THE claim by Guinness against former director Thomas Ward for
repayment of #5.2m paid to him for his services in the Distillers
takeover was ''unanswerable,'' the House of Lords decided yesterday.
Five law lords unanimously dismissed an appeal by the American
attorney, who is fighting extradition to the UK to face criminal charges
in the Guinness affair, against an Appeal Court ruling in May, 1988,
that Guinness was entitled to immediate repayment of the #5.2m on the
grounds that it was unauthorised by the company's board or its articles.
The appeal Judges had also upheld a ruling of Vice-Chancellor Sir
Nicolas Browne-Wilkinson that Guinness was entitled to summary judgment
without a full trial of Mr Ward's contentions that he was entitled to
retain some or all of the money.
Dismissing Mr Ward's appeal, Lord Templeman said Mr Ward claimed the
payment, made to him through his Jersey company, Marketing and
Acquisition Consultants, had been approved by a board committee.
Mr Ward's case was that the fee was for ''advice and services'' he
provided during the Guinness bid for Distillers. In particular he
claimed credit for persuading the Monopolies and Mergers Commission to
allow the Guinness bid, for persuading some reluctant directors to
persevere, and for persuading Distillers to pay Guinness's costs should
the bid prove unsuccessful.
But Lord Templeman said the contract on which Mr Ward relied was
''non-existent''. He said: ''Mr Ward had no right to remuneration
without the authority of the board. Thus the claim by Guinness for
repayment is unanswerable.''
Even if Mr Ward had acted ''honestly and reasonably'' in accepting the
money without board authority, he could nevertheless not be excused from
paying it back.
Mr Ward had sought an order which would entitle him to be paid without
board authority, said Lord Templeman. Such an order would be a breach of
the company's articles which protected shareholders and governed
directors.
Agreeing, Lord Goff of Chieveley said he was not the only person who
had been ''startled'' by the size of the sum Mr Ward claimed had been
paid to him under a binding contract.
Lord Keith of Kinkel, Lord Brandon of Oakbrook and Lord Griffiths
agreed in dismissing Mr Ward's appeal.
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