LEONARD BATTY v BSB HOLDINGS (CUDWORTH) LTD. 2002 EWCA Civ 648

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM SHEFFIELD COUNTY COURT

(Mr Recorder Kealy)

[2002] EWCA Civ 648

Case No Case No: B2/2001/2079

Venue Royal Courts of Justice, Strand,, London, WC2A 2LL

Between

LEONARD BATTYAppellant

BSB HOLDINGS (CUDWORTH) LTD.Respondent

Before

Lord Justice Ward

Lord Justice Sedley

Lady Justice Hale

Mr T. Cranfield (instructed by Russell & Creswick) for the Appellant

Ms Joanne Connolly (instructed by Gordons Cranswick) for the Respondent

Date 24 May 2002

Lord Justice Ward :

This

[1]is a case all about suspension from work, no work no pay and wrongful dismissal. It is in its way all rather sad.

[2]The sorry tale begins in the 70s when Mr Leonard Batty (“Mr Batty”), the appellant, Mr Philip Maxwell-Smith (“Mr Smith”) and the appellant’s late brother Mr Brian Batty (“Mr Brian Batty”) entered into a partnership in the business of installing storage equipment, pallet racking and shelving. The respondent company BSB Holdings (Cudworth) Ltd. was incorporated in about 1982, the “BSB” no doubt recognising the interests and names of the three partners. Mr Batty was the managing director and one gets the impression that he was very much “the boss” of the business. He reached the fine age of fifty in 1997 and wished to realise his shares in the company or otherwise take his capital from it and gently ease himself into retirement. At that time he held the majority interest and Mr Smith held the remainder of the shareholding. Mr Smith was by then the sales director. To this end the company entered into an “Executive Service Agreement” with Mr Batty on 29 th August 1997 under which Mr Batty was appointed “as adviser and consultant” for a fixed term of five years expiring on 1 st September 2002. He was to work during normal business hours and perform the duties appropriate to his employment as such an adviser and consultant. He was to receive an annual salary of £39,000 per annum increasing annually by at least the increase in the Retail Price Index. If he were absent from his employment as a result of physical ill-health or injury he would be entitled to remuneration for the first twenty-six weeks of such absence in any period of twenty-four months. He enjoyed certain other benefits such as private medical insurance cover. The company was able to terminate his employment by written notice with immediate effect if he committed any serious or persistent breach of his obligations under the agreement. Clause 11 dealt with “disciplinary and grievance procedures and suspension”. Clause11.1 provided that there was no formal disciplinary procedure;

11.2 required that any grievance should be raised with the Board; and

11.3 was to this effect:- “The company may at any time suspend Mr Batty on full pay from the performance of all or some of his duties.” After this restructuring of the company, Mr Smith took over as managing director and became the majority shareholder, Mr Batty’s shares being either transferred to the company or to a family trust with only a few retained for himself.

[3]Although the two central protagonists in this dispute, Mr Batty and Mr Smith, had worked amicably together for some twenty-five years, it probably did not need much imagination to realise this new arrangement was never going to be an easy one. Mr Batty was hardly likely to be comfortable in the back seat and Mr Smith had to flex his managing director’s muscles to assert his authority. The Titans soon clashed. Whether rightly or wrongly does not matter for the purpose of this appeal but it is plain that Mr Batty felt he was being squeezed out. Mr Smith was expecting him to accept the reversal of their roles but felt that Mr Batty was, on the contrary, doing his level best to undermine him. The truth of the matter is that nobody had ever defined what Mr Batty’s new role really should be and so the friction and the tension grew as the weeks and months went by.

[4]At the end of December 1997 Mr Batty was ill and away from work for about two or three weeks suffering not only from influenza but also from stress and depression. Life was no better for anyone after his return. He became ill again in April, suffering from viral meningitis, a debilitating illness which kept him off work until 1 st September 1998. On his return, there was a confrontational meeting between the two men and Mr Batty complained that Mr Smith charged him with being disruptive and told him he would prefer it if he would stay at home and only come back when he (Mr Smith) had something he wanted Mr Batty to do. The correspondence that passed between them highlights the number of areas of dispute and gives a flavour of the acrimony that was all-pervasive at the time.

