Andrew Dixon v Globaldata PLC

This judgment will be handed down remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:00am on Tuesday 26 August 2025. Master Brightwell:

1. From January 2006 to 31 December 2014 the claimant, Mr Andrew Dixon, worked for a company known as Canadean Limited (“Canadean”). Canadean is a company providing market research in the beverage industry. In September 2010 the defendant, Progressive Digital Media Group plc, since 2016 known as GlobalData plc, acquired Canadean.

2. This claim concerns the exercisability of share options granted to the claimant, in the defendant company’s unapproved employee share option plan 2010 (“the Plan”) during his period of employment within its group of companies. The claimant claims that his options were extended to continue beyond the end of employment and that he validly sought to exercise them in 2020 and 2022, and seeks an order for specific performance or damages accordingly. In the alternative, he claims a remedy relying on proprietary estoppel.

3. Before explaining the issues to arise, it is convenient to set out the factual background leading up to the termination of the claimant’s employment with Canadean.

4. Following the defendant’s acquisition of Canadean, on 1 January 2011, the claimant was issued with 400,000 ordinary share options in the Plan.

5. In September 2014, the claimant was informed by his line manager, Mr Tim Royston-Webb, that he was being let go from his employment. Mr Dixon’s team was not on track to meet Canadean’s strategic targets, and it had earlier been indicated to him that if performance did not improve his employment may be at risk. The company’s HR department then sent him a draft settlement agreement, which made no reference to his stock options.

6. After the claimant made some internal complaint about the way he had been treated, he met in late September 2014 with Mr Simon Pyper, then Chief Executive Officer of the defendant. Mr Dixon gives evidence that, following Mr Pyper’s intervention, he was requested to stay in post until the end of December 2014 (having initially been asked to leave at the end of September 2014) and asked to agree various restrictive covenants, including not working for any competitors for four months after the end of his employment.

7. In evidence, Mr Dixon said the following, which was not challenged in cross-examination: ‘30. I recall very definitely that Simon did not caveat his assurances regarding my options. There were no time limits or any other conditions imposed upon my options, nor any discussion regarding Simon needing any further approval from anyone in the Defendant. I do not recall the phrase “vest in line with current conditions” … or any similar words being said by Simon.

31. It was not a long meeting and my main takeaway was that I could keep my options after leaving CL. My understanding (at the time and still to this day) was that, subject to my options hitting the relevant (GD) EBITDA targets in the future, they would vest and I would be able to exercise them. It was as simple as that and I did not overthink it whatsoever. I did not think about (nor did I look at any time at) the Plan rules and they were not mentioned. I took Simon's offer/assurances at face value and assumed that I would be entitled in the future to what he said I would be entitled to.’

8. Following that meeting, on 29 September 2014 Mr Pyper sent an email to Mr Dixon, attaching a letter in the following terms. The email was copied to Mr Paul Downes, then the Chief Operating Officer of the defendant company, and read simply, ‘I hope the attached meets with your agreement’. “Compromise Agreement – Amendment Whilst I fully support the decision as detailed in Tim Royston-Webb’s email to you (29 August 2014), I am of the view that the matter was indelicately handled and was certainly not conducted in a manner which recognised your seniority and many years of loyal service. For this, I offer my sincere apologies. With regards to our conversation this morning and subject you [sic] agreeing to extend your termination date to 31 December 2014, I can confirm the following:

1. Restcitive [sic] covenants will extend to four months post your termination date.

2. The 44,000 of outstanding share options will be added to your compromise settlement and will vest in line with current conditions.

3. All other conditions remaind [sic] unchanged. I trust that the above is agreeable to you. Yours sincerely, Simon Pyper CEO Progrssive [sic] Digital Media plc”

9. Mr Dixon goes on his witness statement to say this: ‘36. I have refreshed my memory regarding the terms of the letter. My understanding at the time (and to this day) is that the letter reflects our discussion earlier that day (save for the fact that I do not recall Simon mentioning anything to do with my options “vesting in line with current conditions”, as is stated in the letter). That sentence did not, and to this day, does not, really mean anything to me. I did not question it at the time or seek to understand what it meant. I simply understood that I would be allowed to retain all my rights in my share options as if I was an employee, and cash them in when the relevant EBITDA targets were hit in the future, just like everyone else who had options and still worked for CL or the Defendant.’

10. On 3 October 2014, four days after he had been sent the letter from Mr Pyper, Mr Dixon and Canadean entered into a Settlement Agreement. This included provision, consistent with the letter, providing for Mr Dixon to be subject to restrictive covenants, and clause 16 said as follows: ‘The Employee shall retain his entitlement to 44,800 share options in Progressive Digital Media Group PLC's Share Option Scheme following the termination of his employment.’

11. It is to be borne in mind that Canadean, the other party to the Settlement Agreement, was not the defendant, albeit that it was in the same group of companies.

12. Mr Dixon claims to have entered into the Settlement Agreement in reliance on assurances provided to him by Mr Pyper on behalf of the defendant. In that regard, he says this: ‘39. I relied on Simon's assurances (particularly the assurance that I would be allowed to keep my share options after leaving CL) when I signed the Settlement Agreement, giving up all my employment rights, agreeing to stay longer, and to the restrictive covenants. I assumed that, because the assurances (particularly regarding my share options) were included in the Settlement Agreement (which had been signed by me and by Simon) they were watertight. I had no reason to disbelieve those assurances.

40. If I had not agreed to extend my employment from September to December 2014, I would definitely have gone straight back into employment in October 2014. I had been headhunted and made an offer by Euromonitor International Limited in July 2014 (while I was still at CL), but I decided not to take up the offer and to stay at CL at the time. I believe this highlights that I was an attractive proposition to many businesses at that time, with my wealth of experience and excellent client relationships, and therefore believe that I could have obtained a new job quite quickly and easily.

41. If I had not agreed to the restrictive covenants (primarily the covenant not permitting me to work for any competitors in the world for 4 months) I would likely have targeted competitor companies and gone straight back into employment in January 2015 (possibly after taking a small amount of leave). As above, I consider that I was still a very attractive candidate in January 2015.

42. In actuality, and because I could not work for any of GD's competitors (which effectively meant all companies in my industry) because of the restrictive covenants, my (then) fiancé and I decided to go travelling in the intervening period and we got married in March 2015.’

13. I set out the relevant provision of the Plan rules below. They generally provide for an employee’s options to cease to be exercisable as soon as they are given notice of termination of employment, but the defendant has discretion by rule 7.1 to extend the period when they may be exercised. The claimant contends that his options were extended and that what Mr Pyper said and wrote to him shows that the defendant exercised a discretion under rule 7.1 of the Plan, such that he was entitled to exercise those options, as he later did or purported to do.

14. The key issues to arise on the claimant’s claim are, accordingly, the following: i) Did the defendant exercise or purport to exercise its discretion to extend the period when the claimant’s options in the Plan could be exercised, to extend beyond the end of his employment and, if so, on what terms? ii) Can such an exercise of discretion in Mr Dixon’s favour be construed from what was proposed to him? iii) If the defendant did so exercise its discretion by the actions of Mr Pyper, did Mr Pyper have actual or ostensible authority to do so? iv) If there was no exercise of discretion, can Mr Dixon establish his entitlement to a remedy based on proprietary estoppel? v) Does the exclusion clause in rule 14 of the Plan prevent Mr Dixon from pursuing his claim, if it would otherwise succeed?

15. In the event that the claimant succeeds, either by showing that the ability to exercise his options was extended by the defendant, or through estoppel, the question of remedy will arise. The witnesses

16. Mr Nicholls KC began his closing submissions, in response to Mr Parfitt, by saying there were no disputed facts in this case, but a dispute about how the facts fall to be applied to the questions of law that arise. Save for the defendant’s assertion that Mr Dixon was in a material sense a ‘bad leaver’, and in light of my finding on the primary issue to arise, I agree with Mr Nicholls’ statement in this regard.

17. The only witnesses were the claimant himself, and for the defendant, Mr Lilley. Mr Lilley has been the defendant’s Chief Financial Officer since 2018, and was previously employed by the defendant in a financial role. He had no contemporaneous involvement in the negotiations over Mr Dixon’s departure in 2014.

18. The claimant was cross-examined fairly briefly, and his honesty was not impugned. Some of that questioning concerned Mr Dixon’s knowledge of the Plan rules and as to the reasons why other option holders were entitled to exercise their options later. I do not consider that relevant to whether his options lapsed or not.

