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	United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Guiness plc v Saunders Plc [1989] UKHL 2 (08 February 1990) URL: http://www.bailii.org/uk/cases/UKHL/1989/2.html Cite as: [1990] 2 AC 663, [1989] UKHL 2

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Parliamentary Archives,
HL/PO/JU/18/250

Guinness plc (Respondents)
v.

Saunders and another (Appellant)

JUDGMENT

Die Jovis 8° Februarii 1990

Upon Report from the Appellate Committee to whom was
referred the Cause Guinness plc against Saunders and another,
That the Committee had heard Counsel as well on Monday the
30th and Tuesday the 31st of October as on Wednesday the 1st,
Thursday the 2nd, Monday the 6th and Tuesday the 7th days of
November last, upon the Petition and Appeal of Thomas Joseph
Ward, of Ferry Farms, Annapolis, Maryland 21402, USA, praying
that the matter of the Order set forth in the Schedule
thereto, namely an Order of Her Majesty's Court of Appeal of
the 10th day of May 1988, might be reviewed before Her Majesty
the Queen in Her Court of Parliament and that the said Order
might be reversed, varied or altered or that the Petitioner
might have such other relief in the premises as to Her Majesty
the Queen in Her Court of Parliament might seem meet; as upon
the case of Guinness plc lodged in answer to the said Appeal;
and Counsel also having been heard on behalf of Ernest
Saunders and on behalf of the Serious Fraud Office; and due
consideration had this day of what was offered on either side
in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and
Temporal in the Court of Parliament of Her Majesty the Queen
assembled, That the said Order of Her Majesty's Court of
Appeal (Civil Division) of the 10th day of May 1988 complained
of in the said Appeal be, and the same is hereby, Affirmed and
that the said Petition and Appeal be, and the same is hereby,
dismissed this House: And it is further Ordered, That the
Appellant do pay or cause to be paid to the said Respondents
the Costs incurred by them in respect of the said Appeal, the
amount thereof to be certified by the Clerk of the Parliaments
if not agreed between the parties.

Cler: Parliamentor:

Judgment: 8.2.90

HOUSE OF LORDS

GUINNESS PLC
(RESPONDENTS)

V.

SAUNDERS AND ANOTHER
(APPELLANT)

Lord Keith of Kinkel
Lord Brandon of Oakbrook
Lord Templeman
Lord Griffiths
Lord Goff of Chieveley

LORD KEITH OF KINKEL

My Lords,

I have had the opportunity of considering in draft the
speech to be delivered by my noble and learned friend Lord
Templeman. I agree with it, and for the reasons that he gives I
too would dismiss the appeal.

LORD BRANDON OF OAKBROOK

My Lords,

For the reasons given in the speech of my noble and learned
friend, Lord Templeman, I would dismiss the appeal.

LORD TEMPLEMAN

My Lords,

The appellant, Mr. Ward, admits receiving £5.2m., the
money of the respondent company, Guinness, at a time when Mr.
Ward was a director of Guinness. Payment of this sum to Mr.
Ward was, he says, remuneration authorised by Mr. Saunders, Mr.
Roux and Mr. Ward, who formed a committee of the board of
directors of Guinness. It is admitted by Mr. Ward that payment
was not authorised by the board of directors. In these proceedings
Guinness claim £5.2m. from Mr. Ward and in this application,
Guinness seek an order for immediate payment on the grounds that
the Articles of Association of Guinness and the facts admitted by
Mr. Ward show that the payment to Mr. Ward was unauthorised



- 1 -_



and must be repaid. The Vice-Chancellor, Sir Nicolas Browne-
Wilkinson, made the order sought by Guinness and his decision was
affirmed by the Court of Appeal (Fox and Glidewell L.JJ. and Sir
Frederick Lawton) [1988] 1 W.L.R. 863. Mr. Ward now appeals.

On 19 January 1986 a meeting of the board of directors of
Guinness attended by a quorum passed several resolutions. There
were 10 directors present; they included the chief executive, Mr.
Saunders, and two non-executive directors, Mr. Roux and Mr. Ward.
Legal and investment advisers of Guinness were in attendance.
The minutes of the meeting record that Mr. Saunders and Mr.
Roux explained the background to a proposed recommended offer
by Guinness for the issued share capital of The Distillers Company
Plc. The board considered drafts of an underwriting agreement, a
letter of authority to be signed by each of the directors of
Guinness, two commitment letters by banks, and a merger
agreement between Guinness and Distillers. Mr. Roux reported on
the fees and commissions payable by Guinness pursuant to the
underwriting agreement. There is no record of the possibility of
any fees, commission or remuneration being payable to a director.
The draft merger agreement contained an agreement by Distillers
to pay the costs incurred by Guinness if the offer should not prove
successful and an agreement by Guinness to indemnify the
directors of Distillers should the court determine that it had not
been appropriate for the directors of Distillers to enter into the
merger agreement and to pay the expenses of Guinness. The
board of Guinness resolved that an offer be made and approved
the draft documents which had been considered. The board also
resolved that "any three directors of the company be and they are
hereby appointed a committee of the board with full power and
authority" to settle the terms of the offer, to approve any
revisions of the offer which the committee might consider it
desirable to make and:

"(vi) to authorise and approve, execute and do, or procure to
be executed and done, all such documents, deeds, acts and
things as they may consider necessary or desirable in
connection with the making or implementation of the offer
and/or the proposals referred to above and any revision
thereof. ..."

It is common ground that Mr. Saunders, Mr. Roux and Mr.
Ward established and constituted themselves a committee of the
board for the purposes of the resolutions passed on 19 January
1986, that the committee carried the resolutions into effect and
that a revised offer resulted in Guinness acquiring all the share
capital of Distillers.

