KB-2025-001160 - [2025] EWHC 2369 (KB)

Although Mr Oudkerk put Ground 1 on the basis of waiver by election, and approbation and reprobation, and estoppel by conduct, and although it does not make any difference to the result, the true nature of his argument seemed to me to be that there had been waiver by election when BISL affirmed the Contract and decided to hold Mr Wheeler to the notice which he had given. Waiver by election does not require a party to have made a legal claim or obtained a judgment on an inconsistent basis. It merely requires a party knowingly to have made an unequivocal choice between conflicting rights or remedies which are available to it.

On analysis, Mr Oudkerk’s complaint was not that BISL had adopted the position, in one court or set of proceedings, that Mr Wheeler’s contract continued in force until 7 June 2024 and then argued in another that it had come to an end before 22 February 2024 (the sort of situation which is addressed in the cases considered in LA Micro and Malik (see [40]-[44], above). Nor was it that BISL had waived its right to claim damages on the basis of a February 2024 termination date by making a previous claim for damages on the basis of a 7 June termination date (the sort of situation with which the passage at [72(i)] of Twinsectra (at [50] above) was concerned). His complaint was that, having chosen to continue the Contract until 7 June, BISL had made an election of rights and had therefore waived its right to claim damages on the basis that the Contract had been terminated at some earlier date.

It followed from this, in my view, that Mr Oudkerk’s case under Ground 1 was that the pleaded claim for damages and/or equitable compensation was bound to fail because such a claim had been waived by election. As his argument depended on the evidence of affirmation by BISL, it could only succeed under Part 24, if at all i.e. on the basis that BISL has no real prospect of success on this point.

In my view, Mr Oudkerk’s argument did not come close to meeting the standard required for summary disposal of this head of relief claimed by BISL. At a fundamental level it fails to do so because it does not recognise that damages are assessed on the basis of the hypothetical question of what would have happened if there had been compliance with the duties which have been breached. The counterfactual is necessarily not the same as the actual facts. In this case, the facts are that the Contract was affirmed and continued until 7 June 2024; the counterfactual is that, prior to 22 February, Mr Wheeler disclosed the information which he was duty bound to disclose whereupon his contract and the contracts of the departing EMEA GPF employees would have been terminated at a point which deprived them of their bonuses. Given that the counterfactual is based on hypothetical facts, including BISL having knowledge of the team move and Mr Wheeler’s involvement in it at a significantly earlier date, nor do I accept that Mr Oudkerk’s characterisation of it as “inconsistent” with what actually happened has any real significance.

If one looks at the matter through the lens of waiver by election, I agree that by affirming the Contract BISL waived any right to contend that in fact it had terminated before 22 February 2024 and to assert any rights on that basis e.g. to defend a claim for unpaid wages on the basis that Mr Wheeler was not employed after that date. However, Mr Oudkerk rightly accepted that BISL did not waive the remedy of damages for Mr Wheeler’s breaches of duty. His only objection was to the basis on which damages are now claimed by BISL. As to that objection I do not accept that by affirming the Contract, accepting that the termination date pursuant to Mr Wheeler’s notice would be 7 June, requiring undertakings that he would comply with his obligations if he was to avoid proceedings etc, BISL unequivocally waived a claim for a remedy on the hypothetical basis which it has pleaded in the POC so that such a claim can be summarily dismissed. The question of the basis on which damages might be claimed was left open.

I also agree with Ms McCafferty’s analysis or, at least, her analysis was far from bound to fail. This was that BISL never did have the choice to elect between the right to terminate on notice before 22 February 2024 and the right to affirm the Contract after Mr Wheeler gave 3 months’ notice of termination on 8 March (see [65] of the Glencore case, cited at [53] above). As at the dates of its March/April 2024 letters, the option of earlier termination was not available and there is no sense in which BISL could or did elect between these two rights. What it had was an accrued claim for damages based on Mr Wheeler’s earlier breaches of duty and a right to affirm the Contract. Its exercise of this right did not waive its accrued claim for damages or restrict the scope of that claim in any way, whether unequivocally or at all. The contractual undertakings which BISL sought – confirmation that Mr Wheeler would comply with his obligations – were at most a quia timet remedy for threatened future breaches of duty, and had no bearing on the remedies available to BISL for the earlier actual breaches of duty which had already been committed by Mr Wheeler. BISL was therefore exercising a different right. In addition to this, I accept Ms McCafferty’s submission that the extent to which BISL had sufficient knowledge of the underlying facts relevant to its options as at 12 March or even 18 April 2024 is an issue for trial: see [68] of Glencore, cited at [54] above.

As for Mr Oudkerk’s complaint that this analysis leads to BISL deriving an unfair benefit, if the facts of Mr Wheeler’s conduct are as pleaded in the POC this may not be accepted at trial. But if this is a concern, the court will no doubt be able to give credit for such benefit as BISL received as a result of affirming the Contract, as it might on a cross undertaking as to damages. As Ms McCafferty submitted, the court would not necessarily be obliged to proceed on the basis that BISL was required to terminate at the earliest available point, or would have done so, and she would be entitled to argue that BISL would in fact have left the termination as late as was consistent with its own interests. This might well have been very shortly before the first bonus was due to be paid and therefore only a matter of a fortnight or so before 8 March 2024. The additional benefit gained by BISL through affirming the Contract is therefore potentially minor.

As Ms McCafferty also pointed out, Mr Oudkerk’s submission is highly unattractive given that it rewards the approach which Mr Wheeler is alleged to have taken to the timing of the resignations of the EMEA GPF employees. The logic of his position is that the options open to BISL on 8 March were to treat Mr Wheeler as discharged from the Contract and lose some or all of the contractual protections against the competitive threat of Corinthia which it would otherwise enjoy, or affirm the Contract and allow the departing employees to achieve their objective of keeping their bonuses. Indeed, it is not clear why the logic of Mr Oudkerk’s argument would not lead to the conclusion that, even if BISL had elected to treat the Contact as discharged as at 8 March 2024, it still would still have been prevented from asserting that, if it had known about the team move earlier, it would have terminated earlier. In this scenario BISL would have chosen a termination date of 8 March which, on Mr Oudkerk’s argument, was inconsistent with claiming damages on the basis of a hypothetical earlier termination date. If the answer to this point is that BISL did not have a choice to terminate earlier than 8 March, this is also true in relation to the course which BISL actually took.

In case the analysis set out above is wrong, I have also considered the matter under the abuse of process heading and made the broad, merits-based assessment, which is required, having particular regard to the factors which were said in LA Micro and Malik to be relevant. Essentially for the reasons which I have given I do not accept that BISL’s pleaded basis for its claim for damages is inconsistent with its affirmation of the Contract or that it misuses the court’s procedure in a way which is manifestly unfair to Mr Wheeler or would otherwise bring the administration of justice into disrepute amongst right-thinking people. The greater risk is that accepting Mr Oudkerk’s argument would have this effect. In my view, the pleaded basis for BISL’s claim for damages has a real prospect of success and is not an abuse of process.