[5]This culminated in Mr Smith writing to Mr Batty on 7 th September 1998 a letter which has given rise to an issue in the appeal which I shall call the “suspension issue”. That letter reads:

“It has become increasingly apparent over the last week that the situation between yourself and the company has become unworkable. When leaving the office on Friday afternoon you informed us that you were going to visit your solicitor for advice on how the whole matter of your employment could be resolved. Under the circumstances we believe that this is the best course of action and await your representative's response. In the meantime you should not attend the company until all matters between us have been satisfactorily resolved.”

[6]Mr Batty did instruct solicitors, Jack Danaher & Co. who wrote to the company on 13 th November 1998. They referred to the suspension letter and commented that Mr Batty was entitled to carry out his duties and that any action by the company to prevent him doing so was a breach of the service agreement. They looked forward to proposals which would enable Mr Batty to continue his employment. The company in turn consulted a management company, Drury PSM Ltd. and Mr Izzard, on its behalf, responded to Mr Danaher. He referred to Mr Batty’s ill-health and said that with Mr Batty’s consent an opinion had been sought from his general practitioner on his “state of health and his ability to cope with stress at work” and that that opinion should be obtained before any other issues were considered. It was not until 1 st February 1999 that the general practitioner did respond and reported that Mr Batty appeared to be in very good health and that there was no reason why he should not be employed in the position of adviser to the Board of Directors. In the light of that opinion Mr Izzard wrote to Mr Danaher on 16 th February saying he was enclosing a copy of the medical report, but apparently failing to do so, and saying:- “The combination of absence for medical reasons and other causes for nearly a continuous period of ten months may in itself for Mr Batty have produced a change in the original concept of his continuing role. The same passage of time for the company without a contribution from Mr Batty has given rise to the view that a review of the whole situation could be in everyone’s best interests. In making this proposal the company does not intend or purport to interfere with any contractual obligations or authority. It is however a serious suggestion with the intention of avoiding any further repetition of past difficulties. Please let me know if the proposed review is considered to be of value.” There was no response to that letter. There should have been. It is not clear to me whether Danahers even drew that letter to their client’s attention.

[7]Mr Izzard wrote again on 19 th April 1999, this letter giving rise to the “return to work issue”. Mr Izzard wrote commenting on the failure to reply and concluding:- “The continuous absence has now been for twelve months during which time his salary has been paid in full even though the Service Agreement only provides for remuneration to be paid for six months if the absence is as a result of any incapacity. Please advise of any restriction preventing Mr Batty from providing the full performance of his general duties under the terms of the Service Agreement and if there is no restriction perhaps we could expect a full resumption on Monday 17 th May 1999.”

[8]As the company knew, Mr Batty had gone to America on a month’s holiday. Mr Danaher said this letter was never received. Mr Batty certainly did not have it or know of it. He returned on Sunday 13 th May but he did not go back to work on Monday 17 th , or indeed at all thereafter. Whether he ever intended to do so gives rise to the “willingness to return to work issue”. He undoubtedly had a conversation with Mrs Sugden, the company’s secretary, on 19 th May in which his return to work was discussed and I will have to look at that conversation in more detail later in the course of this judgment.

[9]Not having attended for work, Mr Izzard wrote to Mr Danaher on 25 th May and this letter gives rise to the “no pay issue”. That letter reads:- “I wrote to you last on 19 th April 1999 and amongst other matters proposed that subject to being advised of any continuing incapacity of Mr Batty to perform his general duties he be expected to make a full resumption on Monday 17 th May 1999. No reply was received from you on behalf of Mr Batty to that letter and no appearance either by Mr Batty on 17 th May 1999. The absence of any contact whatsoever is of concern and the company is not prepared to continue with making payment of salary and other financial considerations beyond the end of this month until all matters are satisfactorily resolved. Please confirm receipt and if I can be of assistance to resolve this situation I would be willing to discuss any matters arising.” The letter was sent by fax and by post but Mr Danaher denied its receipt. Once again Mr Batty knew nothing about it

[10]He only learnt that things had changed when he discovered that BUPA were no longer offering to cover medical treatment he then needed. He sent a furious note to Mrs Sugden about the unannounced cancellation of his BUPA subscriptions and she rang him back on Monday 14 th June. It became clear he had not received copies of Mr Izzard’s letter. He was told that his salary and other benefits were being stopped. Mrs Sugden would not or could not say whether he was “sacked or not”. In subsequent proceedings in the Employment Tribunal, Mr Batty suggested that he was constructively dismissed on 14 th June and that gives rise to the “repudiatory breach issue”.

