Tullett Prebon Plc & Ors v BGC Brokers LP & Ors [2011] EWCA Civ 131

[2011] EWCA Civ 131Case No A2/2010/1223(B), 1223, 1222IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN’S BENCH DIVISION
(MR JUSTICE JACK)
REF NO: HQ09X01241
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 22/02/2011
Before
LORD JUSTICE MAURICE KAY Vice President of the Court of Appeal, Civil DivisionLORD JUSTICE HOOPERLORD JUSTICE TOMLINSON
Between
TULLETT PREBON PLC & ORSClaimants/BGC BROKERS LP & ORSDefendants/ Appellants
Mr Andrew Hochhauser QC and Mr Jonathan Cohen (instructed by McDermott Will & Emery UK LLP) for AppellantsMr Daniel Oudkerk QC, Miss Jane McCafferty and Miss Amy Rogers (instructed by Rosenblatt Solicitors) for RespondentsHearing Hearing dates : 13, 14, 15 December 2010
Judgment
[1]Tullett Prebon PLC and its associated companies (Tullett) are active in the field of inter-dealer brokerage, acting as intermediaries for banks and other financial institutions. BGC Brokers LP and its associated company (BGC) compete with Tullett in the same high-value, sophisticated financial markets. The financial products with which they concern themselves include cash, foreign exchange, derivatives, commodities and equities. A successful brokerage business depends on the skills, abilities and contacts of the brokers in its employment. They are highly remunerated. They work in specialist teams or desks. This case is concerned with the efforts of BGC to recruit desks of brokers from Tullett. Those efforts took the form of a coordinated plan in which the central character was Mr Tony Verrier. He was formerly Chief Operating Officer at Tullett’s London office before he left and joined BGC as Executive Managing Director and General Manager on 5 January 2009. As soon as he joined BGC, he put into action a plan to recruit Tullett brokers. He succeeded in persuading 13 to sign “forward contracts” with BGC, although three later changed their minds and stayed with Tullett. They were referred to at first instance as “the Tullett Three”. In total, Tullett employs about 650 brokers in London, as compared with about 600 employed by BGC.[2]The factual background to the case is set out in great detail in the judgment of Jack J (the Judge) which was handed down on 18 March 2010. The trial had begun on 14 October 2009 and it ran until 5 February 2010, when judgment was reserved. I pay tribute to the Judge who produced a meticulous judgment in a relatively short space of time. Its neutral citation is [2010] EWHC 484 (QB). It is about 130 pages long. The findings of fact are extensive. I do not intend to repeat them here. There is no need. This appeal is limited in its scope.

An overview of the issues and findings at trial

[3]Before the events which gave rise to these proceedings the Fifth to Fourteenth Defendants were each brokers who were contracted to Tullett for fixed terms of different lengths and subject to post-termination restrictions. An employer such as Tullett would have much to lose if its brokers were free to move to a competitor without such fixed terms and restrictions. When Mr Verrier and others (including Mr Shaun Lynn, BGC’s President) decided to recruit groups of Tullett brokers, they did so by the use of forward contracts by which individual brokers agreed to join BGC at future dates when free to do so. BGC provided them with indemnities in anticipation of litigation at the suit of Tullett. This is a very litigious industry. BGC also agreed to make substantial signing-on payments to the brokers, usually on the basis of half payable on signing with the balance to follow on the commencement of employment with BGC. Although Tullett sought at trial to establish that the forward contracts were unlawful, the Judge found them to be lawful.[4]Towards the end of March 2009, the broker defendants resigned from Tullett and claimed that they had been constructively dismissed. On 2 April Tullett obtained interim relief, preventing the broker defendants from taking up employment with BGC and preventing BGC from employing them before trial or further order.[5]At trial, the Judge rejected the claim of the defendant brokers that they had been constructively dismissed. He found that BGC, Mr Verrier and Mr Lynn had participated in an unlawful means conspiracy, the unlawful means including the inducement of the broker defendants to breach their contracts of employment with Tullett by leaving early without lawful justification. BGC had made a Part 20 claim against Tullett in relation to the Tullett Three, alleging that Tullett had induced each of them to breach his forward contract with BGC by terminating it without lawful justification and remaining with Tullett. The Judge rejected this claim, holding that the Tullett Three were entitled to terminate their forward contracts as a result of BGC’s conduct, that being essentially the conduct which had proved the conspiracy. The Judge granted Tullett some final injunctive relief which BGC initially sought to challenge on this appeal but ultimately it did not pursue that challenge. Finally, he adjourned Tullett’s claim for damages which remains listed in 2011.

