News Publication Date: 07 December 2017
In the High Court of Justice of the Isle of Man
Civil Division - Ordinary Procedure
Between
ELENA JOYCE AND JOHN NUGENT
(in substitution for and in their capacity as Executors of Albert Gubay (deceased)) Claimant
And
PETER ALAN WILLERS Defendant
Judgment summary issued by the High Court of Justice of the Isle of Man
This summary is provided to assist in understanding the judgment of the court. It does not form part of the judgment. The judgment itself is the only authoritative document. The full judgment is available at www.judgments.im.
This summary concerns a judgment formally handed down by Deemster Corlett on 5 December 2017.
Peter Willers was Albert Gubay’s “right hand man”. He performed this function for some 23 years, ensuring that Mr Gubay’s instructions were implemented. His role in assisting Mr Gubay had been publicly acknowledged. He was never employed by Mr Gubay, but rather by various companies over which Mr Gubay had extensive influence. He was first appointed in 1986 but left in 2009 when he was dismissed for alleged gross misconduct.
Following his dismissal, Mr Willers brought various claims against Mr Gubay personally, relying on promises which he said had been made to him by Mr Gubay. None of the promises were set out in writing.
The claims took many years to come finally to court. Both parties had filed numerous appeals and Mr Gubay had fallen ill and had not completed his evidence.
The first claim related to the Mount Murray development. Mr Willers claimed that Mr Gubay had promised him 10% of the profit arising on the sale of the Mount Murray hotel, conference and residential development. If Mr Willers left employment before the development was sold, Mr Willers claimed that Mr Gubay had promised him that the development would be valued, an account taken, and payment made to Mr Willers.
Mr Gubay admitted that there was a profit sharing agreement in respect of Mount Murray but that it was conditional on Mr Willers remaining in employment and assisting in the sale. Because Mr Willers was dismissed before the sale, he is therefore not entitled to any part of the profit (if any).
The second claim arises from Mr Gubay’s alleged failure to honour an agreement to pay all Mr Willers’ debts out of the profits arising from the sale of the Total Fitness chain of health clubs, in respect of which Mr Willers received from Mr Gubay personally £1million. Mr Gubay did pay an additional sum in respect of some of Mr Willers’ debts. The disputed balance is £200,000.
The third claim arises from an arithmetical error which occurred when a payment was made to Mr Willers concerning Total Fitness. The sum involved is £13,167.20.
The fourth claim is for £1.6million which Mr Willers says is the balance owing to him arising from a promise made by Mr Gubay to pay him £2million in return for all the work he had done for Mr Gubay and in respect of which Mr Willers had already received £400,000 from Mr Gubay which he used to pay for extensive work on his home.
The fifth claim is for the loss of earnings and other benefits arising from his dismissal. Mr Willers says that Mr Gubay promised him that he would continue to hold the position of managing director and in-house legal counsel for so long as he wanted to do so.
The sixth claim is for an order for a valuation and account of property purchases made by the Anglo Group since January 2005 on the basis that there was an agreement between Mr Gubay and Mr Willers that a new company would be formed to acquire all such properties and that Mr Willers would have a 25% interest in it.
With the exception of the third claim, Deemster Corlett has decided that all the claims should be dismissed. In very brief summary:
1. The Mount Murray claims are dismissed because Mr Gubay’s account of the agreement is more probable than is Mr Willers’, which the court found to be wholly improbable. Even if Mr Gubay’s account is accepted, the agreement reached is far too uncertain to be enforced by the court. The court would in effect have to create an agreement rather than enforce it. The Deemster however decided that Mr Willers’ dismissal had been manufactured by Mr Gubay and therefore that Mr Gubay could not rely upon that dismissal alone as a ground for refusing to give Mr Willers what he had been promised.
2. The second and fourth claims are dismissed on the basis that there was no contractual basis for the payments made, which were found on the evidence to be gifts made entirely at Mr Gubay’s discretion. During his time with Mr Gubay, Mr Willers received, in addition to his salary, the sum of £1.8million direct from Mr Gubay. The additional £1.6million claimed by Mr Willers was referred to in “deeds of appointment”, otherwise called “letters of wishes” which Mr Gubay signed from time to time, and which he altered depending upon how he felt about the people listed in those documents. They were akin to a will and the beneficiaries and the amounts due to them could be changed at any time. They did not have an employment basis and the gifts made by Mr Gubay to Mr Willers were not “bonuses” in the true legal sense of that word. The court could not therefore interfere in Mr Gubay’s decision to delete Mr Willers from his list of beneficiaries.
3. The fifth claim is dismissed on the grounds that it is imprecisely and unsatisfactorily pleaded. While it is accepted that it was Mr Gubay who made all the important decisions about Mr Willers’ employment, the claim was bound to fail because Mr Willers’ legal employers were not joined in the claim.
4. The sixth claim is dismissed because the evidence of the other credible witnesses is to be preferred. The claim is not computed and is in any event on the facts of this case inherently improbable.
The court also made findings concerning the conduct of both Mr Willers and Mr Gubay. While Mr Willers behaved unethically from time to time, this was done in order to help Mr Gubay. Mr Gubay’s conduct, particularly after the purported dismissal of Mr Willers, but also at other times in the past, was disgraceful and probably unlawful. Mr Gubay had clearly developed a paranoid belief that Mr Willers was trying to defraud him and wrest control of the Anglo Group from him. There is no evidence to support this and Mr Willers’ departure was, on the evidence before the court, unjustified.
The court also found that it was highly improbable that any legally binding agreement could have been formed when Mr Willers met Mr Gubay for the first time in 1986, just after Mr Willers had been interviewed. Mr Gubay probably made vague statements about making large amounts of money in which Mr Willers might share, but such statements (which seem to have been made to several others over the years) cannot possibly amount to a legally enforceable promise.
Because of the circumstances of Mr Gubay ceasing to give evidence after only a short time in the witness box, the Deemster decided that Mr Gubay’s witness statements should only be given weight when they are supported by other credible testimony or contemporaneous documentary evidence. Mr Gubay passed away on 5th January 2016.