Horkulak v Cantor Fitzgerald International

The claimant, Steven Horkulak, claims damages against the defendant, Cantor Fitzgerald International (“Cantor”), on the ground that he was constructively dismissed from his employment in June 2000. The fixed term of his contract was due to expire in September 2002.

He is now aged 39. Since leaving school he has been employed in the money markets. For 11 years he was employed as a trader, principally in interest rate swaps, interest rate options and interest rate futures. From about 1994 he was employed as a broker in interest rate derivatives and he then moved into more managerial roles. Save for the period of time in which he was out of employment having ceased to work for Cantor he has been in continuous employment since he left school.

In 1996 he was working for Finacore as a senior broker in deutschmark interest rate swaps when he was contacted by Mr Xavier Alcan who had left him at Finacore to join Cantor. Mr Alcan’s approach led to a meeting between Mr Horkulak and Mr Lee Amaitis, at that time the Senior Managing Director of Cantor, now the President and Chief Executive Officer (CEO). The claimant could bring to Cantor his experience and his reputation as a successful broker with trading experience in interest rate derivatives. Mr Amaitis told him that he was wanted so that he could head a deutschmark interest rate swaps team, which could become a major force in Europe. At that meeting Mr Amaitis struck the claimant as a committed and passionate man who was confident and enthusiastic about what he wanted the claimant to do at Cantor.

Mr Amaitis’ experience was, until he came to England in 1996, in the United States and in particular with Wall Street brokerage firms. Cantor is an unlimited company incorporated in England in the business of inter dealer broking on the London market and it is part of a large group known as the Cantor Fitzgerald International Group (The Group). Mr Amaitis joined the Group in March 1995 in New York and, as I have stated, after coming to England in January 1996 as the Senior Managing Director of Cantor and Cantor Fitzgerald Europe and the Far Eastern business of the Group, he became President and Chief Executive Officer. In December 1999 a UK subsidiary company eSpeed Inc was incorporated and he was appointed Executive Managing Director of that company. On 14 September 2001 he was appointed Global Chief Operating Officer and Director of eSpeed Inc as well as taking responsibility for other areas of the business in North America. According to a variety of material before the Court he has acquired a reputation as a forceful CEO. Only months ago in High Court proceedings his management style was severely criticised. On that occasion he did not testify.

On 28 June 2000, the claimant then aged 36, married, with young children, earning, subject to bonus approximately £400,000 and holding the job of a senior managing director in a major broking house in the City of London, left the office, went home and the next day visited his doctor and his solicitor.

According to the notes of Dr Parson he informed the doctor that he had been :

According to the medical records his anxiety state continued and he received medication. He was not fit to work. Dr Parson referred him to Dr Julian Bird, consultant psychiatrist at Hayes Grove Priory Hospital. Dr Parson records the claimant denied “previous psychiatric history” whereas, in truth, the claimant had seen Dr McGilchrist at the Priory Hospital in July 1999. He saw Dr Bird within the first half of July 2000. He repeated complaints about the personal conduct of Mr Amaitis. With the benefit of Dr McGilchrist’s letter dated 14 July 1999 Dr Bird concentrated on the present situation. He concluded:

The doubt about drugs and alcohol was derived from the 1999 position and Dr McGilchrist’s letter:

He takes “….. cocaine, but his habit has become overwhelming.”

“…..he inhales…..probably four grams a week. He has been using cocaine heavily for four years. He would not now think of going out without taking it……….He recognises that he has become paranoid and aggressive as a result……”

“……he describes himself as a high risk taker, though interestingly he also appeared quite avoidant. When a situation becomes too much for him, he simply walks away from it, and for two days went missing from work and home, not telling anyone where he had gone.”

“He had some doubts as to whether he would be able to take enough time off work, however, even though the programme [addictions programme] is based on evening attendances. At the same time he did seem to recognise that unless he took some action he would lose everything, including his job. Very sadly I have heard nothing from him….”

Dr Bird recorded that “he absolutely assures me that he has not used any cocaine or other illegal drug for at least 6 months”.

The claimant attended for therapy from July 2000 onwards. As necessary I shall return to the events. In September Dr Bird reported:

Cantor’s immediate response to the solicitor’s letter of 29 June 2000 was to deny the “vicious and premeditated campaign”, secondly to allege that “….concerns have been expressed to him for some time as a result of his lack of application and commitment to his role” and thirdly to treat the contract of employment as subsisting, notwithstanding the grave allegations he had made and his conduct in absenting himself from his employment, which was then regarded as calling for a “sick note in the usual way”. On the 17 July 2000 Cantor expressed the view that his “…case” was “clearly a contrived and belated attempt to justify his continued dereliction of responsibilities prior to his recent departure”. Nevertheless on 15 August 2000 Cantor’s position was “….that your client remains an employee of the Company” having “ continued to accept payment of his salary. In the light of this, please confirm when your client expects to be in a position to return to work…”. The claimant did not return but commenced these proceedings.

By paragraph 7 of the Particulars of Claim the case was put as follows:

It failed adequately or at all to raise such concerns with the Claimant so as to enable him to address them;

It failed to follow and/or apply its internal disciplinary procedure in respect of the Claimant;

To the extent that Mr Amaitis believed or suspected (rightly or wrongly) that the Claimant’s performance was adversely affected by alcohol or drugs or any other matter or condition:

he continued to insist that the Claimant perform his duties to a standard that Mr Amaitis believed the Claimant could not continue to attain; and/or,

failed to raise such belief or suspicion with the Claimant so as to enable the Claimant to address it.”

By its defence (paragraph 8) Cantor:

admitted Mr Amaitis raised his voice on occasions when he drew the claimant’s attention to serious shortcomings in his performance;

admitted using words which “might be regarded as extreme in polite conversation but were common currency between Mr Amaitis and the claimant”;

asserted that “such behaviour” was regarded as acceptable and had a reasonable and proper cause, namely his “frustration at the repeated and serious shortcomings” in the claimant’s performance;

admitted the occasional banging of the desk in a non-violent and non-intimidatory manner.

By paragraph 23 of the defence the alleged repudiatory breach as at 28 June 2000 was denied and the actions of the claimant in walking out and seeking to terminate were alleged to comprise a repudiatory breach, which Cantor did not immediately accept. By paragraph 25 it is alleged Cantor accepted the breach by not paying salary after 31 August 2000.

By paragraph 27 Cantor asserted that the claimant “would have been dismissed…..in any event by reason of his misconduct and shortcomings; and that these would have entitled Cantor to dismiss him summarily”. It relied upon the so-called “last straw” principle in relation to prior breaches which had not been subject to dismissal and assumed the continuation of offending conduct which would have enabled dismissal within 3 months.

