Yves Patural v DG Services (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Singh |
| Judgment Date | 13 November 2015 |
| Neutral Citation | [2015] EWHC 3659 (QB) |
| Docket Number | Case No: HQ/13/0517 |
| Court | Queen's Bench Division |
| Date | 13 November 2015 |
[2015] EWHC 3659 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
The Strand
London, WC2A 2LL
Mr Justice Singh
Case No: HQ/13/0517
Mr Andrew Hochhauser QC & Ms Jane Russell (instructed by Edwin Coe LLC) appeared on behalf of the Claimant
Mr Christopher Jeans QC (instructed by Baker & Mackenzie LLC) appeared on behalf of the Defendant
These are applications made by the defendant to strike out the claim and/or for summary judgment in favour of the defendant.
The claimant was at all material times employed by the defendant bank. The claimant was initially employed by the defendant between 2001 and 2003 but was made redundant. For present purposes, the claimant started his employment with the defendant in or around February 2006. At all material times he was employed to work in the defendant's money market derivatives desk within its global finance department. He relies in his claim on alleged breaches of his contract of employment. He contends that the defendant breached both an express term and implied terms of that contract in relation to the payment of discretionary bonuses in respect of the years 2008 and 2009.
I turn to the claimant's particulars of claim. At paragraph 3 it is averred that the claimant was employed by the defendant from February 2006 pursuant to a contract of employment contained in: a letter from the defendant to the claimant dated 11 January 2006; the terms and conditions contained in the company and employee handbook dated 1 November 2005; and the compliance manual.
At paragraph 5, it is stated that the claimant claims against the defendant in respect of the defendant's breaches of contract in the award of discretionary bonuses for each of the 2008 and 2009 bonus years, each of which awards was inter alia irrational or perverse in breach of the express term as set out at paragraph 6;in breach of the implied term as set out in paragraph 7(1) and in breach of the implied term of trust and confidence as set out at paragraph 7(2).
As I have mentioned, there is reference in paragraph 5 to an express term of the contract. That is set out at paragraph 6 of the particulars of claim and reads as follows:
"Incentive Awards
All employees are eligible to be considered for an annual Discretionary Incentive Award. Details are specified in the Handbook (page 23). The Company reserves the right to deliver a percentage of the Incentive Awards (whether Guaranteed or Discretionary) under any applicable DB compensation plans that are in effect at the time of the award. The portion of your Incentive Award under DB compensation plans will be determined in a manner broadly consistent with that applied to your peers at similar levels of compensation and taking into account any other factors that the Company determines are relevant in a given year for each business."
As I have said, paragraph 5 of the particulars refer to implied terms which are then set out at paragraph 7 as follows:
"(1) The defendant would not behave arbitrarily, capriciously or inequitably in matters relating to remuneration and, in particular, it would exercise its discretion as to whether to award a bonus to the Claimant and, if so, the amount of that award, in good faith and in a manner which was not irrational or perverse. It was, inter alia, an incident of the said implied term that the Defendant would treat comparable employees in a similar fashion, including as to the amount of their awards, when exercising its discretion.
(2) The Defendant would not, without reasonable and proper cause, act in a manner that was likely to destroy or similarly to damage the relationship of trust and confidence to be expected between the Claimant and the Defendant as employer and employee. It was, inter alia, an incident of the said implied term that the Defendant would give the Claimant proper reasons for his bonus awards, and further that such reasons would be truthful and not misleading."
I will for the sake of convenience during the course of this judgment refer back from time to time to those terms. It is important to recall their full and exact terms even though they may be summarised for ease of exposition more briefly.
The particulars of claim then go on to set out the claimant's case so far as it relates to the 2008 bonus year at paragraphs 8 to 13. It is said at paragraph 8 that, in respect of that year, the claimant generated profits of around £133 million. At paragraph 9 it is said that, on or around 4 February 2009, the claimant was informed by Mr Nicholls (head of global finance and forward foreign exchange) that he was being awarded a total bonus for the relevant year of 1,275,685 euros (in other words around 1 percent of the profits which he had generated that year).
At paragraph 10 it is stated that Mr Nicholls said or around 4 February 2009 to the claimant that:
(1) a material factor in the exercise of the discretion to award him that bonus had been the losses that the bank had made in areas outside the money market derivative desks;
(2) all members of the money market derivatives desk had been treated similarly and that they were all receiving reduced awards because of losses that had been incurred elsewhere;
(3) the claimant was "lucky" that he was not a managing director, because the more senior one was the bigger reduction one suffered in the bonus award. At paragraph 11 it is said that the matters set out at paragraphs 10(1) and (2) were also communicated by a Mr Curtler and a Mr Christian Bittar, to whom there will be more reference later.
At paragraph 12 it is averred that in fact, contrary to the statements made to the claimant, it transpired that for the 2008 year a Mr Carl Maine received a total bonus for the 2008 year of around 38 million euros based upon a profit generated by him of around 479 million euros. It is said that he therefore received a bonus equating to 8 per cent of the profits he generated that year. It is also averred that Mr Bittar received a bonus award of around 84 million euros based upon a profit generated by him for that year of 766 million euros. It is said that he therefore received a bonus equating to 11 per cent of the profits he generated.
Accordingly, at paragraph 13, it is averred that the statements made by the relevant persons were deliberately misleading and untrue, those statements being expressly said to be the ones set out at paragraphs 10 and 11 of the pleading.
Similar averments are made in respect of the 2009 bonus year at paragraphs 14 to 19. It is not necessary for present purposes to rehearse those in detail. They are well-known to the parties and should be read in conjunction with this judgment.
Under the heading "Breaches of contract", at paragraph 20 of the particulars of claim it is alleged that in acting as aforesaid, and in particular in awarding bonuses to the claimant in the sums awarded to him in respect of each of the 2008 and 2009 bonus years, the defendant:
(1) breached the express term of the claimant's contract set out at paragraph 6 and in particular the obligation to treat him in a manner broadly consistent with his peers;
(2) breached the implied terms set out at paragraph 7. In particular:
(a) it was irrational and/or perverse and/or a breach of the implied term of trust of confidence
(i) to award the claimant bonuses in the sums that it did, having regard inter alia to the profits that he generated that year and the bonus awards made to Mr Maine and/or Mr Bittar and/or
(ii) to make those bonus awards without meaningful or rational analysis of the amounts that should be paid and/or
(b) it was a breach of the implied term of trust and confidence to fail to give a proper, complete and accurate explanation and reasons for the awards made to the claimant and to make deliberately misleading and false statements as to the manner in which he and others had been treated and/or
(c) if and insofar as the defendant paid formulaic and/or guaranteed bonus awards to inter alia Mr Maine and/or Mr Bittar, it was a breach of the implied term of trust and confidence to pay such formulaic and/or guaranteed bonus awards (inter alia to Mr Maine and/or Mr Bittar) in such sums as to reduce to a disproportionately small sum the amount available to be paid to other employees, including to the claimant, who was entitled to be considered for discretionary bonus awards in each of those years.
Under the heading "Loss and damage", at paragraph 21 of the particulars of claim, it is alleged that, by reason of the defendant's breaches of contract, the claimant has suffered loss and damage in that he should have received substantially larger bonus awards for each of the 2008 and 2009 bonus years.
The defendant has filed a defence to that claim and the claimant has filed a reply. The claimant has also made a request for further information dated 9 July 2015. A response was made by the defendant on 28 August 2015. On the same date the defendant made the present applications to the court.
The legal principles which govern the two applications before the court are well established. The power to strike out a statement of case is set out in CPR 3.4. At subparagraph (1) it is made clear that reference to a statement of case includes reference to part of a statement of case. Subparagraph (2) states that the court may strike out a statement of case if it appears to the court (a) that the statement of case discloses no reasonable grounds for bringing the claim. That is the provision upon which the defendant relies for present...
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