19. Mr Nicholls did suggest to Mr Dixon that he did not leave Canadean on good terms. In his statement, Mr Dixon gives evidence about the key business relationships he built up, particularly with Coca-Cola, an important client to both Canadean and to the defendant. He also explains that there was nervousness within the company about his departure, and that he travelled to Coca-Cola’s headquarters in Atlanta after the date of his Settlement Agreement, in order to inform his contacts about his departure face to face. He indicates that there was frustration there about the lack of client consultation before his departure was announced, and also that he ensured completion of an annual study for Coca-Cola before he left. None of that evidence was challenged by the defendant. In those circumstances, and where the claimant remained in employment for longer than initially required for the benefit of both Canadean and its parent, the defendant, I accept that the claimant left Canadean on good terms.

20. Mr Lilley was cross-examined somewhat more extensively. Some of Mr Parfitt’s cross-examination sought to explore Mr Lilley’s evidence as to whether the defendant ever exercised its power under the Plan to extend Mr Dixon’s options. The real point there was to explore why there was no evidence from anyone who had been directly involved at the time. Mr Lilley was directly cross-examined mainly about the processes he followed in permitting the exercise of options under the Plan, and why Mr Dixon’s attempt to exercise options had been rejected.

21. One of the issues on which Mr Lilley was cross-examined was the lack of documentation pre-dating 2019. There was a limit to the data available to the defendant from that period. A letter from the defendant’s solicitors to the claimant’s solicitors dated 27 February 2025 on the question of disclosure explained that the defendant’s IT systems had migrated to Microsoft 365 in 2019, and then said: ‘As previously explained, the Defendant did not have the facilities to back-up and store the data of former employees on a permanent basis. As a result, historic data was held in accordance with data retention guidelines, before the storage tapes were rewritten in order to facilitate the storage of more recent data, rendering the previous data no longer extant and, thus, irretrievable. This means that no data exists prior to 2019 with respect to the specified custodians, with one exception: an email PST file related to Simon Pyper was stored on the old servers. The reason for this is that Simon Pyper was the previous CEO of the Defendant, and his data was, therefore, retained for reference purposes.’

22. One effect of this was that, when Mr Dixon appeared in 2020, limited records were available to the defendant. For instance, Mr Lilley had to ask Mr Dixon for a copy of his Settlement Agreement. Mr Lilley was patently candid about the limitation of the defendant’s documentation. He accepted that when Mr Dixon’s options were removed from the spreadsheet or option tracker (mentioned further below), clause 16 of his Settlement Agreement probably was not checked, and he accepted that the position would have warranted further investigation if it had been considered.

23. Mr Lilley was in my view a patently honest witness, and it was not suggested otherwise. He understood and respected the limits of his knowledge of what had happened in 2014 and readily accepted shortcomings in the defendant’s records, such as the lack of knowledge, e.g. whether there were other relevant settlement agreements of which he was unaware. The Plan

24. The Plan, approved by shareholder resolution on 27 April 2010, provides for the grant of options to eligible employees (as defined) to obtain ordinary shares in the capital of the defendant company. Rule 2 of the Plan sets out the relevant provisions governing the grant of options in the Plan.

25. The provisions which were discussed in the most detail at the hearing were those in rules 6.3 and 7.

26. Rules 6.1 to 6.3 provide as follows: ‘ 6. EXERCISE OF OPTIONS 6.1. Earliest date for exercise of Options Subject to Rules 7 and 8, an Option may not be exercised earlier than the latest of: 6.1.1. in relation to the Plan Shares in respect of which the Option is being exercised, the relevant date specified in the Option Certificate under Rule 2.4; and 6.1.2. the date on which the Grantor determines that the Performance Target and any further condition imposed under Rule 5.1, in their original form or as substituted or varied from time to time, have been satisfied or waived. 6.2. Latest date for exercise of Options Notwithstanding any other provision in the Rules, an Option may not be exercised later than the tenth anniversary of the Grant Date and, to the extent not exercised by that time, the Option shall lapse immediately. 6.3. Persons who may exercise Options Subject to Rule 7, an Option may be exercised only while the Option Holder is in Relevant Employment and if an Option Holder ceases to be in Relevant Employment, any Option granted to him shall lapse immediately. This Rule 6.3 shall apply where the Option Holder ceases to be in Relevant Employment in any circumstances (including, in particular, but not by way of limitation, where the Option Holder is dismissed unfairly, wrongfully, in breach of contract or otherwise). An Option Holder may not exercise an Option if he has given or been given notice of termination of employment such that he will cease to be in Relevant Employment at the end of the notice period.’

27. Rule 7.1 then provides: ‘ 7. EXERCISE OF OPTIONS IN SPECIAL CIRCUMSTANCES 7.1. Special circumstances Notwithstanding Rules 6.1 and 6.3, the Grantor may, at its discretion, (provided such discretion is exercised within two months after the cessation of employment), allow an Option Holder who has ceased to be in Relevant Employment for any reason to exercise his Options at any time during such period and on such basis and subject to such conditions as the Grantor determines. To the extent not so exercised or if such exercise is not permitted, the Options shall lapse at the expiry of such period.’

28. Consistent with the provisions above, rule 10 provides that options lapse inter alia on the tenth anniversary of their grant date or, if earlier, when the Option Holder ceases to be in Relevant Employment or when it is provided by (i.e. on an exercise of the power at) rule 7.1 that it shall lapse.

29. The defendant relies on rule 14, headed, ‘Relationship of Plan to Contract of Employment’, which provides: ‘ 14. RELATIONSHIP OF PLAN TO CONTRACT OF EMPLOYMENT 14.1. Contractual Provisions Notwithstanding any other provision of the Plan: 14.1.1. the Plan shall not form part of any contract of employment between any Group Member and an Eligible Employee; 14.1.2. unless expressly so provided in his contract of employment, an Eligible Employee has no right to be granted an Option; 14.1.3. the benefit to an Eligible Employee of participation in the Plan (including, in particular but not by way of limitation, any Options held by him) shall not form any part of his remuneration or count as his remuneration for any purpose and, for the purposes of his contract of employment, shall not be pensionable; and 14.1.4. if an Eligible Employee ceases to be in Relevant Employment, he shall not be entitled to compensation for the loss of any right or benefit or prospective right or benefit under the Plan (including, in particular but not by way of limitation, any Options held by him which lapse by reason of his ceasing to be in Relevant Employment) whether by way of damages for unfair dismissal, wrongful dismissal, breach of contract or otherwise.’

30. In accordance with the Plan rules, Mr Dixon was provided with an ‘Option Certificate’ signed and dated on 1 December 2010 but with the grant date stated to be 1 January 2011. This provided that he was to have 400,000 shares subject to option, to be exercised at any time subject to satisfaction of the performance targets set out in the schedule attached to the certificate. The certificate states, consistent with the Plan rules, that ‘the Option may not ordinarily be exercised later than ten years after the grant date’.

31. The Schedule of Performance Target and other Conditions of Exercise attached to the Option Certificate explains the imposition of performance targets in accordance with rule 5 of the Plan in this way: ‘1.2 The Company wishes to have regard to the interests of all shareholders in deciding what performance targets are set and the aim is to set targets which relate to a sustained improvement in the real financial performance of the Company and it is the intention that the performance condition attaching to the Option will therefore be based on achievement of Normalised EBITDA targets as set out in section 2 below.’

32. So far as material, section 2 of the schedule provides: ‘ 2 THE PERFORMANCE TARGET The Option granted under the Plan has been granted subject to the conditions set out below. 2.1 Basic condition The Option will not Vest and be capable of exercise unless and until the published consolidated results of the Company show that the Normalised EBITDA in any three consecutive financial years within the seven financial years beginning with the financial year ended 31 December 2010 is equal to or exceeds the EBITDA targets set out in section 2.2 below. 2.5 Administration and Variation The Board of Directors will meet as appropriate and consider whether the performance condition has been met and, if it has, it will state this and what proportion of the Option has Vested as a result. Once the condition has been met the Option will be exercisable in accordance with the Plan Rules (and any other applicable regulations such as the UK Listing Authority's Model Code) at any time regardless of future performance. The Board of Directors in its discretion may waive, vary or amend the performance condition, but this discretion shall only be exercised if events happen which cause the Board of Directors to consider that a waived, substituted, varied or amended performance condition would be a fairer measure of performance and would be no more difficult to satisfy. 2.6 Early Termination Under Rule 7, the Company may allow an option holder who has ceased to be employed within the Group to exercise their option notwithstanding that cessation of employment would normally cause the option to lapse. Where the Company does permit the option to be retained and exercised in such circumstances, the period over which the performance condition is measured will ordinarily be treated as terminating on the date of cessation of employment and the proportion of the option which Vest will ordinarily be determined by reference to Normalised EBITDA as shown in the published results for the best three consecutive years (or such shorter period where employment terminates sooner than three years) from the financial year ended 31 December 2010 to the end of the financial year preceding the date of termination of employment.’