In these present proceedings, Mr. Ward pleads that in
consideration of Mr. Ward "providing advice and services" to
Guinness during the currency of the offer (which he refers to as
"the bid") Guinness agreed, in the event of the success of the bid,
to pay to Mr. Ward a sum equivalent to 0.2 per cent. of the
ultimate value of the bid. The agreement is said to have been
entered into by Mr. Saunders, Mr. Ward and Mr. Roux on behalf of
Guinness and Mr. Ward on his own behalf. It is said that Mr.
Saunders orally agreed about 19 February 1986, and that Mr. Roux
orally agreed about the beginning of May 1986, and that the
agreement was made or evidenced by an invoice delivered to



- 2 -

Guinness by a company now admitted to be controlled by Mr.
Ward. The invoice claimed £5.2m. for advice in respect of the
successful acquisition of Distillers. The invoice was approved by
Mr. Roux and the sum of £5.2m. was paid. Mr. Ward pleads in
the alternative that an agreement by Guinness to pay Mr. Ward
for his advice and services was made by Mr. Saunders who had
implied actual authority, or ostensible authority, to do so. Mr.
Ward pleads that he performed valuable services for the benefit of
Guinness in connection with the bid. These services were rendered
between 8 January 1986 (a day prior to the board meeting on 19
January) and 20 April 1986. These services as set out in
particulars furnished by Mr. Ward were, in summary: (1)
negotiations on behalf of Guinness at meetings and in the course
of telephone conversations with directors and representatives of
Distillers; (2) negotiations on behalf of Guinness at meetings and in
the course of telephone conversations with officials of the
Monopolies and Mergers Commission; and (3) discussions from time
to time of the bid, the revised bid and the desirability of and
implementation of the bid at meetings (including the board meeting
held on 19 January 1986) and in the course of telephone
conversations with members of the board of Guinness and
professional advisers of Guinness.

Mr. Ward claims particular credit for persuading the
Monopolies and Mergers Commission to allow Guinness to bid for
Distillers, for persuading some reluctant directors of Guinness to
persevere with the bid and for persuading Distillers to pay the
costs of Guinness in connection with the bid should it prove
unsuccessful.

Thus Mr. Ward admits receipt of £5.2m. from Guinness and
pleads an agreement by Guinness that he should be paid this sum
for his advice and services in connection with the bid. Mr. Ward
admits that payment was not authorised by the board of directors
of Guinness.

The articles of association of guinness provide:

"REMUNERATION OF DIRECTORS. 90. The board shall fix
the annual remuneration of the directors provided that
without the consent of the company in general meeting such
remuneration (excluding any special remuneration payable
under article 91 and article 92) shall not exceed the sum of
£100,000 per annum. . . . 91. The board may, in addition to
the remuneration authorised in article 90, grant special
remuneration to any director who serves on any committee
or who devotes special attention to the business of the
company or who otherwise performs services which in the
opinion of the board are outside the scope of the ordinary
duties of a director. Such special remuneration may be
made payable to such director in addition to or in
substitution for his ordinary remuneration as a director, and
may be made payable by a lump sum or by way of salary,
or commission or participation in profits, or by any or all of
those modes or otherwise as the board may determine."

Articles 90 and 91 of the articles of association of Guinness
depart from the Table A articles recommended by statute, which
reserve to a company in general meeting the right to determine



- 3 -

the remuneration of the directors of the company. But by article
90 the annual remuneration which the directors may award
themselves is limited and by article 91 special remuneration for an
individual director can only be authorised by the board. A
committee, which may consist of only two or, as in the present
case, three members, however honest and conscientious, cannot
assess impartially the value of its work or the value of the
contribution of its individual members. A director may, as a
condition of accepting appointment to a committee, or after he
has accepted appointment, seek the agreement of the board to
authorise payment for special work envisaged or carried out. The
shareholders of Guinness run the risk that the board may be too
generous to an individual director at the expense of the
shareholders but the shareholders have, by article 91, chosen to
run this risk and can protect themselves by the number, quality
and impartiality of the members of the board who will consider
whether an individual director deserves special reward. Under
article 91 the shareholders of Guinness do not run the risk that a
committee may value its own work and the contribution of its own
members. Article 91 authorises the board, and only the board, to
grant special remuneration to a director who serves on a
committee.

It was submitted that article 2 alters the plain meaning of
article 91. In article 2 there are a number of definitions each of
which is expressed to apply "if not inconsistent with the subject or
context." The expression "the board" is defined as

"the directors of the company for the time being (or a
quorum of such directors assembled at a meeting of
directors duly convened) or any committee authorised by the
Board to act on its behalf."

The result of applying the article 2 definition to article 91,
it is said, is that a committee may grant special remuneration to
any director who serves on a committee or devotes special
attention to the business of the company or who otherwise
performs services which in the opinion of the committee are
outside the scope of the ordinary duties of a director. In my
opinion the subject and context of article 91 are inconsistent with
the expression "the board" in article 91, meaning anything except
the board. Article 91 draws a contrast between the board and a
committee of the board. The board is expressly authorised to
grant special remuneration to any director who serves on any
committee. It cannot have been intended that any committee
should be able to grant special remuneration to any director,
whether a member of the committee or not. The board must
compare the work of an individual director with the ordinary
duties of a director. The board must decide whether special
remuneration shall be paid in addition to or in substitution for the
annual remuneration determined by the board under article 90.
These decisions could only be made by the board surveying the
work and remuneration of each and every director. Article 91
also provides for the board to decide whether special remuneration
should take the form of participation in profits; the article could
not intend that a committee should be able to determine whether
profits should accrue to the shareholders' funds or be paid out to
an individual director. The remuneration of directors concerns all
the members of the board and all the shareholders of Guinness.



- 4 -

Article 2 does not operate to produce a result which is
inconsistent with the language, the subject and the context of
article 91. Only the board possessed power to award £5.2m. to
Mr. Ward.

Reliance was next placed on article 110 which provides:

"The directors may establish any committees, local boards or
agencies for managing any of the affairs of the company,
either in the United Kingdom, or elsewhere, and may
appoint any persons to be members of such local boards, or
as managers or agents, and fix their remuneration, and may
delegate to any committee, local board, managers or agent
any of the powers, authorities and discretions vested in the
board, with power to sub-delegate, and may authorise the
members of any local board, or any of them to fill any
vacancies therein, and to act notwithstanding vacancies, and
any such appointment or delegation may be made upon such
terms and subject to such conditions as the directors may
think fit ... "

Therefore, it is said, the board may delegate to a
committee the power conferred on the board by article 91 to
grant special remuneration to a director. But article 110 could
not have been intended to allow a local board or agency or
manager to fix the remuneration of a director and article 110
expressly provides that remuneration shall be fixed by the board.
Article 110 does not enable the board to delegate the power of
deciding directors' remuneration which by articles 90 and 91 is
vested in the board alone.

Next, reliance was placed on article 100(D) which is in the
following terms:

"Any director may act by himself or his firm in a
professional capacity for the company and any company in
which the company is interested, and he or his firm shall be
entitled to remuneration for professional services as if he
were not a director; provided that nothing herein contained
shall authorise a director or his firm to act as auditor to
the company or any subsidiary."

