The Company and Association reps met and agreed that payment would be made of an ex gratia amount with regard to the pension payment, and a refund of contributions. The decision was published in the newsletter. One redundant pilot was told what his payment and refund would be. He received the refund, but then the company rescinded its decision to make the ex gratia payments. When he sought to recover it, he was told that there was no obligation to pay it.
The Co says the promise and agreement had no legal effect because there was no intention to enter legal relations because ex gratia means not binding and the background knowledge of the parties understood it as such. Ex gratia may mean without admission of liability, or without there being any pre-existing legal right (may be to avoid setting an awkward precedent). Settlements are often expressed in this way. But this does not mean that such agreements are legally unenforceable.
It was understood at the meeting that if the payments were made without legal obligation on the part of the company, then it would not be taxable. So the agreement, it was argued, was intended to exclude legal sanctions. The evidence was not sufficient to establish that this was the intention of all present. Judgment for the plaintiff