 2LL
B e f o r e :
| Tesco Stores Limited||Claimant|
|- and -|
|(1) Simon Pook|
(2) Natasha Kersey Pook
(3) Universal Projects (UK) Limited
Mr Donald Broatch (instructed by L. E. Law) for the Defendants
Hearing dates : 1st and 2nd April 2003
Crown Copyright ©
Mr Justice Peter Smith:
THE RESIDUAL CLAIM
THE BRIBE ALLEGATION
EVIDENCE OF PAYMENT
BURDEN AND/OR STANDARD OF PROOF
"The courts of law in this country have always strongly condemned and, when they could, punished the bribing of agents, and have taken a strong view as to what constitutes a bribe. I believe the mercantile community as a whole appreciate and approve of the court's views on the subject. But some persons undoubtedly hold laxer views. Not that these persons like the ugly word "bribe" or would excuse the giving of a bribe if that word be used, but they differ from the courts in their view as to what constitutes a bribe. It may, therefore, be well to point out what is a bribe in the eyes of the law. Without attempting an exhaustive definition I may say that the following is one statement of what constitutes a bribe. If a gift be made to a confidential agent with a view of inducing the agent to act in favour of the donor in relation to transactions between the donor and the agent's principal and that gift is secret as between the donor and the agent – that is to say , without the knowledge and consent of the principal - then the gift is a bribe in the view of the law. If a bribe be once established to the court's satisfaction then certain rules apply. Amongst them the following are now established, and, in my opinion, rightly established in the interests of morality with the view of discouraging the practice of bribery. First, the court will not enquire into the donor's motive in giving the bribe, nor allow evidence to be gone into as to the motive. Secondly, the court will presume in favour of the principal and as against the briber and the agent bribed, that the agent was influenced by the bribe; and this presumption is irrebuttable. Thirdly, if the agent be a confidential buyer of goods for his principal from the briber, the court will assume as against the briber that the true price of the goods as between him and the purchaser must be taken to be less than the price paid to, or charged by the vendor by, at any rate, the amount or value of the bribe. If the purchaser alleges lose or damage beyond this, he must prove it ".
"Counsel for the plaintiffs says:-
"Yes, but earlier the learned judge has said that if a gift be made to a confidential agent with a view to inducing him, it is a bribe, and, therefore, in using the later language and referring to the bribes the learned judge is in effect saying: "I am using these later presumptions in cases where a bribe has been established and I have already defined a bribe as being only something which has been established as being paid with a certain motive." That, of course, would tear up the whole of the learned judge's observation because he says lower down that the courts will not receive evidence as to what is the motive of the person making the payment. The motive will be conclusively inferred against him."
DUTY TO DISCLOSE
"It will be notice that Bell was not a director of Levers and with respect I cannot accept the view of Greer LJ that if he was in a fiduciary relationship with the Niger Company he was in a similar fiduciary relationship with the share holders…"
It seems to me that if there was a fiduciary obligation Lord Atkins decision might not have been the same. Similarly Lord Thankerton prefaced his observations (page 231) upon the fact that Bell and Snelling were not in a relationship as master and servant with Lever Bros. It is in that light that his statement "in the absence of fraud … I am of the opinion that neither a servant nor a director of a company is legally bound forthwith to disclose any breach of the obligations arising out of the relationship so as to give the master or the company the opportunity of dismissal …" however, he also said, "there may well be case where the concealment of the misconduct amounts to a fraud on the master or company …".
"Counsel for the defendant (Mr Powles) submitted, as a general proposition, that, putting fraud on one side, there is no general duty on directors or employees to disclose a breach of duty on their part. As I understood his argument he recognised in the case of fiduciaries, such as directors, if they have failed to account for secret profits which they had made, then their failure to account must necessarily involve in consequence a failure to reveal a breach of duty which had given rise to that duty to account. Counsel for the defendant (Mr Powles) in his argument put in the forefront of the authorities on which he relied a dictum of Lord Thankerton in Bell and Lever Bros Ltd.  AC at 231, a dictum with which Lord Blanesburgh appears to have agreed at page 199.
There is, in my judgment, much force in counsel for the defendant's (Mr Powles) submission. Indeed counsel for the plaintiff's (Mr Thoresby) argument, that a director is under a duty to disclose any breach of duty on his part before an agreement of the kind in the present case was entered into, could lead to the extravagant consequence that the director might have to make what counsel for the defendant (Mr Powles) has called a 'confession' as a prerequisite of such an agreement. But, in my judgment, it is not necessary to decide in this case whether counsel for the defendant's (Mr Powles) submission is correct, because, as I have read the judgment of the judge, having regard to the facts found by him, no breach of duty was committed by the defendant in this case, before the termination agreement was made … ".
"subject to the provision of rules 7.1 and 7.2(a) participants rights to exercise an option shall terminate on his ceasing to be employed within the group for any reason. A participant ceases to be employed within the group on the date that he is no longer employed a company within the group or a director employed under a contract of employment of any such company…".
CONCLUSION ON COUNTERCLAIM