In the event no argument has been pursued in connection with waiver on the part of Cantor, and Cantor has sought to defend the claim by reference to the alleged shortcomings on the part of the claimant as comprising reasonable justification for the extent, manner and tone of Mr Amaitis’ responses to the claimant’s conduct. Although at times it seemed as though much of the evidence was directed towards justifying a case for the summary dismissal of the claimant, the fact remains he was not dismissed but left his employment. The central facts which are in dispute and fall for determination are those alleged in support of his claim for constructive dismissal. In resolving the dispute on those issues the whole conduct of the claimant and Mr Amaitis has become relevant.

The words and expressions described by the defence as ones which “might be regarded as extreme in polite conversation” are, on the uncontradicted evidence before the court, foul and abusive expressions and swear words. Although their use on all the occasions alleged by the claimant has been disputed, the general currency of such language within Cantor has been accepted and established. Thus it has been necessary to consider the operation of the law in a workplace where such language is commonplace and consider how far its prevalence is capable of affecting the requirements of the law in connection with the employer and employee relationship. The law has developed so as to recognise an employment contract as engaging obligations in connection with the self esteem and dignity of the employee. There is an obvious tension between the circumstances which have been addressed in this development of the law and the currency of the language in evidence in this case.

It is obvious that the developments in employment law have not been carried with the avowed purpose of eliminating the use of foul and abusive expressions and swear words in the workplace. It is also clear from the cases that the use of such language can undermine the contract of employment. (See Palmanor Ltd v Cedron[1978] ICR 1008, Cantor Fitzgerald International v Bird and others[2002] IRLR 267). In this instance its prevalence raises a question as to how far regular use can sanitise it so as to remove its power to offend. Although the claimant disavowed reliance upon the mere use of such language and sought to found his case on the substance of the issue underlying each exchange, there are difficulties in seeking to disassociate the subject matter of an exchange from the language in which it is expressed. Language, however debased, provides a window into a person’s mind and one must assume some measure of choice to have been employed by the speaker. Even where the coinage of words occurs, as in this workplace, because little time is available for thought, let alone the art of the wordsmith, its use serves to convey some meaning, a viewpoint, or emphasis and an attitude going well beyond the barren coarseness of the language itself. Save where words have been chosen with a view to expressing nothing, the starting point must be not to disregard them, but to attempt to attribute some meaning to their adoption. I have not forgotten that the claimant himself was given to foul language and according to Miss Fenelly, an employee at Cantor, used it to her. That said, he is not for that reason to be deprived of complaining about its use towards him, though it is a factor to be considered.

It has been generally agreed that work at Cantor has certain hallmarks. Brokers have to negotiate deals over the telephone in the space of a few minutes. They deal in very large sums of money. If deals go wrong the financial consequences can be severe. It is a tough market place where quick thinking, firm determination and risk taking are essential attributes for a successful career. Employees are regarded as “producers”, but the only product is money. Performance and pay are assessed by reference to the “product” generated by individuals and collectively by groups of individuals within the different departments. Managers are assessed by reference to the “product” of their sections and their ability to control costs and expenses, which, of course, reduce the “product” available to be shared. The bond which keeps the employees together is money and everyone’s eye is on the size of the share which can be acquired for themselves. Where an individual’s share of money can be directly affected by another person’s conduct, acute personal instincts are at play. All these factors create a low threshold of toleration for a perceived lack of performance.

It is against this background that the conduct of the claimant and Mr Amaitis must be assessed. According to the case for Cantor, Mr Amaitis is “direct” and “forceful”, having a style of management and communication appropriate to the workplace in question. It is fair to assume that he is regarded as a very successful CEO of the London business. According to Cantor the claimant could not cope with the pressures, tensions and demands which were properly incidental to the job and, in essence, left not because he was driven out by unlawful conduct on the part of Mr Amaitis, but because he could not cope with the job.

The claimant joined Cantor, pursuant to a contract of employment dated 17 January 1997, as a director responsible for deutschmark rate swaps in Cantor’s Currency Interest Rate Group. His salary was set at £200,000 per annum for the first and second year of service. In addition he was granted a “once only” guaranteed loyalty bonus of £200,000 for the first year and £100,000 for the second year. Further he was entitled to be paid a discretionary bonus; the amount of which was to be mutually agreed. Yet further he received a guarantee that in the third year of his employment and each subsequent year he would receive compensation of not less than 75% of the total for the immediately preceding year. By any standards this was a substantial package of remuneration. The claimant was then aged 34 years. In July 1997 he received further benefit. He was awarded 4,572 Grant Units in Cantor Fitzgerald International LP, entitling him to share in the profits of the Partnership.

When the claimant joined Cantor, deutschmark interest rate swaps generated a revenue of about $12 million through a team of ten brokers. Within twelve months twenty five brokers were generating a revenue of $24 million. He was promoted to Managing Director and Joint Head of Interest Rate Derivatives; the other joint head being Mr Xavier Alcan. This promotion added to the claimant’s responsibilities. He had to oversee the dollar swap desk and the interest rate options desk as well. His progress continued. In January 1999 he became Global Head of Interest Rate Derivatives, responsible for the swap desk and the credit derivatives desk in New York. Later he entered into a fresh Contract of Employment.

He became employed as Senior Managing Director pursuant to a contract dated 17 August 1999. His salary (“commission compensation”) was set at £250,000 per annum, but Cantor reserved the right to reduce it by no more than 25% if total revenue fell beyond a set level. He became entitled to a once only bonus of £100,000 and a guaranteed bonus of £100,000 in respect of the financial year ending 30 September 2000. In addition he became entitled to a discretionary bonus to be mutually agreed. He signed the Standard Terms and Conditions of Cantor Fitzgerald on 18 August 1999.

The Terms and Conditions included the following:

By clause 2(2) he was required to have a high level of product and market knowledge

By clause 2.3 he was to use reasonable endeavours to improve relationships with clients by entertaining and making personal contracts.

By clause 2.4 he acknowledged that Cantor generally expected its broker employees to generate commission income of not less than two to three times their fixed remuneration and that their general performance is assessed with regard to that standard.

By clause 6.4 it was provided that Cantor was entitled to require the claimant to undergo examinations by a medical adviser, to receive the results and to require the claimant

By clause 16 it was provided that the standard terms and conditions and accompanying letter contained the entire agreement between the parties.

Being bound by the policies and procedures manual embodying a disciplinary procedure “…designed to help and encourage all employees to achieve and maintain standards of conduct, attendance and job performance”.