33. The stated growth targets in paragraph 2.2 of the schedule are EBITDA (i.e. earnings before interest, taxes, depreciation and amortisation, subject to adjustment in accordance with paragraph 2.3) of £10 million, £15 million and £20 million, with 20% of the option vesting at the first figure, and 40% at each of the subsequent figures.

34. It is common ground that, following a share consolidation in 2013, the claimant was left with 56,000 options and that the growth targets were met in 2013 such that he was entitled to and did exercise his options in relation to 11,200 ordinary shares in the defendant company, leaving him with 44,800 options as at the date when he was informed that his employment with Canadean was to be terminated.

35. It is also common ground that the basic condition, set out in paragraph 2.1 of the schedule and set out above, was varied by the company by 2013. After the claimant’s employment had ended

36. Despite the requirement in paragraph 2.1 of the Option Certificate that the EBITDA performance targets be exceeded in three consecutive years, in practice the Plan was operated to apply where the target was met in any one year, thus enabling tranche 1 options to be exercised based on 2013 results alone. The performance targets were then later amended, and tranche 2 was sub-divided into tranches 2A and 2B such that, by 2018, the normalised EBITDA targets were £32 million (2A), £41 million (2B), and £52 million (3). It is implicit in this, and in the way in which option holders were permitted to exercise their options, that the requirement for targets to be met by no later than 2017 was also amended.

37. Mr Dixon diligently checked the defendant’s financial results each year after his departure from Canadean. It is clear that he subjectively understood that his share options had not lapsed and that he would remain entitled to exercise them. Whilst he accepted in cross-examination that he did not read the Plan rules when the Settlement Agreement was negotiated, and that he was not familiar with the provisions of rule 7.1, his subjective understanding was not challenged.

38. He indicates that he became aware on 6 March 2020, on reading the defendant’s annual report for the previous year, that the tranche 2 EBITDA targets had been met. After several exchanges with Mr Graham Lilley, the defendant’s Chief Financial Officer, and others, the defendant indicated to Mr Dixon that his options had lapsed when he left Canadean’s employment, Mr Lilley writing to him on 29 April 2020: ‘As all award holders of the Company's share option scheme are well aware, and as clearly set out in the rules of the share option scheme, the Remuneration Committee's approval is a mandatory requirement to grant a share option award or to vary the terms of the award. The continuing eligibility of an award following the termination of an award holder's employment also expressly requires the Remuneration Committee's approval.’

39. After taking legal advice, and after communications between the parties’ solicitors, Mr Dixon sent an exercise notice in relation to tranche 2 on 15 December 2020 in exercise or purported exercise of his rights under the Plan.

40. Having seen that the defendant had extended the right to exercise the third tranche of options by an additional year, Mr Dixon exercised or purported to exercise rights in relation to tranche 3 by an exercise notice sent on 1 April 2022.

41. No point is taken on the form of notice served by the claimant. That is not the objection taken by the defendant to the claim.

42. Mr Lilley’s evidence on behalf of the defendant is that a record is maintained by the defendant of those option holders who continue to hold options capable of being exercised. In his witness statement, he said this: ‘17. I first became aware that Mr Dixon believed that he had retained his share options beyond the Termination Date [i.e. 31 December 2014], and that they were capable of being exercised, when he emailed me on 6 March 2020. I was surprised by the email because I had never seen any indication that Mr Dixon had been given good leaver status by the Board. Where the Board approves good leaver status the leaver’s name features on a spreadsheet that we use to keep track of option holders internally (the “Share Option Tracker”). Mr Dixon’s name was not listed on that spreadsheet. Where an employee leaves employment without good leaver status, we no longer track or record their options in this spreadsheet. This spreadsheet is reviewed twice a year for financial reporting purposes by the HR department and myself. The understanding of both myself and the HR department (for the entire period from his termination of employment to now), as reflected in this spreadsheet, is that Mr Dixon had not retained his share options post-termination. I recall speaking to Peter Harkness prior to responding to Mr Dixon’s email, who at that time was the head of the Remuneration Committee. He confirmed to me that at no time had the Board been asked to approve Mr Dixon retaining his options, and he had no awareness of the matters set out in the September Letter or clause 16 of the Settlement Agreement. I checked this against the documentary records and there was no record of any exercise of the Rule 7.1 power by the Board in favour of Mr Dixon, or even a record about the possibility of Mr Dixon being permitted by the Board to retain his options.’

43. There is no reference to ‘good leaver’ or ‘bad leaver’ status in the Plan rules or in any documentation provided to Mr Dixon concerning his own options. The concept of a ‘Bad Leaver’ was introduced as an amendment to the Plan in 2022 for those who had deferred their right to exercise options. It was there defined narrowly, to exclude the right to exercise for those who were summarily dismissed, in continuing breach of their contract of employment or had breached post-termination restrictive covenants.

44. Mr Lilley explained that option holders under the Plan, whose options were due to lapse in January 2021, were permitted to exercise their options outside the ten-year period stipulated in the Option Certificate. He said: ‘26. …. This was limited to Award 1 option holders who were current employees of the GlobalData group and a small number of former employees who were granted good leaver status, including employees of related party companies of the Defendant (the “Related Party Employees”). These individuals are shown on the Share Option Tracker, on the tab entitled “Analysis of Active Options”, from the sub-heading “Part of PLC, moved to private to reduce Related Party transactions” to the final row.’

45. Consideration of the Share Option Tracker or spreadsheet reveals that the individuals other than current employees were mostly former employees who had departed in order to work for another company controlled by Mr Michael Danson, majority shareholder in the defendant, who was its Chairman in 2014 and is now its Chief Executive Officer. Mr Pyper himself also retained options. Mr Joe Terreni, another former employee, also retained options after his departure; his settlement agreement provided that he would retain his options ‘in lieu of [his] existing grant’, to ‘vest on the Tranche 3 performance trigger being satisfied’. Mr Parfitt suggested that roughly 5/9ths of the subsisting options showing on the spreadsheet and due to lapse in January 2021 were held by current employees, and 4/9ths by former employees. It was not suggested that this calculation of the split was inaccurate. The spreadsheet shows Mr Dixon’s options having lapsed after 2014.

46. Mr Lilley’s evidence is that the revised performance target for tranche 3 was not going to be met in 2020, i.e. before the options granted in 2011 would lapse in accordance with rule 6.2 of the Plan rules. This was because of the effect of the COVID pandemic on the defendant’s operations.

47. The defendant created a new plan in 2020, which gave those who had extant, expiring options at the end of the term of the Plan an equivalent number of new share options in the new plan. Mr Dixon was not included. As with the tranche 2 exercise, Mr Lilley’s evidence was that he was advised that Mr Dixon’s options had not been extended beyond his departure from Canadean, and so he was not included in the new 2020 plan.

48. By the time the defendant came to consider how to give effect to the third tranche of entitlement, which was not to be met before the expiry of extant options granted in January 2011, the defendant was very much aware of Mr Dixon’s claim. Thus, Mr Lilley wrote to Mr Danson on 31 July 2020, saying the following in relation to that point: ‘2011 scheme – Technically the scheme expires in Jan 2021, a year earlier than the target is expected to be achieved. I think we probably need to get the Remco to do something on this for the scheme to continue/ do a new scheme for one year replacing the existing. Need to think about the accounting for this (so it doesn’t blow up a huge charge) but would be a good way to “cleanse” the option list of people who are no longer here and cannot come out of the woodwork as we have seen with Meek and Dixon!’

49. The other individual referred to is Mr Mark Meek, CEO of the defendant until 1 July 2012. In his evidence on the first day of the trial, Mr Lilley indicated that he was unaware of a settlement agreement with Mr Meek, but a copy of such an agreement dated 5 April 2012 was disclosed by the defendant on the second day of the trial, together with an undated and draft copy of Mr Pyper’s settlement agreement and a complete copy of that entered into with Mr Terreni on 24 May 2019.

50. Further, a document headed ‘Review of the 2010 Share option Scheme’ and dated 3 December 2020, referred to the previous remuneration committee meeting on 17 November 2020, and noted the expiry of options on 1 January 2021. The paper went on: ‘The Remco noted that management had explored a number of alternative solutions with Reed Smith, on the assumption that the Remco/Board approve that this Group should still retain or get replacement share options i. letting those options lapse in accordance with the terms of the plan and then separately establishing a new option scheme for current employees with a performance condition equivalent to the current “third milestone”; ii. amending the option plan to effectively extend the term of the 2011 options for current employees; or iii. terminating the current plan and separately establishing a new scheme for all current employee option holders.’