Further salient facts

[6]For the purposes of this appeal, much of the focus has been on Tullett’s Forward Cable Desk, the Head of which was Mr James Hall. His contract with Tullett tied him until June 2012 at the earliest, with post-termination restrictions thereafter. On 30 January 2009 he signed a forward contract with BGC, providing that he would commence employment as soon as he was free to do so but no later than 31 January 2013, which would have been four weeks after the expiry of his post-termination restrictions. The forward contract provided for substantial salary and commission payments once employed, together with a signing-on payment of £413,000, of which half was payable immediately and the balance on commencement of employment. The signing-on arrangements were actually set out in a separate document entitled “Loan Agreement and Promissory Note”. Although it contained provisions for repayment, in the words of the Judge:
“provided all went well, it [viz the £413,000] was his to keep”
. He was also provided with an indemnity. On 25 March 2009 Tullett suspended Mr Hall. Shortly before that Tullett had issued and served the present proceedings. Although Mr Hall was later to claim that he had been constructively dismissed, the Judge set that in the context that “he was a disaffected employee of Tullett, was assisting Mr Verrier in the recruitment of his desk to BGC and was working with Mr Verrier to provoke conduct which might be relied on in support of a claim for constructive dismissal”, in relation to which “he relied on manufactured grounds”.[7]Mr Hall’s desk at Tullett included Mr Steven Harkins, Mr Robert Sully and Mr Paul Bishop. They were successfully recruited to BGC as part of the raid. It also included Mr Tom Stevenson, Mr Mark Comer and Mr Nigel di Palma. They too were initially tempted and signed forward contracts but they later changed their minds. They are the Tullett Three. Prior to these events, Mr Hall and these six brokers had been a close unit, working successfully together for several years.[8]Three other desk Heads were successfully recruited by BGC: Mr James Bowditch of the Sterling OBS (Short) Desk, Mr James Wilkes of the Sterling Cash Desk and Mr Mark Yexley of the Dollar Cash Desk. Mr Bowditch took two brokers with him and Mr Wilkes took one. Having described some of Mr Hall’s contractual arrangements with BGC in some detail, it is unnecessary to do the same with the others’. They were not all precisely the same but, for present purposes, there were no material differences.[9]The conspiracy and the ruthless implementation of it were the subject of a vast quantity of evidence. It referred to a large number of conversations and meetings. I should refer briefly to some of them. On 26 January 2009, Mr Verrier hosted a dinner in a private room at the Bleeding Heart Restaurant for Mr Hall’s Forward Cable Desk. One of those present was Mr Marshall, formerly an in-house solicitor at Tullett, but by this time a partner in the firm of Russell, Jones & Walker. He had represented Mr Verrier when Tullett had brought proceedings against him in 2008. Between January and March 2009 he advised the Tullett brokers who were being recruited for BGC by Mr Verrier. From the end of March he acted only for Mr Verrier and remained his solicitor at trial. He played an important part in the events of January – March 2009. Although not named as a defendant, the case for Tullett was that he was one of the conspirators. He did not give evidence. On any view he was an important, if somewhat penumbral, figure in what transpired. The Judge wisely concluded that he should be “careful to make no more findings concerning him than are necessary to my decision”. Nevertheless, he found that Mr Marshall “became involved in a plan to get the … brokers to leave Tullett together and within a short period without regard to whether there were valid grounds for alleging constructive dismissals”. One of the brokers who received advice from Mr Marshall was Mr Cohen. On the basis of one of Mr Marshall’s attendance notes, the Judge found that Mr Verrier had given Mr Cohen an assurance that “one way or another, he would be out in six weeks”. That is precisely what came to pass.[10]On 11 March, Mr Verrier gave a dinner at Rules Restaurant for all the brokers who had signed forward contracts. Mr Lynn and Mr Marshall were also present. Mr di Palma was not present but two or three days later he had a conversation with Mr Hall in which Mr Hall said: “I saw Tony [Verrier] yesterday and we are all thinking of leaving together … This is only going to work if we all start together at BGC”.[11]Tullett, too, was anxious to meet with its targeted employees, at least in part in order to seek to persuade them to stay. There were two meetings, referred to as “the Whiteboard Meetings”, held on or about 5, 9 or 11 March. I shall return to what transpired when I deal with the Tullett Three and the Part 20 claim.[12]Following the service of proceedings and the suspension of Mr Hall on 25 March, there was a flurry of activity, some of it preserved in email and text messages. No doubt more would have been preserved if Mr Verrier had not orchestrated the “disappearance” of a number of mobile phones and Blackberries. The Judge referred to his “gambit to ‘lose’ Blackberries whenever he thought they might contain inconvenient material”.[13]On 26, 27 and 30 March the defecting brokers sent emails or letters were written on their behalf resigning from Tullett and indicating constructive dismissal claims. Interim relief was granted to Tullett by the Judge on 2 April.