Article 91 deals with directors' remuneration; article 100(D)
deals with directors' charges for professional services. There is a
distinction between remuneration and professional charges.
Remuneration depends on an assessment of the value of the
individual and the perceived quality of his work. Professional
charges can be checked by taxation in the case of lawyers and in
other instances by professional recommendations and standards of
comparison. Mr. Ward nowhere alleges in his pleadings that he
provided professional services. Counsel on his behalf stated that
Mr. Ward was a member of a New York firm of attorneys. The
professional charges of that firm in connection with the bid were
paid to the firm pursuant to article 100(D). If Mr. Ward had
performed legal professional services separately from the services
rendered by his firm, then article 100(D) would apply. The advice
and services upon which Mr. Ward relies in these proceedings were
not legal professional services. Counsel informed the House that
Mr. Ward was one of a number of experts who advise and



- 5 -

negotiate, implement or frustrate take-over bids. Counsel did not
suggest that these experts are all lawyers or that they constitute
a profession or that they possessed the indicia of a profession,
namely, an organisation which controls entry and membership,
provides educational and training qualifications, insists upon a
standard of work and behaviour, imposes disciplinary sanctions for
misconduct and, above all, acknowledges and enforces a duty to
the public over and above the duty common to all of obeying the
law. The services pleaded by Mr. Ward were the services he was
bound to carry out and which any member of the board is entitled
and bound to carry out as a member of a committee established
by the board. Guinness admit for the purposes of this application
that Mr. Ward performed services which were of value to
Guinness, although if it were necessary to do so Guinness would
attempt to prove, and Mr. Ward would deny, that Mr. Ward has
exaggerated the value of his services and that some of his
activities were improper and caused damage to Guinness. For
present purposes it suffices that Mr. Ward seeks remuneration for
his services as a member of a committee; he is not seeking
remuneration for professional services provided in a professional
capacity. Failure to comply with article 91 cannot be disguised as
an application of article 100(D).

Mr. Ward also pleads that Mr. Saunders possessed implied
actual authority or ostensible authority to agree on behalf of
Guinness that Mr. Ward should be paid for his services. This
allegation is inconsistent with the express terms of the resolution
dated 19 January 1986 whereby the board conferred power in
relation to the bid on the committee and not on Mr. Saunders.
The board could not confer on the committee the right to agree
or to award special remuneration to a director. The board could
not confer such a right on Mr. Saunders. The resolution dated 19
January 1986 does not purport to confer on anybody a power which
the board could not confer. The articles of Guinness are binding
on the board, on the committee, on Mr. Saunders and on Mr.
Ward. Mr. Ward was not entitled to assume that Mr. Saunders
possessed an authority inconsistent with the articles of Guinness,
inconsistent with the appointment of the committee and
inconsistent with the terms of the appointment of the committee.
If before or at the board meeting on 19 January 1986 the board
had been requested to agree to grant special remuneration to Mr.
Ward, such a request might well have met with a favourable
response. If the bid for Distillers had not led to allegations of
misconduct by Guinness it is possible that the payment of £5.2m.
to Mr. Ward's company, apparently for services rendered by his
company, would not have been questioned or, at any event, that
Mr. Ward would not have been required to repay that sum. But
there never was any contract by Guinness to pay special
remuneration to Mr. Ward for services rendered in connection with
the bid for Distillers.

Since, for the purposes of this application, Guinness concede
that Mr. Ward performed valuable services for Guinness in
connection with the bid, counsel on behalf of Mr. Ward submits
that Mr. Ward, if not entitled to remuneration pursuant to the
articles, is, nevertheless, entitled to be awarded by the court a
sum by way of quantum meruit or equitable allowance for his
services. Counsel submits that the sum awarded by the court
might amount to £5.2m. or a substantial proportion of that sum;



- 6 -

therefore Mr. Ward should be allowed to retain the sum of £5.2m.
which he has received until, at the trial of the action, the court
determines whether he acted with propriety and, if so, how much
of the sum of £5.2m. he should be permitted to retain; Mr. Ward
is anxious for an opportunity to prove at a trial that he acted
with propriety throughout the bid. It is common ground that, for
the purposes of this appeal, it must be assumed that Mr. Ward and
the other members of the committee acted in good faith and that
the sum of £5.2m. was a proper reward for the services rendered
by Mr. Ward to Guinness.

My Lords, the short answer to a quantum meruit claim
based on an implied contract by Guinness to pay reasonable
remuneration for services rendered is that there can be no
contract by Guinness to pay special remuneration for the services
of a director unless that contract is entered into by the board
pursuant to article 91. The short answer to the claim for an
equitable allowance is the equitable principle which forbids a
trustee to make a profit out of his trust unless the trust
instrument, in this case the articles of association of Guinness, so
provides. The law cannot and equity will not amend the articles
of Guinness. The court is not entitled to usurp the functions
conferred on the board by the articles.

The 28th edition of Snell's Principles of Equity, first
published in 1868, contains the distilled wisdom of the author and
subsequent editors, including Sir Robert Megarry, on the law
applicable to trusts and trustees. It is said, at p. 244, that:

"With certain exceptions, neither directly nor indirectly may
a trustee make a profit from his trust. . . . The rule
depends not on fraud or mala fides, but on the mere fact of
a profit made."

The 24th edition (1987) of Palmer's Company Law, first
published in 1898, contains the distilled wisdom of the authors and
subsequent editors concerning the law applicable to companies and
directors. It is said, in volumn 1, at pp. 943-944, that:

"Like other fiduciaries directors are required not to put
themselves in a position where there is a conflict (actual or
potential) between their personal interests and their duties
to the company. . . . the position of a director, vis-à-vis
the company, is that of an agent who may not himself
contract with his principal, and ... is similar to that of a
trustee who, however fair a proposal may be, is not allowed
to let the position arise where his interest and that of the
trust may conflict. ... he is, like a trustee, disqualified
from contracting with the company and for a good reason:
the company is entitled to the collective wisdom of its
directors, and if any director is interested in a contract, his
interest may conflict with his duty, and the law always
strives to prevent such a conflict from arising."