[11]In February 2000 he brought a claim for “damages for breach of Executive Service Agreement” claiming some £223,792.99 said to be the damages suffered by him by reason of the defendant’s repudiation of the agreement, the company’s breach being their ceasing to pay him his salary, pension contributions and other benefits after the end of May 1999.

[12]That claim was heard by Mr Recorder Kealy over three days in May 2001 and in his judgment given on 17 th July 2001 that claim was dismissed and judgment entered for the defendant company with costs. Mr Batty now appeals with our permission. The Law.

[13]There was little discussion nor even dispute about the central principle which applies in this case, namely, that to be entitled to pay, the employee must show that he has worked or is willing to work for it. The governing authority is Miles v Wakefield Metropolitan District Council

[1987] ICR 368

where Lord Templeman said at p.391D:- “In a contract of employment wages and work go together. The employer pays for work and the worker works for his wages. If the employer declines to pay, the worker need not work. If the worker declines to work, the employer need not pay. In an action by a worker to recover his pay he must allege and be ready to prove that he worked or was willing to work.”

[14]To succeed in his claim, Mr Batty has to show that the company was in repudiatory breach of the contract of employment through its failure and refusal to pay his salary and benefits. That requires him also to establish that the company was obliged to pay him even though he was not at work and that his absence from work was justified by the continuing operation of his suspension from work which was never properly revoked. He must show that but for his suspension he was willing to perform his duties. As the events unravelled, they give rise to the five issues to which I have adverted and to which I now turn.

[15]They are: i) The suspension issue – what was the nature and effect of the letter of 7 th September 1998? ii) The return to work issue – was the letter of 19 th April 1999 an effective countermanding of the instruction not to work? iii) The willingness to work issue – had Mr Batty shown a willingness to return to work? iv) The no pay issue – was the company justified after the letter of 25 th May in stopping payments of salary and benefits? v) The repudiatory breach issue – in all the circumstances was the company in repudiatory breach of its contract of employment in stopping payment of his salary and benefits? The suspension issue.

[16]Mr Cranfield sought to argue, if I correctly understood him, that the company were not entitled to suspend Mr Batty pursuant to the provisions of Clause 11.3 of the Service Agreement and that this suspension only came into effect because of an agreement made between the parties on terms that he could remain on “garden leave” until all matters had been satisfactorily resolved. A new argument is sought to be advanced in this court that the attempt to require the appellant to return to work before all matters had been resolved and/or the refusal to make further payment to his salary until such matters had been resolved was a repudiation of that agreement. I do not accept those arguments for the following reasons:- i) Mr Cranfield submits that because the Service Agreement by clause 14.3 contained the entire agreement between the parties, a suspension under the agreement could only operate if clause 11.3 could be properly invoked. He submits that if clause 11 is read as a whole then it is clear that suspension can only be imposed as part of disciplinary and grievance procedures and these had not been properly invoked. There are two reasons to reject this submission. First it is not open to be taken as it was conceded below. The Recorder held:- “Although it [the letter of 7 th September 1998] does not refer to the contract, this letter is clearly a letter of suspension under clause 11.3, and it is common ground between the parties that this is the case.” Secondly the three parts of clause 11 are quite separate and self-standing. They are not inter-dependent. The literal meaning of 11.3 gives effect to the intention of the parties which plainly was to give the company the right to suspend Mr Batty on full pay at any time. That is what the letter of 9 th September did. ii) I see the superficial attraction for the submission that the terms of the letter make the suspension one which will last until all matters of dispute between the parties have been satisfactorily resolved. That is what the letter says. Once, however, it has to be accepted that the letter brings about suspension by operation of clause 11.3, and not by some other free-standing variation of the contract of employment, then the words are readily to be understood as words of purpose and explanation, not as words imposing a contractual condition. The purpose of the suspension was to enable the parties to resolve the matters between them. It does not follow that the company could not revoke the suspension before matters had been resolved. With proper notice the company clearly could do so.