By an Agreement, also dated 18 August 1999, made between the claimant, Cantor Fitzgerald LP and Cantor Fitzgerald International (the defendant) the claimant agreed in return for $1 that his base units in Cantor Fitzgerald LP (then estimated at $800,000) should be valued at “zero dollars”. This Agreement is governed by the laws of the State of Delaware in the USA. It was signed by Mr Amaitis, Mr Lutnick (for the Partnership) and the claimant. It is common ground that had the claimant not signed it, he would not have been promoted. According to Mr Amaitis the Agreement served to ensure loyalty and commitment because, despite the unconditional terms of the written Agreement, the understanding was that so long as the claimant did not leave his employment and work for a competitor it would not be implemented in accordance with its terms. According to the claimant it was known within Cantor as “the blood oath” and was seen as key to a long and prosperous future with Cantor. The unusual circumstances and existence of this Agreement and its relationship to the contract of employment have not been raised in these proceedings and therefore call for no conclusion by the court. Its existence however serves to confirm the strength of the bond of money which held the managers together and to shed some light on the proximity of the relationship between the claimant and Cantor.

In order for the claimant to succeed in a claim for wrongful dismissal he must establish:

The leading authority on the implied term of trust and confidence is now the decision of the House of Lords in Mahmud & Malik v BCCI[2000] AC 20. See the speech of Lord Steyn at 45 c-D:

Lord Nicholls described the implied obligations as (p35A-B):

The term was further considered by the House of Lords in Johnson v Unisys [2003] 1 AC 518 in the context of the termination of an employment relationship. In Johnson Lord Hoffman also had regard to the evolution of the implied term of trust and confidence. He stated (at 539A-D):

The test as to whether there has been a breach of the implied term of trust and confidence is an objective one. As Lord Steyn put in Mahmud & Malik (p 47G-H):

Furthermore, an employer can breach the implied term of trust and confidence by one act alone or by a series of acts which cumulatively amount to a repudiatory breach of contract, even if the last even in that series is not actually a breach of contract at all: see Lewis v Motorworld Garages Ltd [1986] ICR 157 in which Glidewell LJ stated:

Where the repudiatory breach alleged is of the trust and confidence term:

There is no question of a contractual term that an employer must behave “reasonably” (or “not unreasonably”): that is a matter for the employment tribunal. Moreover, an employer may engage in conduct which is “out of order” without thereby repudiating the contract, although repeated behaviour of that kind may be a different matter. Cantor Fitzgerald v Bird[2002] IRLR 867, SS28.

The test to be applied is not subjective. The employee’s actual perception is not material. The test is an objective one; that is whether viewed objectively, the employer’s conduct so impacted on the employee that the employee could properly conclude that the employer was repudiating the contract. Brown v Merchant Ferries [1998] IRLR 682, NICA.

A number of points having particular relevance to the facts of this case can be extracted from a detailed consideration of the speeches in the House of Lords in Mahmud and Johnson v Unisys.

The notion of an employment contract giving rise to a “master and servant” relationship is now obsolete. (Lord Steyn, Mahmud. 45H – 46A)

The obligation of mutual trust and confidence has emerged from the general duty of co-operation between contracting parties. (See Professor Brodie: (1996) 25 ILJ 121)

The relationship remains defined by the respective role and responsibilities of the employer and the employee. The employer has the right to exercise authority and to instruct and direct, namely to “manage his business as he sees fit” and the employee has a duty to comply with reasonable instructions and directions. The responsibility for the running of the business and the methods of achieving the legitimate aims of the business ultimately lie with the employer.

Given that the respective roles are, at their elemental level, as in (iii) above, the movement away from a master and servant relationship requires particular attention to the element of co-operation which underpins the character of the contract of employment. An employee’s participation in the business cannot simply be regarded as the work of a servant for the benefit of the employer, but has to be recognised as “….one of the most important things in his or her life. It gives not only a livelihood but an occupation, an identity and a sense of self-esteem.” (Lord Hoffmann Johnson v Unisys 539 B-C)

In a master and servant relationship, the benefit for the servant was to be paid a wage. The “co-operation” required of an employer, to which a contract of employment gives rise in modern times, cannot be met simply by remuneration, nor, in my judgment, can the level of it affect the principle which is now in play. I reject as fallacious the proposition, which has surfaced in argument from time to time, that where very substantial sums are paid by an employer, he acquires a right to treat employees according to a different standard of conduct from that which might otherwise be required.

In the instant case the thrust of some of the argument has been to the effect that huge salaries are paid in broking houses because employees may be subjected to stress, anxiety and summary treatment. As the expression goes, “if you can’t stand the heat of the kitchen, get out”. Obviously the court must recognise and pay regard to the character and nature of the business in question. But due regard will not exclude the application of the law as it has developed, for as Lord Steyn observed in Johnson vUnisys Ltd (paragraph 19 532 B-F):

“….stress-related psychiatric and psychological problems of employees…..[have] greatly increased”

“These considerations are testimony to the need for implied terms in contracts of employment protecting employees from harsh and unacceptable employment practices.”

The particular role and status of an employee will define the character and degree of co-operation to which the contract of employment gives rise. For example a senior manager is likely to perform some of the employer’s functions and will be seen by employees to be doing so, whilst also being subject to a more senior manager who is his employer.

A senior manager can co-operate in a business at a high level of involvement. In the performance of his contract he needs to cultivate and maintain the confidence of those employees over whom he exercises managerial control and he needs the support and co-operation of his “employer”, more senior management, to carry out his duties in this regard and generally. Since he has managerial duties, his judgment having been invoked cannot properly be subjected to instant and dismissive conclusions which accord no respect to his viewpoint. Co-operation at this level takes on characteristics akin to partnership. In this connection the so called “blood oath” agreement is not without relevance.

From about July 1997 the claimant and Mr Amaitis spent a considerable amount of time together. The claimant makes no complaint of hostility towards him in this period but he has given an account of Mr Amaitis’ conduct.

The picture portrayed by the claimant’s evidence, drawn together from a number of individual incidents, was as follows. Mr Amaitis ran Cantor in an extremely dictatorial style, showing an almost “whimsical” attitude to the hiring and firing of employees. He was abusive towards and about employees and frequently required the claimant to implement instructions to dismiss employees. On one occasion he was told to dismiss the entire dollar interest rate swaps team because they were all “fucking useless”. An effort by the claimant to placate him failed. The claimant was sufficiently concerned to consult the Head of Human Resources for guidance. As a result he arranged meetings and gave each individual a warning. They were later each given three months notice.

Mr Amaitis did not dispute the occasion but he denied using abusive words about the employees. He did not directly dispute expressing a desire to instantly dismiss them but asserted that later he had been party to and aware of the circumstances in which ultimately they left with notice. By the time cross examination had been completed the incidence of the use of foul and abusive language by him and others had been fully investigated and I am unable to place weight upon his denial in his second witness statement about the use of such language. His denial that he was dictatorial in style simply did not accord with the tenor of his own evidence.

In my judgment Mr Amaitis is a dictatorial manager and executive. I have concluded that he sees it as his role to be so. As he was minded to accept in evidence, he has brought to the executive and managerial level the habits of the trading floor. He issues staccato instructions, raises his voice, shouts, expects instant responses and is quick to criticise where he perceives failings or faults. He regularly employs strong, foul language and swear words and expressions containing expletives.