The application of these principles to remuneration in the
case of a trustee is described by Snell as follows, at p. 252:

"As the result of the rule that a trustee cannot make a
profit from his trust, trustees and executors are generally



- 7 -

entitled to no allowance for their care and trouble. This
rule is so strict that even if a trustee or executor has
sacrificed much time to carrying on a business as directed
by the trust, he will usually be allowed nothing as
compensation for his personal trouble or loss of time."

The application of these principles to remuneration in the
case of a director is described by Palmer as follows, at p. 902:

"Prima facie, directors of a company cannot claim
remuneration, but the articles usually provide expressly for
payment of it ... and, where this is the case, the
provision operates as an authority to the directors to pay
remuneration out of the funds of the company; such
remuneration is not restricted to payment out of profits."

The following also appears, at p. 903 :

"The articles will also usually authorise the payment by the
directors to one of their number of extra remuneration for
special services. Where such provision is made, it is a
condition precedent to a director's claim for additional
remuneration that the board of directors shall determine the
method and amount of the extra payment; it is irrelevant
that the director has performed substantial extra services
and the payment of additional remuneration would be
reasonable."

So far as contract is concerned, Lord Cranworth L.C., in
Aberdeen Railway Co. v. Blaikie Bros. (1854) 1 Macq. H.L. 461,
considered, at pp. 471-472:

"the general question, whether a director of a railway
company is or is not precluded from dealing on behalf of
the company with himself, or with a firm in which he is a
partner. The directors are a body to whom is delegated the
duty of managing the general affairs of the company. A
corporate body can only act by agents, and it is of course
the duty of those agents so to act as best to promote the
interests of the corporation whose affairs they are
conducting. Such agents have duties to discharge of a
fiduciary nature towards their principal. And it is a rule of
universal application, that no one, having such duties to
discharge, shall be allowed to enter into engagements in
which he has, or can have, a personal interest conflicting,
or which possibly may conflict, with the interests of those
whom he is bound to protect. So strictly is this principle
adhered to, that no question is allowed to be raised as to
the fairness or unfairness of a contract so entered into. It
obviously is, or may be, impossible to demonstrate how far
in any particular case the terms of such a contract have
been the best for the interest of the cestui que trust which
it was possible to obtain. It may sometimes happen that
the terms on which a trustee has dealt or attempted to deal
with the estate or interests of those for whom he is a
trustee have been as good as could have been obtained from
any other person - they may even at the time have been
better. But still so inflexible is the rule that no inquiry on
that subject is permitted."

- 8 -

So far as equity is concerned, Sir John Stuart V.-C. in
Barrett v. Hartley (1866) L.R. 2 Eq. 789 said, at p. 796, that
there was a:

"very well established principle of this court that a trustee
is not to exact anything for his services. For the defendant
it was contended, that although the payment was called a
bonus, it was for important services rendered. No doubt the
importance and benefit of the services can hardly be
exaggerated. But a trustee who greatly benefits his cestui
que trust by performing his duties is not entitled to say to
him that he will not give him his property, or proceed to
execute the trust, unless he be paid a bonus."

In Bray v. Ford [1896] AC 44 a solicitor who was a
governor of a charitable college charged profit costs for his
professional services under the mistaken belief that the
memorandum of association allowed him to do so. Lord Watson
said, at p. 48, that the respondent was not

"legally justified in charging and accepting payment of full
professional remuneration in respect of services rendered by
him to the college in his capacity of solicitor .... the
respondent was neither entitled to charge profit costs in
respect of these services, nor to retain them when received
by him. Such a breach of the law may be attended with
perfect good faith, and it is, in my opinion, insufficient to
justify a charge of moral obliquity, unless it is shown to
have been committed knowingly or with an improper
motive."

Lord Herschell said, at pp. 51-52:

"It is an inflexible rule of a court of equity that a person
in a fiduciary position, such as the respondent's, is not,
unless otherwise expressly provided, entitled to make a
profit; he is not allowed to put himself in a position where
his interest and duty conflict. It does not appear to me
that this rule is, as has been said, founded upon principles
of morality. I regard it rather as based on the
consideration that, human nature being what it is, there is
danger, in such circumstances, of the person holding a
fiduciary duty being swayed by interest rather than by duty,
and thus prejudicing those whom he was bound to protect.
It has, therefore, been deemed expedient to lay down this
positive rule. But I am satisfied that it might be departed
from in many cases, without any breach of morality, without
any wrong being inflicted, and without any consciousness of
wrongdoing."

Equity forbids a trustee to make a profit out of his trust.
The Articles of Association of Guinness relax the strict rule of
equity to the extent of enabling a director to make a profit
provided that the board of directors contracts on behalf of
Guinness for the payment of special remuneration or decides to
award special remuneration. Mr. Ward did not obtain a contract
or a grant from the board of directors. Equity has no power to
relax its own strict rule further than and inconsistently with the
express relaxation contained in the articles of association. A



- 9 -

shareholder is entitled to compliance with the articles. A director
accepts office subject to and with the benefit of the provisions of
the articles relating to directors. No one is obliged to accept
appointment as a director. No director can be obliged to serve on
a committee. A director of Guinness who contemplates or accepts
service on a committee or has performed outstanding services for
the company as a member of a committee may apply to the board
of directors for a contract or an award of special remuneration.
A director who does not read the articles or a director who
misconstrues the articles is nevertheless bound by the articles.
Article 91 provides clearly enough for the authority of the board
of directors to be obtained for the payment of special
remuneration and the submissions made on behalf of Mr. Ward,
based on articles 2, 100(D) and 110, are more ingenious than
plausible and more legalistic than convincing. At the board
meeting held on 19 January 1986, Mr. Ward was present but did
not seek then or thereafter to obtain the necessary authority of
the board of directors for payment of special remuneration. In
these circumstances there are no grounds for equity to relax its
rules further than the articles of association provide. Similarly,
the law will not imply a contract between Guinness and Mr. Ward
for remuneration on a quantum meruit basis awarded by the court
when the articles of association of Guinness stipulate that special
remuneration for a director can only be awarded by the board.