[17]Thus this new case being advanced before us must fail not only because it is too late to introduce it in this court but also because it is plainly wrong. In my judgment the letter of 7 th September was an effective suspension of Mr Batty on full pay from the performance of all his duties under the Service Agreement. It operated until countermanded on reasonable notice. The return to work issue.

[18]Did the letter of 19 th April effectively countermand the instruction given in September not to attend the company? This is essentially a matter of law. Two points arise: first what did the letter mean, and secondly could it bind Mr Batty who was ignorant of it?

[19]The letter must take its meaning not only from its language but from the context in which it was written and the background circumstances prevailing at the time. One must remember therefore that the suspension was operated for the purpose of giving the parties an opportunity to resolve their difficulties. There were two difficulties at the time, the one was the health of Mr Batty and the other was the personality clash between him and others, Mr Maxwell-Smith in particular. Little appears to have been done to resolve the latter. Jack Danaher called for proposals and Mr Izzard suggested that Mr Batty’s health and ability to cope with stress at work be investigated before other issues were to be considered. A medical report, which took a long time, declared Mr Batty fit for work. On 16 th February Mr Izzard called for a review of the whole situation. There was no response. The position on 19 th April was, thus, that Mr Batty had been ill throughout the summer of 1998, had returned unhappily to work for a few days in September, was apparently fit to work yet he had been away for nearly a year. Although he had been entitled to some sick pay, he was drawing his full salary throughout that period. The letter called for an explanation of why Mr Batty should not perform his duties and continued with the vital words, “If there is no restriction perhaps we could expect a full resumption on Monday 17 th May 1999”. That was a courteous letter. It was not confrontational. But, in my judgment, its meaning was clear: "“please justify your absence, otherwise report for duty”. He had to respond one way or the other. Doing nothing was not an option open to him. The Recorder was therefore right in his view which was this:- “Although it is delicately expressed, the underlying message is reasonably clear: unless he is ill we expect him back to work in four weeks time. … It is not phrased as an ultimatum. Although there was no direct evidence about it, it seems clear that the date for return to work was not picked at random but was intended to follow immediately on the claimant’s return from his holiday in America on the previous Friday, 14 th May.”

[20]Absent a reasonable excuse for not working, a reasonable employee, who was fit to work, would understand that letter to require him to attend. Its terms were sufficient to countermand the suspension which had been allowed in September On the face of it reasonable notice for lifting the suspension was given.

[21]Mr Danaher denied receiving that letter. The Recorder held:- “The company had used the mutually agreed path for its communication to Mr Batty. It also deliberately refrained from direct communication for reasons which I do not wholly follow. But given Mr Batty’s insistence on using agents I accept that in law Mr Batty had been given the message about returning to work. I also accept Mr Batty’s evidence that he did not in fact receive the message. …With all respect to Mr Danaher the evidence of what was happening at his end does not inspire me with confidence. His assistant was in charge of his file yet his reference appears on the correspondence. The assistant has since departed and I have not heard from her. I am sure that all the various letters were in fact received by Danahers and that legally Mr Batty has to be fixed with notice of their contents. I am by no means sure, however that Mr Batty ever received the actual notice.” The Recorder’s findings of fact on this point are not challenged. In my judgment his conclusion on the law was correct. If Mr Batty has a complaint, it is a complaint which should be directed to Mr Danaher whose incompetent handling of this case on the Recorder’s findings is quite startling.

[22]If, as I find, this was an effective countermanding of the instruction to stay away and was a polite instruction to return to work, and if, as I am also bound to find, Mr Batty is to be fixed with the knowledge of his agent, then he is the one in breach of the service agreement whether he actually knew it or not.. The willingness to work issue.