Although he was reluctant to concede it was the case, I am satisfied on the evidence I have heard from the claimant and from the witnesses Jane Middleton, Rhonda Lawrence and Peter Lewis, that rather than being occasional, the use of swear words, expletives, and foul and obscene language is an everyday and frequent aspect of the communications uttered by Mr Amaitis. In addition I am satisfied that the language has become a hallmark of his managerial style. I do not accept that its use can be regarded as incidental or meaningless. It is commonly the language of dictatorial leadership and for Mr Amaitis it exemplifies his attitude as an employer. He does not set out to accommodate employees but to dictate to them, to require them to perform and to be available to explain themselves at any moment he requires. So long as he has faith in an employee, that employee will be outside the direct range of his outbursts. He was minded to attempt to mitigate the forcefulness of his personality by disputing some of the detail in the claimant’s evidence but his own evidence, including his demeanour and responses in the witness box, left the true position beyond doubt. His business philosophy is simple. He is passionate about money and the need for the business to make money. To act so as to unnecessarily reduce profitability excites him to anger and passion. He put it in these uncompromising words:

I accept from the account given by the claimant and other evidence in the case, that for the period of their relationship to the end of 1999, Mr Amaitis behaved as I have generally described, but in this period he appears to have had no cause to find fault with the claimant. In addition to the occasion referred to in paragraph 37 above, the claimant’s witness statement refers to a number of occasions when Mr Amaitis issued peremptory threats to dismiss employees in foul language. The tenor of the evidence is not only borne out by the witnesses I have heard, but it is consistent with the conclusion I have reached about his management style. His exercise of authority was extreme. He was given to making threats of instant dismissal if his orders were not carried out or he felt he had been “embarrassed” by someone’s conduct. There is no evidence the threats were invariably or even regularly implemented but the conduct does demonstrate that the restraints and obligations arising out of a contract of employment were not at the forefront of his thinking. It is unnecessary for me to rehearse the details further but I should summarise my reasons for preferring the claimant’s account.

The measure of agreement by Mr Amaitis to the claimant’s portrayal of him left no rational basis for concluding that the claimant was wrong in the totality of his evidence in relation to this period of time up to the end of 1999. Mr Amaitis asserted that he upheld high standards of performance. Where profit was concerned he was “passionate”. Where failure occurred he was decisive. He is not a man who views compromise as a sensible option. As we shall see many of his occasions for complaint against the claimant stem from his aversion to meeting the other side of a case. These factors, taken with his acceptance of the use of foul and coarse language, all point to the reliability of the claimant’s account. It is noteworthy that his abusive outburst to Jane Middleton led to her remaining in employment only because it was agreed that she need have no direct dealings with him.

The claimant, had he thought about it, could have been in no doubt about what might be in store for him if Mr Amaitis had reason to question his performance.

There has been comprehensive disclosure of the claimant’s medical records. When aged 21 years (1985) he was referred to a specialist who recorded, among other things, the following:

In 1998 his doctor referred him to the Priory Hospital because he was “extremely stressed”. The doctor opined: “I feel that a lot of his problem is job and stress related….”. He attended for therapy. I have already referred to his visit to Dr. McGilchrist in July 1999. The claimant gave evidence about this.

Mr Béar, QC for Cantor, launched a full attack on the credibility of the claimant. He submitted that the court should not accept his evidence unless supported by other evidence, namely a measure of agreement from the defendant or some other quarter. He relied upon a number of factors as justifying this conclusion.

Concealment of evidence from Cantor and his solicitors. The claimant admitted that in January 2001 he resumed heavy drinking and the use of cocaine. He was admitted to the Priory Hospital but he attempted to conceal this from his solicitors and Cantor. In cross examination he admitted that at the time he had no “issues” about withholding information from Cantor.

Dishonesty in connection with his cocaine addition. The claimant explained his resumption of drinking and taking of cocaine in 2001 by reference to a conversation with a broker, which conversation caused his recollection of the treatment he had received at the hands of Mr Amaitis to come to the forefront of his mind. The account is not supported by the contemporaneous medical notes. He did not retract or correct the position in his oral evidence. As to 1999 he asserted that having seen Dr McGilchrist he simply stopped, probably by October 1999.

Lying to Dr Parsons about “a previous psychiatric illness”. When questioned the claimant suggested that perhaps he had not appreciated that the 1999 episode qualified as psychiatric treatment or did not understand the doctor’s question to extent to the 1999 treatment.

Selective recollection. Mr Béar instanced the difference between his detailed recollection in connection with the allegations against Mr Amaitis and his inability to remember details of medical treatment and drinking and taking cocaine.

Exaggeration. The claim as advanced by the claimant imputed to Mr Amaitis a deliberate course of bullying and intimidation, designed to humiliate him in the eyes of others. The case was not sustainable, submitted Mr Béar, and had not ultimately been supported by counsel for the claimant.

I have considered these submissions. There is a need for the exercise of some caution in respect of the claimant’s evidence. It is necessary in considering his account of his drug and alcohol addiction. In common with many addicts he has found it difficult to recognise the true extent of his addiction, has been on occasions reluctant to admit it or to reveal it and has understated his drug usage. He has an anxious personality, but he could not have survived in the industry without a strain of tenacity and determination, which has been demonstrated by his conduct of this litigation. Unlike Mr Amaitis he has a discernible sensitivity. He would rather be liked than feared. It is likely that his use of cocaine accentuated an inclination to sensitivity to criticism and did overlay his perceptions of Mr Amaitis with elements of paranoia. I have no doubt that he felt vulnerable to the disclosure of his alcohol and drug addiction and that he had the intention of concealing the evidence. But the evidence has been disclosed, the truth is out and subject to my expressed reservations I am satisfied he gave his evidence in court honestly.

The claimant alleged that whilst having lunch with business colleagues he received a call on his mobile phone from Mr Amaitis. He was ringing in connection with a bonus schedule, which the claimant had prepared, to complain that brackets had not been placed where they should have been to indicate that a bonus had already been paid and thus was not due for payment. It is not disputed by Mr Amaitis that he complained about the schedule but his lack of clear recollection about this, the last exchange he had with the claimant, is surprising. Although initially his recollection was that he had met that day with the claimant, he was prepared to accept that his recollection may have been at fault in his regard. He accepted he had spoken on the telephone. In his witness statement (paragraphs 41 and 42) he recollected:

A number of points have to be made about his account in these paragraphs of his first witness statement.

He expresses no doubt about his recollection. He confidently contradicts the claimant’s account of a telephone conversation: “In fact what happened was ….”

He asserts that the issue he raised was “an important matter”. He does not dispute the point about the absence of brackets and he asserts the reason for taking issue with the schedule was that he had already stated that unless there was improvement, “no bonuses would be paid”.