It was submitted on behalf of Mr. Ward that Guinness, by
the committee consisting of Mr. Saunders, Mr. Ward and Mr. Roux,
entered into a voidable contract to pay remuneration to Mr. Ward
and that since Mr. Ward performed the services he agreed to
perform under this voidable contract there could be no restitutio
integrum and the contract cannot be avoided. This submission
would enable a director to claim and retain remuneration under a
contract which a committee purported to conclude with him,
notwithstanding that the committee had no power to enter into the
contract. The fact is that Guinness never did contract to pay
anything to Mr. Ward. The contract on which Mr. Ward relies is
not voidable but non-existent. In support of a quantum meruit
claim, counsel for Mr. Ward relied on the decision of Buckley J. in
In re Duomatic Ltd. [1969] 2 Ch. 365. In that case a company
sought and failed to recover remuneration received by a director
when the shareholders or a voting majority of the shareholders had
sanctioned or ratified the payment. In the present case there has
been no such sanction or ratification either by the board of
directors or by the shareholders. Mr. Ward also relied on the
decision in Craven-Ellis v. Canons Ltd. [1936] 2 K.B. 403. In that
case the plaintiff was appointed managing director of a company
by an agreement under the company's seal which also provided for
his remuneration. By the articles of association each director was
required to obtain qualification shares within two months of his
appointment. Neither the plaintiff nor the other directors obtained
their qualification shares within two months or at all and the
agreement with the managing director was entered into after they
had ceased to be directors. The plaintiff having done work for
the company pursuant to the terms of the agreement was held to
be entitled to the remuneration provided for in the agreement on
the basis of a quantum meruit. In Craven-Ellis the plaintiff was
not a director, there was no conflict between his claim to
remuneration and the equitable doctrine which debars a director
from profiting from his fiduciary duty, and there was no obstacle



- 10 -

to the implication of a contract between the company and the
plaintiff entitling the plaintiff to claim reasonable remuneration as
of right by an action in law. Moreover, as in In re Duomatic
Ltd., the agreement was sanctioned by all the directors, two of
whom were beneficially entitled to the share capital of the
company. In the present case Mr. Ward was a director, there was
a conflict between his interest and his duties, there could be no
contract by Guinness for the payment of remuneration pursuant to
article 91 unless the board made the contract on behalf of
Guinness and there was no question of approval by directors or
shareholders.

In support of a claim for an equitable allowance, reference
was made to the decision of Wilberforce J. in Phipps v. Boardman
[1964] 1 W.L.R. 993. His decision was upheld by the Court of
Appeal [1965] Ch. 992 and ultimately by this House under the
name of Boardman v. Phipps [1967] 2 AC 46. In that case a
trust estate included a minority holding in a private company
which fell on lean times. The trustees declined to attempt to
acquire a controlling interest in the company in order to improve
its performance. The solicitor to the trust and one of the
beneficiaries, with the knowledge and approval of the trustees,
purchased the controlling interest from outside shareholders for
themselves with the help of information about the shareholders
acquired by the solicitor in the course of acting for the trust.
The company's position was improved and the shares bought by the
solicitor and the purchasing beneficiary were ultimately sold at a
profit. A complaining beneficiary was held to be entitled to a
share of the profits on the resale on the grounds that the solicitor
and the purchasing beneficiary were assisted in the original
purchase by the information derived from the trust. The purchase
of a controlling interest might have turned out badly and in that
case the solicitor and the purchasing beneficiary would have made
irrecoverable personal losses. In these circumstances it is not
surprising that Wilberforce J. decided that in calculating the
undeserved profit which accrued to the trust estate there should
be deducted a generous allowance for the work and trouble of the
solicitor and purchasing beneficiary in acquiring the controlling
shares and restoring the company to prosperity. Phipps v.
Boardman decides that in exceptional circumstances a court of
equity may award remuneration to the trustee. Therefore, it is
argued, a court of equity may award remuneration to a director.
As at present advised, I am unable to envisage circumstances in
which a court of equity would exercise a power to award
remuneration to a director when the relevant articles of
association confided that power to the board of directors.
Certainly, the circumstances do not exist in the present case. It
is in this respect that section 317 of the Companies Act 1985 is
relevant. By that section:

"(1) It is the duty of a director of a company who is in any
way, whether directly or indirectly, interested in a contract
or proposed contract with the company to declare the
nature of his interest at a meeting of the directors of the
company .... (7) A director who fails to comply with this
section is liable to a fine. . . ."

In Hely-Hutchinson v. Brayhead Ltd. [1968] 1 Q.B. 549, the
Court of Appeal held that section 317 renders a contract voidable



- 11 -

by a company if the director does not declare his interest.
Section 317 does not apply directly to the present case because
there was no contract between Guinness and Mr. Ward. But
section 317 shows the importance which the legislature attaches to
the principle that a company should be protected against a
director who has a conflict of interest and duty. There is a
fundamental objection to the admission of any claim by Mr. Ward
whether that claim be based on article 100(D), a quantum meruit,
section 727 of the Act of 1985 or the powers of a court of
equity. The objection is that by the agreement with the
committee, which is the foundation of Mr. Ward's claim to any
relief, he voluntarily involved himself in an irreconcilable conflict
between his duty as a director and his personal interests. Both
before and after 19 January 1986, Mr. Ward owed a duty to tender
to Guinness impartial and independent advice untainted by any
possibility of personal gain. Yet by the agreement, which Mr.
Ward claims to have concluded with the committee and which may
have been in contemplation by Mr. Ward even before 19 January
1986, Mr. Ward became entitled to a negotiating fee payable by
Guinness if, and only if, Guinness acquired Distillers and, by the
agreement, the amount of the negotiating fee depended on the
price which Guinness ultimately offered to the shareholders of
Distillers. If such an agreement had been concluded by the board
of directors, it would have been binding on Guinness under article
91 but foolish in that the agreement perforce made Mr. Ward's
advice to Guinness suspect and biased. But at least the conflict
would have been revealed to the board. As it was, the agreement
was not made by the board and was not binding on Guinness. The
agreement was made by the committee and ought not to have
been made at all. By the agreement Mr. Ward debarred himself
from giving impartial and independent advice to Guinness. Mr.
Ward was a director of Guinness and in that capacity was able to
negotiate his own agreement with the committee of which he was
a member, and was able to discuss the bid by Guinness for
Distillers with the other directors, to advise and participate in
decisions on behalf of Guinness relevant to the bid (including a
decision to increase the amount of the offer) and to procure the
acquisition by Guinness of Distillers and thus to claim £5.2m. from
Guinness. I agree with my noble and learned friend Lord Goff of
Chieveley that for the purposes of this appeal it must be assumed
that Mr. Ward acted in good faith, believing that his services were
rendered under contract binding on the company, and that in that
mistaken belief Mr. Ward may have rendered services to Guinness
of great value and contributed substantially to the enrichment of
the shareholders of Guinness. Nevertheless, the failure of Mr.
Ward to realise that he could not properly use his position as
director of Guinness to obtain a contingent negotiating fee of
£5.2m. from Guinness does not excuse him or enable him to defeat
the rules of equity which prohibit a trustee from putting himself
in a position in which his interests and duty conflict and which
insist that a trustee or any other fiduciary shall not make a profit
out of his trust.