[23]There is a great deal of dispute about what happened next. It has caused me some unease and was one reason for granting permission to appeal. I am still uncomfortable about truly what happened. The Recorder made this finding:- “In fact, even though he had not received actual notice of the contents of the April 19 th letter, he had by the weekend become informally aware of enough of its contents sufficient to alert him to the possibility that the end of his period of suspension could be in sight. Had he been truly anxious to return I cannot picture him sitting quietly by: he would I am sure have rung someone at the company to find out what was happening. He would at least have wanted to find out when he was expected and might even have wanted to know what he was going to be allowed to do. That he did nothing of the sort at that stage strongly suggests to me that by then he had no intention of returning.”

[24]There are problems with that finding. He had already found that Mr Batty did not know anything about the letter. There was no evidence to support the finding that he had by the weekend become aware of any of its contents. The only evidence which bears on this is the conversations he had with Samantha, his accountant and a former employee. As to that the Recorder found:- “He told me in evidence that she [Samantha] had told him later (he did not say how much later) that he was expected back at work on 17 th May and that an ex-employee called Sandy had told him much the same thing. The effect of what they all told him was not so much that he was expected back as that he was going back. However he had heard nothing from the company.” We have now looked at the transcript of his evidence. That makes it plain that he was saying that his daughter had told him on the Tuesday or Wednesday, i.e. the 18 th or 19 th May, that she had heard he was going back to work shortly. He also said that his accountant told him that probably on 18 th or 19 th but in any event after the date he was supposed to have returned. He gave similar evidence about Sandy. There was no evidence to suggest he knew at the weekend that he was expected back to work on the Monday.

[25]Moreover he did not sit quietly by once he had heard this talk of his going back. He telephoned the company on 19 th May and spoke to Mrs Sugden and raised the question of his return to work. He and Mrs Sugden differed in their recollection of that conversation. The Recorder notes the two accounts in this way:- “His account is that he asked her whether it was true that they were expecting him to come back to work. She asked him if he had not heard from his solicitor who would be writing to him. He asked her that in future the company should deal directly with him. Other matters were also discussed including her letter of the previous day. She did not say that they had been expecting him back to work except possibly in general terms and certainly not that they had been expecting him two days before this conversation took place. She did say that they had been told not to discuss it with him. He would have asked what his solicitor was supposed to be telling him. He said nothing about not coming in or not wanting a letter or sticking it up her bum (or arse). This was being made up by Mrs Sugden. … Mrs Sugden’s account is rather different. Realising that it had been an important conversation she made a note immediately afterwards. She wrote down the exact words as best she could remember: she was 100% sure they were accurately recorded. After dealing with two other matters Mr Batty had said “I heard I was supposed to start work last Monday”. She said that was what they had thought and asked who had told him. He said he had been told by three people including his daughter. She asked if he had had a letter from his solicitors to which he replied “No, I don’t want a letter, I am not getting a letter, you can stick it up your bum, I’m not coming in.” It had been a good-humoured, friendly conversation. … She took the claimant to be saying he was never coming back to work. It was not her place to discuss Mr Batty’s job with him.”

[26]The Recorder’s finding was this:- “I find it extraordinary, if Mr Batty was in the slightest way interested in returning to work, that he did not either press Mrs Sugden for more information or, having got nothing concrete, that he did not instantly contact Mr Danaher to find out what was going on. This conversation, which is agreed all round to have taken place, is of course crucial. It was, as I find, important enough for Mrs Sugden to have made a note immediately afterwards. The note is agreed to be accurate in all respects and I have no reason to doubt that it is her genuine recollection set down a very short time after the event. The key words in her account are “I don’t want a letter” and “I’m not coming back in”. I think that is what Mr Batty said. It fits his reaction, or rather his lack of positive reaction, to the rumours which he had already heard. It explains why he did not immediately contact Mr Danaher. He was simply not interested.”

