Mercer v Heart Of Midlothian Plc [2001] ScotCS 135 (31 May 2001)

Mercer v Heart Of Midlothian Plc [2001] ScotCS 135 (31 May 2001)

The privileges conferred on the pursuer were attached to the future honorary position of Life President, not given in connection with his retirement as director. They did not constitute a 'payment' within the meaning of section 312, as there was no depletion of company assets. The defenders' averments were insufficient to establish that section 312 applied.

Citation
[2001] ScotCS 135
Parties
Pursuer: Alexander Wallace Mercer; Defenders: Heart of Midlothian plc
Jurisdiction
Scotland
Judgment Date
31 May 2001
Procedural Posture
Civil / Opinion on Procedure Roll (preliminary Pleas)
Outcome
For the pursuer; defences and counterclaim dismissed; declarator granted.
Legal Topics
Director Retirement Benefits, Section 312 Companies Act 1985, Compensation for Loss of Office, Declarator, Reduction, Corporate Governance
Company Law Director Retirement Benefits Section 312 Companies Act 1985 Compensation for Loss of Office Declarator Reduction Corporate Governance

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Parties

Alexander Wallace Mercer

Pursuer

Heart of Midlothian plc

Defenders

Procedural Posture

Civil / Opinion on Procedure Roll (preliminary Pleas)

Legal Issues

  1. 1 Whether privileges conferred on retiring director constitute a 'payment' under section 312 of the Companies Act 1985
  2. 2 Whether such privileges were made 'in connection with' retirement from office as director
  3. 3 Whether section 312 applies to non-cash benefits

Ratio Decidendi

The privileges conferred on the pursuer were attached to the future honorary position of Life President, not given in connection with his retirement as director. They did not constitute a 'payment' within the meaning of section 312, as there was no depletion of company assets. The defenders' averments were insufficient to establish that section 312 applied.

Court Disposition

For the pursuer; defences and counterclaim dismissed; declarator granted.

Orders

  • Decree of dismissal of the counterclaim.
  • Decree of declarator in terms of the first conclusion of the principal action.