BAILII Citation Number:  [2002]  EWHC 2736 (QB)
Case No. 02/TLQ/0682

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand, London. WC2A 2LL
Date: 29 July 2002

Before:

THE HON MR JUSTICE McCOMBE

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CANTOR FITZGERALD INTERNATIONAL
	Claimant

‑ and ‑

(1st) EDWARD BIRD
(2nd) LUIGI BOUCHER
(3rd) SPENCER GILL
(4th) GARBAN‑INTERCAPITAL
MANAGEMENT SERVICES LIMITED
Defendants
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MR ANDREW HILLIER QC/MR CHARLES BEAR (instructed by Olswang) for the Claimant
MS SUZANNE MCKIE (instructed by Berwin Leighton Paisner) for the 1st, 2nd & 3rd Defendants)
MR ANDREW HOCHHAUSER QC/MR MARTIN GRIFFITHS (instructed by MacFarlanes) for the 4th Defendant
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JUDGMENT

Mr Justice McCOMBE
	
(A) Introduction

1.	 This is an action brought by Cantor Fitzgerald International ("Cantor"), a company incorporated in England and Wales with unlimited liability, against Mr Edward Bird ("Mr Bird"), Mr Luigi Boucher ("Mr Boucher"), Mr Spencer Gill ("Mr Gill") and Garban‑Intercapital Management Services Limited ("Icap"). Cantor carries on business as an inter‑dealer broker in London, broking deals between other dealers on behalf of investment banks and security houses. The individual defendants were all, until earlier this year, employees of Cantor employed as brokers in Cantor’s Interest Rates Division. Icap is also a company carrying on business as an inter‑dealer broker in London. Cantor and Icap are competitors.

2. 	In April 2002 all three individual defendants ceased working for Cantor and announced the intention of taking up employment with Icap. Cantor claims that such action constituted repudiatory breaches of the contracts of employment and purported to accept such repudiation as terminating the contracts. For their part, the individual defendants contend that Cantor was itself in repudiatory breach of the same contracts and that they were each entitled to accept such repudiation by resigning as they did. Cantor contends that Icap unlawfully induced the individual defendants to break their contracts with Cantor.

3. 	The claim form, initiating the action, was issued on 24 April 2002. By an order of Mr Justice Silber made that day, it was ordered that all issues in the action except quantum (ie including liability and claims to injunctive relief) should be tried as preliminary issues and a speedy trial of those issues was directed. That trial of those preliminary issues has now been conducted before me, save for this. During the course of the trial the parties indicated to me that the question of whether any defendant is liable to repay certain sums to Cantor should be held over to the trial of any questions of quantum of damage that may arise hereafter.  I agreed to that course.

4.	 The first issue to determine is whether it was Cantor or its employees that were in breach of the employment contracts in such manner as to allow the opposite party to treat such breach as repudiatory and determine the contracts or any of them. (It is not disputed that, if Cantor was not in repudiatory breach of a relevant contract of employment, entitling the employee to determine the contract, then the employee must himself have been in repudiatory breach by ceasing unilaterally to work for Cantor.) The second issue is whether Cantor unlawfully induced any breach of contract that there may have been by any of the individual defendants. The third issue, dependent upon the outcome of the first two issues, is whether, if Cantor is successful on either of these issues, an injunction should be granted against the defendants or any of them and, if so, what form that injunction should take. Cantor's claims for repayment from Mr Gill a sum of £250,000 in respect of what is called in his contract, a "forgivable loan" and against each individual defendant for repayment of certain bonuses paid to them are now held over for future resolution as already indicated.

5. 	As a mirror image of Cantor's claim, the individual defendants claim that it was Cantor that repudiated the contracts of employment, that such repudiations were accepted by each of them and that they are entitled to damages accordingly. Any questions of damages upon those counterclaims are also to be tried later.

(In the passages that follow there are several quotations from the documents in the case and from previously decided cases. In the normal course, such quotations would have been rechecked against the originals, following preparation of the judgment. However, the hearing concluded on 17 July and the parties' wish for a judgment before the end of the present sittings has not permitted this exercise to be carried out in its entirety. I apologise, therefore, for any imperfections of transcription that there may be in this respect.)

(B) The Contracts

(1) Mr Bird

6.         Mr Bird was employed under a contract dated 18 September 2000 incorporating certain standard terms and conditions promulgated by Cantor. The terms of Mr Bird's contract included the following:

The term of Mr Bird's employment was for a period of one year from 18 September 2000, automatically extending for further successive periods of one year, unless either party gave the other during the fourth month prior to the renewal date written notice of intention not to renew or extend the contract (clause 1 of the contract). Accordingly, the Mr Bird was employed for a period ending initially on 18 September 2002.

Mr Bird was employed as a broker on the Claimant's Euro Interest Rates Swaps Desk (clause 2(c) of the contract).	

Mr Bird (a) was to devote the whole of his time and attention to the generation of commission revenue and to work as a profitable employee; (b) was required to the best of his ability to use his best endeavours at all times to promote the development of Cantor’s business and reputation; and (c) was not to be directly or indirectly employed by, or engaged in the affairs of, any other company, business or enterprise (clauses 2.1 and 9.1 of the standard terms and conditions).

Cantor was entitled to dismiss Mr Bird summarily where so entitled at common law, including without limitation, substantial breach of any of the terms of the contract of employment or wilful refusal or neglect to carry out instructions or duties (clause 8.1 of the standard terms and conditions).

Further, the standard terms and conditions imposed upon Mr Bird contained the following post‑termination restrictions:

By clause 15.1 it was provided:

"Non‑Solicitation

"During the course of your employment and for a period of twelve months after its termination, you will not:

15. 1.1 alone or with others, directly or indirectly, for your own benefit or the benefit of any person or organisation other than [Cantor] induce or attempt to induce any individual to whom this subclause applies to leave the employment of or to discontinue the supply of their services to (Cantor) without

[Cantor's] prior written consent (whether or not such action would result in a breach of contract by such individual) nor shall you encourage counsel or procure the individual to do so. This clause shall apply to any individual who is an employee or who provides services to [Cantor] or any associated company with whom you had material and/or regular dealings in the course of your employment during the twelve months prior to the termination of your employment (the "Relevant Period') and whose gross total annual compensation in the Relevant Period was not less than £50,000. This paragraph will survive the expiration or lawful termination of this Agreement. "

"By clause 15.2 of the terms it was provided as follows:

"Having regard to the need of the Company to protect the good will of its business developed by, inter alia, clientlcounterparty promotional expenditure, you will not during the term of your employment (which for the avoidance of any doubt expressly includes any period during which the Company exercises its rights pursuant to clause 2.5 or 8.2) (and in the case of subparagraph 15.2.1 only), for a period of 20 weeks after its termination) without the consent of [Cantor], alone or with others, directly or indirectly and whether for your own benefit or the benefit of any person or organisation other than the Company;

15.2.1 solicit or entice away, or carry on Business with, or transact Business with, any client of the [the Company (whether a company or an individual) or counterparty (whether a company or individual) with whom you are, or have been, actively involved within the Relevant Period. For the purposes of this sub‑clause "Business " shall mean any business with which you have been actively involved in the Relevant Period:
	...”		

(2) Mr Boucher

7. 	Mr Boucher's contract was dated 12 July 2001; it provided as follows:

Mr Boucher's contract of employment would expire on 12 July 2002 if notice of intention not to renew or extend was given in the fourth month prior to that date (clause 1 of the contract). (Mr Boucher gave such notice on 18 March 2002, so that his contract (as stated in that letter) would have terminated on 12 July 2002 in accordance with the contract's terms.)

Mr Boucher was employed as a managing director of the Interest Rate Derivatives Desk of Cantor (clause 2(c) of the contract).

The contract and other incorporated standard terms and conditions contained terms in respect of devotion to duty, summary dismissal and post‑termination restrictions as already quoted in respect of Mr Bird above.

(3) Mr Gill

8. Mr Gill's contract is dated 17 August 1999. It provided among other things as follows:

The term of employment was for a period of three years from the Commencement Date, automatically extending for further successive periods of one year, unless either party gave the other during the fourth month prior to the renewal date written notice of intention not to renew or extend the contract (clause 1 of the contract).

A dispute arises on the statements of case as to whether or not the commencement date was altered from 1 October 1999 to 18 October 1999. Therefore Mr Gill was employed for a period ending initially on or about either 1 October or 17 October 2002. The dispute was not addressed or resolved at the trial.

Mr Gill was employed as a broker on the Euro IRS Desk of Cantor (clause 3(a) of the contract).

Again there were terms requiring Mr Gill to devote himself to his duties and the like and for summary dismissal. There are similar post‑termination restraints imposed upon Mr Gill also.

9.	 It is, of course, accepted that each of these contracts were subject to the usual common law rules as to repudiation of contracts, acceptance of such repudiation by the non‑offending party and the premature determination of the contract by this process.

10.          The remuneration provisions of the contracts are also of relevance. Mr Gill's contract entitled him to a fixed remuneration (called a "fixed draw") of £150,000 per annum for the first two years of his employment. Thereafter, there was a provision entitling Cantor to reduce the fixed draw by up to 25 per cent if commission revenue generated by Mr Gill did not reach a certain level. In addition, there was provision for payment of a discretionary bonus, to be paid within 90 days of 30 September in any year: for an undefined "Initial Period of Employment" it was stated that the bonus would be not less than 30 per cent of commission revenue generated by Mr Gill, less the amount of his salary and other fixed remuneration in that year. Clause 4(c) gave Mr Gill an entitlement to a "one time forgivable loan" of £250,000, repayable if, at any time prior to the expiry of two years from the "Commencement Date" (ie a date in October 1999), Mr Gill gave notice to terminate his contract or left Cantor's employment otherwise than as a result of a fundamental breach by Cantor. Again, the loan was to be repayable if Mr Gill left Cantor (other than in response to a fundamental breach) in the final year of the initial "Period of Employment" and then entered into employment or other business relationship with a competitor of Cantor. It was also to be repayable on a sliding scale in the event of Mr Gill leaving, but without entering into competitive employment. Otherwise, at the end of three years from the Commencement of Employment, the loan was to be forgiven and waived by Cantor.

11.	 Under Mr Bird's contract he was to have a guaranteed fixed draw of £125,000 per annum subject to Cantors right to reduce that by 25 per cent if his commission revenue, generated in any period of three months, was less than the fixed draw in the same period. He was also to be entitled to a discretionary bonus but this was not to be less than between 25 per cent and 35 per cent of the commission revenue generated by him in any financial year.

12.	 Mr Boucher was to have a £200,000 fixed draw per annum with similar rights to Cantor to reduce the sum on a decline in performance. He also was to have an entitlement to a discretionary bonus, but in this case, there was no fixed percentage payable. It was, however, subsequently agreed between Mr Boucher and Cantor that his bonus would be not less than between 30 and 32 per cent.

13.	 In each case the contracts provided for repayment of the bonus paid in respect of any financial year if within nine months of the end of that year the relevant defendant commenced employment with a competitor of Cantor. Cantor claims to enforce the repayment of Mr Gill's loan and one financial year's bonus in respect of each defendant under the provisions which I have just mentioned. As indicated, these issues have been held over to a later date.

(C) Facts

14.	 It became clear to me that Cantor and Icap work in a highly competitive environment, in which they and other rivals compete on a daily basis for business and, hardly less frequently, for the best staff in their fields. Staff recruitment over recent years has involved both Icap and Cantor in approaching potential recruits employed by rivals, directly or through recruitment agents, with a view to "poaching" such recruits from those rivals. A pattern has developed of ascertaining from the target recruit his or her current contractual status, his or her interest in a post with the "poacher", offers of attractive salaries, bonuses and joining payments, immediate contracts offering employment as soon as the target is free to take it up (with the expectation that the target will seek early release, if otherwise still under contract) and indemnities against claims made by the earlier employer after the target's departure. While such offers of employment have tended to be promoted aggressively to a desired target recruit, and in some cases have involved simultaneous offers to groups of key employees in rival concerns, the steps that I have outlined are not in themselves unlawful. Those facts have to be carefully recalled when considering the colourful manner in which the recruitment campaigns are conducted (including that conducted in this case).

15.	 The action principally concerns matters that occurred from September 2001 onwards. At that time Mr Boucher had been in employment with Cantor since 1996. Mr Bird had joined in 1997 and Mr Gill had been employed since 1999. Their latest contracts, their duration and their terms have been outlined above.

16. 	The action concerns the business of Cantor which, of course, is an English company, carrying on business in London. However, there can be no doubt that the tragic events of 11 September 2001 in New York provide the backdrop to what happened. On that day Cantor's associated company in New York lost 658 employees in the attack on the World Trade Centre. Icap's own New York business also suffered and very tragically one colleague of theirs also lost his life. The events of 11 September did not have an immediate or direct effect upon the business of the department of Cantor with which I am concerned. I accept the evidence of Monsieur Xavier Alcan ("Mr Alcan"), a senior managing director of Cantor that, 

"In fact, the impact of 11 September 2001 on the interest rates division (with the exception of the dollar swaps team) was minimal. Of course, we were all affected emotionally by what had happened, but in practical terms, there was very little change."