This appeal

[14]BGC have permission to appeal(1) the rejection of the defendant brokers’ constructive dismissal claims, which is alleged to have been wrong in fact and in law and to have been inconsistent with the Judge’s approach to the Part 20 claim and(2) the dismissal of the Part 20 claim as to which it is said that the Judge erred in law in his analysis of the allegation of inducement of breaches of contract and was inconsistent with his approach to the issue of the constructive dismissal of the defendant brokers. I am simplifying these grounds of appeal for ease of presentation at this stage. In addition, BGC seeks to renew its application for permission to appeal on other grounds which have previously been refused by the Judge and/or by a single Lord Justice on consideration of the papers. It follows that the two main issues are constructive dismissal and the Part 20 claim.[1]Constructive dismissal[15]On behalf of BGC, Mr Andrew Hochhauser QC and Mr Jonathan Cohen advance a number of submissions in support of grounds of appeal which take issue with the finding of the Judge to the effect that Tullett was not in repudiatory breach of its brokers’ contracts of employment by reference to the implied term of trust and confidence. By this means, BGC seeks to establish that its broker recruits left Tullett because they were constructively dismissed and not because BGC had induced them to break their contracts or because there had been an unlawful means conspiracy. It is also said that there is inconsistency between the way in which the Judge approached the issues of constructive dismissal by Tullett and the Part 20 claim against Tullett. The focus of the constructive dismissal submissions was upon the positions of Mr Sully, Mr Bishop, Mr Harkins (brokers on Tullett’s Forward Cable Desk) and Mr Yexley (Head of its Dollar Cash Desk). It is suggested that the Judge’s rejection of their constructive dismissal was both factually impermissible and wrong in law.[16]The approach of

the Judge to this issue is to be seen from the following passages:

“80…the defendant brokers can rely on any conduct by Tullett which, objectively considered, constituted a breach of Tullett’s duty not seriously to damage the degree of trust and confidence which each was entitled to have in Tullett … 104. Looked at objectively the second purpose of the meetings [held between Tullett and brokers who had entered into forward contracts with BGC] was to persuade the … brokers to renege on their contracts with BGC and remain at Tullett, the first purpose being to persuade them not to walk out early … 105. The next question is whether this conduct, considered objectively, was conduct likely to destroy or seriously damage the relationship of trust and confidence between Tullett and the brokers in question. Here Tullett was requiring the brokers to comply with their contracts with Tullett and threatening them with legal action and huge claims if they did not. At the same time Tullett was trying to persuade the brokers not to honour their contracts with BGC. That is the high point of the brokers’ case. 106. Tullett’s conduct was not intended to attack the relationship between Tullett and the brokers, but was intended to strengthen it. The context in which it happened was that the brokers were expecting a call from BGC to leave Tullett, and were prepared to do so in reliance on BGC’s indemnity … 107. I conclude that in the particular circumstances Tullett’s conduct at the meetings was not such as to seriously damage its relationship of trust and confidence with the brokers … 108. As the conduct is to be considered objectively it may in a sense be irrelevant how the brokers reacted. But I think that the contemporaneous reaction of people to a party’s conduct may be of assistance in judging its seriousness.”
[17]As to that, the view of the Judge, if I may paraphrase it, was that the reaction of the brokers was conditioned by considerations of tactics and timing. (1). The factual challenge[18]The case for BGC on this ground of appeal relies heavily on other unappealed findings of fact by the Judge. Having analysed the evidence about the meetings between the Tullett hierarchy and the brokers who had entered into forward contracts with BGC, he found (rejecting the evidence of the Tullett witnesses on this point) that the Tullett senior management had sought to persuade the brokers to renege on the forward contracts even though they had disavowed any such intention at the outset of the meeting. Mr Hochhauser describes this disavowal as “wholly false” and deploys the language of “deception” and “dishonesty”. He submits that where an employer has resorted to such conduct in order to persuade an employer to renege on a contract lawfully and freely entered into with a third party, the only permissible finding is that he has committed a repudiatory breach of the duty of trust and confidence which, upon acceptance by the employee, sustains an analysis of constructive dismissal.[19]I am wholly unimpressed by this submission. The question whether or not there has been a repudiatory breach of the duty of trust and confidence is “a question of fact for the tribunal of fact”: Woods v WM Car Services (Peterborough) Limited, [1982] ICR 693, at page 698F, per Lord Denning MR, who added: “The circumstances … are so infinitely various that there can be, and is, no rule of law saying what circumstances justify and what do not” (ibid).[20]In other words, it is a highly context-specific question. It also falls to be analysed by reference to a legal matrix which, as I shall shortly demonstrate, is less rigid than the one for which Mr Hochhauser contends. At this stage, I simply refer to the words of Etherton LJ in the recent case of Eminence Property Developments Ltd v Heaney [2010] EWCA Civ 1168 (at paragraph 61):
“… the legal test is whether, looking at all the circumstances objectively, that is from the perspective of a reasonable person in the position of the innocent party, the contract breaker has clearly shown an intention to abandon and altogether refuse to perform the contract.”
That, it seems to me, was essentially the approach of the Judge in paragraphs 105 and 106 of his judgment.[21]I have no doubt whatsoever that the Judge was entitled and indeed correct to find that, as a matter of fact, Tullett did not manifest an intention “to abandon and altogether refuse” to perform their contracts with the brokers – quite the contrary. It wanted to preserve its contracts with the brokers. (2). The legal challenge[22]The central point in this ground of appeal is that it is said that, having correctly directed himself in paragraph 80 of the judgment that the defendant brokers could rely on any conduct by Tullett “which, objectively considered, constituted a breach of its duty not seriously to damage the degree of trust and confidence which each was entitled to have in Tullett”, the Judge departed from that self-direction by applying a subjective approach when he came to make his findings. In particular, exception is taken to the language of paragraph 106, where the Judge said:
“Tullett’s conduct was not intended to attack the relationship between Tullett and the brokers, but was intended to strengthen it.”