Finally, judgment against Mr. Ward on this application was
resisted in reliance on section 727 of the Act of 1985. That
section provides:

"(1) If in any proceedings for negligence, default, breach of
duty or breach of trust against an officer of a company or



- 12 -

a person employed by a company as auditor ... it appears
to the court hearing the case that that officer or person is
or may be liable in respect of the negligence, default,
breach of duty or breach of trust, but that he has acted
honestly and reasonably, and that having regard to all the
circumstances of the case (including those connected with
his appointment) he ought fairly to be excused for the
negligence, default, breach of duty or breach of trust, that
court may relieve him, either wholly or partly, from his
liability on such terms as it thinks fit. . . ."

Mr. Ward requested the committee to pay him and received
from the committee out of moneys belonging to Guinness the sum
of £5.2m. as a reward for his advice and services as a director.
Mr. Ward had no right to remuneration without the authority of
the board. Thus the claim by Guinness for repayment is
unanswerable. If Mr. Ward acted honestly and reasonably and
ought fairly to be excused for receiving £5.2m. without the
authority of the board, he cannot be excused from paying it back.
By invoking section 727 as a defence to the claim by Guinness for
repayment, Mr. Ward seeks an order of the court which would
entitle him to remuneration without the authority of the board.
The order would be a breach of the articles which protect
shareholders and govern directors and would be a breach of the
principles of equity to which I have already referred.

I would dismiss this appeal.

LORD GRIFFITHS

My Lords,

I have had the advantage of reading in draft the speeches
of my noble and learned friends Lord Templeman and Lord Goff of
Chieveley. I agree with them, and for the reasons that they give
I too would dismiss the appeal.

LORD GOFF OF CHIEVELEY

My Lords,

In this case, Guinness seeks judgment for the recovery of a
sum of £5.2m. paid to the appellant, Mr. Ward, without a trial.
Before the Vice-Chancellor it obtained a judgment on admissions;
the Vice-Chancellor's decision was affirmed by the Court of
Appeal, from whose decision Mr. Ward now appeals to your
Lordships' House.

I believe that I am not the only person concerned with
these proceedings who has been startled by the size of that sum,
which Mr. Ward has claimed to have been paid to him under a
contract binding on Guinness. But, for present purposes, the



- 13 -

amount is irrelevant. For since Guinness is seeking a judgment
without a trial in proceedings in which Mr. Ward is protesting his
good faith, he must be treated as, ex hypothesi, an innocent man,
who has acted throughout in complete good faith, under what he
believed to be a contract binding on Guinness, and indeed as one
who claims to have rendered valuable services to Guinness,
performed with great skill, which have contributed significantly,
perhaps crucially, to the success of Guinness's bid for the shares
in Distillers, thereby very substantially enriching the shareholders
of Guinness. It is on this basis that Guinness's claim to be
entitled to judgment against Mr. Ward has to be considered. It
has also to be borne in mind that Mr. Ward claims that, if by any
chance he is not entitled to the sum of £5.2m. under a contract
binding on Guinness, then he is entitled to some recompense for
the services which ex hypothesi he has rendered to Guinness,
either by way of an equitable allowance, or on a quantum meruit,
or under section 727 of the Act of 1985.

What course has the action taken? Before the Vice-
Chancellor, judgment was given against Mr. Ward on admissions, on
the basis that he had received the money in breach of his
fiduciary duty as a director of Guinness, by reason of his failure
to disclose his interest in the agreement under which he performed
the services, as required by section 317(1) of the Act of 1985. In
the Court of Appeal, Mr. Ward's appeal against that decision was
dismissed. It was said of him [1988] 1 W.L.R. 863, 870-871 that
he had "succeeded in getting his hands on the company's money,"
and that the company had never ceased to own the money which
he had been paid. Accordingly Mr. Ward was constructive trustee
of the money which he had received, and must pay it back. If he
wished to make a claim for remuneration in respect of the
services which he claimed to have rendered to Guinness, he must
bring a separate action.

The matter then came before your Lordships' House, by
leave of the House. Mr. Ward's submissions were presented to the
Appellate Committee, in an argument conspicuous for its
moderation as well as for its skill, by junior counsel, Mr. Crow.
It gradually became clear that Mr. Crow's criticisms of the
decisions of the courts below were well founded, and that (quite
apart from very serious difficulties arising upon the construction of
section 317) they were inconsistent with Hely-Hutchinson v.
Brayhead Ltd. [1968] 1 Q.B. 549, a decision of an exceptional
Court of Appeal consisting of Lord Denning M.R., Lord Wilberforce
and Lord Pearson. The decision in that case proceeded on the
basis that the statutory duty of disclosure (then embodied in
section 199 of the Companies Act 1948) did not of itself affect
the validity of a contract. The section had however to be read
with provisions in the articles, imposing a duty of disclosure upon
directors of the company. If a director enters into, or is
interested in, a contract with the company, but fails to declare his
interest, the effect is that, under the ordinary principles of law
and equity, the contract may be voidable at the instance of the
company, and in certain cases a director may be called upon to
account for profits made from the transaction: see per Lord
Wilberforce, at p. 589, and Lord Pearson, at p. 594. Perhaps the
matter is put most clearly by Lord Pearson, who said:

- 14 -

"It is not contended that section 199 in itself affects the
contract. The section merely creates a statutory duty of
disclosure and imposes a fine for non-compliance. But it
has to be read in conjunction with article 99. The first
sentence of that article is obscure. If a director makes or
is interested in a contract with the company, but fails duly
to declare his interest, what happens to the contract? Is it
void, or is it voidable at the option of the company, or is it
still binding on both parties, or what? The article supplies
no answer to these questions. I think the answer must be
supplied by the general law, and the answer is that the
contract is voidable at the option of the company, so that
the company has a choice whether to affirm or avoid the
contract, but the contract must be either totally affirmed
or totally avoided and the right of avoidance will be lost if
such time elapses or such events occur as to prevent
rescission of the contract. . . ."