His recollection of the meeting extended to the gist of what he had said to the claimant:

that the proposal was unacceptable;

that in his management judgment what was needed was “to review carefully broker numbers and the remuneration costs of the brokers and that in that ‘context’ paying brokers was a misjudgment”;

In his second witness statement he stated:

In cross examination he stated:

The resolution of this conflict of fact is significantly affected by whether a meeting took place. It is puzzling how Mr Amaitis could have recalled, at the date of his witness statements, the act of “insubordination” on the part of the claimant in leaving his office and never returning, but have become unsure about it by the time of the trial. His written evidence was calculated to portray the claimant as having walked out of an important meeting for no good reason. On Mr Amaitis’ evidence, that had not happened on any other occasion. If it happened it was a serious failing on the part of the claimant. On a matter as important as the bonuses to be paid to employees a meeting would have been appropriate and perhaps for this reason Mr Amaitis believed there had been one, but I am satisfied none occurred on that day. Further to suggest paying, as the claimant is said to have done, bonuses to prevent employees leaving, is hardly an outlandish suggestion to be dismissed out of hand although, of course, the absence of profitability would plainly be an important aspect to weigh in the process. On this occasion (as on others to which I shall come) I am satisfied that Mr Amaitis rebuked the claimant. By then, as he states in his second witness statement, he had “lost faith” in him. His grounds for disapproval should have been expressed at a meeting, but if the only complaint he had was on the absence of brackets, neither a meeting nor a telephone call would appear to have been necessary. His choice of the telephone accommodated his desire to summarily and strongly disapprove of what the claimant had done without giving the claimant a chance to respond. The absence of brackets was raised on the telephone. I have no doubt that his anger gave way to strong abusive expressions, such as “Where the fuck are you?” and, “What’s this piece of shit in front of me about bonuses?”, and calling the claimant a “stupid mother-fucker”. The claimant was not directly challenged in this regard. The coarseness of his language has two important facets. It expressed the conclusive authority he intended to convey on the issue and it precluded rational discussion. I am satisfied that the minor nature of the criticism relating to the absence of brackets and the strength of the language in which it was expressed convinced the claimant he could not continue to work with Mr Amaitis. The episode was to put him in fear of meeting Mr Amaitis and being able to continue with his employment. He left Cantor not as an act of insubordination in the face of the exercise of reasonable authority by his employer, but because his role and status as a senior manager and employee had been severely undermined.

The occasion bears a similarity to an incident in February 2000. It took place at a meeting. The claimant presented a report about trading platforms to Mr Amaitis, in company with a colleague, Mr Jokisch. Within minutes of the presentation Mr Amaitis shouted: “get this shit out of here”, “it will never fucking work”, “it would never corner the fucking market”. He then “stormed” out of the room. There was no real dispute about this incident. Mr Amaitis agreed he said: “Get this crap out of here. It is a piece of shit and it will never work” and that “it was crap”, that he shouted about it and said: “It will never work, get it out of here. I do not want to see it”. He agreed that he walked out. In walking out he demonstrated his contempt for the presentation.

The claimant’s contract of employment as a senior managing director acknowledged the need for a measure of commitment and participation outside normal working hours. In an international business involving transactions and affairs taking place in different time zones it is commonplace for frequent telephone calls to be made out of hours. Mr Amaitis was entitled to contact the claimant at all reasonable hours, outside normal hours. What would be reasonable would depend upon the reason for the call. In March 2000 the claimant was on holiday for a few days and at the Cheltenham Festival. Mr Amaitis phoned him to complain that the claimant had failed to fix a meeting between a prospective employee (Kevin Spencer) and Mr Amaitis. It is clear it had been for the claimant to fix the meeting and that one had not been arranged. According to the claimant Mr Amaitis used expletives to express his annoyance. I accept the evidence of the claimant without acquitting him of bearing responsibility for the incident. The tone adopted by Mr Amaitis was not challenged. The incident has more significance for the point it makes in the changing relationship of the claimant and Mr Amaitis. By the 28 April 2000 the relationship had deteriorated further.

The claimant was at home at about 8 pm celebrating his daughter’s birthday. Mr Amaitis telephoned about a bonus payment to Mr Novotny. According to the evidence of the claimant Mr Amaitis “went berserk”, threatened to “fucking break” the claimant “in two” and sack him. There was a torrent of abuse. He called the claimant a “mother fucking son of a bitch” several times. Mr Amaitis accepted that he probably said: “Who runs this fucking company?” He accepted he was angry and that the conversation was not “co-operative”. He denied losing his temper. His account was not consistent. In his first witness statement he said he did not remember the incident. In his second witness statement he did remember it. In his oral evidence he gave a full account and an explanation not given before. His complaint was that the claimant had engendered an expectation in Mr Novotny by discussing the possibility of a bonus being payable, which had compromised his position.

I am prepared to accept that Mr Amaitis did strongly disapprove of the way in which the claimant had handled the bonus issue with Mr Novotny. Having heard him in evidence I have no doubt that he was incensed at the prospect of having to pay a bonus where he believed one should not be paid. I acquit Mr Amaitis of having telephoned deliberately in the knowledge that the claimant was celebrating a birthday. He apologised for that. It was wholly in character for him to telephone to voice his objection to a proposal and I have no doubt he was particularly incensed on this occasion because he felt his authority had been undermined. I am satisfied that he used language and abuse to express his viewpoint as the claimant described. To threaten “to break” someone “in two” is to adopt the language of criminal intimidators. It was not a criminal threat to harm the claimant but a clear expression of the level of anger and intolerance he harboured for the claimant, which was wholly incompatible with the continuance of a relationship based on mutual trust and confidence.

Mr Amaitis’ grounds for objecting to a number of the claimant’s bonus and remuneration proposals were thoroughly examined in the course of the evidence. On two occasions they fell out over the appropriate package for two employees; Delhouze and Martinot. The claimant disagreed with Mr Amaitis’ proposals for Mr Delhouze’s return from the New York office. The claimant regarded Mr Amaitis’ offer as too low and as unlikely to be acceptable. Mr Amaitis’ view was that if Mr Delhouze did not like it, then “fucking fire him”. Mr Delhouze did not accept it and the claimant did not advance the negotiations or “fire” him. Despite abusing both the claimant and Mr Delhouze, Mr Amaitis closed the deal on the terms suggested by the claimant. Mr Amaitis’ evidence was unsatisfactory on the issue. In chief he had no recollection of it. In cross examination he agreed he probably said: “do the fucking deal”, because he was impatient that nothing had been done. On the evidence before the court it is difficult to be judgmental about the merits of the opposing arguments. Both actors behaved in character. Mr Amaitis, unyielding and intemperate and interested in having his way, and the claimant exhibiting his “avoidance” technique in the face of a conflict.