[27]In coming to that conclusion the Recorder make no reference to matters which might have driven him to be more sceptical of Mrs Sugden’s account. When Mrs Sugden herself wrote to Mr Batty as she did on 18 th May, the day after he should have been back, she as company secretary said nothing about his failure to return when they had all been nervous and apprehensive about what he would do if he did. This coyness and her failure to tell him directly with him when he telephoned on the 19 th what had been said to his solicitors strike me as being “more extraordinary” than Mr Batty’s failure to press for information. Then there was a management meeting held by the company on Friday, 21 st May. The judge accepted the minutes as a genuine record of what was discussed. Strangely those minutes are silent as to the very relevant parts of this particular conversation and record only that “He didn’t want a letter (regarding starting back at work)”. The meeting resolved to instruct Mr Izzard to deal with the matter. Mr Izzard said that he had not been told that Mr Batty had said he was definitely not coming back. Had he been told that he would have written a very different letter from the one he did. The letter he wrote on 25 th May was in fact inaccurate in saying there had been no contact whatsoever, but the company allowed it to go uncorrected. The Recorder dealt with this as follows:- “Either they did not tell him of Mr Batty’s “I am not coming in” remark or they did not explain to Mr Izzard their present interpretation of those words as indicating a permanent decision. The minute of that meeting does not in fact mention the phrase. I am sure that the note was faxed to Mr Izzard but I am not sure that he drew the same conclusion about its significance as was suggested to him in evidence at the trial. I can find no other sensible explanation for his failure to mention it in his letter of 25 th May.”

[28]The comment is strongly made that: i) the other sensible explanation is that this information was not made available to Mr Izzard which puts the question mark against Mrs Sugden’s evidence; and ii) the real explanation is that the company were more concerned to pre-empt Samantha’s raising at the company’s A.G.M. the question of why Mr Batty was not working for his money.

[29]Miss Connolly, counsel for the company, points however to her vigorous cross-examination of Mr Batty and to what she submits are his very unsatisfactory answers when he was dealing with his conversation with Mrs Sugden. There is great force in that point. Despite my unease, I cannot usurp the function of the judge who heard that evidence, saw the witnesses and was able to judge their demeanour. It is, in my judgment, impossible for the Court of Appeal to reverse a finding of fact made by the trial judge simply because the probabilities of the case may strike the appellate judge differently. We have to approach this appeal on the basis that Mr Batty showed in that conversation with Mrs Sugden that he simply was not interested in coming back to work. It is a crucial finding. The no pay issue.

[30]The letter of 25 th May must have been written by Mr Izzard against the background of the state of affairs as he believed them to be. It is only in that way that one can explain how he began the letter referring to “the absence of any contact whatsoever [being] of concern.” That was the expressed justification for stopping payment of Mr Batty’s salary "“until all matters are satisfactorily resolved”.

[31]The Recorder held that the intention of that letter, which is set out in paragraph 9, was perfectly clear:

“The ball is now in your court, either come in or we will stop paying you”

. It was expressed in less tentative terms than the letter of 19 th April. Mr Izzard now made it plain that, “Subject to being advised of any continuing incapacity of Mr Batty to perform his general duties, he [had been] expected to make a full resumption on Monday 17 th May”. Anyone reading that would know he should have been back at work on the 17 th . The reason why the company were not prepared to continue making payment of his salary was also perfectly obvious – they had expected him to be back at work and had heard nothing from him or from Mr Danaher. The Recorder was satisfied this was sent both by fax and by post. Mr Danahar denied receiving either. The Recorder was prepared to accept that Mr Danahar knew nothing about the letter and so could not tell Mr Batty who remained in ignorance of it.

[32]Mr Cranfield protests that having found, correctly he submits, that Mr Batty knew nothing of this letter, it was not proper for the judge to infer that, “ By now Mr Batty thought he was in an unassailable position”. The Recorder went on to find that:- “He was not interested in what they might be trying to tell him through his solicitor. He imitated the action of the ostrich”. That finding does not sit easily with the fact that when Mr Batty learnt that his BUPA subscriptions had ceased he made immediate protest to the company about it. There is also force in the points made by Mr Cranfield that if anyone was burying its head in the sand, it was the company. The company wrote to Mr Batty on 18 th May, as I have already indicated, and said nothing about his failure to return the previous day on 19 th May. Mrs Sugden was not forthcoming about the contents of the letter to his the solicitor she knew he ought to have received. She would not discuss with him on 14 th June whether he had been sacked or not. The company was hardly putting its head above the parapet.