On this basis I cannot see that a breach of section 317, which is
not for present purposes significantly different from section 199 of
the Act of 1948, had itself any effect upon the contract between
Mr. Ward and Guinness. As a matter of general law, to the
extent that there was failure by Mr. Ward to comply with his duty
of disclosure under the relevant article of Guinness (article
100(A)), the contract (if any) between him and Guinness was no
doubt voidable under the ordinary principles of the general law to
which Lord Pearson refers. But it has long been the law that, as
a condition of rescission of a voidable contract, the parties must
be put in statu quo; for this purpose a court of equity can do
what is practically just, even though it cannot restore the parties
precisely to the state they were in before the contract. The most
familiar statement of the law is perhaps that of Lord Blackburn in
Erlanger v. New Sombrero Phosphate Co. (1878) 3 App.Cas. 1218,
when he said, at p. 1278:

"It is, I think, clear on principles of general justice, that as
a condition to a rescission there must be a restitutio in
integrum. The parties must be put in statu quo. ... It is
a doctrine which has often been acted upon both at law and
in equity."

However on that basis Guinness could not simply claim to be
entitled to the £5.2m. received by Mr. Ward. The contract had to
be rescinded, and as a condition of the rescission Mr. Ward had to
be placed in statu quo. No doubt this could be done by a court
of equity making a just allowance for the services he had
rendered; but no such allowance has been considered, let alone
made, in the present case.

Faced with these problems, Mr. Oliver Q.C. was driven, in
the last resort, to submit that Hely-Hutchinson v. Brayhead Ltd.
was wrongly decided. I have to confess that I would hesitate long
before holding that a decision of such a court was erroneous.
Careful study of the decision, with the assistance of counsel,
merely served to reinforce my natural expectation that the case
was rightly decided.

This being so, it followed that the decisions of the courts
below in the present case, founded as they were upon a breach of



- 15 -

section 317 by Mr. Ward, were erroneous. In ordinary
circumstances, this conclusion would have led to the appeal being
allowed. But Mr. Oliver then sought to justify the judgment on
other grounds. It was first suggested by him quite simply that Mr.
Ward, having received the money as constructive trustee, must pay
it back. This appears to have formed, in part at least, the basis
of the decision of the Court of Appeal. But the insuperable
difficulty in the way of this proposition is again that the money
was on this approach paid not under a void, but under a voidable,
contract. Under such a contract, the property in the money would
have vested in Mr. Ward (who, I repeat, was ex hypothesi acting in
good faith); and Guinness cannot short circuit an unrescinded
contract simply by alleging a constructive trust.

The next suggestion was that it was unnecessary to have
regard to section 317 at all. There was a simpler solution to the
problem. The committee which Mr. Ward claimed to have agreed
to his remuneration, thereby binding the company, had no power to
do so, either under article 91 or under article 100(D) of the
articles of association. It followed that the contract upon which
Mr. Ward relied was void for want of authority, and that Guinness
was therefore entitled to recover from Mr. Ward the money paid
under it on the ground of total failure of consideration, or
alternatively on the basis that he had received the money as
constructive trustee. On this basis, it was suggested, summary
judgment should be entered against Mr. Ward for the full sum.

Having had the benefit of the assistance of counsel, I have
reached the conclusion that article 91 does not empower a
committee of the board of Guinness to authorise special
remuneration for services rendered by directors of the company.
It is true that the articles of Guinness are conspicuous neither for
their clarity nor for their consistency. In particular there is no
sensible basis upon which it is possible to reconcile article 91 with
article 110 without doing violence to the language of one or other
article. But I am satisfied that I should accept Guinness's
argument on this point.

But what about article 100(D)? Plainly, on its express
words, it is outside the ambit of article 91. For under it a
director who acts for the company in a professional capacity is to
be remunerated as if he were not a director.

Mr. Crow told your Lordships that Mr. Ward claims that he
was acting in a professional capacity, in that he was acting as a
business consultant. Your Lordships' House has to consider
whether that submission should be rejected without hearing any
evidence upon it. I have been troubled whether it would be proper
to do so. There is a tendency among elderly professional men to
restrict the meaning of the word "profession" to the older
professions, such as the church, medicine and the law. But, in the
course of this century, the meaning of the word has expanded, and
I suspect that it is still expanding at an accelerating rate. For
my part, I would be unwilling to hold, without evidence, what are
the modern professions today. Even so, as is demonstrated in the
speech of my noble and learned friend, Lord Templeman, there are
the most formidable difficulties which would in any event have to
be surmounted if business consultancy as such were to be
recognised as a profession; and, especially as the expression



- 16 -

"business consultant" is capable of more than one meaning, I am
satisfied that a bare assertion of the proposition cannot of itself
be enough to justify a trial on this point in the present case.

The matter may be more appropriately approached in
another way. Mr. Ward's profession was undoubtedly that of an
American attorney, he being the senior partner in a law firm in
Washington D.C.; and I can find no allegation in the pleadings that
he was acting as a professional business consultant. Let it be
supposed that he was not an American attorney but an English
solicitor. It is well known that English solicitors may develop the
most formidable negotiating skills, which they may deploy in the
course of their profession as solicitors. No doubt the same is true
of many experienced American attorneys. Had an English solicitor,
who was also a non-executive director of Guinness, acted as Mr.
Ward claims to have done, there might be circumstances in which
he could claim to have acted in his professional capacity as a
solicitor in this country. But it appears that Mr. Ward was not
acting, in the context of a purely English take-over bid, in the
course of his profession as an American attorney. He appears to
have been simply deploying, as a non-executive director of
Guinness, an incidental (though no doubt important) skill which he
had acquired in the exercise of his profession. On this basis, on
his pleaded case, Mr. Ward could not have been acting in the
course of his profession and article 100(D) has no application in
the present case.

But the matter does not stop there. Let it be accepted
that the contract under which Mr. Ward claims to have rendered
valuable services to Guinness was for the above reasons void for
want of authority. I understand it to be suggested that articles 90
and 91 provide (article 100 apart) not only a code of the
circumstances in which a director of Guinness may receive
recompense for services to the company, but an exclusive code.
This is said to derive from the equitable doctrine whereby
directors, though not trustees, are held to act in a fiduciary
capacity, and as such are not entitled to receive remuneration for
services rendered to the company except as provided under the
articles of association, which are treated as equivalent to a trust
deed constituting a trust. It was suggested that, if Mr. Ward
wishes to receive remuneration for the services he has rendered,
his proper course is now to approach the board of directors and
invite them to award him remuneration by the exercise of the
power vested in them by article 91.