The Lise Martinot incident took on a different character as a result of Mr Amaitis’ evidence. In his first witness statement he could not recall the incident. In the second he said that the negotiation took place when the claimant was on holiday and was “nothing to do with the claimant personally”, but that he had decided to pay the severance package on its merits. In cross examination it became another illustration of how the claimant had “compromised” Mr Amaitis’ position and forced him to agree to it. If it had been the latter I would have expected Mr Amaitis to have remembered it at the time of his statement.

In certain circumstances such shifts in evidence can lead a court to conclude that a witness is being dishonest. In this instance the position is more complex. I have concluded that Mr Amaitis rarely expressed criticism to anyone in a manner which was designed to demonstrate the reason for his disapproval, as opposed to demonstrating the level of his disapproval and reinforcing his authority as the “boss”. The thrust of the claimant’s case, which I accept, is that once Mr Amaitis had “lost faith” in the claimant, the detail of the circumstance was not important. It was subsumed into the overall conclusion to which he had come, namely that the claimant was not performing well, in particular, so as to reduce costs. In an attempt to answer the detail he has rationalised after the event. Had he thought about things at the time he may have been able to be rational on these occasions and register a ground for complaint. In truth I believe he viewed discussion as a sign of weakness.

Similar changes in his evidence occurred in response to the claimant’s case in connection with the dispute over $18,000 which had been due from J P Morgan Chase. The claimant’s case was that Mr Amaitis had deliberately set out to make life difficult for him. That was certainly the consequence of what took place. However, I have no doubt that the cause of the difficulty between them was that there was a difference of opinion as to whether J P Morgan Chase, having written off $475,000 owed by Cantor, should be pursued to pay $18,000 of outstanding commissions. Again the claimant showed his “compromising” style. Mr Amaitis was characteristically resistant to giving out anything when, by being adamantine it could be retained. On the evidence it seems there was scope for two views, but on the evidence, which I accept, the difference in approach was never discussed and the claimant was criticised without having a proper opportunity to express his view.

On this occasion, as on others, Cantor suggested that had the claimant obeyed instructions, then differences and disputes would have been avoided. That begs the question as to whether “co-operation”, rather than following instructions, was merited. Cantor has also responded by asserting that Mr Amaitis had good cause to criticise the claimant’s performance and general failings. Rhonda Lawrence, Mr Amaitis’ personal assistant, gave evidence about the difficulty she experienced in contacting the claimant by mobile phone and of not knowing where he was. Mr Windeatt, a manager in Cantor’s accounting department, gave evidence about the number of occasions when it was necessary for attention to be drawn to the claimant’s failure to keep control of travel and entertaining costs. Although I find both were inclined to overstate the position, I have little doubt that from time to time the claimant was unobtainable. Mr Amaitis expected him to be obtainable at all times. He was even annoyed when the claimant was absent because he was ill.

In paragraph 34 of his witness statement Mr Amaitis accepted that he warned the claimant that if he was not available when he needed him it could lead to the termination of employment. The claimant’s case is that he was frequently threatened with the sack in the course of abusive reprimands and in May 2000, in the presence of the President of Cantor, Mr Lutnick, was told that if he answered a question incorrectly he would “walk this afternoon”. The evidence was not directly challenged. Mr Amaitis remembered the occasion but denied threatening him with dismissal. The allegation was pleaded to have occurred on 23 June but the evidence is otherwise. I accept the claimant’s account.

The claimant missed a flight back from Monaco. He had probably drunk too much the night before. I am satisfied that when he was summoned to Mr Amaitis, he was told that he “should be fucking dismissed”, that Mr Amaitis banged the table with his fist and said words to the effect that the claimant annoyed him so much that he caused him “pains in his chest”. Mr Amaitis had cause to complain about him missing the flight. It could have merited a formal warning. At least a warning carries some continuing re-affirmation of the contract and an opportunity for the relationship to continue. Mr Amaitis’ comments excluded such a prospect. I believe he intended to exclude a future relationship. By this time he had no wish to retain the claimant as senior managing director.

A variety of complaints were advanced about him being uncontactable, either because he disappeared for two days, for example, in 1999, and in Tokyo in 2000. Further it is alleged he was frequently absent from work and did not answer his mobile. As the medical evidence has indicated, it is within the claimant’s character to avoid issues, to absent himself and, no doubt, to cut off contact by telephone. The two day absence in 1999 is recorded by the doctor. I have little doubt that he was not always available when Mr Amaitis wanted to talk to him, and that, as time went by in 2000, he deliberately avoided Mr Amaitis. It would not take many such occasions for Mr Amaitis to be angered and to conclude that the claimant was not performing as he should. The evidence does not permit a clear conclusion to be drawn. The claimant’s responsibilities required him being out of the office recruiting brokers and entertaining and socialising with bankers. He may not always have left a message stating his whereabouts and sometimes he may have left his mobile off as well. Prior to January 2000 there is evidence this may have generated some difficulty. After 2000 it probably became part of the wider and more serious circumstances of breakdown in the relationship between the claimant and Mr Amaitis.

Criticism was advanced on behalf of Cantor in connection with a number of incidents: the use of “link brokers”, Rabobank, and Freddie Han and Vito Laterza. The case for Cantor changed in connection with these issues. In cross examination, as to the use of “link brokers” for example, Mr Amaitis complained about delay on the part of the claimant in settling the issue. The pleadings referred to permitting link brokers to be used. As to Rabobank, it was said in cross examination that the problem flowed from the claimant’s “agreement” to put a cap on commissions. It is not clear that he did so. If, as I am prepared to accept, there was some basis for the view that the claimant could have acted differently on these and other occasions, there is no evidence proper discussion took place at the time about these issues.

In paragraph 6 of his first witness statement, Mr Amaitis stated:

In paragraph 26 of his second witness statement he stated:

The evidence does support the conclusion that the claimant was drinking excessively throughout his employment at Cantor, in particular, including during the course of 1999, when he was promoted to senior managing director. I reject the suggestion made by Mr Amaitis that by this promotion, he was “given the benefit of the doubt”. I do not believe that Mr Amaitis accords the benefit of a doubt. His style is to respond to the existence of a doubt with criticism, not promotion.

In 1999 the claimant felt his addiction to alcohol and cocaine was out of hand and he sought help. He went to Dr McGilchrist in July 1999. I regard the fact that he sought medical advice a significant feature of the conflict on this part of the case. I do not accept his evidence that he completely overcame his addiction to cocaine in the time he suggested (by October 1999) but it is likely, and I find, that he had some success in curtailing it. He may have reduced his alcohol intake but he probably continued to drink heavily. The medical evidence does not support the conclusion that in June/July 2000 when he left Cantor he was addicted, but the claim he made to the doctors that he had been free of it for some six months is probably not true.