17.	      It seems clear, however, that the tragic devastation and loss of life within Cantor's associated business raised questions in the minds of all concerned in this case in Cantor about the future of both the New York and the London operations. In the immediate aftermath of 11 September 2001, Icap became concerned that Cantor might try to recruit Icap's own staff. Mr Michael Spencer ("Mr Spencer"), chief executive of Icap plc, Icap's holding company, expressed this concern to Mr Lee Amaitis ("Mr Amaitis"), the chief executive of Cantor, at a meeting in London on 1 October 2001. Mr Spencer had learned that Cantor had engaged a firm of recruitment agents. Mr Spencer suggested to Mr Amaitis that Cantor and Icap should agree for a period not to seek to recruit the staff of the other. This proposal was rejected by Mr Amaitis. To its credit, lcap, through Mr Spencer, had also pledged a sum of $500,000 to the charitable funds set up for the families of the New York victims. Icap further agreed to the early release of two former employees of theirs that Cantor desired to recruit: they were Mr Laurence Holyoake and a Mr Cribb. Shortly thereafter normal business resumed in the staff recruitment process.

(In the passages that follow, I cite certain parts of communications, mostly by e‑mail, between representatives of Icap. Save where they otherwise be indicated, I accept that the e‑mails accurately record the events, opinions and thinking of the respective persons as stated and identified in them.)

(1) October 2001 ‑ 20 January 2002 and the "New Deal"

18.	 In early October Mr Spencer, on Icap's behalf, also engaged a staff recruitment agent, a Miss Gina Bentley. She approached Mr Boucher and another employee of Cantor, a Mr Sebastien Pere. On about 5 October 2001, Mr Fritz Vogels ("Mr Vogels"), director of Icap's Euro Swaps Desk, approached Mr Bird. This seems to have been at the suggestion of Bank of America who were anxious that Mr Bird should be recruited following the move of another broker at Icap to a different responsibility. Mr Vogels and Mr Bird rnet at a coffee bar near Liverpool Street Station. According to Mr Vogels, Mr Bird was already complaining that Cantor was "messing around with his contract" and that he "felt under a lot of pressure from Danny La Vecchia to sign a new contract". However, as will appear later this subject was not mentioned to Mr Bird by Mr La Vecchia until late October, possibly between the 15 and 31 of October. Mr Daniel La Vecchia ("Mr La Vecchia") is an Executive Managing Director of Cantor who, until April 2002, had responsibility for a number of divisions of the Cantor business, including the interest rates division with which I am concerned.

19.	 On 11 October 2001, Mr Spencer received a report from Mr David Casterton ("Mr Casterton"), managing director of Intercapital Europe Ltd, upon an approach made to another potential recruit engaged by another rival in the business. Mr Spencer responded as follows:

" .... you pursue Spencer Gill and leave off Tyan for the mom. My agent has made good prog with said Seb and Luigi and I will see them next week. However it is essential that nothing gets back to Xavier or Amaitis as to our nibbling. I would love to plan a heist .... keep in touch."

20.	On the same day Mr Casterton contacted Mr Gill by telephone. On 15 October 2001 Mr Casterton reported further to Mr Spencer that he understood from Mr Gill that the latter was under contract to Cantor for a year but would love to get out. Mr Casterton reported that Mr Gill had said that Cantor's coverage of a certain aspect of the business was "appalling and getting worse". Mr Casterton reported that he was arranging a meeting with Mr Gill that day.

21.	 On 17 October 2001 Mr Spencer met Mr Boucher and Mr Pere. Mr Casterton had been invited to join the meeting but was unable to do so. In his e‑mail to Mr Spencer reporting that fact, Mr Casterton wrote,

" .... there are two commercial aspects to employing these guys, the first is their making money for us on Euro IRS and I need to know that they will do this, the second is damaging the oppo and the upfront costs involved which is your call. I am pretty sure that there is a strong argument for the former but need to be certain, you alone can assess the relative value in the latter...

Happy hunting, David."

22. 	A report from a Mr George Macdonald of Icap to Mr Casterton about the 17 October meeting stated that Mr Spencer was aiming towards securing Mr Boucher and Mr Pere by December 2001. The e‑mail from Mr Casterton to Mr Spencer and Mr Macdonald of the 23 October 2001 (which I accept as an accurate report) records as follows:

"Met Spencer Gill from Cantor’s today. Spen was at Garban at the time of the merger but went to Cantor’s for reasons of lines and money. Spen was and remains a good broker .....

In summary he would like to leave Cantor’s and would much prefer to be working for us in principle but in practical terms sees this as difficult as he did at the time of the merger. The principal problem is that all Spen's lines are very well covered here, the secondary issues are contractual . .....

Spen is just into his third year of a three‑year contract . ... He is on a revenue contract having refused to sign the new discretionary contract which most of the desk signed some time ago. Last year they paid his bonus without a problem.

We face two problems. One integrating Spen to our desk, two getting him out of Cantor’s.

1 .	 ...

2. 	Needs some thought. As it stands he doesn't feel unfairly treated by Cantor’s even though given the chance he knows they will stiff him. For him to even consider leaving in breach today he would need an indemnity plus a guarantee from us that we would reimburse any upfront amount he is required to repay Cantor’s plus his loss of bonus….

I would suggest that we carry on the charm offensive with Spen so that he really wants to join us, maybe a drink one evening with you guys. In the meantime, December seems a long way off but it may be worth waiting to see if Cantors wriggle on his bonus. If they do then we have all the legal ammunition we need to get Spen out easily, if they don't then it reduces the amount we would need to compensate Spen ..."

The reply of 25 October 2001 from Mr Spencer to Mr Casterton included the following:

" Vv useful. Again let’s talk when you are back and yes I will meet him next week. Oh I would love to put one up their bottom and this is the time I have been waiting for just a few years!!!"

Clearly, the conciliatory feelings of September had now run their course.

Shortly before 2 November 2001, Mr Spencer met Mr Boucher again and was very impressed with him.

23.  In the meantime, by letter dated 31 October 2001 to Mr Bird, Cantor had proposed a revised contract of employment for him providing for him to be remunerated on a commission only basis, ie removing the "fixed draw" under his contract. In cross‑examination Mr Bird initially denied receipt of this letter but had to accept that he had so received it when there was produced to him a copy of it that had been sent by his own solicitors by fax. They could only have had that document from Mr Bird himself. It is the proposal of these terms to Mr Bird, to the other individual defendants and generally to the brokers in their department, that lies at the heart of the defence to Cantor's claims.

24.	 All the defendants contend that from Autumn 2001 onwards Cantor relentlessly and aggressively sought to secure its employees agreement to these terms in a manner undermining mutual trust and confidence and giving rise to repudiatory breaches on Cantor's part, which in addition to other such breaches the individual defendants accepted by resigning from Cantor in April 2002.

25.	 A similar proposal of "commission only" remuneration for Mr Boucher is dated 16 November 2001. Much the same proposal was put to Mr Gill by a letter dated 14 January 2002. At a meeting with Mr Casterton and Mr Vogels on 12 November 2001, Mr Bird mentioned to them that he felt under pressure to accept the proposals. According to Mr Bird's evidence, however, the earliest date upon which the principle of a new contract was raised to him was towards the end of October 2001 when the matter was raised with him at a very short meeting with Mr La Vecchia.

26. 	At about the same time, there was a dispute over the trading desk between Mr Bird and Mr Alcan. It involved a transaction between clients of Cantor, being handled initially by Mr Bird and another broker called Mr Girst. In short, Mr Bird and Mr Girst concluded a deal on behalf of clients concerning an interest rate swap. Within a very short time, Mr Alcan intervened indicating that he was able to offer a better price than that arranged between Mr Bird and Mr Girst. The Bird/Girst deal was technically concluded but Mr Alcan insisted that it be unscrambled. Mr Bird's evidence was that Mr Alcan went berserk and when it was pointed out that the trade had been concluded, Mr Alcan responded, "that's your fucking problem". Mr Alcan accepted that he might well have said this. He also said misunderstandings of this type do happen frequently. That is not accepted by the defendants.

27.	 I interpolate here to set out my impression and finding as to the nature of language used in this department at Cantor and by those employed there generally. It was essentially common ground that virtually everyone employed in this business used foul language regularly. Mr La Vecchia and Mr Alcan accepted this, as did all the defendants. It appeared to me that the use of obscenities was at all times commonplace and part of the ambience of the business. In the ordinary course, none of the participants here would have been in the slightest offended or intimidated by the use of foul language in the workplace, even in the context of a disagreement between colleagues about a business matter or other matter pertaining to them personally. It was the language in which they all dealt. It seemed to me to be language reminiscent of the quick fire exchanges in American office scenes so familiar from the cinema, using language, that years ago, would have been wholly unacceptable but which now is, perhaps regrettably, commonplace in many places of work as the machismo image of Hollywood is imported into real life. To my mind therefore, it is the underlying substantive content of the relevant exchanges and the circumstances of those exchanges that are far more important in comprehending the effect of the words spoken on both hearing them rather than the manner which the exchanges were expressed.

28.	 Returning to the dispute about the trade between Mr Alcan and Mr Bird, it seems to me that the fact that this incident is so well recalled by all suggests that the event was far from common. Mr Alcan was clearly assertive and possibly domineering in his determination to get his own way over the matter. In short, it seems to me that, on a balance of probabilities, Mr Alcan was, to use the term that might readily be adopted in this or any other business, "out of .order" However, looked at in isolation, I do not accept that this incident would constitute a serious breach of contract on the part of Cantor, if a breach of contract at all. Managers can behave in a manner that is "out of order" in this sense without immediately rendering the mutual employer in breach of contract towards the non‑offending employee. Repetition may be a different matter, but on its own and I see this matter entirely as a classic case of a clash of forceful personalities in a business of this type. However, in the context of Cantor's overall dealings with Mr Bird, the incident does play a part in the conclusions that I have reached.

29. 	In mid‑November (probably 14 November) Mr Bird met Mr Vogels again, together with Mr Casterton, at a City wine bar. Mr Bird was given a draft Icap contract of employment to consider. It seems that after that meeting Mr Bird and Icap were envisaging that Mr Bird would leave Cantor and that the departure would be likely to be under hostile conditions. I refer to two e‑mails by Mr Casterton reporting to others in Icap:

"... Ed Bird, looking promising. Saw him yesterday, he is mentally with us and is gathering courage for the fight ahead we are arranging a meeting to look at the legal situation next week.

Spencer Gill. Saw him last night, he certainly wants to join but is concerned over line issues. Wants to sit down next week with me to go through specifics regarding lines. If he's happy we will move forward.

On the issues of the French guys still would much prefer Luigi on his own as I don't think Seb either adds much to our business or particularly damages theirs. That’s in your court."

"Michael Ed Bird is ready and spoiling for the fight with Cantor’s and is about to start the ball rolling later today. He will tell them he is not happy and will not be signing his newcontract as he would actually like to leave. He will not at this stage mention Icap he will be non‑specific telling them that he has a number of options. I had a meeting last night with him and Dan Lavender so he is well briefed. I have indemnified him against any legal action, let battle commence. I hope to get to see Spen tonight to accelerate things there.

On the French front what is the next stage with Luigi we need French bums on seats as soon as feasibly possible to strengthen our Paris coverage as Marco moves on."

(C2/446 and 449).

30.	 On 15 November 2001 Mr Spencer was proposing to Mr Casterton to meet "to talk about our CF game plan". Mr Bird said in evidence that throughout November and December, he kept in regular contact with Mr Casterton, Mr Vogels and Mr Schreiber, an "in‑house" lawyer with Icap. On 29 November, Mr Spencer met Mr Boucher and Mr Pere. On 18 December 2001 Mr Pere sent a letter of resignation from Cantor to Mr Amaitis.

31. 	This letter from Mr Pere caused an altercation between Mr Alcan and Mr Pere. The former considered that, as line manager to Mr Pere, he ought to have been informed of the resignation, if not before at least at the same time as Mr Amaitis. Mr Alcan reacted badly to this and made his views known to Mr Pere in the presence of other brokers. Mr Alcan spoke in French. Mr Boucher said Mr Alcan screamed and shouted. Mr Alcan denies this although he admits he was cross. Mr Boucher says he considered that Mr Alcan's behaviour was pathetic and unprofessional.

Mr Alcan says, on the other hand that he is surprised by the complaint. He said in cross‑examination:

"I am surprised that Luigi is bringing that up because, first of all, Sebastien never expressed that he had felt humiliated, number one. Number two, I had a conversation with him afterwards in my office where Sebastien said to me, by the way, I am sorry you were right I should have given you this letter to you or cc'd the letter that I sent to Lee Amaitis to you, and thirdly I do not believe that ever in my career I would humiliate Sebastien in front of anyone so I do not think this incident is an incident."

32.	 Mr Boucher accepted in cross‑examination that Mr Alcan and Mr Pere had gone to Mr Alcan's office, after the initial altercation, to talk. In my view, this was a dispute between Mr Pere and Mr Alcan. Mr Alcan says it was amicably resolved and there is no evidence to contradict that. It does not seem to me that the incident adds significantly to the current issues.

33. 	There is little doubt that in this period Cantor, through principally Mr La Vecchia and Mr Alcan (under direction of Mr Amaitis), were urging brokers to accept the new commission only remuneration. Each of the defendants gives evidence of discussions with Mr La Vecchia or Mr Alcan (in Mr Boucher's case) inviting them to sign up to what has been called "the new deal". All resisted this, having what they saw to be the attraction of the security of the "fixed draw".

34. 	To my mind, Cantor handled these new proposals badly. It is clear from the evidence that Mr La Vecchia's original oral explanations of the proposals gave the impression that the new remuneration on offer was 40 per cent of the commission revenue generated. In particular, Mr Gill gave evidence of this. However, he was not taken in and he queried it from the start, having heard from others that the formal offer had included deductions from the 40 per cent commission on offer. Clearly, Mr La Vecchia's explanation painted a rosier picture than was warranted by the formal offers actually presented to each in due course.

35.	 The offers did not meet with a favourable reception by the individual defendants in this case, or more generally by Cantor's employees. By reference to statistics produced by Mr Alcan, it appeared that by January 2002 perhaps only four relevant employees had signed the new terms and 36 others had declined.

Ill‑advisedly, on about 16 January 2002 Mr Amaitis, gave instructions to pay roll operatives at Cantor not to pay customary salaried staff who either had been or were to be offered "commission only" terms. Mr La Vecchia says in paragraph 3 of his second witness statement (B1:25G),

"To be more specific, I first discussed this with Lee in the week commencing 7 January and continued discussing it the following week. The plan we agreed as a result was to give the brokers a choice ‑ either they were to have their regular salary, or if they accepted the new deal the amount under the new deal. We wanted to say to the brokers that they could have a small cheque, or if they went to the new deal a much larger cheque. The idea was that Lee would sit down with each of them their salary or salary plus bonus and see for himself why they were so confused."

36. The payments to be made were likely to yield substantially higher remuneration in that payment than customary payment of the "fixed draw" would have yielded. However, the mechanics whereby this was effected were heavy‑handed and resulted in the staff not receiving their January pay on the 21st of the month, as would have been normal, but a day later on 22 January.

37.	 Mr La Vecchia told me that the object of this exercise was to demonstrate the substantial benefit to staff, as Cantor saw it, of getting performance related pay every month rather than awaiting a lump sum bonus at the end of the financial year. However, the decision was that of Mr Amaitis and the motivation behind it was his. He has not given evidence before me and, accordingly, I have no direct evidence as to Mr Amaitis's real motives for the move. In short, neither Mr La Vecchia or Mr Amaitis could understand why employees did not like this proposed manner of payment. They were unable to comprehend the employees determination to retain their fixed draw terms. In my view, however, the employees' reluctance is readily understandable and the manifest stubbornness of Mr La Vecchia and Mr Amaitis in being unwilling to grasp this obvious lack of attraction in the proposals is an unattractive feature of their conduct in this case.

38. 	Before proceeding further with the events of 21 January 2002, to which I must refer in some detail, it is necessary to say a little more about how the proposal of the new commission deal was handled by Cantor, both generally and with regard to each of the employees and each of the individual defendants concerned in this case.

39. 	None of the defendants received other than fairly limited documentation dealing with Cantor's proposals for the new remuneration arrangements. These documents were confined to, in the case of Mr Gill, the letter of the 14 January 2002 together with an earlier draft originally put together for a different employee the relevant name having been deleted from it. In Mr Bird's case the relevant document was the letter of 31 October 2001 to which I have already referred, and in Mr Boucher's case the document was the letter of the 16 November 2001 to which I have also referred.

40. 	Mr La Vecchia told me that when discussing the new proposals with staff members he tended to write calculations down on pieces of paper which he put before the relevant employee. He also said that on occasions he marked up the figures with a felt tip marker on the window of his office which he subsequently wiped off. At another stage he said that he wrote the details down on a board in his room. He also said that, on other occasions he did calculations on a calculator and presented the final result to the relevant employee for him to see. He said that any piece of paper he produced was available to the brokers for them to retain, although he accepted in the end that he did not give any of the pieces of paper that he could recall to any of the brokers concerned for them to keep.

41.	 Mr La Vecchia's conclusion in evidence was that, when an individual said that he or she was interested in the terms proposed, he then arranged for formal documentation to be produced to them. However, I do not think that this can be entirely right, because it seemed clear to me that each of the present individual defendants hardly seemed to show or express any sort of enthusiasm at any stage for the new proposals. Therefore, it seems unlikely that it was only at that stage that they were given the letters to which I have already referred.

42. 	   It seems to me, in general, that the information that Mr La Vecchia communicated was essentially as Mr Bird suggested in evidence that the new deal represented a true 40 per cent commission basis; in other words, as Mr Bird put it, that the broker would receive £40,000 or $40,000 for every £100,000 or $100,000 revenue generated by him.

43.	 One of the methods that Mr La Vecchia employed to endeavour to persuade brokers to accept the "new deal" was to indicate to them that the bonuses payable to employees under the existing contracts were entirely at the discretion of Cantor. Mr Bird and another broker, a Mr Barbrack gave evidence to the effect that Mr La Vecchia made it clear to each of them that under the existing contracts Cantor was not obliged to pay any form of bonus at all. It appeared from Mr La Vecchia's evidence that he did indeed consider that bonuses to employees under the old contracts were at the entire discretion of Cantor. (I refer in this respect to the answers given to him as recorded on the transcript for Day 4 page 28.22‑29.1, page 64.15‑25, page 76.60‑19 and page 81.25‑page 82.5.)

44. 	I accept the evidence of the individual defendants that in promoting the new proposals Mr La Vecchia was forthright in his manner. Mr Gill called him pushy. In other respects it was said he was aggressive. In his own evidence Mr La Vecchia put it that he was "aggressive as far as trying to give money out ...". (Day 3 page 89.4-17). As I have already said bad language was an everyday occurrence in this business and Mr La Vecchia was no exception to this. I am confident that in promoting the new arrangements Mr La Vecchia, being "pushy" or "aggressive", would use bad language if it served his purpose. Mr Alcan confirmed that Mr La Vecchia was in the habit of swearing a lot (Day 5 page 153.6).

45.	 I turn to consider certain aspects of the evidence concerning Mr Bird and Mr Gill and particular events arising out of the attempts by Cantor to persuade them to accept the new payment proposals.

46. 	First, I deal with Mr Bird. It was accepted by Mr La Vecchia in his evidence that he could not recall fully every conversation he had had with Mr Bird on the subject, but he did accept that he was talking to Mr Bird almost every week about the proposals from about October 2001 until Mr Bird left in April 2002. This accorded with Mr Bird's evidence on the subject. Mr Alcan, for his part agreed that he spoke to Mr Bird on about three or four occasions concerning the new deal. Additionally, in the early weeks when the proposals were being promoted, on one occasion Mr Bird told Mr Alcan and Mr La Vecchia that he was thinking of leaving Cantor and that he had been approached by two broking houses. On one of these occasions Mr La Vecchia asked Mr Bird how he felt to be the first person to leave Cantor since the events of September 11.  I also accept Mr Bird's evidence that Mr La Vecchia also told him that if he left Cantor he (Mr La Vecchia) would make sure that Mr Amaitis and Mr Lutnick and Cantor "fucked [him] over". In oral evidence Mr Bird was asked whether he was frightened by this. His answer was that Mr Amaitis and Mr Lutnick were two very powerful people and when threats like that were made alarm bells rang.

47.	 Next, I would refer to certain matters relating specifically to Mr Gill. I shall turn in a moment to a meeting involving Mr Gill and Mr Amaitis on the 21 January. Apart from this, Mr Gill complains specifically about the "pushy" manner in which Mr La Vecchia promoted the new deal to him. Mr Gill thought that Mr La Vecchia spoke to him about the matter on about ten occasions. Mr La Vecchia agreed that the discussions continued from October 2001 to the time when Mr Gill left in April 2002. Mr Alcan also admitted discussing and promoting the new deal proposals with Mr Gill on occasions. Mr Gill's evidence, which I accept, was that he was not at any stage interested in accepting anything other than the fixed draw arrangement and that therefore the new proposals were unsatisfactory. The letter of January 2002 to Mr Gill, to which I have already referred, made a revised offer of a fixed draw of £5,000 per month together with revised commission arrangements. Mr La Vecchia said that Mr Gill received these revised proposals with somewhat more enthusiasm. According to a second statement from Mr La Vecchia made very shortly before the start of the trial Mr La Vecchia said that he recalled Mr Gill saying something along the lines of "now we are getting closer ‑ this is a horse of a different colour". I do not think Mr Gill said anything of the sort. Mr Gill denied making any such comment. I think it is clear that Mr Gill was at all times unwilling to accept a revision of his fixed draw proposals and I do not think that he indicated any interest in these terms.

48.	 I should note as a matter of background that apart from the present individual defendants 14 other brokers in the Interest Rates Division left Cantor for one reason or another during the course of Cantor's promotion of these new proposals.

(3) 21 January 2002

49.	 As indicated, Mr Amaitis, and Mr La Vecchia had decided to offer the brokers either their standard pay or pay calculated on the basis of the "new deal".

Interviews to communicate this plan were to be held on the afternoon of Monday 21 January 2002. As already mentioned, the 21st of each month was the customary payday at Cantor but Mr Amaitis had already stopped the customary salary payments for that day. Mr Gill, as one of the lead brokers, was to be called in first. It is very unfortunate that this process was not put in train far earlier, at least at the time of the instruction to the pay roll staff on 16 January. As it was the scheme went awry. There was considerable dispute from the evidence as to what precisely happened. My findings are as follows.

50.	 It was about three or four o'clock in the afternoon. Mr Alcan was asked to join Mr Amaitis and Mr La Vecchia in the fifth‑floor boardroom at Cantor. He had not been forewarned of the meeting or its purpose. When the three had gathered, Mr Gill was called but he was engaged on another business matter. Mr Ben Pummell, another broker was called in his place. The details of the discussion with him did not emerge in evidence. Then Mr Gill became free and was seen next. However, in the  meantime, Mr Alcan was himself called away to attend to urgent business. Mr Gill said in evidence that Mr Alcan had been present at his interview. However, Mr Alcan had already been cross‑examined by Mr Hochhauser for Icap on the basis that he was not at that meeting: see eg Day 5 page 150.18‑19, and the contrary was not directly put to him. I think Mr Gill is mistaken in his recollection of this part of the events.

51. On entry, it appears that Mr Gill was manifesting somewhat disrespectful body language. This body language led Mr Amaitis to say in obscene terms that Mr Gill should show him some respect. Mr Amaitis said Mr Gill was being disrespectful in refusing to accept the new pay deal even with an.element of fixed draw (£5,000) which had been put to Mr Gill about a week earlier. I am quite satisfied that Mr Amaitis said this in an aggressive and bullying fashion. As Mr Gill related, Mr Amaitis reacted to Mr Gill's continued refusal of the new terms by saying, "If you don't sign this deal you don't make any money, I'll sack you anyway". He dismissed Mr Gill from the room by saying, "Just get out of the fucking room".

52.	 Mr Gill returned to the dealing room on the fourth floor. In the meantime, Mr Amaitis had decided that the interview process was likely to go nowhere and he resolved, as related by Mr La Vecchia, to pay all the brokers in accordance with the "new deal", terms hoping perhaps that the extra money would convince them or possibly hoping to impose the arrangement on them. I do not have Mr Amaiti's evidence either way. I think that Mr La Vecchia was right in his evidence about the timing of this decision. If Mr Amaitis had made up his mind to do this on 17 January, when the instructions were initially given to stop the usual salary payments, steps would have been put in hand at the same time to make the alternative payments.

Equally, Mr Alcan had not heard of this proposal before the news of it got to the brokers themselves.

53.	 Mr Gill returned to his desk. A very short time later he was recalled by Mr Amaitis who saw him this time in his office. Mr Gill said he thought that he was going to be dismissed. I think this second part of the interview was, however, less hostile. Mr Amaitis stated to Mr Gill that he was going to pay him as if the new terms had been implemented and, as Mr Gill says, in the colourful language of the trade Mr Amaitis said, "just take the fucking money and get out of here". Mr Gill left in the company of Mr La Vecchia and said to him that he thought he was going to be fired. Mr La Vecchia said he thought Mr Gill seemed happy. I do not believe that Mr Gill was happy in the least.

54.	 As I have said I have not had the benefit of Mr Amaitis's own account of the meeting. From Cantor's side, the evidence was given by Mr La Vecchia. Mr La Vecchia, loyally to his superior, endeavoured to downplay Mr Amaitis's words and behaviour at the first meeting with Mr Gill. He could not do so entirely, and I detected an embarrassment in his evidence about the matter. As an industrial relations exercise, this episode clearly scored very low indeed. Mr Amaitis's behaviour was unacceptable for a chief executive officer to display to a staff member of Mr Gill's rank.

55. 	Mr Gill returned from this short second session with Mr Amaitis and Mr La Vecchia. I accept Mr Alcan's evidence that Mr Gill told him something to the effect that he had been told off by the boss and had been treated like a schoolboy (like a "student" or "pupil" in Mr Alcan's own words). I also accept that, to Mr Alcan, Mr Gill did not appear to be otherwise distressed ("depressed" in Mr Alcan's words) by this incident. However, I do accept Mr Gill's evidence that these two sessions with Mr Amaitis affected him considerably.

56.	 After this meeting two further events of relevance happened. First, Mr Alcan was told by Mr La Vecchia of what Mr Amaitis intended to do regarding the January payments, ie to pay the brokers the sums to which they would have been entitled under the "new deal". Secondly, Mr Gill's colleague Mr Warn, discovered that his pay had not been received into his bank account. Mr Gill called his own bank and found that the same had happened with regard to his salary. This caused disquiet and anger amongst the staff. The salaries were in fact paid on the following day in accordance with the "new deal" terms.

(4) 22 January ‑ 17 April 2002

57.	 It appears that payslips were despatched to the employees on or about 31 January, indicating a payment of basic salary as under their old contracts together with a commmission payment (see eg in Mr Bird's case, C3:595).

I
58. 	By e‑mail of that day to Mr Alcan, Mr Bird asked for a breakdown of the payment. It is clear from a letter dated 8 February 2002 (0:603) from Mr Bird's solicitors to Mr Schreiber at Icap, that the reply to that enquiry was in fact by a letter dated 24 January from Mr La Vecchia (C2:566) which simply stated that the sum paid was salary for January, together with a sum on account bonus, representing commission earned in the month of October 2001, less expenses in relation to the recipient's employment. The breakdown was not given but the matter was not further pursued by Mr Bird. A letter in similar terms was sent to Mr Gill, dated 4 February 2002 (C3:601).
I2002 (0:601).
59. 	Mr Casterton said that, on either 22 or 23 January, Mr Gill reported to him the events of 21 January, including the meeting of that day with Mr Amaitis. On 23 January 2002, Mr Casterton reported to Mr Macdonald the situation as it then appeared with regard to the recruitment of Mr Bird and Mr Gill. The e‑mail was copied to Mr Spencer. The report included the following:

"Subject: ED BIRD/SPENCER GILL

Thought I should e‑mail you both outlining the situation with Ed Bird and Spencer Gill at Cantor’s.

The bottom line is I want these guys, as both would significantly strengthen our desk without a doubt. Ed is 31 Spen 33 so both are in their prime with quite a few years on some of our elder statesmen thus giving us longevity as a business.

Ed's situation is as follows. Firstly BOA [Bank of America] asked us to approach him as their number one broker. He also takes Goldman’s line without whom Cantor’s would struggle. If we remove him from Cantor’s it would blow a big hole in their broadside as he is currently wearing the yellow jersey round there. In order to get him however we need to give him a lot of comforts which is not cheap . ....

I'm asking him to sign a three‑year contract ... [remuneration terms are then given] For the time that he is prevented from earning bonus by Cantor’s, either by garden leave or restricted covenants we will pay him 15K per month.

We are also indemnifying him against any potential legal fall out. I hope you think this is a worthwhile investment, it is not cheap but any premium we pay should be justified by the potential spin off business we receive as Cantor’s market share suffers.

Spencer is the key man for Cantor’s on the short end. As you know Cantor’s have issued all their staff with new contracts which none of the short Euro team has signed. All are looking to Spen for his leave, if he goes they will also go either to Euros or Prebon! ...

Again another big investment but a high quality broker who although he overlaps significantly with some of Marcus's team will up our profile in the market and strengthen our core. It also in one move makes it open season on Cantor’s short Euro market share . ...."

Mr Macdonald's response later the same day to Mr Casterton was:

"David, whilst, as you say, these two are expensive, it will hasten Cantor’s demise, and I am sure we will pick up additional market share. My vote is that we go full steam ahead on both these."

The final word on this subject was from Mr Spencer on 25 January as follows:

"Absolutely!! You have my 110 per cent support here."

60.	 On 23 January 2002, Mr Schreiber of Icap sent a second draft employment contract to Mr Bird's solicitor. On 25 January 2002 Mr Casterton sent to Mr Gill an offer of employment and a form of indemnity.

On 4 February, Mr Casterton told Mr Vogels that Icap was going to get Mr Bird to tender his resignation: C3:601 B. On 12 February, Mr Bird did write to Mr Alcan in the following terms:

" .... I wish to inform you that I do not intend to renew my current contract with Cantor Fitzgerald and that in due course I will be delivering notice to you to terminate my employment in accordance with my current contract.

As you know, I have not been happy at Cantor Fitzgerald for some time. I have worked hard for Cantor Fitzgerald throughout my employment. But I feel that this has not been properly recognised and I do feel that I have little practical alternative.

I hope it will be possible for us to deal with my eventual departure in a practical manner and to agree between us a mutually acceptable departure date in the circumstances ...."

61.	 Mr Alcan received this letter and spoke to Mr Bird reminding him that he was under contract. Mr Bird indicated that he knew that to be the case but hoped for an early release. I accept further Mr Bird's evidence that shortly after the delivery of this letter in February 2002 Mr La Vecchia told him he would have to work "every fucking day of his contract". On 14 February Mr Cramp reported to Mr Casterton and others in the following terms:

"Ed has just called me. He has resigned and their response was as expected. They have told he will be going nowhere until his contract ends in September. He is readying himself for a tough battle."

62. This message was sent following an e‑mail of Mr Casterton's own somewhat earlier in the day saying that Mr Bird had handed in his notice in on the previous evening and saying that Mr Gill would hopefully do so on the following day. Mr Casterton's e‑mail ended,

"The games now start!!"

Thereafter, Mr Casterton e‑mailed Mr Michael Spencer, Mr Macdonald and Mr Schreiber in the following terms,

"Just to keep you in touch, Ed Bird handed his notice in to Cantors last night. Gave it to Xavier who understanding and reasonable and prepared to consider compromise. He subsequently received a call from Nick Camp with a message from Danny La Vecchia in New York saying they would make him work every fucking day of his contract. Game on!"

63.	 On 20 February, Mr Gill signed his contract with Icap. On 21 February Mr Gill and Mr Boucher (but not Mr Bird) were again paid a sum that was commensurate with what they would have received under the "new deal". The payslips were, however, again issued (on the last day of the month) indicating a payment of salary plus commission (C3:657‑8). No further queries appear to have been raised about these payments. At the beginning of March, Mr La Vecchia again asked Mr Gill to sign up to the new contract. Mr Gill described Mr La Vecchia's attitude as pushy but not aggressive, in contrast to how he had viewed Mr Amaitis's attitude at the meeting in January.

64.	 On 8 March Mr Gill wrote to Mr La Vecchia and to Mr Alcan in the following terms:

"Dear Danny and Xavier, I am writing to let you know that I am not intending to renew my contract with you when it expires on October 18th this year. I know that I will have to give notice in June of this year so this letter is not giving you notice but merely letting you know in as good time as possible of my intentions…. "

Mr Gill said in his written evidence the following:

" .... Although my contract specified that I could not give notice until June 2002, now that I have decided that I could not stay there I wanted to see if they would release me early. If they did not, I would be forced to resign and claim constructive dismissal because of their treatment of me in relation to effused, the e‑speed tax my bonus and the new contracts ...."

65.	 The letter of 8 March elicited an immediate reaction from Mr La Vecchia who appears to have been informed of its receipt by Mr Alcan. Mr La Vecchia called Mr Gill from an airport in Italy. Mr Gill describes Mr La Vecchia's attitude as "insulting" in using the expression, "you're not concerned about your family". The transcript of the conversation (which was to a taped line at Cantor) is reproduced at E:186BB and I have also heard the recording. I do not accept that it was insulting in any way. The tone is genial and the conversation ends on pleasant terms.

66. 	On 13 March Mr Casterton wrote to colleagues about a meeting with Mr Gill that morning as follows:

"... Had a meeting with Spencer this morning to discuss various outstanding recruitment issues surrounding Cantor’s. Looks like we may take a more offensive stance on this soon with a bit of luck, if so likely to centre around Ed Bird. Things with the French guy seems to be moving slowly forward, Seb's contract expires on 30th of this month but it looks like they will try to hold him out for up to six months! Luigi is under contract until 30th June so we shouldn't hold our breath on this. We should get going on a charm offensive with these guys, lets get them bold as much as we can. If they start to feel their part of the gang round here their much less likely to flake out on us….”

67.	 On 18 March, Mr Boucher wrote a letter informing Cantor that he did not intend to renew his contract with the company and asked them to accept that letter as notice to terminate his employment on 12 July 2002. Clearly, no suggestion was made in that letter that Mr Boucher had grounds to terminate the contract immediately or that he would do other than serve out his employment up to 12 July 2002. Mr Boucher accepted that the letter indicated that he was thereby accepting that his contract was binding on him. He continued by saying that he had a strong feeling that he had lost confidence in the management at Cantor. Mr Boucher also said that; after the sending of that letter, no further pressure had been applied to him to sign the new contract terms. Such pressure as there was came from Mr Alcan who hoped to persuade Mr Boucher to stay at Cantor and talked to him about that on several occasions.

68. 	It is necessary at this stage to recount certain events relating in particular to Mr Bird. Cantor allege, that in March 2002, Mr Bird became substantially less productive in generating business and was at times positively disruptive. The figures produced do indeed indicate that Mr Bird generated less revenue in March than immediately preceding periods and that on some days (including three consecutive days) he produced no trade at all. Mr Bird gave explanations for this, with regard to particular "lines" or clients for which he was responsible at that time. The relevant lines were JPM Chase, Mizuho, Goldman Sachs, Merrill Lynch and Bank of America.

69.	 It is necessary first to deal with Goldman Sachs. Mr Bird said that this line was taken away from him in February which impacted on his production. It is right that the particular line trailed off in that month, reducing to nil in March. In November and December at least the principal broker for that line at Cantor was a Mr Laurence Holyoake who had a particularly good relationship with Goldman Sachs. The relatively low Goldman Sachs production on Mr Bird's part with Goldman Sachs did not significantly reduce his production overall. The line was restored to him in January 2002 for one month and was removed again at the beginning of February as he related.

70. 	As for JPM Chase, Mr Bird told me that the relevant trader was on holiday for three weeks in March. So far as Merrill Lynch is concerned, Mr Bird said that his contact there was having his own employment difficulties and was reluctant to generate business; thus the revenue from that client reduced substantially in March. At Mizuho, Mr Bird said, the contact was in the course of a move to New York and was in the process of handing over to a new trader. This caused a decline in revenue.

71. 	Bank of America was one of Mr Bird's most important lines. It was that bank that initiated Icap's interest in Mr Bird in the first place and they were anxious for Icap to employ him. However, here too the March revenues declined substantially. In this case, Mr Bird said that one of the Bank of America traders had resigned and was returning to New York and therefore the business decreased. Mr Alcan's view was that in the ordinary course the business from the bank would still have been substantially similar even if only one trader had been lost. Mr Alcan had the clear view that Mr Bird's efforts to generate business had reduced.

72.	 I accept both strands of this evidence to a point. I think Mr Bird was demoralised in his work for Cantor after he had made a definitive decision to leave. However, I also accept that for the reasons he gave that the revenue might have declined anyway but I further accept Alcan's evidence that on occasions Mr Bird would be disruptive and, for example, would adopt a mocking tone of exaggerated laughter when Mr La Vecchia's name was mentioned (as related in paragraph 39 of Mr Alcan's witness statement and amplified by him in oral evidence). Mr Boucher said that Mr Bird was "not particularly" disruptive, ie he was to some extent disruptive.

73.	 Mr Bird makes specific complaint that after, he indicated his intention to leave Cantor, in February 2002, he came to work to find that his computer did not work (reamended defence paragraph 10, particulars, sub‑paragraph (c)). In his witness statement (paragraph 21) Mr Bird referred to an occasion when his computer did not work for a couple of days. He put this as being shortly after an incident at the end of March about which he had spoken in a previous paragraph.

74. 	These matters were investigated. I have heard evidence from Mrs Daryl Houston of Cantor's IT data centre. She produced the records of the relevant incidents. She said that between the beginning of February 2002 and his departure in April 2002 Mr Bird reported four faults. This compared with eight faults reported by him in January. Mrs Houston believed that the number of reports was fairly standard for a broker on the desk. On the first three occasions the problem was access to e‑mail. Mrs Houston reported that two of these were dealt with within 30 minutes and the third was resolved on the same morning. The last incident was on 2 April 2002. Over the previous weekend Mr Bird's work station had been moved to a less prominent place on the desk, some three places removed from the nearest colleague. This had been done, Mr Alcan stated because of Mr Bird's perceived disruptive behaviour and reduced productivity.

75.	 The service records produced by Mrs Houston show that Mr Bird's fault was logged at 7.57 am on 2 April. The record indicating that the matter had been resolved is timed at 10.21 am on the following morning, ie some 26 hours in all rather than the two days suggested in Mr Bird's statement. Clearly, this was a fault impeding Mr Bird's trading and, as such as Mrs Houston indicated, would usually receive priority over other technological faults. She accepted that the period of over 24 hours for the repair seemed long but stated that the engineer has no specific recollection of the incident and is unable to say why this delay occurred.

76. 	Finally, in this period I should deal with the other incident at the end of March 2002, already briefly alluded to, about which Mr Bird also complains specifically in his statement of case. He put it in paragraph 20 of his witness statement as follows:

"At the end of March 2002, a strange incident involving Xavier made me contemplate resigning. I greeted Xavier that day by slapping him playfully on the back twice. There is nothing unusual about this. Xavier lost his temper and hit me hard on the back and then on the arm (which left a bad bruise). Bizarrely, he then licked his fingers and wiped them on my neck. Although it was normal for Xavier to play‑fight, on this occasion, he was heavy‑handed and aggressive and his tone was anything but playful. His wiping his spittle on me was disgusting and offensive."

Mr Alcan's written evidence on this matter was:

"[Mr Bird] was always messing around and I frequently had to tell him to stop doing so. At one time his computer would not work and I remember him complaining about it. He said that that was it, he could not work. I remember that everyone was trying to fix it. On another occasion, about a week or so after he decided to leave, he came up to me and put his finger on my face. I realised that my face was wet and that he licked his fingers before wiping them on me. I said "Thanks very much" and he said, "You’re welcome". I knew he was just trying to wind me up, because he was bored and frustrated because he had not been released. This was, in fact, a very minor incident. Mr Bird alleges that I licked my fingers and wiped spit on his neck. This was true, but this was just in retaliation for him doing the same to me (which was obviously embarrassing as it shows that I was being wound up by him). On another day, Mr Bird again walked past me and punched me gently on the shoulder. I said he should stop it and leave me alone. He just smiled and did not say anything. He went back to his desk. A little later, I walked past and punched him back by surprise. It was not done in a nasty way and I do not believe Mr Bird did it in a nasty way. It was just horse‑play I should point out that these kind of incidents are not that unusual among brokers."

77.	 Mr Bird accepted (Day 7 page 29) that he had on one occasion put spittle on Mr Alcan. This was not mentioned at all in Mr Bird's witness statement and was clearly relevant to the allegation being made by Mr Bird in his own statement of case. I accept and prefer Mr Alcan's evidence about this incident.

78. 	Before turning to events of April 2002 when all the defendants left Cantor's employment, I must say something about Mr Boucher's particular position.

79. 	A "commission only" deal was offered to Mr Boucher in November 2001. Mr Alcan introduced it to him and was enthusiastic and regular in his promotion of it in the weeks that followed. At some time before Christmas 2001 Mr Boucher saw an internal accountant at Cantor who explained how precisely the "new deal" would work. Mr Boucher thought that Mr Alcan's official explanation had been misleading. Mr Boucher told Mr Alcan that he did not want to accept the new terms. Mr Alcan appeared to accept this but Mr Boucher was aware of the continued pressure on colleagues to accept the offer. He found this unsettling. Mr Boucher explained in his oral evidence why he preferred the security of the "fixed draw" arrangement.

80.	 Mr Boucher was also paid on "new deal" terms in January and February 2002. He thought that he might be being tricked into it accepting the new terms by accepting the payment and so offered to repay it. In the end, however, he resolved not to do so.

81. 	Mr Boucher described the management styles of Mr Alcan and Mr La Vecchia. He said his relationship with Mr Alcan was friendly, although he did have arguments with him. Mr La Vecchia, said Mr Boucher, was a tough guy. In promoting the new deal, he was "pushy" but not aggressive.

82. 	Mr Boucher had been approached by recruitment agents acting for Icap in early October 2001 and had had meetings with Icap representatives on various occasions in late 2001 and early 2002. On about 15 March, Mr Boucher met Mr Schreiber, Icap's legal adviser. On 18 March Mr Boucher wrote to Cantor, as I have indicated, telling them of his decision not to renew his contract with the company and terminating his employment on 12 July 2002. In oral evidence, Mr Boucher accepted that at that stage he regarded his contract with Cantor as binding upon him. He also accepted that no pressure was applied to him to sign the commission only terms after that date and that he had duly received his salary in the usual way in accordance with his contract in March 2002.

83. 	I return briefly to Mr Gill as I have mentioned on 8 March he had handed in his letter stating that he would not be renewing his contract. Mr Alcan was anxious to persuade him to stay. He suggested to Mr Gill that they should have dinner together to discuss the matter. Mr Alcan renewed the invitation in a telephone conversation on 19 March 2002. I have seen the transcript of this conversation and have listened to the tape they include the following exchange:

"Mr Alcan "When are we having that dinner then?

Mr Gill ... "Because between houses can we arrange something later this afternoon?

Mr Alcan "Yes I would like to".

Mr Gill "Where are we going? Anywhere nice?"

Mr Alcan "Wherever you like ‑ your my guest, you're my customer for the evening ...We can go whoring afterwards if you like. Do you like caviar? ...."

In his witness statement, Mr Gill says this:

"I thought this was offensive and incredibly unprofessional behaviour for a senior manager in such circumstances."

84.	 There was a dispute in evidence whether Mr Alcan's use of the word "whoring" was meant to signify resort to prostitution or going to a lap‑dancing establishment or the like. Mr Gill accepted that (reluctantly) he had been to the latter type of establishment before at the behest of clients. I do not think that what Mr Alcan meant is of great importance. What is abundantly clear to me is that this was an entirely friendly and jocular exchange, punctuated by laughter on both sides. I do not accept for one moment that Mr Gill was offended by Mr Alcan's remark. One only has to listen to the tape to reach that conclusion.

85. 	The 22nd March was an important day in Icap's decision making process. By e-mail from Mr Cramp of Icap to Mr Butler at Bank of America, Mr Cramp wrote:

"Hi Joe, we're very much in the hands of Cantor still. Michael Spencer is considering the virtues of going to all out war with Cantor’s via the law court route. He has met with our legal eagles this week to try to sort out the best way forward . ..."

Mr Butler responded to Mr Cramp in an e‑mail shortly thereafter which includes. the following passage:

"... as for our friends at Cantor’s, it is a sticky situation. I had suggested early on in this to Ed that we stop quoting them unless they release him. I am not sure that this will actually have the desired effect, we know how everyone thinks Cantors are a bunch of "* * * *". So stumped is probably one of the many words that can be used to describe the scenario."

86. Mr Cramp reported this exchange to Mr Casterton and others saying that it looked as though the situation would have to be .reviewed. The final e‑mail of the series is from Mr Casterton to Mr Cramp and others which includes the following:

"Interesting choices? Upstairs with the lawyers now with Spencer at 2.30 to discuss Ed's strategy. I am hopeful that these meeting will result in our taking an aggressive approach to getting Ed moving out of Cantor’s. This is likely to result in Ed being on garden leave for awhile, at that stage we need Chuck and Joe to start applying pressure to Cantor’s. Let you all know later ...."

Later the same day Mr Cramp was able to write to Mr Butler in these terms:

"Joe, I have just come out of a meeting with Michael Spencer and Clumpy [Mr Casterton] Mr Spencer has decided to go down the "screw them to the wall" route, so if I can suggest, stay put with Jerry for a couple of weeks and hopefully the public schoolboy will be here soon. Clumpy will speak to Ed next week, so please don't say anything yet. Thanks."

87. 	It was accepted in evidence by Icap's witnesses that at this stage the decision was taken for the individual defendants to resign and to allege that Cantor was in repudiatory breach of the employment contract. (See eg Day 10 p.149) On 26 March 2002 Mr Casterton reported to Mr Vogels and Mr Cramp as follows:

"I am meeting Ed at 12 o'clock in Corneys Broadgate Exchange to brief him on his next move which will be aggressive and happen next week. Other news is that Luigi resigned this morning so game on!"

(It is noteworthy that the "resignation" of Mr Boucher here mentioned must be his letter of 18 March, in which there was no suggestion that the "resignation" was as a result of repudiatory breach by Cantor.)

88.	 By letter dated 27 March Mr La Vecchia responded to Mr Gill's letter of 8 March, stating the intention not to renew Mr Gill's contract. Mr La Vecchia reminded Mr Gill of the terms of his contract referring to the "notice window", and the earliest expiry date as being 17 October 2002.

89. 	On 2 and 3 April, meetings were held between Mr Gill and Mr Bird (respectively) and Icap representatives to conclude arrangements for their resignations. Mr Bird was due to depart on holiday abroad and, as he told me in his evidence, he was anxious to be in the country when his resignation was given because he envisaged that he might be required to deal with urgent court proceedings.

90. 	By e‑mail of 5 April, Mr Casterton reported to Mr Spencer and Mr Macdonald in these terms:

"Guys just to let you know that round one with Cantor’s is about to start on Monday. Spencer Gill will not turn up for work on Monday, he has signed a letter which is being couriered by his lawyer to Cantor’s at 8.00am Monday informing them that he no longer intends to work there and will be taking up new employment on the 22 April. We are due to send a letter to Cantor’s later on in the day telling them that we are employing Spencer and that the sensible approach would be to move towards a commercial settlement. Ed Bird is on holiday his letter will be couriered to Cantor’s the following Monday."

Mr Spencer's response to Mr Casterton and Mr Macdonald was as follows:

"Good stuff, tell me when we need the press to add some momentum to our endeavours ..."

91.	 Mr Spencer and Mr Casterton both accepted that Icap had indeed provided information to journalists which led to an article in eFinancial News dated 22 April 2002. On 8 April 2002 Mr Casterton received an e‑mail from a colleague at another firm which reads:

"Congratulations!! "Spencer joins Spencer" can see the headlines on financial news now….."

Mr Casterton replied:

"Don't think they have written the article yet, but I like the headline. This is only the first shot in the battle for Spen. Yet to hear anything back from our friends at Cantor’s. I expect a warm and friendly phone call sometime this afternoon in New York time!"

92.	 On that day, Mr Gill had written his resignation letter and did not attend for work at Cantor. His letter read:

"I am writing to inform you that from today, I will no longer be attending for work. I have made it clear that I will not be renewing my contract with Cantor Fitzgerald and I am, obviously, keen that I should make a fresh start with my new employer as soon as possible. I asked you whether the company would be prepared to consider releasing me from my contract and you said no.

The atmosphere at the company has deteriorated to the extent that it is obvious to me that I have no future with the company. Lee Amaitis has been unnecessarily aggressive and rude towards me (and, I understand, others) in relation to the company's attempt to impose new contractual terms. I have always made it clear that I'm not prepared to agree to work without salary. Lee's reaction to this was to shout at me that "I should just "sign the f***ing deal". Later he said "you may as well sign this f* * *ing deal because if you stop making money I'll sack you anyway."

The company had also said on a number of occasions that it sees no future in voice broking. I am no longer prepared to carry on in an environment in which it is clear that the company's behaviour is destructive and completely unreasonable.

I have accepted an offer of employment with another company, but will not start work with them until 22 April..."

93. 	On 16 April, Mr Bird wrote his letter of resignation to Cantor. This stated:

" .... In my earlier letter I made it clear that I would not be renewing my contract with Cantor Fitzgerald.

Since then I have continued to work normally, although your and Danny's behaviour has been increasingly hostile, motivated merely by the fact that I have indicated that I no longer wish to work at Cantor. Danny has repeatedly told me in front of other members of the desk that any money I make will not go to me, but will be retained by the company. You have moved me to the end of the desk so that I am no longer close enough to the other brokers on the desk to hear what is happening on the desk. This severely affects my ability to do my job and is effectively an attempt to exclude me from the business. Both you and Danny have behaved in an extremely unpleasant manner. In a bizarre incident you recently licked your fingers and then wiped your spittle on my neck. You also punched me hard on the arm. I found this behaviour unacceptable and decided to consider my position whilst away on holiday. Having reflected on matters, I am no longer prepared to continue to work in such a hostile environment and I do not consider myself bound any longer by my contract with the company.

I will not, therefore, be attending for work after my return from holiday. I have accepted an offer of employment with Icap, but I will not be commencing work with Icap until 29 April ...."

On the following day (17 April), Mr Boucher wrote his letter to Cantor:

"... As you know, I have for sometime been disenchanted with my employment at Cantor Fitzgerald. In particular, I have been disturbed by the aggressive approach that the company has to its employees as shown by the recent attempts to force me and others to sign up to new contracts of employment on much less favourable terms, including recent manipulations to my pay. The company has also said that it sees little future in voice broking so my career is obviously limited.

For these reasons I decided that I did not wish to continue my career with Cantor Fitzgerald and, as you know, last month I served formal notice to terminate my employment, due to expire on 12 June 2002.

As you know, I am going on holiday with effect from today and I am not due to return until 29 April 2002. I will not be returning to work after my return from holiday and I propose to commence work with my new employer, Icap, as soon as possible after my return. I hope that we are able to agree on an amicable and orderly termination ...."

94.	 Following delivery of these letters, each of the individual defendants ceased to work for Cantor. Their acts were treated by Cantor as repudiatory breaches. of contract and were accepted accordingly as terminating the contracts. These proceedings were initiated shortly thereafter.

Following delivery of these letters, each of the individuals defendants ceased to work for Cantor. Their acts was treated by Cantor as repudiatory breaches of contract and were accepted accordingly as terminating the contracts. These proceedings were initiated shortly thereafter.

(D) The Law

(1) Constructive Dismissal

95. 	It is common ground that the substantial questions for me are whether Cantor committed repudiatory breaches of the employment contracts and whether, at the time I at which each defendant ceased working for Cantor, he was or was not entitled to accept such breach or breaches as terminating the contracts. This last issue turns upon questions of whether the defendants affirmed the contracts after any relevant breaches, putting an end to their rights to accept the relevant repudiation. Again, it is common ground that the law to be applied is the common law of contract unaffected, by any gloss that might have been applied in other jurisdictions where statute has modified the common law. Thus, one must be careful, in analysing cases of constructive dismissal in the Employment Tribunal and on appeals therefrom, not to import additional concepts that may have developed from the statutory definition of "dismissal" in that context.

96.	 The basic law is easily stated by reference to the judgment of Lord Denning MR in Western Excavating (ECC) Limited v Sharp [1978] ICR 221, 226A‑C, where he said:

"... If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is constructively dismissed. The employee is entitled in those circumstances to leave at the instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once. Moreover, he must make up his mind soon after the conduct of which he complains; for, if he continues for any length of time of leaving, he will lose his rights to treat himself as discharged. He will be regarded as having elected to affirm the contract."

97.          The principal term of the contract that it is alleged was broken by Cantor is the implied term as to trust and confidence between employer and employee, formulated by Lord Steyn in Malik v Bank of Credit & Commerce International [1997] ICR 20, 45F as follows:

"The employer shall not without reasonable and proper cause conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee."

98.	 In a further passage relied upon by counsel for Cantor Lord Nicholls of Birkenhead in Malik characterised the relevant obligation as being a "general obligation not to engage in conduct likely to undermine the trust and confidence required if the employment relationship is to continue in the manner the employment contract implicitly envisages". (See at page 35)

99.	 The individual defendants also alleged that Cantor was in breach of its obligation to pay the contractual wages, both by its late payment in January 2002 and by the payment of total remuneration calculated by reference to the "new deal" in January and February 2002.

100. 	Again, it is not, I think, controversial that there can be a breach of the implied term as to trust and confidence even if the relevant action of the employer is not directed at the particular employee (see Malik's case (supra) and Millbrook Furnishing Industries Limited v McIntosh [1981] IRLR 309). Further, the relevant repudiatory conduct can consist of a series of improper acts of which the last may be a "straw that breaks the camel's back": Lewis v Motorworld Garages Limited [1986] ICR 157.

101.	 I was further taken to passages in speeches in the House of Lords pointing out the relatively recent development of the principles of mutual trust and confidence between employer and employee and the transformation of the nature of the contract of employment in the eyes of the law in the last 30 years or so: see again per Lord Steyn in Malik at page 45C‑E and per Lord Hoffmann in Johnson v Unisys [2001] 2 WLR 1076, 1091 C. In the Johnson case, Lord Steyn referred to the implied obligation of good faith as being an employer's obligation of fair dealing (see at page 1088E). However, I do not think that the defendant went so far as to submit that every breach of the obligation of employer or employee to be "fair" to the other would necessarily be a repudiatory breach. However, if the breach amounted to conduct calculated and likely to destroy or seriously damage the relationship of trust and confidence between employer and employee that, virtually inevitably, will be repudiatory since it necessarily goes to the root of the contract: see per Arnold J, giving the judgment of the Employment Appeal Tribunal in Courtaulds Northern Textiles Limited v Andrew [1979] IRLR 84,85‑6 and per Browne‑Wilkinson J, in the same Tribunal, in Woods v WM Car Services (Peterborough) Limited [1981] ICR 666, 672B.

102.	       I was further referred to passages in the judgment of Judge LJ in Cantor Fitzgerald v Callaghan [1999] ICR 639, emphasising the importance of an employer's obligation to pay the contractual salary or wages: see pages 648‑9 of the judgment where the learned Lord Justice said:

"... In reality it is difficult to exaggerate the crucial importance of pay in any contract of employment .... "

The learned Lord Justice referred to RF Hill Limited v Mooney [1981] IRLR 258, 260 where Browne‑Wilkinson J observed:

"The obligation on an employer to pay remuneration is one of the fundamental terms of a contract. In our view, if an employer seeks to alter that contractual obligation in a fundamental way, such as he has sought to do in this case, such attempt is a breach going to the very root of the contract and is necessarily repudiation."

A little later in his judgment in the earlier Cantor Fitzgerald case Lord Justice Judge said this:

"In my judgment the question whether non‑payment of agreed wages or interference by an employer with a salary package is or is not fundamental to the continued existence of a contract of employment depends on the critical distinction to be drawn between an employer's failure to pay, or to delay in paying, renewed remuneration and his deliberate refusal to do so. Where the failure or delay constitutes a breach of contract, depending on the circumstances this may represent no more than a temporary fault in the employer's technology, an accounting error or simple mistake, or illness, or accident, or unexpected events (see, for example, Adams v Charles Zub Associates Limited [1978] IRLR 551). If so it would be open to the court to conclude that the breach did not go to the root of the contract. On the other hand if the failure or delay in payment were repeated and persistent, perhaps also unexplained, the court might be driven to conclude that the breach or breaches were indeed repudiatory.

Where, however, an employer unilaterally reduces his employees' pay, or diminishes the value of the salary package, the entire foundation of the contract of employment is undermined. Therefore an emphatic denial by the employer the obligation to pay the agreed salary or wage, or a determined resolution not to comply with his contractual obligations in relation to pay and remuneration, will normally be regarded as repudiatory."

103. 	I was also taken to various examples of the application of these principles in the cases. In particular reliance was placed upon RF Hill Limited v. Mooney (supra) and the Woods case (supra), involving changes or attempted changes in an employees terms of service. In Hill the employer introduced a revised commission arrangement about which the Employment Appeal Tribunal said:

"... what the employers have sought to do in this case is to tear up the existing contractual obligation as to the computation of remuneration, by reference to a given formula. In its place they have sought to impose a different formula, the exact operation of which at the date at which they attempted to impose it was incapable of assessment. The obligation on an employer to pay remuneration is one of the fundamental terms of the contract. In our view, if an employer seeks to alter that contractual obligation in a fundamental way, such as he sought to do in this case, such attempt is a breach going to the very root of the contract and if necessarily a repudiation. It is not open to him, subsequently, to come along and seek to show by detailed calculations, not capable of being made at the time, that in fact it would not have operated in very seriously detrimental way. The obligation on the employer is to pay the contractual wages, and he is not entitled to alter the formula whereby those wages are calculated. We think, therefore, that on the question of fundamental breach the decision of the Industrial Tribunal is correct."

104.	 In Woods, along with other complaints, the industrial tribunal had found that the employer had asked the employee to take a reduced wage. She refused and the tribunal had found that, although no threats had been made, the employers had put pressure on her to accept the wage reduction. The tribunal had held that she had not been constructively dismissed. On appeal the Employment Appeal Tribunal decided that it would have reached a different decision, but did not interfere, because the decision below could not be termed impossible or perverse. However, in indicating his differing view on that case Browne‑Wilkinson J said (at page 671 F‑672B):

"Experience in this Appeal Tribunal has shown that one of the consequences of the decision in Western Excavating case has been that employers who wish to get rid of an employee or alter the terms of his employment without becoming liable either to pay compensation for unfair dismissal or a redundancy payment have had to resort to methods of "squeezing out" an employee. Stopping short of any major breach of the contract, such an employer attempts to make the employees life so uncomfortable that he resigns or accepts the revised terms. Such an employer, having behaved in a totally unreasonable manner, then claims that he has not repudiated the contract and therefore that the employee has no statutory rights to claim either a redundancy payment or compensation for unfair dismissal.

It is for this reason that we regard the implied term we have referred to as being of such importance. In our view, an employer who persistently attempts to vary an employee's conditions of service (whether contractual or not) with a view to getting rid of the employee or varying the employee's terms of service does an act in a manner calculated or likely to destroy the relationship of confidence and trust between employer and employee. Such an employer has therefore breached the implied term. Any breach of that implied term is a fundamental breach amounting to. a repudiation since it necessarily goes to the root of the contract: See Courtaulds Northern Textiles Limited v Andrew [1979] IRLR 84."

105. I was also referred to cases where the Employment Appeal Tribunal has considered the question of the use of foul language by employer to employee: eg Palmanor Limited v Cedron[1978] ICR 1008, the Courtaulds case (supra), Hilton International Hotels (UK) Limited v Protopapa [1990] IRLR 316, Isle of Wight Tourist Board v Coombes [1976] IRLR 415 and Moores v Bude‑Stratton Town Council [2000] IRLR 676. In the last mentioned case Lindsay J said,

"18. 	It cannot be doubted that that even a single incidence of verbal abuse may found a claim to constructive and unfair dismissal ....

19. 	These cases suggest that, whilst as one would expect, that even a single incident of verbal abuse, though not coming from the employer himself or itself can ground a successful claim for constructive dismissal on the basis of its having been destructive of the mutual obligations of trust and confidence between employer and employee, each incident needs to be examined in the light of its surrounding circumstances. They will include that the verbal abuse was, so to speak, "authorised" in the sense of coming from some senior person in the employer's organisation and thus seeming to have the authority of the employer behind it and whether a timely retraction or apology was offered by the employer."

Affirmation

106. 	The general position is stated as follows, in Chitty on Contracts 28th Ed. (1999) Vol. 1. para.25‑002:

"Affirmation. Where the innocent party, being entitled to choose whether to treat the contract as continuing or to accept the repudiation and treat himself as discharged, elects to treat the contract as continuing, he is usually said to have "affirmed" the contract. He will not be held to have elected to affirm the contract unless, first, he has knowledge of the facts giving rise to the breach, and, secondly, he has knowledge of his legal right to choose between the alternatives open to him. Affirmation may be express or implied. It will be implied if, knowledge of the breach and of his right to choose, he does some unequivocal act from which it may be inferred that he intends to go on with the contract regardless of the breach or from which it may be inferred that he will not exercise his right to treat the contract as repudiated ....

.... If the innocent party unreservedly continues to press for performance or accepts performance by the other party after becoming aware of the contract and his right to elect, he will be held to have affirmed the contract."

107. 	In the Callaghan case (supra) a question of affirmation also arose. A repudiatory breach had been committed by the employer shortly before Christmas in the relevant year and the employees resigned in January. Judge LJ said, at page 653D:

"The ultimate question is one, not of law, but of fact. Assuming that it is possible to isolate the issue of tax liability separately from the remaining problems, some dealt with in this judgment and some raised and dealt with below, together with the suspicions of double‑dealing and "poaching" and negotiations, I am unable to detect any sufficient evidence that the employees affirmed these contracts or waived the breaches of which they were complaining. After a prolonged period in which they had every reason to believe that the problems would be resolved in accordance with the mutual understanding of the agreement, shortly before Christmas they were informed of the decision by Mr Amaitis which constituted a repudiatory breach of contract. Then after a short time, largely over the Christmas and New Year period, they gave notice and left. Examining this period as closely as possible in the overall context, there is, in my judgment insufficient evidence from which to draw the inference that these contracts of employment were affirmed."

108. 	This decision was reached after reference to the judgment of the Employment Appeal Tribunal in WE Cox Toner (International) Limited v Crook [1981] IRLR 443 which is cited extensively in a further case relied on by Icap, namely Waltons and Morse v Dorrington [1997] IRLR 488. At page 491 Morison J said,

"The question as to whether the tribunal misdirected themselves on the affirmation issue did cause us some concern. It seems to us that Mr Griffiths was entirely right to draw our attention to the decision in [Cox Toner]. In that case the Employment Appeal Tribunal, presided over by Lord Browne‑Wilkinson, said this at page 446:

"Although we were not referred to the cases outside the field of employment law, our own researches has led us to the view that the general principles applicable to a repudiation of the contract are as follows. If one party ("the guilty party") commits a repudiatory breach of the contract, the other party ("the innocent party") can choose one of two courses: he can affirm the contract and insist on its further performance, or he can accept the repudiation, in which case the contract is at an end. But he is not bound to elect within a reasonable or any other time. Mere delay by itself (unaccompanied by an express or implied affirmation of the contract) does not constitute affirmation of the contract; but if it is prolonged it may be evidence of an implied affirmation ... Affirmation of the contract can be implied. Thus, if the innocent party calls on the guilty party for further performance of the contract, he will normally be taken to have affirmed the contract since his conduct is only consistent with the continued existence of the contractual obligation. Moreover, if the innocent party himself does acts which are only consistent with the continued existence of the contract, such acts will normally show affirmation of the contract. However, if the innocent party further performs the contract to a limited extent but at the same time makes it clear that he is preserving his rights to accept the repudiation or is only continuing so as to allow the guilty party to remedy the breach, such further performance does not prejudice his right subsequently to accept the repudiation ....

Mr Griffith asked us to apply that authority and submitted that it should be applied. We also draw attention to a passage in the latest edition of Harvey on Employment Law, which says this: "There is no fixed time limit in which the employee must make up his mind. It depends upon all the circumstances including the employee's length of service, the nature of the breach and whether the employee has protested at the change. Mere protest will not, however, prevent an inference that the employee has waived the breach, although exceptionally a clear reservation of rights might do so. Where the employee is faced with giving up his job and being unemployed or waiving the breach, its not surprising that the courts are sometimes reluctant to conclude that he lost his right to treat himself as discharged by the employer merely by working at the job for a few months."

(3) Inducement of Breach of Contract

109.	 I have read and heard extremely interesting and thought provoking submissions on the subject of the requisite mental element of the alleged tortfeasor in the constitution of this tort. Cantor's primary submission was that where a party knows of a contract between two others and intentionally procures the termination of that contract he will be liable if it subsequently turns out in fact that the termination was a breach of contract. As a corollary, Cantor submits that where knowledge of the contract has been established, it is no defence for a defendant, who intentionally procures the factual event complained of, to say that he did not intend to procure a breach and he believed that the contract breaker was entitled to do the procured act. On the other hand, Icap submitted that liability is only established where the alleged tortfeasor knew the existence of the contract and intended to procure its breach and that that person procured the breach with that intention. In paragraph 64 of its final written submissions Cantor provided four alternative submissions on the facts, as to Icap's mental state, each leading to liability on Icap's part. After a careful review of the authorities it was far from easy to detect where precisely the line has to be drawn in this complex area of the law.

110. 	However, there was common ground to this extent. Both Mr Hillier for Cantor and Mr Hochhauser for Icap were agreed on one set of circumstances that would clearly result in liability. This centred round Cantor's formulation of an alternative submission in paragraph 64.2 of its written argument. There it was submitted that if Icap procured a breach and was aware that there were no proper grounds to justify the brokers leaving immediately when they did and claiming that they had been constructively dismissed, Icap would then be liable. Mr Hochhauser agreed. He further agreed that liability would also follow if the breach was procured by Icap in circumstances where it was recklessly indifferent as to whether there were proper grounds to justify such action on the brokers’ part: see Day 14 pp.95‑96. In the one case where it matters to the outcome of this action I have concluded that Icap was "reckless" in this sense for reasons which will be set out hereafter. Accordingly, I do not think that it would be right to state my own views, tentatively reached, as to the effect of the present authorities in this area or the primary rival submissions set out above. That process would only lengthen substantially what is already a lengthy judgment and would delay its production when, for good commercial reasons, all parties are anxious to know the result of this action prior to the end of the current legal term.

111.	 I have also had in mind the many threads of "accessory liability" for legal and equitable wrongs considered in the opinion of the Privy Council, delivered by Lord Nicholls of Birkenhead, in Royal Brunei Airlines v Tan [1995] 2 AC 379, especially the reference to the "analogy" at page 387A‑C. In such circumstances, lengthy "obiter dicta" from a judge at first instance are unlikely to be helpful.

(E) Conclusions

112. 	In the end, I have reached the conclusion that the respective positions of Cantor vis‑a‑vis Mr Bird and Mr Gill on the one hand and Mr Boucher on the other are very different. I find that Cantor did commit repudiatory breaches of contract against Mr Bird and Mr Gill, but did not do so against Mr Boucher. The breaches related to Cantor's attempts to make Mr Bird and Mr Gill accept the "new deal" and the circumstances surrounding those attempts. The different results derive principally from the fact that, as regards Mr Bird and Mr Gill, the matter was handled on Cantor's behalf by Mr La Vecchia (and, in Mr Gill's case, significantly by Mr Amaitis) whereas, in Mr Boucher's case, it was handled by Mr Alcan. Mr La Vecchia and Mr Amaitis had a very different style to Mr Alcan. Mr La Vecchia was tough, domineering and persistent in his handling of this matter. I accept the evidence of Mr Bird and Mr Gill that Mr La Vecchia promotion of the "new deal" was extremely forthright and, as was standard with his manner of speech, there was much use of swearing and obscenities (a trait confirmed by Mr Alcan: Day 5 page 153). The explanations of the new proposals were perfunctory and misleading. Nothing was provided on paper except the odd letters which were themselves opaque and open-ended in their treatment of the commission terms when it came into what the real deductions of expenses were. As already related, in response to Mr La Vecchia's blandishments, Mr Bird indicated that he was thinking of leaving Cantor. This led to Mr La Vecchia's very unpleasant remarks about what Mr Amaitis and Mr Lutnick would do in response at the instance Mr La Vecchia's. The persuasions were also accompanied by Mr La Vecchia's erroneous indications that bonuses under the existing contracts were at Cantor's sole discretion and might be withheld if Mr La Vecchia did not get his way. Both Mr Bird and Mr Gill made it abundantly clear to Mr La Vecchia that they did not want to forgo the "fixed draw" elements in their contracts and were not prepared to do so. Mr La Vecchia accepted, however, that he continued to talk to Mr Bird about the new terms and to seek to persuade him around to them: Day 4 page 78. The same was true of his dealings with Mr Gill: Day 4 page 88.

113. 	There then followed Mr Gill's encounter with Mr Amaitis on 21 January. "Encounter" is the correct word, in my view, since "meeting" or "interview" would not convey the true tenor. Whatever Mr Gill's body language, I think it is clear that Mr Amaitis behaved disgracefully at this meeting. Even by the robust standards of this trade, the language and comments of Mr Amaitis on this occasion may well, on their own, have crossed the threshold of conduct repudiatory of the employment contract, when one has regard to the cases on this subject noted above.

114.	 There followed the recall of salaries on 21 January and payment of substantially larger sums than customary to the staff on 22 January. Mr Bird specifically asked for a breakdown of the payment on 31 January (C3:599). The pay slip and short response from Mr La Vecchia dated 24 January (C2:566) did not fully provide this, although the pay slip indicated that the basic salary had been paid and the brief letter showed that a sum on account of bonus had also been paid. The calculation of the bonus sum was not provided.

115. 	Following the "encounter" of 21 January, Mr Gill was moved to call Icap (Mr Casterton) on the following day and to say that he wanted to get out of Cantor (Day 9 at page 4).

116. 	It seems to me that by this stage Cantor (through Mr La Vecchia and Mr Amaitis) had broken (vis‑a‑vis Mr Gill and Mr Bird) the implied term not to conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between the parties: there was no reasonable or proper cause for this.

117. 	I do not accept that any express term was established whereby Cantor was bound to pay salary on the 21st of the month and not a moment later. However, what had happened here was that the hard sell of the "new deal" to Mr Bird and Mr Gill had gone far too far. The promotion had been aggressive and misleading, pay had been stopped (albeit only for 24 hours) and then large sums of money, virtually unexplained arrived into Mr Bird and Mr Gill's bank accounts. They did not know where they were and were concerned that they might be being tricked into taking the new terms in spite of their express refusal to do so. There had been no consultation of any sort. In my view, this combination of events, affecting Mr Gill and Mr Bird, clearly cross the line and equates closely with the type of conduct considered by Browne‑Wilkinson J in Woods (supra) at pages 671‑672.

118.	 Mr Boucher's case, however, was different. Mr Alcan handled the proposal of the new deal to him. Mr Alcan did not explain it properly and Mr Boucher thought that Mr Alcan may have been untruthful. However, he went to the accountant at Cantor for a fuller explanation which led him to decide that he did not want to accept the deal. He told Mr Alcan of this and, while Mr Alcan continued to try to persuade him to accept, this was done in a friendly manner: Day 8 page 59. The contrast in the style of promotion of the deal was very different.

119. 	  Mr Boucher did not think the staff were concerned because of the delayed payment in January: Day 8 page 59. On hearing from a colleague what had happened he spoke to Mr Alcan and simply said, "I think it is not a good idea, Xavier" (Day 8 page 60). Mr Boucher's quiet reaction indicates to me a wholly different manner of dealing with this matter between him and Mr Alcan from that which prevailed between Mr Gill/Mr Bird and Mr La Vecchia. Mr Boucher was also concerned that the extra payment might be a trick. But, he was reassured by Mr Alcan and by Mr La Vecchia (Day 8 page 126). He also spoke with a pay roll colleague (Miss Gail Cook), after the additional payment was repeated in February. However, in the end, he felt it was unobjectionable to retain the extra money.

120.	 As Mr Boucher had explained he had been considering leaving the broking business for some time and moving to another field of work, perhaps banking. However, he became interested in Icap's approaches. He decided to give notice of termination in accordance with his contract. As he said, at this time he had had no discussions with Icap about leaving Cantor because of any bad behaviour on Cantor's part (Day 8 page 67): he thought that there were no discussions about this until a meeting held much later, on 15 April 2002, two days before he signed his contract with Icap and told Cantor that he would not be continuing to work for them. He accepted in evidence that his contract was still binding on him as at 18 March, that he had not been intimidated, insulted or threatened, and that work carried on as normal for him thereafter. (Day 8 pp. 69‑73). He said he had lost confidence in Cantor's management, but he gave his contractual notice for that reason. As Mr Hillier submitted, however, loss of confidence in management is not the same as conduct by the employer calculated to destroy or seriously damage trust and confidence between employer and employee in the sense of the implied term relied upon. Moreover, he never told Mr Alcan of his loss of confidence (Day 8 p.70). There were no further attempts after 18 March to get him to sign up to the "new deal".

121. 	In his witness statement, Mr Boucher referred to a further incident in which Mr Alcan had impersonated Mr Pere in a telephone call to Mr Schreiber at Icap, endeavouring to find out Mr Boucher's plan vis‑a‑vis Icap. In the statement, Mr Boucher put this incident as being at the end of March but in oral evidence he thought the incident was more likely to have been before his resignation letter of 18 March 2002.

122.	 In Mr Boucher's defence to Cantor's claim he also relies upon a further matter as an element of the constructive dismissal contended for. It is alleged that Cantor was due to distribute to Mr Boucher a 25 per cent tranche of 10,788 shares in eSpeed Inc in January 2002, but failed to do so. In evidence, Mr Boucher was shown a copy of a document at C3:656B which appeared to be a stock certificate of eSpeed Inc, dated 26 February 2002, relating to shares issued to him. He accepted that the shares had in fact been issued to him: Day 8 p.123. In re‑examination, it appeared that the complaint boiled down to Mr Boucher not having been given written notification of the issue of the shares as he had been with regard to earlier tranches of shares: C 1:201 and 233. It is impossible to regard that matter as coming anywhere near to an element of repudiatory breach of the employment contract on the part of Cantor.

123.	 As already related, Mr Casterton accepted that it was on 22 March that Icap decided that each of these individual defendants had good cases to contend that they had been constructively dismissed: Day 10 p.149. It is difficult to see how this conclusion was reached with regard to Mr Boucher, since he said, and I accept that he had not discussed resigning for bad behaviour on the part of Cantor until 15 April. Mr Boucher's oral evidence about what occurred at that meeting of 15 April was very vague indeed, save that he recalled some discussion as to whether he had reasons to justify his leaving Cantor early: Day 8 pp.79‑93. He was unable to recall any specific instances of which he had informed Mr Casterton and Mr Schreiber at that meeting.

He could not remember whether there was discussion of any problems that had arisen for him at Cantor after 18 March when he had handed in his resignation letter. However, he concluded, because of the discussion at the meeting, that he had grounds for alleging constructive dismissal and he told me that if he had not attended that meeting he would not have made that decision (Day 8 pp.96‑97).

124. 	By e‑mail of 13 March, Mr Casterton had made it clear, without saying so directly, that Mr Boucher was going to have to stay at Cantor until 30 June: C3:694. But on 22 March, the decision was made that Mr Boucher, as well as Mr Bird and Mr Gill, had good grounds for walking out of Cantor. However, Mr Casterton had no information of his own upon which to base this he only had some information that Mr Schreiber related to him. We have not heard at this trial from Mr Schreiber. On 26 March, Mr Casterton reported Mr Boucher's resignation by saying, "Luigi resigned this morning. So game on!" Mr Casterton was wholly unable to explain satisfactorily what he meant by that expression: Day 11 p.30.

125. 	Mr Boucher's evidence concerning his letter of the 18 March and events (or lack of them) thereafter was put to Mr Casterton who said that was not how he remembered the meeting of 15 April: Day 11 p.35. A little later there was the following exchange between Mr Casterton and Mr Hillier on behalf of Cantor concerning Mr Boucher's evidence: viz Day 11 page 36 line 7. Mr Hillier put to Mr Casterton the following: .

"Q. I want to take you to one further reference. Page 92 at line 15 the question is: Q. " You had given notice on 18th March?" A. "Yes."

Q. "Was there any discussion at this meeting [I am referring here to the meeting with you] about whether any further problems had arisen in your employment since that date?"

A. "No." Then he says: "I cannot remember now."

A. "My recollection of the meeting is Luigi was quite insistent at the time that Xavier was still applying pressure to sign, sign, sign. As he says, it is nice to be wanted but it can get too much."

Q. "He is saying that in relation to Monsieur Alcan's attempts to persuade him to stay."

A. "Well, at the meeting on the 15th that is not how it came across to me."

Q. "Is that not simply because you were interpreting anything that was said as indicating improper behaviour by Cantors?"

A. "I would hope not, no. I think we have been fairly careful and considered."

Q. "You were not in fact going into any detail at all with Mr Boucher, were you?"

A. "I think that was a fairly detailed discussion at the time."

Q. "You went into that meeting having already decided that he was going to leave, provided he sign his contract?"

A. "No. As I say, his lawyer was present. He went through the situation. He was one of the most vociferously anti the contract from the very outset. He made that absolutely clear. He was not happy about it."

Q. "But you made no attempt to enquire into what pressure had been brought to bear on him in relation to the contract, what the pressure related to?"

A. "The pressure ‑‑ yes, we did. The pressure related to Xavier constantly ‑‑ as I say, I think, in a friendly way and whatever way, just constantly ‑‑ the pressure with Xavier constantly urging him to sign the new deal.""

126.	 I do not accept that evidence from Mr Casterton in so far as it varies from that given by Mr Boucher. I think that the decision had been taken simply to "lift out" Mr Boucher, along with Mr Bird and Mr Gill, and that any further examination of the grounds for an allegation by Mr Boucher of constructive dismissal against Cantor was no more than perfunctory or superficial. There was no detailed examination of the circumstances and no basis upon which Icap could draw any satisfactory conclusion as to whether Mr Boucher had any grounds for alleging constructive dismissal, whether good bad or indifferent. It seems to me that what was decided was that Mr Bird and Mr Gill were leaving and so Mr Boucher should leave too, in the hope that he too might turn out to have a good claim in constructive dismissal. In other words, Icap were reckless as to whether there were grounds for so alleging or not. That amounts to an unlawful inducement of a breach of contract, even on the basis of Icap's submissions on this subject: see Day 14 pp. 95‑96.

127. 	I have decided that Cantor was in repudiatory breach of its obligations to Mr Bird and Mr Gill by the end of January 2002. Neither of them indicated any acceptance of such repudiations by resignation until April 2002, some two to three months later. The question arises, therefore, whether in the interim either Mr Bird or Mr Gill affirmed their contracts, in spite of the breaches so as to preclude their lawful resignation in April. I think that they did not so affirm the contracts.

128. 	I have set out the legal principles relating to "affirmation" above. As stated in Callaghan's case, the ultimate decision on this is not one of law but of fact: see per Judge LJ at pp.D.653B‑C. I have also in mind the passage in Mr Justice Morison's judgment in the Waltons & Morse case at p.492, paragraph 35, in which Mr Justice Morison cites the passage from Harvey on Employment Law to which I have already referred above.

129.	 In this case, the "new deal" style payments were repeated in February. Mr La Vecchia was continuing his endeavours to persuade both men to accept the new terms. They were obviously entitled to consider their positions in complex circumstances which had themselves developed over a period of months from October 2001. Cantor relies in particular, as constituting affirmation, upon Mr Bird's letter of 12 February 2002 and Mr Gill's letter of 8 March 2002, stating that they would not be renewing their contracts later in the year. It is submitted in each case that those letters appear to envisage the continuing effectiveness of the contracts. Of course, until acceptance of a repudiation, the relevant contract is still in force. Each employee was clearly indicating his discontent in the employment and was giving clear signs of an intention to leave. In the context of the breaches committed by Cantor up to February 2002, I do not believe that the act of either Mr Gill or Mr Bird amounted to a clear affirmation of the contract with knowledge of all the facts and knowledge of a legal right to resign immediately. Affirmation is essentially the legal embodiment of the everyday concept of "letting bygones be bygones". I do not consider that anything like this occurred in the period from February until mid‑April 2002. Accordingly, I find that Cantor repudiated its contracts with Mr Bird and Mr Gill and that such repudiations were accepted when each of them of them resigned in April 2002.

130.	 In the case of Mr Boucher, it is probably because of his own obvious candour in his oral evidence, that I find that he had no proper cause for resigning as he did and that he was in repudiatory breach of his contract when he did so. That breach was accepted by Cantor as terminating the contract. The breach was clearly in my view induced by Icap, on or about 15 April 2002, for the reasons given above. (I should say that I considered Mr Boucher's witness statement somewhat less reliable than his oral evidence, since be disavowed certain parts of it when examined on them: eg the use of the term "constructive dismissal" (Day 8 p.69); the date of the occasion when Mr Alcan impersonated Mr Pere (Day 8 p.61); and the contrast between the second sentence of paragraph 25 of his witness statement and his evidence on Day 8 pp. 79‑82 where he was much more vague about the meeting on 15 April.)

131. 	As I have indicated on the section of this judgment relating to the law it has not been necessary for me to decide the issues of law relating to the mental element required on the part of the alleged tortfeasor to give rise to the tort of unlawful inducement of the breach of contract. However, I should set out my findings of fact as to Icap's state of mind at the time when it decided that Mr Bird and Mr Gill had proper grounds for alleging constructive dismissal by Cantor and when on 2 and 3 April 2002, it offered its support for them to resign and encouraged them to do so.

132.	 In this context, the whole of the development of this recruitment campaign from October 2001 onwards is relevant. It is well documented by exchanges of e‑mails which largely speak for themselves.

133.	 Mr Spencer made his motivation very clear in the oft‑cited e‑mails of 11 and 25 October 2001 (C1:305 & 356). In oral evidence, Mr Spencer explained those e‑mails as follows: Day 10 p.52‑53:

"With respect, your Honour this is an organisation, Cantor Fitzgerald who have been predatory on my organisation on many times in the past, including as you know, the illegal recruitment of some twenty staff some years earlier from our emerging market business, which indeed resulted in the destruction of that business and resulted in them paying us significant damages and here I was looking to give them a little bit of their own medicine back, but in a legal context, and I want to stress it would be in a legal context."

134.	 I accept that Mr Spencer and, therefore, Icap wanted to avoid anything illegal. As Mr Spencer said, in view of Cantor’s track record for litigation, to do otherwise would not have benefited Icap. However, although Icap was offering contracts which were to bring the other defendants into Icap's employment when they were free to do so, I do not accept Mr Spencer's evidence that he was expecting them to serve out their contracts fully and then to abide by the post‑termination restrictions. As early as November, Mr Casterton envisaging a "fight" by Mr Bird to leave Cantor (eg C2:446 & 459). The plans led to Mr Bird and Mr Gill writing their letters of 12 February and 8 March respectively, in the hope that it would be possible to negotiate an early departure. Mr Casterton, from an early stage, considered the possibility of Mr Gill (and possibly Mr Bird also) "leaving in breach" (C2:349). He was prepared to offer an indemnity for this purpose if necessary: C2:459. I do not accept Mr Casterton's evidence that the indemnity was simply meant to recover potential recalls of bonuses and matters of that sort: Day 10 p.134. However, the decision on these matters was not for Mr Casterton to take. Such decisions were for Mr Spencer: see Day 10 p.68.

When Mr Spencer heard about Cantor's payments to staff in January he was of the personal view that they constituted a breach of contract: Day 10 pp. 70‑71.

135.	 In the end, Icap, through Mr Spencer, made the decision that all three individual defendants should go down the avenue of alleging constructive dismissal by Cantor. The decision was taken after receiving legal advice. I do not speculate, of course, as to what legal advice was given. However, in my view, Mr Spencer took the view that such risks as there were in taking that course were worth taking, even though he was clear that it would be likely to lead to litigation with Cantor. He must have been conscious that, as with all litigation, there would be uncertainties in the outcome, but he hoped that Icap would prevail. As already indicated, however, Icap, as he must have known, had no knowledge of the true position between Cantor and Mr Boucher and yet subsequently persuaded him to leave regardless of that fact. While not intending to procure breaches of contract Icap decided to accept whatever risks there were. In Mr Boucher's case they had no grounds for considering that he had a constructive dismissal claim to make whereas in Mr Gill's and Mr Bird's cases they were prepared to take the risks and they have been fortunate in being vindicated in that choice.

(F) Relief

136. 	Clearly, Cantor is not entitled to any relief against Mr Bird or Mr Gill and the claims against them are each dismissed. Similarly any claims made by Cantor against Icap in respect of Mr Bird and/or Mr Gill are also dismissed. As regards Mr Boucher and Icap, all financial claims have been adjourned to come on at a future date.

However, Mr Boucher's counter claim must also be dismissed. I invite the submission of a draft order for directions for the further prosecution of those matters.

137.	 There remains the question of the injunctions sought. As against Mr Boucher, Cantor asked for an injunctions to restrain breaches of the post‑termination covenants contained in clauses 15.1, and 15.2.1 of the standard terms and conditions set out above. Against Icap, Cantor asks for injunctions restraining it from "inducing, procuring or participating" in any breach of the first, second or third defendant of the respective post‑termination covenants. It also asks for an order in the following terms. I quote from paragraph 2 of the prayer to the particulars of claim:

"2. An order against the Fourth Defendant restraining it for a minimum of six months from the date of issue of proceedings (with liberty to apply for further periods of restraint) ‑

a. From knowingly inducing, procuring or participating in any breach of contract by any broker employed in the claimant's Interest Rates Division: and/or

b. From making any offer of employment to any broker employed in the claimant's Rates Division the terms of which take effect before the expiry of the fixed term (or as the case may be notice period) of the employee concerned, alternatively, restraining the Fourth Defendant in respect of its solicitation of such employees for such period and in such terms as the court considers just."

138. 	In the light of my findings above, the question is whether Cantor’s should be granted this injunctive relief, or any of it, having regard to the breach of contract committed by Mr Boucher and Icap's procurement of it.

139.	 Mr Hochhauser for Icap strenuously resisted the grant of any injunction along the lines of paragraph 2(b) quoted above which, he submitted, went much further than anything previously granted in similar cases and which would lead to a proliferation of applications in any case where Icap sought to recruit a Cantor employee. Further, he submitted that, in view of Cantor's "track record" in the courts and in recruitment of Icap's staff it had disentitled itself to equitable relief. In this latter regard, Mr Hochhauser referred to the decisions made against Cantor in respect of its own inducement of breaches of contract in the past: see Inter Debt Trading Limited v Hobbis and Others (including, Cantor Fitzgerald Inc), Court of Appeal 25 March 1999, and to Cantor's continued attempts to recruit or "destabilise" Icap's staff in the run up to the present trial.

140. 	I have considered these matters and it seems to me that I should grant Cantor limited injunctive relief against Mr Boucher and Icap in respect of the liabilities established against them.

141. 		I have seen no evidence to suggest any breach or threatened breach by Mr Boucher of the terms of clause 15(1) of the standard terms. However, it does seem to me that the breach of contract proved entitles Cantor to relief, in terms of clause 15.2.1 of the standard terms, against Mr Boucher. I also propose to grant an injunction against Icap from inducing, procuring or participating in any breach by Mr Boucher of clause 15.2.1.

142. 		I am not prepared to make any order in terms of paragraph 2(b) of the prayer to the particulars of claim. When the matter was explored in argument, I was far from sure what such an order was intended to cover and what it might cover, whether intended or not. In other words, it was too uncertain in its application to be granted on the facts of this case. I do propose, however to grant an injunction in a modified form of paragraph 2(a) of the prayer for a period of six months from the inception of theseproceedings. The modification that I have in mind is that reflected by the interim order of Silber J of 24 April 2002.

143.	 In my view, such an order is justified. Cantor is not to be punished, by the refusal of equitable relief, because of events that occurred in 1994. Nor does it seem to me that the instances of other approaches to Icap's staff are or were of a nature disentitling them to such relief. On the other hand, in the recruitment of all three individuals in this case, Icap "sailed very close to the wind" in its efforts to secure them. It took the risks of in its stride and, where that risk was unjustified, it seems to me that suitable injunctions should follow.

144. 	These are two organisations (Cantor and Icap respectively) for whom, as it has seemed to me, the interests of individual employees have been subordinated to a larger "game" (the word used regularly by one of Icap's officers in the course of the events related above).  Cantor conducted its relations with staff at the borderlines of the employees' contractual rights and sometimes beyond them. Icap desired to recruit its targets as soon as possible and as soon as it was thought there was an arguable case that they had been constructively dismissed. The result as to whether the boundaries of legality were crossed, by either Cantor or Icap, in the case of any individual employee was largely fortuitous. In such circumstances, it seems only appropriate that, where the line is crossed, injunctions should be granted to fit the breaches of the law that had been established in any individual case.

(G) Outcome in Summary

145.		 The results of this trial, therefore, are:

(1) The claims against Mr Gill and Mr Bird are dismissed, as are the related claims against Icap; 

(2) The claim succeeds against Mr Boucher in respect of his repudiatory breach of contract, at the instigation of Icap, shortly before his contract was to expire anyway; his counterclaim is dismissed;

(3) Accordingly, the claim against Icap in respect of the unlawful inducement of the breach of Mr Boucher's contract, succeeds;

(4) Limited injunctive relief will be granted against Mr Boucher and Icap, as indicated in the immediately preceding section of this judgment;

(5) Questions of financial relief against Mr Boucher and Icap and the counterclaims of Mr Bird and Mr Gill are to be resolved at a later date and the parties are invited to submit a draft directions for the further conduct of the proceedings in these respects.

(The parties are also asked to produce a draft order to reflect the terms of this judgment.)