The leading authorities on the doctrine have been rehearsed
in the opinion of my noble and learned friend, Lord Templeman.
These indeed demonstrate that the directors of a company, like
other fiduciaries, must not put themselves in a position where
there is a conflict between their personal interests and their duties
as fiduciaries, and are for that reason precluded from contracting
with the company for their services except in circumstances
authorised by the articles of association. Similarly, just as
trustees are not entitled, in the absence of an appropriate
provision in the trust deed, to remuneration for their services as
trustees, so directors are not entitled to remuneration for their
services as directors except as provided by the articles of
association.

- 17 -

Plainly, it would be inconsistent with this long-established
principle to award remuneration in such circumstances as of right
on the basis of a quantum meruit claim. But the principle does
not altogether exclude the possibility that an equitable allowance
might be made in respect of services rendered. That such an
allowance may be made to a trustee for work performed by him
for the benefit of the trust, even though he was not in the
circumstances entitled to remuneration under the terms of the
trust deed, is now well established. In Phipps v. Boardman [1964]
1 W.L.R. 993, the solicitor to a trust and one of the beneficiaries
were held accountable to another beneficiary for a proportion of
the profits made by them from the sale of shares bought by them
with the aid of information gained by the solicitor when acting for
the trust. Wilberforce J. directed that, when accounting for such
profits, not merely should a deduction be made for expenditure
which was necessary to enable the profit to be realised, but also a
liberal allowance or credit should be made for their work and skill.
His reasoning was, at p. 1018:

"Moreover, account must naturally be taken of the
expenditure which was necessary to enable the profit to be
realised. But, in addition to expenditure, should not the
defendants be given an allowance or credit for their work
and skill? This is a subject on which authority is scanty;
but Cohen J., in In re Macadam [1946] Ch. 73, 82, gave his
support to an allowance of this kind to trustees for their
services in acting as directors of a company. It seems to
me that this transaction, i.e., the acquisition of a
controlling interest in the company, was one of a special
character calling for the exercise of a particular kind of
professional skill. If Boardman had not assumed the role of
seeing it through, the beneficiaries would have had to
employ (and would, has they been well advised, have
employed) an expert to do it for them. If the trustees had
come to the court asking for liberty to employ such a
person, they would in all probability have been authorised to
do so, and to remunerate the person in question. It seems
to me that it would be inequitable now for the beneficiaries
to step in and take the profit without paying for the skill
and labour which has produced it."

Wilberforce J.'s decision, including his decision to make such an
allowance, was later to be affirmed by the House of Lords (sub
tit. Boardman v. Phipps [1967] 2 AC 46).

It will be observed that the decision to make the allowance
was founded upon the simple proposition that "it would be
inequitable now for the beneficiaries to step in and take the profit
without paying for the skill and labour which has produced it." Ex
hypothesi, such an allowance was not in the circumstances
authorised by the terms of the trust deed; furthermore it was held
that there had not been full and proper disclosure by the two
defendants to the successful plaintiff beneficiary. The inequity
was found in the simple proposition that the beneficiaries were
taking the profit although, if Mr. Boardman (the solicitor) had not
done the work, they would have had to employ an expert to do
the work for them in order to earn that profit.

- 18 -

The decision has to be reconciled with the fundamental
principle that a trustee is not entitled to remuneration for services
rendered by him to the trust except as expressly provided in the
trust deed. Strictly speaking, it is irreconcilable with the rule as
so stated. It seems to me therefore that it can only be
reconciled with it to the extent that the exercise of the equitable
jurisdiction does not conflict with the policy underlying the rule.
And, as I see it, such a conflict will only be avoided if the
exercise of the jurisdiction is restricted to those cases where it
cannot have the effect of encouraging trustees in any way to put
themselves in a position where their interests conflict with their
duties as trustees.

Not only was the equity underlying Mr. Boardman's claim in
Phipps v. Boardman clear and, indeed, overwhelming; but the
exercise of the jurisdiction to award an allowance in the unusual
circumstances of that case could not provide any encouragement to
trustees to put themselves in a position where their duties as
trustees conflicted with their interests. The present case is,
however, very different. Whether any such an allowance might
ever be granted by a court of equity in the case of a director of
a company, as opposed to a trustee, is a point which has yet to
be decided; and I must reserve the question whether the
jurisdiction could be exercised in such a case, which may be said
to involve interference by the court in the administration of a
company's affairs when the company is not being wound-up. In
any event, however, like my noble and learned friend, Lord
Templeman, I cannot see any possibility of such jurisdiction being
exercised in the present case. I proceed, of course, on the basis
that Mr. Ward acted throughout in complete good faith. But the
simple fact remains that, by agreeing to provide his services in
return for a substantial fee the size of which was dependent upon
the amount of a successful bid by Guinness, Mr. Ward was most
plainly putting himself in a position in which his interests were in
stark conflict with his duty as a director. Furthermore, for such
services as he rendered, it is still open to the board of Guinness
(if it thinks fit, having had a full opportunity to investigate the
circumstances of the case) to award Mr. Ward appropriate
remuneration. In all the circumstances of the case, I cannot think
that this is a case in which a court of equity (assuming that it
has jurisdiction to do so in the case of the director of a company)
would order the repayment of the £5.2m. by Mr. Ward to Guinness
subject to a condition that an equitable allowance be made to Mr.
Ward for his services.

Finally, I cannot see any prospect of success in a claim by
Mr. Ward to relief under section 727 of the Act of 1985. Given
that Guinness's claim must be one for the recovery of money paid
to Mr. Ward under a void contract and received by him as a
constructive trustee, there is no question of his being able to
claim relief from liability for breach of duty, as might have been
the case if Guinness's claim has been founded upon breach by Mr.
Ward of his duty of disclosure.

I have been very conscious, throughout this case, that
Guinness is seeking summary judgment for the sum claimed by it,
without any trial on the merits. Even so, I have come to the
conclusion that Mr. Ward has no arguable defence to Guinness's
claim. The simple fact emerges, at the end of the day, that



- 19 -

there was, in law, no binding contract under which Mr. Ward was
entitled to receive the money and that, as a fiduciary, he must
now restore that money to Guinness. For these reasons, I would
dismiss the appeal.

- 20 -