Commerzbank Ag v Keen

Commerzbank Ag v Keen

The Bank had a wide contractual discretion over bonuses, and Mr Keen failed to show any real prospect of establishing irrationality or perversity in the exercise of that discretion for 2003 and 2004. The contract clearly excluded bonus entitlement for 2005 if not employed at the payment date, and the Unfair Contract Terms Act 1977 did not apply to the employment contract in this context.

Parties
Appellant: Commerzbank AG; Respondent: James Keen
Jurisdiction
England and Wales
Judgment Date
17 November 2006
Procedural Posture
Civil Appeal / Appeal From Summary Judgment Refusal
Outcome
Appeal allowed. Summary judgment granted for the Bank. Mr Keen's claims dismissed.
Legal Topics
Discretionary Bonus, Implied Terms, Summary Judgment, Unfair Contract Terms Act 1977
Employment Law Contract Law Discretionary Bonus Implied Terms Summary Judgment Unfair Contract Terms Act 1977

Case Brief

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Parties

Commerzbank AG

Appellant

James Keen

Respondent

Procedural Posture

Civil Appeal / Appeal From Summary Judgment Refusal

Legal Issues

  1. 1 Whether the employer exercised its discretion on bonus payments irrationally or perversely in breach of contract for 2003 and 2004.
  2. 2 Whether the refusal to pay a bonus for 2005 was a breach of contract or contrary to the Unfair Contract Terms Act 1977.

Ratio Decidendi

The Bank had a wide contractual discretion over bonuses, and Mr Keen failed to show any real prospect of establishing irrationality or perversity in the exercise of that discretion for 2003 and 2004. The contract clearly excluded bonus entitlement for 2005 if not employed at the payment date, and the Unfair Contract Terms Act 1977 did not apply to the employment contract in this context.

Court Disposition

Appeal allowed. Summary judgment granted for the Bank. Mr Keen's claims dismissed.

Orders

  • Order of Morison J set aside.
  • Bank's application for summary judgment granted.