[33]The critical issue, however, is whether in law the letter of 25 th May put Mr Batty on sufficient notice that if he did not attend for work, his salary would stop at the end of the month. Given that the Recorder found that his solicitors had received it and that their notice must be treated in law as his, the letter makes that position clear enough. I am unable to accept Mr Cranfield’s submissions on this letter. He would argue for a very literal construction to the letter namely that there was to be no payment until all matters had been satisfactorily resolved, and so he submits even a return to work would not have resulted in a resumption of payment of the salary, quite the opposite. He goes so far as to submit that a refusal to pay salary even if work was resumed is an anticipatory breach which Mr Batty was capable of accepting and did accept. In my judgment the letter cannot be given that literal meaning. As it would be objectively understood by men of business, and these were men of business, this letter read in the context of all that had gone before amounted to notice that payment would be withheld at the end of the month unless Mr Batty returned to work or satisfactorily explained why he could not do so. The repudiatory breach issue.

[34]The company paid Mr Batty’s salary on 31 st May but took steps immediately to stop the benefits, including his BUPA subscription. Mrs Batty discovered that and the insurance brokers confirmed that the company had advised them that Mr Batty’s name was to be deleted from the BUPA scheme with effect from 1 st June 1999. Mr Batty immediately fired off a furious fax asking what that meant as the company had not as at that time advised him of anything relating to that matter. He followed it up with a telephone call to Mrs Sugden who told him that she had been instructed not to pay him anything, and asked if he had received a letter from his solicitors sent on 24 th (which may in fact be 25 th ) May. He had not received it and asked for copies of all letters. She confirmed that his salary had been stopped. He asked twice if that meant the company had sacked him and she replied that they were not paying him until the matter was resolved but did not say whether he was sacked or not.

[35]The Recorder found in his Commentary on this part of the case:- “I think Mr Batty’s astonishment as displayed in his fax to Mrs Sugden of 12 th June was genuine. He really did not think that the company would have called his bluff in that way. I think he knew perfectly well that his suspension period was at an end and that he was once more obliged to do his 37½ hours work a week. He had no intention of doing so as he had made clear to Mrs Sugden in the telephone call. He did not want to know. The effect of all of this is that I am satisfied that, certainly by the end of May, Mr Batty knew that he was being called into work and was refusing to attend. That finding of fact is crucial to the decision in this case.”

[36]Once again Mr Cranfield can legitimately make some criticism of that conclusion. He refers to the earlier part of the judgment where the Recorder thought that Mr Batty was imitating the actions of the ostrich in “deliberately trying to avoid being told officially what he had heard on the grapevine”. But then the Recorder goes on to say this:- “But in fact his next actions convince me that he did not actually know what was being said.”

[37]The next actions were his telephoning in high dudgeon following the cancellation of his BUPA subscription. So Mr Cranfield argues that the Recorder is making quite inconsistent findings in that he was on the one hand convinced that Mr Batty did not actually know what was being said in or about the letter of 25 th May but also saying that by the end of May he knew he was being called in to work. If he was ignorant of the contents of the two material letters of 19 th April and 25 th May, then all he knew was the rumour which on his evidence was the gossip on the grapevine that he was going back to work, coupled with what he could glean from the conversations with Mrs Sugden on 19 th May. There is considerable force in the submission that this is a very shaky foundation for a finding that Mr Batty knew he was being called into work and was refusing to attend or that he was engaged in a game of bluff with the company.