51. Mr Lilley accepted in evidence that the proposal that was approved was for all option holders whose names appeared on the spreadsheet to be included in the new plan. That included the former employees on the list, but not Mr Dixon, whose claim was known but whose options appeared from the spreadsheet to have lapsed when he left employment.

52. In the event that the claimant succeeds, accordingly, questions will arise as to his entitlement to the value of the tranche 2 exercise. I did not understand the defendant to deny that, if the options were extended to the end of the ten-year term, Mr Dixon would have been entitled to exercise them, because the revision of the performance targets to enable that exercise (as tranche 2A and 2B) was for all existing option holders. The correct date for valuation is, however, not agreed. The claimant also contends that the defendant either in fact included the claimant within the new scheme created to give effect to the tranche 3 entitlements, alternatively that his exclusion from the new scheme was irrational within the meaning of Braganza v BP Shipping Ltd [2015] 1 WLR 1661 . Did the claimant’s options lapse?

53. The material questions are whether the defendant exercised its discretion to extend the period when the claimant could exercise his options (and, if so, on what terms) and, if so and the relevant action was taken by Mr Pyper, whether Mr Pyper had authority to do so. The question whether there was an exercise of discretion is logically prior to that of whether the person carrying out the discretion had authority to do so. There is no document in this case expressly stating that it is or purports to be an exercise of the rule 7.1 power. The questions whether Mr Pyper did in fact purport to exercise the power on behalf of the defendant and, if so, whether he was authorised to do so are accordingly interlinked.

54. The claimant’s primary case is that, as a result of the way in which his Settlement Agreement was negotiated with Mr Pyper and agreed, the defendant made an exercise of discretion in his favour, pursuant to rule 7.1 of the Plan. Paragraph 14 of the amended particulars of claim sets out the claimant’s position in this way: ‘14. The Defendant, as Grantor, exercised its discretion in favour of Mr Dixon pursuant to Rule 7.1 of the Plan’s Rules. That there was an exercise of this discretion was apparent when Mr Pyper proposed the arrangements on 29 September 2014 (both the earlier oral proposal and the later written proposal) which were then incorporated into the Settlement Agreement. The effect of this exercise of discretion was to disapply the restriction in Rule 6.3 of the Plan’s Rules in relation to Mr Dixon, notwithstanding that he was going to be leaving his Relevant Employment with CL. The Defendant permitted Mr Dixon to retain his share options and, in the event that the exercise conditions were subsequently met, Mr Dixon would be entitled to exercise them.’

55. In the re-re-amended defence, the defendant pleads that its remuneration committee was authorised to exercise the power at rule 7, that such committee made no exercise of the power, and that Mr Pyper was not authorised to exercise the power. Paragraphs 3 and 5 of the re-re-amended reply make the following points relevant to an understanding of the claimant’s case as to authority. ‘3. …. (b) Although it is admitted that the Defendant was not a party to the Settlement Agreement, clause 16 of the Settlement Agreement is evidence of and demonstrates the exercise by the Defendant of the discretion under Rule 7.1 of the Plan which allowed Mr Dixon to continue to hold share options notwithstanding the termination of his employment. (c) This exercise of discretion was apparent from the discussion and letter from the Defendant’s CEO Mr Pyper on 29 September 2014. (d) The Defendant’s CEO signed the Settlement Agreement on behalf of CL [i.e. Canadean]. The incorporation of clause 16 into this Settlement Agreement was not a pointless exercise by CL as a stranger to the Plan, but proof of a valid act undertaken by the Defendant. It is significant that this proof occurred in a document signed on behalf of CL by the same person who was the CEO of the Defendant and had written the 29 September 2014 letter on the Defendant’s behalf. ….’ ‘5. …. (a) Mr Pyper had actual, alternatively ostensible, authority to exercise the discretion under Rule 7.1, as the CEO of the Defendant and the person negotiating on behalf of the Defendant and CL regarding the terms of Mr Dixon’s departure. Mr Pyper did purport to act as if he had such authority, as is clear from the proposal he made in the 29 September 2014 letter and clause 16 of the Settlement Agreement which he signed. (b) As to paragraph 13.1(b)(ii) of the Defence, the 29 September 2014 letter was evidence of an exercise of the discretion under clause 7.1 of the Plan. It did not refer to the clause, but its only possible effect was reliant on an exercise of that discretion. (c) As to paragraph 13.1(b)(iii) of the Defence, the 29 September 2014 letter was evidence of an exercise of the discretion under clause 7.1 of the Plan. The exercise of discretion was, perhaps, conditional on Mr Dixon’s acceptance, but it was not (in terms of its effect under the Plan) an offer, still less a mere “proposal”. It was not conditional on any approval by the board of the Defendant or its remuneration sub-committee.’

56. In commencing his closing submissions, Mr Parfitt submitted that this is a claim about enforcing a bargain. The claimant, however, does not plead that as a result of the facts relied on he entered into a new contract with the defendant upon entering into the Settlement Agreement with Canadean, or that his existing contractual relationship with the defendant in accordance with the Plan rules was varied absent an exercise of discretion in his favour. He pleads that the defendant exercised the rule 7.1 power in his favour. His primary case clearly relies upon there having been such an exercise, and the submissions at trial proceeded accordingly.

57. The claimant’s argument proceeds in this way. The power in rule 7.1 is to be exercised by the Grantor. In relation to an option granted by the company, the Grantor is defined by rule 1.1.15 as the Board. The Board is then itself defined by rule 1.1.5 as ‘the board of directors of the Company or a duly authorised committee thereof’. The defendant’s articles as they stood in 2014, consistent with Table A, permitted delegation of any of the board’s powers, authorities or discretions to a committee of one or more other persons. It is also clear on authority that such delegation may be made to an individual: see Re Taurine Co Ltd (1883) 25 ChD 118 .

58. Mr Parfitt submitted that Mr Pyper had either actual or ostensible authority to exercise the power. He relied on the decision of the Court of Appeal in Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 and, in particular, to the summary of Lord Denning MR at 583: ‘I need not consider at length the law on the authority of an agent, actual, apparent, or ostensible. That has been done in the judgments of this court in Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd [ [1964] 2 QB 480 ]. It is there shown that actual authority may be express or implied. It is express when it is given by express words, such as when a board of directors pass a resolution which authorises two of their number to sign cheques. It is implied when it is inferred from the conduct of the parties and the circumstances of the case, such as when the board of directors appoint one of their number to be managing director. They thereby impliedly authorise him to do all such things as fall within the usual scope of that office. Actual authority, express or implied, is binding as between the company and the agent, and also as between the company and others, whether they are within the company or outside it. Ostensible or apparent authority is the authority of an agent as it appears to others. It often coincides with actual authority. Thus, when the board appoint one of their number to be managing director, they invest him not only with implied authority, but also with ostensible authority to do all such things as fall within the usual scope of that office. Other people who see him acting as managing director are entitled to assume that he has the usual authority of a managing director. But sometimes ostensible authority exceeds actual authority. For instance, when the board appoint the managing director, they may expressly limit his authority by saying he is not to order goods worth more than £500 without the sanction of the board. In that case his actual authority is subject to the £500 limitation, but his ostensible authority includes all the usual authority of a managing director. The company is bound by his ostensible authority in his dealings with those who do not know of the limitation. He may himself do the “holding-out.” Thus, if he orders goods worth £1,000 and signs himself “Managing Director for and on behalf of the company,” the company is bound to the other party who does not know of the £500 limitation… .’

59. Mr Parfitt acknowledged that, for there to have been actual authority, the board of the defendant would have needed to make an express decision. He did not suggest that actual authority to exercise the rule 7.1 power might be implied merely from Mr Pyper’s appointment as CEO; reliance was placed instead on the circumstances of the case. Accordingly, the submission is that Mr Dixon was given every indication that Mr Pyper was fully authorised to exercise the rule 7.1 power. He thus had ostensible authority to exercise it and also to agree the revised settlement deal with Mr Dixon.

60. Pausing there, I would note that Mr Nicholls accepted that it would in theory have been possible for an individual to be given actual authority to exercise the rule 7.1 power. The defendant’s case is that the evidence does not support the conclusion that Mr Pyper was so authorised or that he in fact did exercise the power.

61. With the above points on authority in mind, the claimant’s case on the exercise of rule 7.1 on the facts proceeds further as follows.

62. As at September 2013, the claimant had already validly exercised his options for the purposes of tranche 1. By paragraph 6.3 of the Plan rules, options normally cease to be exercisable as soon as an option holder is given notice of termination of employment. No further results were to be published before the claimant’s employment within the group was to end, on the basis of the extension of that employment to 31 December 2014. Accordingly, there was no possibility in accordance with the rules as they stood, and the application of the performance targets set out in the option certificate (even as already varied by the company such that the targets required to be satisfied in only one year rather than three years), of the claimant receiving any further benefit before his employment came to an end. And a strict application of paragraph 2.6 of the terms in the option certificate would provide for the period for ascertainment of the performance conditions in the option certificate to end with the termination of employment. Accordingly, submits Mr Parfitt, Mr Pyper on behalf of both the defendant and Canadean must have been offering the claimant something other than what he would have been entitled to merely by his options remaining enforceable until the end of his employment in December 2014.