Even when full allowance is made for Cantor’s right, acting through Mr Amaitis, to set and maintain a very strict, demanding regime of performance for its employees, I am unable to conclude that such criticisms as it had in connection with the claimant’s conduct were properly raised and handled. Threats of dismissal should not be used to intimidate. Nor should they be issued in intemperate language. The level of the rebuke must be proportionate to the alleged failing on the part of the employee.

There is a Human Resources department at Cantor staffed by lawyers. The Disciplinary Procedure which Cantor imposed as a term of the contract of employment states:

Mr Amaitis demonstrated a lack of familiarity with the Disciplinary Procedure. He thought reference was being made to the contract terms when first asked about it. He then, reasonably in my view, suggested that it was inappropriate to use the disciplinary processes in connection with a senior managing director, but as I find that was not what he elected to do. A deliberate choice to avoid the formal procedures required the alternative, to reflect the spirit of the Procedure. As I have already stated Mr Amaitis did not proceed by way of discussion and advice. He did not use e-mail very often. On 14 June 2000 the claimant endeavoured to seek his advice over the J P Morgan issue. He set out some detail for Mr Amaitis and asked: “Please advise”. On 16 June 2000 Mr Amaitis replied:

He did know what it was about. He has remembered it and raised it, complaining of the claimant’s handling of it. He deliberately refused to co-operate and chose to issue an order carrying an implied criticism of the claimant’s failure to manage: “manage your business”.

I have concluded that Mr Amaitis began to have his doubts about the claimant’s ability to perform in late 1999. Such shortcomings as he perceived were not significant. The claimant’s heavy alcohol intake had probably reached levels where from time to time it impacted upon his work, but not so as to render him unfit to do the job. Once the seeds of doubt had been sown I am satisfied Mr Amaitis did nothing to prevent their unrestrained development.

By January 2000, Mr Amaitis had “lost faith” in the claimant, but he did nothing to redress his progress to this conclusion. He believed at the time that it was because of addiction to alcohol and cocaine but he took no action either by way of advice or disciplinary process. Having considered the evidence in connection with Cantor’s complaints, including the occasions complained about by the claimant, the effect of it does not support the conclusion that he was failing in grave or serious respects, as opposed to fault being found with his judgment and availability whenever an opportunity arose. Important as these were to Mr Amaitis, they were not seen at the time as disabling the claimant from the performance of the contract, nor do they support a case for the effects of alcohol and probably some cocaine having really serious consequences on his performance. On an objective view of the relationship under the contract, it was under strain. The increase in tension probably increased the propensity of the claimant to cause annoyance to Mr Amaitis, but unless the differences were properly resolved and not exacerbated, it was inevitable the relationship would break down.

In my judgment the contract broke down and the position of the claimant became intolerable because Mr Amaitis took every opportunity to vent his disapproval of the claimant, to the claimant and sometimes to him in the presence of others. He demonstrated by his outbursts that he had lost faith in him and gave him no chance to re-establish the trust and confidence which would recreate the “faith”.

Far from having a discussion and giving advice he uttered intemperate, summary views in foul and abusive language. His solution seems to have been to frighten the claimant into performing according to the standards he required and to make it plain that any contrary view which questioned his authority would not be tolerated.

It is unnecessary for me to conclude whether he intended to force the claimant to leave because the employer’s motive is irrelevant in these circumstances. However, I am satisfied that after his outburst, in particular on the telephone on 28 April 2000 and on the telephone on 28 June 2000, he removed any possible basis for the claimant having trust and confidence in his ability to preserve the relationship. I find that he was by then deeply traumatised by the way in which he had been treated over many months. I accept that Mr Amaitis acted so as to maintain what he regarded as the exclusive imperative, productivity, but he was not entitled to:

assert his authority by the use of foul and abusive language which gave no chance for the claimant to respond to any criticism;

continue to insist on his levels and standards of performance where he had grounds to believe that the claimant could not attain them.

I have reached the firm conclusion that Mr Amaitis’ deliberate course of conduct from January 2000 to 28 June 2000 breached the implied term of trust and confidence in the claimant’s contract of employment. As a senior managing director, having responsibility for managing employees, his position became intolerable. The outbursts of Mr Amaitis to the claimant were bound to become common knowledge in Cantor. Without Mr Amaitis’ support, his authority to manage employees was severely undermined.

The frequent use of foul and abusive language did not sanitise its effect. It was a hallmark of the dictatorial style of Mr Amaitis’ management. By remaining in employment at Cantor and resorting to it himself on occasions, the claimant nevertheless remained entitled to proper treatment in accordance with his contract.

The environment at Cantor is undoubtedly stressful and demanding. This gives rise to its own problems. High standards of performance are legitimate requirements in an employment contract. Equally the contract can be conditional upon performance. These factors will add to the stress and tension. These legitimate demands must be balanced by a fair system of enforcement which reflects the particular conditions affecting the employment. On this occasion Mr Amaitis displayed neither balance nor fairness in the criticisms he levelled at the claimant.

The claimant had the benefit of a fixed term contract which was due to expire on 30 September 2002. The relevant period for the assessment of damages is from 28 June 2000 until 30 September 2002.

Cantor has raised a number of points in reply to this assessment.

Since the direct costs of the Global Interest Rate Derivatives Area exceeded 50% at the 30.9.00 the claimant’s final salary should be reduced by 25% (see clause 3(a) of the contract).

Whilst the claimant remained in charge of the desk it could have continued to show a costs overrun of more than 50%. Therefore throughout the period of the claim the claimant’s fixed salary should be calculated at the reduced rate. (£15,625 per month, not £20,833).

Salary paid by Tullett Plc for the period to 30.9.02 (with bonus of £25,000) has to be credited £ 425,000.

At all times from 28.6.00 the claimant would have been subject to summary dismissal, therefore no damages are recoverable.

Cantor submits it is a basic principle of law that damages are assessed at the level of the defendant’s minimum obligation. Reliance is placed upon Lavarack v Woods of Colchester Ltd [1967] QB 278. The headnote accurately reflects the majority of the court in holding:

Contrary to Mr Béar’s submission the case does not govern the instant claim because the claimant had the benefit of a term in his contract which entitled him to receive a discretionary bonus, whereas Mr Lavarack was arguing that, had his contract survived, he would have been entitled,

In my judgment the two relevant cases which disclose the correct approach are Clark v Nomura International Plc[2000] IRLR 766, Clark v BET Plc [1997] IRLR 348, Cantor was obliged to exercise its discretion reasonably and in good faith. Had it refused to exercise its discretion at all or done so unreasonably or in bad faith, it would have acted in breach of contract.