[38]This court must, however, recognise that those were firm findings of fact by a judge who had heard the case over three days and had had the unique advantage not fully possessed by this court of seeing the witnesses in the witness box. I must remind myself that the Court of Appeal ought not to take the responsibility of reversing conclusions of fact unless the trial judge has palpably misused his advantage. We are not to interfere merely as a result of our own view of the probabilities of the case. The vital finding of fact has to be the Recorder’s preference for the evidence of Mrs Sugden relating to the conversation of 19 th May. She had an attendance note to support her recollection: Mr Batty’s account was severely dented in cross-examination. Worried as I have been, and in part as I still am, I cannot upset those crucial findings of fact.

[39]That being so the Recorder’s conclusion is unassailable on appeal. He found:- “I am satisfied here that Mr Batty did indeed know that his suspension was lifted and in that state of knowledge refused to attend for work. Accordingly the company was entitled to stop paying him. By so doing they were not in breach of the employment contract. The contract continued but the obligation to pay was in suspension so long as the claimant refused to attend for work.” The Result.

[40]The position in summary thus seems to me to be as follows:- i) The letter of 19 th April lawfully removed the suspension and amounted to an instruction to Mr Batty to attend for work. If there were any doubt about it the letter of 25 th May removed the doubt. ii) As a matter of law Mr Batty is fixed with the knowledge of those letters in the light of the judge’s finding that they were actually received by his agent, Mr Danahar. iii) On the judge’s findings, which I have to accept, Mr Batty indicated on 19 th May that he was not coming in to work. Although said in an apparently light-hearted good-humoured way, it was an indication of his unwillingness to work. iv) Mr Batty took no steps to clarify the position with his solicitors and the company heard nothing more from him or from his solicitors. The company was entitled to infer that he was unwilling to work. v) On the findings of fact made by the Recorder, he refused to attend for work knowing his suspension was lifted. vi) Accordingly the company were entitled to withhold his salary. vii) If they were entitled not to pay him he could not complain that their failure to pay was a repudiatory breach. Consequently he was not entitled to terminate the contract of employment and seek to recover damages for the unpaid salary for the remainder of the term.

[41]I reach this conclusion with some hesitation and with some regret. Mr Batty was not well served by Mr Danahar. On the findings of the Recorder the letters were received and a competent solicitor would have recognised the urgency of the matter and the need to advise the client immediately. My short acquaintance with Mr Batty when he appeared before me in person suggested to me that he was of a disposition where he would rather put up with difficulties and even make as many of his own as he could without losing the benefit of his Service Contract. The Recorder thought otherwise. He had the unique advantage of seeing and hearing the parties and whatever my view of the case, I cannot upset his conclusions. On his finding Mr Batty was unwilling to work. The company were therefore justified in not paying him. This could all have been handled very differently but there it is. The appeal must be dismissed.

Lord Justice Sedley:

[42]The case finally erected by Mr Cranfield with the court’s help upon his first and entirely general ground of appeal is that i) the company’s letter of 19 th April 1999 to Mr Batty’s solicitors did not amount in law to due notice of termination of Mr Batty’s suspension, and ii) but for the continuing suspension Mr Batty would have been willing to return to work.

[43]The first of these propositions is a matter of law, but it falls to be answered against the background of facts found by the Recorder. In my judgment, given Mr Batty’s senior status in the company, the letter of 19 th April contained a clear message: either return to work on 17 May or explain why you cannot do so. He did neither. In my view the absence of any response from him put an unequivocal term to the suspension as from 17 May.

[44]Even if this is wrong, the Recorder’s findings of fact controvert Mr Batty’s assertion that he was ready and willing to return to work. This is a necessary averment in an action for salary (see Miles v. Wakefield MDC

[1987] ICR 368

, HL) and it can be no less necessary in an action for wrongful dismissal based on a repudiatory withholding of work. In any event the Recorder’s finding negatives any consequential loss.

[45]On both scores therefore Mr Batty in my judgment fails, making it unnecessary to consider Ms Connolly’s further submission that his conduct in the conversation of 19 April amounted to a separate repudiation of his contract of employment. Things said in anger are not always to be given contractual effect but there is no need here to embark upon that difficult question.

[46]I too would therefore dismiss the appeal.

Lady Justice Hale:

[47]I also agree.

Order

appeal dismissed with costs, to be subject to detailed assessment if not agreed. (Order does not form part of the approved judgment)