63. The claimant further relies on the circumstances in which Mr Pyper came to be involved in negotiations. It is, he submits, apparent from the unchallenged evidence and from the face of the 29 September 2014 letter that Mr Pyper stepped in because it was considered that something had gone wrong with the way in which the claimant had been informed that his employment was to end. It is also apparent that the defendant believed that it was in its interests for Mr Dixon’s employment to be extended beyond the initially intimated termination date and that something ought to be offered to him in return for that.

64. The claimant relies also on what was described as a ‘black hole’ in the evidence. This refers both to the absence of documentary evidence from 2014, because the defendant had not retained its records following its change of IT system in 2019, and the absence of evidence, notably from Mr Pyper or from Mr Danson, who must given his position have known what was going on in 2014. There are no contemporaneous records of communications with the remuneration committee, nor any contemporaneous internal email correspondence. Mr Parfitt submitted that I should make adverse inferences from the failure to call evidence from others who would be better placed to comment on what the defendant did in 2014 than was Mr Lilley, who was not directly involved at that time and gave evidence of the defendant’s procedures from information he had acquired later. In particular, Mr Pyper agreed as part of his own settlement agreement on departure from the defendant to assist the defendant in any way, including by preparing witness statements and giving evidence in legal proceedings. Mr Lilley indicated that he had spoken to Mr Pyper following intimation of the claim and the absence of evidence from him should be taken as an indication that he could not give any evidence that was helpful to the defendant and an adverse inference should be drawn from the lack of such evidence.

65. Mr Parfitt made a number of forensic points about the 29 September 2014 letter, and its covering email: i) The fact that it was copied to Mr Downes is significant. Should there be any doubt, this shows that Mr Pyper was not acting on a frolic of his own, but the board should be taken as being fully aware of what he was doing. ii) Both the covering email and the letter invite Mr Dixon to accept an offer that had been made to him. Mr Dixon already had an agreement with the defendant, represented by his options in the Plan. The fact that the terms were agreed with the defendant, represented by the inclusion of clause 16 in the Settlement Agreement with Canadean, is evidence that the defendant must have exercised the rule 7.1 power in the claimant’s favour. iii) The letter appears to have been written in a hurry. There are obvious typographical errors, and the proposed terms (numbered (1) to (3)) are in a different font from the rest of the letter. The proposed terms may have been copied from another document, and this suggests that there were other discussions going on in the background, to which Mr Pyper was party. This also shows that Mr Pyper was not acting on a frolic of his own, and adds weight to the submission that the rule 7.1 power was exercised, as the letter could not be written in the terms in which it was without the exercise of that power.

66. The claimant’s position is that Mr Pyper exercised the rule 7.1 power himself, not by writing the 29 September 2014 letter, but that letter is evidence that the power was so exercised. As I have stressed in setting out this discussion of the claimant’s primary case, Mr Dixon accepts that on such case he must demonstrate that the rule 7.1 power was exercised. His case is that it was exercised by Mr Pyper.

67. Mr Nicholls responded by submitting that any exercise of the power would have to contend with the requirements of rule 7.1 itself. That rule states that any exercise will be to permit the continuing exercise of share options ‘at any time during such period and on such basis and subject to conditions as the Grantor determines’. The Grantor is, as set out above, the Board of the defendant or its appointed committee. If Mr Pyper was the appointed committee then, in order to exercise the power, he would have had to determine the matters required by the rule.

68. Two points are then derived from this analysis. First, the failure or apparent failure of Mr Pyper to specify the basis on which the claimant’s options might be exercised shows that he never purported to exercise the power, and/or was not authorised to do so (and I will mention ostensible authority separately further below). Secondly, the lack of determination on these points means that even if Mr Pyper was authorised to and did purport to exercise the rule 7.1 power, his exercise was invalid on the grounds of uncertainty. No conditions were ever determined, unlike in the case of Mr Pyper’s own settlement agreement (which was with the defendant and not with Canadean), which expressly included an exercise of the rule 7.1 power, including a statement of the basis on which it could be exercised.

69. Mr Parfitt responded to the second point on certainty, that it was a matter of interpretation, and that the usual principles of contractual interpretation should be applied to ascertaining what was intended. On the claimant’s case, what was intended by the words of the 29 September 2014 letter – ‘will vest in line with current conditions’ – is that the claimant would be left in the same position following the end of his employment as he was before he was given notice of termination of his employment, and therefore in the same position as all the other initial option holders granted options in January 2011. This would leave him subject to any revisions in entitlement applied by the company to other option holders, and not subject to the unrevised initial performance targets etc.

70. Mr Nicholls in turn responded to this interpretation by contending that the words in the letter mean no more than that the options would continue in existence until the end of Mr Dixon’s employment, at the end of 2014. As I have noted, under rule 6.3 of the Plan, options cease to be exercisable as soon as an option holder is given notice of termination of their employment. This would mean the disapplication of that rule. In practice, no benefit could accrue to Mr Dixon between September and December 2014, no further results would be announced in that period, and Mr Dixon would be restricted by paragraph 2.6 of the terms in the Option Certificate to reliance on results announced in previous years.

71. The difficulty with an approach to the issue relying on the principles concerning the interpretation of contracts or other instruments is that it relies on the 29 September 2014 letter as itself being an exercise of the rule 7.1 power, and then seeks to apply the canons of construction to that letter. But the letter is not, on the claimant’s case, an offer by the defendant to enter into a contract or to vary its existing agreement with him. It is an offer by Canadean (on whose behalf Mr Pyper was acting) to enter into the Settlement Agreement, which offer was accepted. Further, the claimant’s statements of case eschew the argument that the letter itself was an exercise of discretion by Mr Pyper acting on behalf of the defendant. Paragraph 5(c) of the amended reply pleads that the letter is evidence of an exercise of the discretion under rule 7.1 of the Plan. If the alleged exercise was undocumented, then it is unclear to what the principles of construction could apply. To repeat, it is not the claimant’s case that the words used in the letter became part of a contract; it is his case that they evidence the exercise of the rule 7.1 power. The rules as to the interpretation of contracts are used to construe the wording of documents. Whilst I agree that it is a relevant question whether the 29 September 2014 letter evidences the exercise of the rule 7.1 power, I do not consider that an interpretation of the words of the letter can determine whether the power was exercised.

72. I consider, rather, that the evidence as a whole supports the defendant’s case, that the rule 7.1 power was not exercised. Mr Lilley was not challenged on his evidence that it was the remuneration committee of the board, or the full board, which exercised the power. The other settlement agreements belatedly disclosed show that it was generally recognised, at least at the later times when they were executed, that a conscious exercise of the power was required, and that the terms on which the options could in future be exercised required to be determined and set out. Mr Lilley also gave evidence that, from the outset, Mr Dixon’s name was removed from the spreadsheet of option holders, suggesting that the then holder of the spreadsheet was not informed that a decision had been made that Mr Dixon’s options should continue. Mr Lilley was cross-examined as to what the remuneration committee would have done if the matter had been brought to its attention at the time when Mr Dixon left the company, and he readily accepted that it would have warranted proper consideration. That all points to the need for an exercise of the rule 7.1 power having been overlooked in 2014.

73. Further, it seems to me as a matter of logic that the power would in practice not be exercised before the relevant settlement agreement had been entered into. Whilst in theory the power might be capable of exercise contingently on a satisfactory settlement agreement later being made, the way in which the power was dealt with in the other settlement agreements which were (belatedly) disclosed by the defendant is coherent. In those cases, the rule 7.1 power was expressly exercised within (i.e. at the same time as) the settlement agreement in question, or new options were granted. It was no part of the claimant’s case that Mr Pyper might have exercised the power after he wrote the 29 September 2014 letter; this is said to be evidence of an exercise of the power. In my view that must mean an exercise by the time when that letter was written.

74. I do not consider that this is a point on which I can draw adverse inferences either from the lack of disclosure by the defendant (i.e. from the fact contemporaneous documents are no longer available) or from the failure to call Mr Pyper, Mr Danson or others. The way in which Mr Dixon’s options were treated at all material times as having lapsed, and Mr Lilley’s evidence as to how the tracking of options operates, suggests that the requirement for an exercise of the rule 7.1 power was overlooked by all concerned. It was not the claimant’s case that there was a lost or undisclosed minute of a meeting of the board, or of a signed written resolution, at which the power was delegated by the board to Mr Pyper, or that there was a similarly lost record of Mr Pyper having exercised the power unilaterally.