Mr Béar also relied upon the principle of “minimum obligation” in response to the right to reduce basic salary by up to 25% and the right to summarily dismiss the claimant. The material part of clause 3(a) of the contract (reduction of salary) is as follows:

If, as a matter of fact and law, Cantor would have been entitled to summarily dismiss the claimant at any time between 28 June 2000 and 30 September 2002 then the claimant is not entitled to damages for the period after the date when Cantor’s entitlement would have arisen. I shall return to the facts on the issue later. Having regard to the importance of the issue on the discretionary bonus and its connection with the claimant’s conduct, I propose to deal with the bonus issue first of all.

The principal battleground has been joined over whether Mr Amaitis would have been obliged to award a bonus for 2000 or 2001. The claimant submits that his remuneration package for both years would have been similar to that awarded to other senior managing directors on other desks and in line with one who worked on the same desk and another who worked on the desk after the claimant left on 28 June 2000.

In my judgment the claimant was not entitled to expect parity. He was entitled to a fair and rational assessment of his entitlement. For the purpose of the court looking at the position the payment to others is relevant to the probability of a bonus being paid to the claimant.

Mr Amaitis set out the criteria for awarding a bonus in paragraphs 11-18 of his third witness statement, which because it contained profit figures and remuneration for others, remained confidential. His approach can be summarised as follows. The following factors would have been particularly important.

Whether employment costs exceeded 50% of revenue of the desk.

A broker could normally expect 30-35% of his personal revenue and a discretionary bonus will make up the difference, if any, between salary and that figure.

The bonus scheme can be used to “weed” out non producers.

Travel and entertainment should be at 4%.

He looked for 20% bottom line profit on a desk.

In my judgment certain basic facts about the claimant’s remuneration at Cantor need to be remembered. In each of 1997 and 1998 he received £400,000. In 1999 his salary was fixed at £250,000 with a guaranteed bonus for 2000 of £100,000 and he received a once for all bonus of £100,000 in total £450,000. I regard the submissions for the year 2000 to the effect that he would have had his fixed salary reduced and would have only been paid his guaranteed bonus, as envisaging a highly unlikely outcome.

The London Interest Rate Derivatives desk was running at a significantly` higher percentage than 50% for cost over revenue. The figures suggest at least 63% and perhaps higher. But there were factors which had contributed to this, which were not in dispute:

That the New York figures were low and business had been poor;

Expensive fixed remuneration for “star” brokers had been set in an attempt to improve the profitability.

The travel and expenses were over the 4% but so were other desks. The other desks where bonuses were paid were not invariably achieving the strict letter of the criteria. Indeed the criteria were not fixed (as was the reduction in fixed salary) and the purpose of the bonus was to create an incentive without losing the disciplinary control which it could have. In my judgment the claimant would have received a discretionary bonus taking his total remuneration package in 2000 to £520,000. That total assumes the deduction which the law requires should be made to the fixed remuneration for the months of July, August and September 2000:

I reject the submission that had Mr Horkulak not been constructively dismissed he would have been dismissed within about 3 months after June 2000. Had Cantor not breached the contract of employment the capacity of the claimant to perform was not sufficiently affected by alcohol or cocaine so as to render him unfit for work. His excessive use of alcohol had a long history and he had, when necessary, taken steps to reduce it by seeing his doctor and a consultant. Even after the treatment he received at the hands of Mr Amaitis in 2000 his condition as recorded by the Priory Hospital did not disclose a dependence equal to the 1999 level when he had managed to maintain his position and achieve promotion.

The claimant maintains that his remuneration package for 2001 would have been in the region of £900,000. In reaching this figure he urges that account should be taken of the total package of remuneration received by other senior managing directors, including any bonus in partnership units and share options. Where awarded, a discretionary bonus could be paid in partnership units. Other managers received housing and car allowances. I approach the figures by reference to the likely outcome from a fair and rational exercise of discretion and the expectation, engendered by his promotion to a senior level, that his remuneration would be substantially larger from year to year.

I do not accept that there is sufficient evidence to assume that had the claimant been in charge of the desk the 50% threshold would have been exceeded.

It is not disputed that 2001 was a better year for the desk. I see no ground for concluding that had the claimant remained in charge he would have failed to achieve improvement as well. The New York Interest Rate Options desk showed a significant profit. There was a profit for the area (London, New York and Tokyo) but it was less than the 20% criterion. But Tokyo had not fared well.

Mr Amaitis suggests that the turnaround was due to better control of employment costs and travel and entertainment, which control the claimant would not have achieved. This conclusion is based upon an assertion that the claimant was so far behind the other managers in 2000 that the position would have continued. The figures justified a conclusion that he had problems, namely employment costs with high fixed remuneration and low returns in New York. Travel and entertainment control, by the withdrawal of a corporate credit card, was taken by Cantor and it is likely to have contributed to an improvement. I have insufficient evidence to justify the conclusion that the claimant’s ability to gain control was so significantly less than the others that he would not have done so.

However having regard to the nature of the evidential exercise and the element of uncertainty which is involved I approach the conclusion by exercise of caution and moderation.

In my judgment having regard to the claimant’s level of responsibility it is highly likely that his remuneration package for the year 2001 would have been as follows:

There are two arguments said to lead to the conclusion he should have done so, which have been advanced for Cantor. The first can be dealt with briefly. Cantor and ICAP are competitors. Cantor alleged in High Court proceedings that at the material time ICAP had poached Cantor employees. Therefore it has been suggested the claimant could have obtained employment there, had he approached ICAP, and it was unreasonable of him not to do so. The claimant did not approach ICAP because he did not believe he would have been acceptable. The contention for Cantor is too speculative to be upheld and I have no reason to conclude that the claimant’s belief was unreasonable. The claimant’s record shows him to have been in work since he left school. I am not persuaded he deliberately or unreasonably failed to find work.

The next argument requires more consideration. At the beginning of 2001 the claimant suffered a relapse. The medical assessment at the end of 2000 suggests he had recovered sufficiently to take steps to return to work. It would have taken him 2 – 3 months to obtain employment – say by the end of March 2001.

He did not receive any response and by the time his solicitors wrote on 8 February 2001 saying he was abroad for 4 weeks he had returned to the Priory Hospital. He had misled his solicitors. Since I have concluded that Cantor wrongfully terminated the contract, the refusal through Mr Amaitis to acknowledge the wrong it had done, in my judgment, exacerbated the original breach. On balance I have concluded that had it responded and accepted liability it is unlikely he would have relapsed. In the circumstances it is not open to Cantor to suggest the claimant failed to mitigate his damage. In my judgment Mr Brennan was correct to submit that the episode was part of the continuum flowing from the breach.

For completeness, although it was barely argued, Cantor counterclaimed the £100,000 paid in 1999 when the new contract was negotiated, on the basis it was conditional on the contract running the term. It was not. In any event but for the breach by Cantor it would have run its term.

It follows that the claimant is entitled to damages, subject to tax issues, as follows: