Horkulak v Cantor Fitzgerald International, Court of Appeal - Queen's Bench Division, July 31, 2003, [2003] IRLR 756,[2003] EWHC 1918 (QB),[2004] ICR 697

Issuing Organization:Queen's Bench Division
Actores:Horkulak v Cantor Fitzgerald International
Resolution Date:July 31, 2003

Case No: HQ01X02541

Neutral Citation No. [2003] 1918 QB



Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 31 July 2003

Before :


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Between :

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Timothy Brennan QC and David Craig (instructed by Mishcon de Reya Solicitors) for the Claimant

Charles Béar QC and Julian Wilson (instructed by Olswang Solicitors) for the Defendant----------

Hearing dates : 23 June - 3 July 2003

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Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.




The Claimant para 1

Lee Amaitis para 4

The claimant's departure from Cantor and thereafter para 5

The pleadings para 12

Foul and abusive language para 17

The Employment Contract para 21

The Legal Framework for the consideration of the case

Liability para 26

Implied term of trust and confidence para 27

The relationship of the claimant and Mr Amaitis to the end of 1999 para 36

The personal circumstances of the claimant relevant to end of 1999 para 44

The claimant as a witness para 46

Findings of fact in connection with the claimant's case for

constructive dismissal

28 June 2000, ``The last straw'' para 48

February 2000 para 53

Phone calls to the claimant para 54

28 April 2000

Monaco, June 2000 para 63

Cantor's criticisms of the claimant's performance para 64

Conclusions on liability para 70

Damages para 82

The Law para 84

Discretionary bonus para 89

2001 para 96

Should the claimant have returned to work earlier? para 102

Counterclaim para 105

Mr Justice Newman :

The claimant

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

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

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

Lee Amaitis

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

The claimant's departure from Cantor and thereafter

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

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

``.....under threat constantly from his immediate boss of losing his job since December, although he has never been told of any actual thing he has done wrong. He feels he cannot tolerate this any more and broke down yesterday - has been crying and shaking uncontrollably.''

His solicitors, Mishcon de Reya wrote to Cantor as follows:

``FAO Jane Middleton 29 June 2000

Dear Sirs


We are instructed by Steve Horkulak (``Mr Horkulak'') in respect of his constructive dismissal by Cantor Fitzgerald.

Mr Horkulak has been a victim of a vicious and premeditated campaign of bullying, harassment and intimidation by Lee Amaitis (``Mr Amaitis''), the President of Cantor Fitzgerald, over the last 6 months during which he has been insulted and humiliated on a weekly, and often, daily, basis. During this time he has tried to retain his composure and dignity and to continue to perform his duties in a diligent and professional manner. He is unable to do so any longer.

The final straw came on this Tuesday 28 June 2000 when Mr Amaitis launched a hysterical verbal attack on Mr Horkulak for the trivial matter of omitting brackets from a schedule detailing proposed bonus payments to staff. This constitutes a repudiatory breach by Cantor Fitzgerald of Mr Horkulak's contract of employment that he hereby accepts.

Unfortunately, Mr Horkulak is suffering from extreme stress and anxiety and has been put on a course of tranquillisers by his doctor. For this reason we are unable to take full instructions at this time. We will fully particularise our client's complaints in due course though we are instructed that many members of your staff including Robert Faulkner, General Counsel, are already fully aware of the treatment that Mr Horkulak has received.

We shall be initiating proceedings against Cantor Fitzgerald in due course. In the meantime and given the circumstances we request that you do not contact our client and that all communications be conducted through this firm.''

Yours faithfully


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

``I think this is an acute stress reaction with both anxious and depressive features. I think the possible contribution of drugs and alcohol remains in doubt.''

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

· He takes ``..... cocaine, but his habit has become overwhelming.''

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

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

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

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

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

``He was very tense and restless and voluble in describing what amounts to phobic reactions to anything connected with his traumatic work experiences and his fears of his ex-boss........Steven says he is not abusing alcohol or drugs....''

11. Cantor's immediate response to the solicitor's letter of 29 June 2000 was to deny the ``vicious and premeditated campaign'', secondly to allege that ``....concerns have been expressed to him for some time as a result of his lack of application and commitment to his role'' and thirdly to treat the contract of employment as subsisting, notwithstanding the grave allegations he had made and his conduct in absenting himself from his employment, which was then regarded as calling for a ``sick note in the usual way''. On the 17 July 2000 Cantor expressed the view that his ``...case'' was ``clearly a contrived and belated attempt to justify...

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