75. For these reasons, I find that there was no exercise by the defendant of the rule 7.1 power.

76. Strictly, there is no need separately to consider questions of authority. Mr Parfitt appeared, however, to suggest that the fact of an exercise of the power could be discerned in the circumstances of the case by reference to the principles of ostensible authority. He did not strongly press the suggestion that Mr Pyper had been expressly authorised by the board to exercise the rule 7.1 power, i.e. by the board applying its mind to that question and delegating the power in accordance with articles 102 or 103.1 of its articles as then in force. I agree with Mr Nicholls that there is no evidence that the board ever authorised Mr Pyper to exercise the rule 7.1 power as a delegated committee of one.

77. If it were possible to find that Mr Pyper had exercised the power, I accept that such an exercise would likely have fallen within his ostensible authority. See the analysis of Arden LJ in Smith v Butler [2012] BCC 645 at [28]–[30]: ‘28. Mr Dougherty’s proposition is that, in principle, the implied powers of a managing director are those that would ordinarily be exercisable by a managing director in his position. In my judgment, Mr Dougherty’s proposition is correct. In Hely-Hutchinson v Brayhead Ltd , 583, Lord Denning MR held that the board of directors, on appointing a managing director, “thereby impliedly authorise him to do all such things as fall within the usual scope of that office”. Mr Dougherty’s proposition is also supported by the passage that Mr Berragan cited from [1968] 1 QB 549 Gore-Browne on Companies , vol 1, chapter 14, para 14[9]. Another way of putting that point is that the managing director’s powers extend to carrying out those functions on which he did not need to obtain the specific directions of the board. This is simply the default position. ….

29. On this basis, as might be expected, the test of what is within the implied actual authority of a managing director coincides with the test of what is within the ostensible authority of a managing director: see Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd . [1964] 2 QB 480

30. The holder of the office of managing director might today more usually be called a chief executive officer in (at least) a public company. He or she has generally to work on the basis that his appointment does not supplant that of the role of the board and that he will have to refer back to the board for authority on matters on which the board has not clearly laid out the company’s strategy. He or she would thus be expected to work within the strategy the board had actually set.’

78. This in principle affords wide ostensible authority to a CEO. I consider it probable that a CEO such as Mr Pyper could on the basis of this authority have ostensible authority to exercise a power such as the power at rule 7.1 of the Plan, if that were a necessary part of a transaction. So, if he had executed a written instrument purporting to exercise the power, the option holder would have been entitled to assume that he had been authorised to do so. Delegation to him would have been possible in accordance with the articles of the company, of which the person dealing with the director is deemed to have knowledge.

79. The question whether the CEO had such ostensible authority would arise, however, only if the power was in fact exercised. I agree with Mr Nicholls that that is not something that can be proven through reliance on ostensible authority. It must separately be established that the power was exercised before any question of ostensible authority can arise. Whilst Mr Parfitt did not put the point quite so starkly, his position when boiled down appears to be that, because Mr Pyper might unilaterally have exercised the power and his assurance could be given effect only if it was so exercised, the court should find that the power was exercised as Mr Dixon would have been entitled (if he had been aware of the point) to assume that Mr Pyper had authority to do so, and because he did assume that Mr Pyper did have authority to do whatever was required to give effect to his assurances. I do not consider that an analysis of this kind can show that Mr Pyper did in fact exercise the power, which would have required a conscious decision on his part and an awareness on his part that that is what he was doing.

80. For these reasons, I am not persuaded either that Mr Pyper was actually authorised by the board of the defendant to exercise the rule 7.1 power in favour of Mr Dixon or that he did in fact exercise it on behalf of the company. Accordingly, the questions whether the claimant was included in the tranche 2 options or the new scheme, and the Braganza issue, do not arise. The defendant did not resolve to extend the claimant’s options despite, as I go on to discuss, providing the claimant with an assurance that it would do so. The claim in proprietary estoppel

81. The alternative way in which the claimant pursues his case or, as Mr Parfitt said, his fallback, is through the doctrine of proprietary estoppel.

82. I was referred to the following authoritative formulation of the requirements which a claimant must satisfy, by Lord Scott of Foscote in Thorner v Major [2009] 1 WLR 776 at [15]: ‘15. Lord Walker, in para 29 of his opinion, identified the three main elements requisite for a claim based on proprietary estoppel as, first, a representation made or assurance given to the claimant; second, reliance by the claimant on the representation or assurance; and, third, some detriment incurred by the claimant as a consequence of that reliance. These elements would, I think, always be necessary but might, in a particular case, not be sufficient. Thus, for example, the representation or assurance would need to have been sufficiently clear and unequivocal; the reliance by the claimant would need to have been reasonable in all the circumstances; and the detriment would need to have been sufficiently substantial to justify the intervention of equity. …’

83. Connected to the requirement for detrimental reliance by the claimant on the representation or assurance of the defendant is the requirement for it to be unconscionable for the defendant to resile from the representation or assurance given. Robert Walker LJ put it thus in Gillett v Holt [2001] Ch 210 at 232: ‘The overwhelming weight of authority shows that detriment is required. But the authorities also show that it is not a narrow or technical concept. The detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances. There are some helpful observations about the requirement for detriment in the judgment of Slade LJ in Jones v Watkins 26 November 1987. There must be sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded—that is, again, the essential test of unconscionability. The detriment alleged must be pleaded and proved.’

84. Proprietary estoppel is generally relied on in relation to the acquisition of interests in or over land. It is clear on authority, however, that it extends beyond such interests. I will deal with Mr Nicholls’ objections below, but he did not contend that it was conceptually incapable of extending to share options, or to shares. The claimant relied on Harris v Kent [2007] EWHC 463 (Ch) , where Briggs J held that the claimant in that case was entitled to a remedy in estoppel following his reliance on a representation that he would be entitled to regard himself as the beneficial owner of half of certain shares held by the defendants. His statement, at [121], of how the estoppel arose is strikingly concise. In Yeoman’s Row Management Ltd v Cobbe [2008] 1 WLR 1752 , Lord Scott said at [14] that the doctrine applied to claims to a proprietary right – ‘usually a right to or over land but, in principle, equally available in relation to chattels or choses in action’. This clearly includes rights in or over shares.

85. Consideration therefore turns to the nature of the assurance given by Mr Pyper to Mr Dixon on behalf of the defendant. This was that his share options would vest in line with current conditions, and that he would retain his entitlement to 44,800 options (the latter being the way in which the point was recorded in clause 16 of the Settlement Agreement). As I have indicated above, Mr Nicholls submitted that this offered the claimant nothing more than he was entitled to under the Plan rules read together with the Option Certificate, such that he would be entitled to retain his options until his employment actually came to an end, even though in practice there was no practical possibility of his receiving any benefit in accordance with those rules in that time. Mr Dixon had the benefit of legal advice when negotiating the terms of the Settlement Agreement, and it was his own lookout if the assurance he was given was essentially illusory. For this reason, it was submitted on behalf of the defendant that it has not acted contrary to the representation made by Mr Pyper, and there was no indication that the rule 7.1 power would be exercised in the claimant’s favour or at least that any exercise would be limited in the manner described in this paragraph. Mr Pyper said that the options would be added to the Settlement Agreement and they were so added.

86. I disagree with this analysis. A person in the position of the claimant, who was being asked to extend the time when he worked for the company for three months beyond the period he was initially required to work and to subject himself to restrictive covenants for a period thereafter, upon an assurance that he would retain his existing stock options on current conditions, would understand that he was being offered something of some real value. I also disagree with Mr Nicholls’ characterisation in oral submissions of the claimant’s position as relying on a ‘misrepresentation’ by Mr Pyper. Paragraph 15 of the amended particulars of claim alleges that Mr Pyper made an assurance to Mr Dixon in relation to the continuing right to exercise his options. I consider that what Mr Pyper said purported to be an assurance and falls to be viewed accordingly.

87. The relevant question is what Mr Dixon reasonably understood Mr Pyper, on behalf of the defendant, to have meant through his words and acts: see Thorner v Major at [5]–[6], Lord Hoffman. It is also Mr Dixon’s unchallenged evidence that he understood that he would continue to be entitled to exercise his options after cessation of his employment as if he had continued in employment, i.e. as I have described at [69] above (albeit in a different context). I consider it reasonable for him to have understood the defendant’s assurance in that way: cf. Thorner v Major at [27].

88. Thorner v Major was not a case in a commercial setting, or where the relevant assurances had been made in writing. It involved assurances, characterised as ‘oblique and allusive’ but mutually understood, that the claimant would inherit the defendant’s farm if he continued to work for him without remuneration. It cannot, in my view, be harder to establish a relevant assurance because it is made in writing. This is not a case, like Yeoman’s Row , where parties took the risk that their negotiations, continuing subject to contract, might not lead to a binding agreement between them. Nor do I consider that, in an estoppel case, it is necessary to interpret any material document in accordance with the canons of contractual construction. It is in the nature of an alleged proprietary estoppel that there is no contract to be construed. The court considers not only the words used, but all the material acts of the defendant. It is clear from Thorner v Major that the reasonable understanding of the claimant of the meaning of these words and acts is what counts. See especially at [84].

89. Having said that, it seems to me that Mr Dixon’s understanding of the words used in relation to the share options is also objectively reasonable. This is for three reasons. First, the suggestion that Mr Pyper intended to offer Mr Dixon something which could practically never result in any benefit to him seems objectively improbable in circumstances where Mr Pyper was seeking to persuade Mr Dixon to act in the defendant’s interests. Secondly, and connected with this, Mr Lilley’s palpably honest evidence in cross-examination was that the defendant would not have taken advantage of Mr Dixon, and that it tries to do the right thing by its employees. He accepted that if the remuneration committee had been informed in 2014 of the terms of the Settlement Agreement and that there had been no exercise of the rule 7.1 power, it would not have kept quiet and would have reviewed the position based on what Mr Pyper had said. It was not Mr Lilley’s evidence that the remuneration committee or Mr Danson would necessarily have come to the view then that Mr Dixon’s options would lapse or had lapsed on the termination of his employment. As Mr Parfitt submitted in closing, Mr Lilley accepted that no-one looking at the Settlement Agreement would have thought that Mr Dixon’s options had lapsed. Thirdly, there is no evidence from anyone on behalf of the defendant indicating that their understanding of Mr Pyper’s words and of clause 16 of the Settlement Agreement was as narrow as Mr Nicholls suggests; that is only counsel’s submission. Such evidence might not be admissible for the purposes of contractual construction, but it would be relevant when determining the reasonableness of Mr Dixon’s understanding of what he was told.

90. I would also comment that Mr Dixon’s understanding is consistent with what was later agreed with Mr Pyper in his own settlement agreement. That agreement was that his options would ‘continue to vest in two tranches (50% T2 and 50% T3) in accordance with [the defendant’s] performance targets (as set by [the defendant’s] remuneration committee from time to time) the Scheme Rules, [and] the Option Certificate’. Whilst Mr Pyper’s agreement post-dates Mr Dixon’s by some years, it shows the way in which the defendant understood how options under the Plan could continue to be exercisable following the termination of an employee’s employment. I do not agree that the defendant complied with the assurance by adding the options to the Settlement Agreement. First, the extension of the options merely until the end of 2014 afforded no actual benefit to Mr Dixon and I find that neither Mr Pyper nor Mr Dixon intended the assurance to be so illusory. Furthermore, the options were in no meaningful sense in fact ‘added’ to the Settlement Agreement. They were certainly mentioned in clause 16 but on the defendant’s case (which I accept) the rule 7.1 power was not exercised. Such an exercise of discretion would have been required even for the limited extension to the date of cessation of employment (see rule 6.3 of the Plan).

91. Mr Nicholls argued that the representation made by Mr Pyper on behalf of the defendant was not an assurance that Mr Dixon would acquire any proprietary interest. He already held options under the Plan, and it was said that he would retain those options. Mr Nicholls relied on Newport City Council v Charles [2009] 1 WLR 1884 , where it was held that a housing authority landlord could not acquire by proprietary estoppel the right to bring a possession claim in circumstances where its tenant concealed facts which would have justified the landlord bringing a claim for possession until after the time when such a claim had become time barred. The Court of Appeal held that the landlord was not claiming any interest in land; its interest as freeholder was not in question and it did not require any estoppel to found it: see at [27]. The tenant’s conduct founded an estoppel by representation which, unlike proprietary estoppel, did not found a cause of action. With evident regret, the Court of Appeal dismissed the claim.

92. I consider that case to be of no relevance to the present claim. In this case, the subsistence of Mr Dixon’s options is very much in question. It is the defendant’s position that they have lapsed and, as I find, Mr Dixon was given an assurance that they would continue in existence. I do not consider equity to be so inflexible that it can give effect to an assurance that an interest would be conveyed to the claimant, but that it cannot give effect to an assurance that an interest would continue and not cease to exist.

93. I did not understand Mr Nicholls to be making the objection that the assurance given by Mr Pyper on behalf of the defendant was insufficiently clear and unambiguous to form part of a claim to an interest by virtue of a proprietary estoppel. I consider that the assurance, understood in the way I have described above, was sufficiently clear and lacking in ambiguity. The number of shares over which the options would continue to subsist, and not lapse, was fixed. The way in which the assurance was communicated in the 29 September 2014 letter explained that the conditions for exercise, required to be determined by rule 7.1, would be as Mr Dixon reasonably understood them to be. The conditions for exercise would therefore, as with other former employees whose options did not lapse, be liable to variation in accordance with the rules of Plan in due course.

94. It is relevant to consider the comments of Lord Neuberger of Abbotsbury in Thorner v Major as to the requirement of certainty in a claim for proprietary estoppel. He explained at [94], with reference to Cobbe’s case, that there had in that earlier case been total uncertainty as to the nature of the benefit or interest that the claimants had expected to receive as a result of the parties’ in-principle agreement. In Thorner v Major , the subject matter of the material assurances was a farm and, even though the physical extent of the farm might change in time, the nature of the interest to be received was clear – the extent of the farm at the death of the representor: see at [95]. I consider what Lord Neuberger said at [85]–[86], after stating at [84] that the effect of words and action must be viewed in their context, to be of application here: ‘85. Secondly, it would be quite wrong to be unrealistically rigorous when applying the “clear and unambiguous” test. The court should not search for ambiguity or uncertainty, but should assess the question of clarity and certainty practically and sensibly, as well as contextually. Again, this point is underlined by the authorities, namely those cases I have referred to in para 78 above, which support the proposition that, at least normally, it is sufficient for the person invoking the estoppel to establish that he reasonably understood the statement or action to be an assurance on which he could rely.

86. Thirdly, as pointed out in argument by my noble and learned friend, Lord Rodger of Earlsferry, there may be cases where the statement relied on to found an estoppel could amount to an assurance which could reasonably be understood as having more than one possible meaning. In such a case, if the facts otherwise satisfy all the requirements of an estoppel, it seems to me that, at least normally, the ambiguity should not deprive a person who reasonably relied on the assurance of all relief: it may well be right, however, that he should be accorded relief on the basis of the interpretation least beneficial to him.’

95. See also what Lord Neuberger said at [98]. In particular, ‘focussing on technicalities can lead to a degree of strictness inconsistent with the fundamental aims of equity.’ Any uncertainty in how the assurance given to the claimant ought reasonably to be understood can be addressed at the stage of remedy, and does not mean that a remedy should be denied altogether. This is material here in the context of the tranche 3 exercise under a new plan, the circumstances of which will not have been foreseeable in 2014.

96. Nor do I consider it to be an objection to an estoppel arising that the context was commercial rather than domestic or familial. This is not a case (such as Cobbe’s case) where the parties might have been expected to enter into a contract but had consciously chosen not to do so (see Thorner v Major at [96]). The relevant contract was always going to be made between the claimant and Canadean, and indeed was so made.

97. On a summary judgment application issued by the defendant in 2024, Mr Nicholls argued that the property subject to the claimed proprietary estoppel did not relate to specified property. For a proprietary estoppel to arise, the representation or assurance made must relate to identified property owned by the defendant: see Thorner v Major at [61] (Lord Walker of Gestingthorpe) for this requirement. Again, this point was not pursued at the trial, but for the avoidance of doubt I am satisfied that an option over a company’s shares is property which is identified. An option, or the bundle of rights held under the Plan at such time when the option subsists and has not lapsed, is a chose in action independent of the property right which might be obtained upon the exercise of the option.

98. In Thorner v Major , Lord Neuberger said at [101]: ‘101. Hoffmann LJ memorably said in Walton v Walton (unreported) 14 April 1994; [1994] CA Transcript No 479, para 21, “equitable estoppel [by contrast with contract] … does not look forward into the future [; it] looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept.”’

99. That question requires consideration of the detriment which the claimant has incurred in reliance on the assurance given to him. In this case, the question of when the promise falls to be performed is not entirely straightforward. In my view it relates both to the time when the rule 7.1 power should have been exercised (which was upon or shortly after the entering into of the Settlement Agreement) and when the options came to be exercisable thereafter. If the options had continued in existence on the same footing as they would have done had Mr Dixon’s employment continued, they would have been exercisable on tranche 2 within their initial period of validity. He would also have been eligible to be considered for inclusion in the new scheme when the tranche 3 targets were not going to be met in 2020, at which point all subsisting 2011 option holders were included. It was, of course, apparent to the claimant that the defendant contended that his options had lapsed only when he sought to exercise them. It would have been open to the claimant to argue that his rights were being unconscionably denied at any time after the defendant contended that his options would not continue as if he remained in relevant employment, as Mr Pyper’s words and actions were reasonably understood by him.

100. I have set out above at [12] Mr Dixon’s unchallenged evidence of the detriment he incurred in reliance on the assurance given to him by Mr Pyper. The defendant does not maintain the argument pursued on the summary judgment application, that insufficient detriment was pleaded. The primary detriment was the entry into the Settlement Agreement, which required the claimant to work until the end of 2014 and then to be bound by restrictive covenants, thus putting him out of the employment market for some months.

101. The defendant’s objections at trial to the finding of an equitable estoppel focused on the assurance given on behalf of the defendant rather than the elements of detriment and unconscionability. I consider that the defendant has acted unconscionably in not giving effect to the assurance provided by Mr Pyper orally when meeting Mr Dixon and in his 29 September 2014 letter, and which was then reflected in the Settlement Agreement. I set out above what I consider the assurance to have been. The detriment was far from minimal and, again, any question of proportionality should be considered at the stage of remedy.

102. As I have indicated, Mr Lilley gave candid evidence about the lack of records held by the defendant which would enable discrepancies with his spreadsheet of option holders to be investigated. He also accepted that the defendant, when the issue arose in 2020, had no way of knowing whether other binding agreements had been reached. Mr Lilley was asked a series of questions in cross examination as to how Mr Dixon would have been treated if the fact that the remuneration committee had not approved the extension of his options (i.e. by exercising the rule 7.1 power) had become known around the time when the Settlement Agreement was made.

103. In cross examination Mr Lilley accepted (by indicating that he assumed) that if the defendant had become aware of the lack of remuneration committee approval, it would have told Mr Dixon of this fact, and indicated that a new arrangement would be required. He accepted that the defendant would not have taken advantage of Mr Dixon, that it does not try to take advantage of its employees, and that by and large it tries to do ‘the right thing’.

104. I accept that evidence given by Mr Lilley, which sits uneasily with the position adopted by the defendant to the proprietary estoppel claim. I consider that the indications given by Mr Lilley in evidence are of how the defendant ought conscionably to have acted in light of the non-exercise of the rule 7.1 power in Mr Dixon’s favour. Its failure now to give effect to the assurances provided in autumn 2014 is unconscionable and I consider that the claimant is entitled to a remedy. I consider that the failure to give effect to the entitlement to which Mr Dixon would have had is demonstrated by the refusal to give effect to the tranche 2 rights. On the basis that Mr Dixon’s options would have continued throughout the lifetime of the Plan, and treating him in the same way as all other 2011 option holders, he would have been entitled to exercise those options (as he sought to do). As I indicate further below, it is less obvious to me that the assurance given in 2014 leads to it being unconscionable for the defendant to deny the tranche 3 payment, which was made under another scheme, after the lifetime of the Plan. I consider it to be consistent with authority for that question to be considered at the stage of remedy.

105. For the avoidance of doubt, and for reasons I have already explained, the defendant cannot rely on any poor performance by the claimant to refute the claim of unconscionability. The evidence does not support any such finding, and in any event the assurance was given to the claimant, and his reliance on it was sought, in full awareness of any criticisms that might have been made of his performance during his employment.

106. A final objection by the defendant to the granting of a remedy is the exclusion clause at rule 14.1.4, which I have set out at [29] above. The question is whether the clause is intended to cover the breach which has occurred. When one considers clause 14.1 as a whole, it predominantly concerns the employment relationship. Rule 14.1.1 to 14.1.3 deal with the employment contract, which may (as in this case) be with another Group Member, rather than with the defendant itself. Rule 14.1.4 concerns any loss flowing from the fact that an option holder ceases to be in Relevant Employment.

107. On its face, rule 14.1.4 prevents an employee whose employment has come to an end from seeking any remedy in respect of any loss of right or prospective right or benefit under the Plan, including that of his or her options lapsing. For the exemption clause to bite, the loss must flow from the Eligible Employee ceasing to be in Relevant Employment. Where the loss does flow from such cessation of employment, the exclusion is wide. So, if an employee is unfairly dismissed from employment, even after giving notice of intention to exercise an option, the clause will prevent a claim for damages for loss of the option: Micklefield v SAC Technology Ltd [1990] WLR 1002 (John Mowbray QC). The exemption clause in that case was to similar effect to the clause in the present claim.

108. But, this is not a case of a claimant pursuing a claim that he lost his options or other rights under the Plan because of the loss of his employment. The claimant does not claim damages or compensation for loss resulting from a loss of his rights upon the cessation of his employment. He claims relief in equity for the denial of rights which he was promised, and on the basis of which promise or assurance he acted to his detriment. He accepts that, were it not for that assurance, his rights under the Plan would have come to an end. Put another way, I do not consider that rule 14.1.4 was intended to protect the defendant from a claim based on an assurance that an employee’s rights would continue, or from claims that rights had been acquired through estoppel. It was objectively intended to protect the defendant from a claim that an employee had suffered loss flowing from the cessation of their employment. That is not the loss which the claimant is claiming here. Were it necessary, I would hold that the assurance provided to the claimant included by necessary implication an assurance that the defendant would not seek to deny the rights promised by reliance on rule 14.1.4. (While it does not arise, I would also have held that the exemption clause would not prevent a claim that the rule 7.1 power had been exercised. The suggestion that a company can exercise a power in favour of an option holder and then deny him the right to enforce the rights given through that exercise by reliance on an exemption clause is self-evidently wrong.)

109. That leaves the question of remedy. The submissions I received were all premised on the claimant succeeding on his primary case, that the rule 7.1 power had been exercised in his favour. I have not heard submissions on the appropriate remedy in proprietary estoppel or on the authorities relevant to that issue. In principle, the burden is on the defendant to plead and prove that specific enforcement of the full assurance, or its monetary equivalent, is disproportionate: Guest v Guest [2024] AC 833 at [76], Lord Briggs JSC. It is, however, not clear to me what full enforcement would entail in this case and, again, I have heard no submissions on the point.

110. There are (at least) two discrete issues. First, there is an issue as to the value of the claimant’s options as at the date of his putative exercise of the tranche 2 rights: the market price of the company’s shares increased significantly between the date on which the tranche 2 rights generally became exercisable and the date when Mr Dixon purported to exercise them. I heard submissions on that issue on the footing that the options had continued in existence, but those submissions do not necessarily address the estoppel claim. Secondly, whether full enforcement entails the value of the tranche 3 rights being included, when the defendant would always have had the right to exclude the claimant from the new scheme, is not obvious to me. Again, the arguments may mirror those made on the footing that the options had been extended in accordance with rule 7.1, but they may or may not meet the claim in estoppel.

111. I have given careful consideration to whether it might be satisfactory to ask the parties simply to provide supplementary written submissions on the question of remedy on the estoppel claim. Having done so I have come to the view that the remedy should be determined as a consequential matter following the handing down of judgment.

112. At the summary judgment application hearing in 2024, Mr Parfitt indicated that he would rely also on promissory estoppel, and he incorporated into his trial skeleton argument the paragraphs from the application skeleton on estoppel. The effect of a promissory estoppel is that a party is precluded by a promise or assurance given through words or conduct from asserting either a right or a defence as the case may be. The claimant’s skeleton argument suggested that the relevant estoppel would be one preventing the defendant from denying that the rule 7.1 power had been exercised. This would effectively grant to the claimant a proprietary right. It is far from obvious to me that this can be achieved through promissory estoppel and, as the point was not explained at trial, I will not consider it further in this judgment. Conclusion

113. I am unable to find that the defendant in fact exercised its power under rule 7.1 of the Plan to extend the claimant’s options beyond the cessation of his employment. The claim that he validly exercised those options depends upon such an exercise having taken place, and must accordingly fail.

114. For the reasons given above, however, I find that the defendant assured Mr Dixon that his options would continue to be exercisable following the end of his employment on the same footing as if he remained in his employment, in a similar manner to how they continued to be exercisable by other former employees. Mr Dixon relied on that assurance to his detriment and I consider both that the assurance was of a proprietary interest to which equity can give effect through a proprietary estoppel, and that it is unconscionable for the defendant to repudiate its assurance. The question of remedy is one which will be dealt with as a consequential matter at a hearing.