[23]Mr Hochhauser submits that this constituted a subjective analysis of Tullett’s reasons for acting as it did and not an objective consideration of whether its conduct was calculated or likely to seriously damage or destroy the relationship of trust and confidence.[24]I do not accept this submission. It assumes that Tullett’s intention was irrelevant whereas the central question is whether it had “clearly shown an intention to abandon and altogether refuse to perform the contract” (Eminence Property Development Ltd, at paragraph 61). As Etherton LJ went on to say (at paragraph 63):
“… all the circumstances must be taken into account insofar as they have been on an objective assessment of the intention of the contract breaker. This means that motive, while irrelevant if relied upon solely to show the subjective intention of the contract breaker, may be relevant if it reflects something of which the innocent party was, or a reasonable person in his or her position would have been, aware and throws light on the way the alleged repudiatory act would be viewed as such by a reasonable person.”
[25]There, as here, the matter under consideration was repudiatory breach. Mr Hochhauser seeks to draw support from Malik v Bank of Credit and Commerce International [1998] AC 20 which was concerned with an action for damages against a former employer, by then in liquidation, for breach of the implied term of trust and confidence. Repudiation was not an issue. In that context, Lord Steyn said (at page 47G):
“The motives of the employer cannot be determinative, or even relevant, in judging the employees’ claims for breach of the implied condition.”
[26]In Malik, the breach did not arise from the way in which the employer treated its employees but from the way in which it conducted its business in general. It ran the business in a corrupt and dishonest way and when innocent employees later lost their jobs because of the liquidation, they suffered loss in the labour market because they became associated with their former employer’s malefactions.[27]The present case is manifestly different. At its heart, it is concerned with the specific dynamics between employer and employees, not with the indirect effect of corporate behaviour on employees. The issue is repudiatory breach in circumstances where the objectively assessed intention of the alleged contract-breaker towards the employees is of paramount importance. I have no doubt that the Judge approached this issue correctly. He referred (at paragraph 105) to the question whether the conduct of the Tullett hierarchy “considered objectively was conduct likely to destroy or seriously damage the relationship of trust and confidence between Tullett and the brokers in question”. Indeed in the material passages of the judgment, he referred repeatedly to the need for objective assessment. In order to address the issue of repudiatory breach in the circumstances of this case, it was necessary for him to include an objective assessment of the true intention of the Tullett hierarchy. In so doing, he reached the conclusion that that intention was not to attack but to strengthen the relationship. This was a permissible and, in my view, correct finding, reached after a careful consideration of all the circumstances which had to be taken into account “insofar as they bear on an objective assessment of the intention of the [alleged] contract breaker” (Eminence). All that is clear from the judgment. As it happens, it is confirmed by a perusal of the transcript of the proceedings after judgment when the Judge was hearing an application for permission to appeal. He said:
“A party can still have an intention which may be relevant, but the intention is to be judged objectively … I had it very much in mind that [I] had to have my objective spectacles on.”
[28]That was not after-the-event rationalisation. It was an apt description of what is readily apparent from the judgment.[29]I am satisfied that there is nothing in this ground of appeal. (3). Constructive dismissal: paragraph 106 of the judgment[30]Pitchford LJ granted permission on this additional, related ground. Paragraph 106 of the judgment is set out at paragraph 16 above. The complaint here is in relation to the words:
“The context in which it happened was that the brokers were expecting a call from BGC to leave Tullett and were prepared to do so in reliance on BGC’s indemnity.”
[31]The brokers in question are, again, Messrs Sully, Bishop and Harkins of the Forward Cable Desk. It is submitted by Mr Cohen that the evidence and the other findings did not support the proposition that the brokers were parties to a plan to leave Tullett regardless of whether they had a lawful basis for doing so or that they were aware of such a plan. I do not think that this submission goes anywhere. For one thing it may seek to imbue the words with a meaning which they were not intended to have. In a long, detailed and impressive judgment, we should hesitate to interpret a single sentence such as this in a determinative way. More importantly, even on the meaning contended for on behalf of BGC, it does not detract from the finding that Tullett was not in breach of the implied term of trust and confidence. I do not see how this ground of appeal could succeed in view of the failure of the primary ground in relation to constructive dismissal. (4). Interplay between constructive dismissal and conspiracy[32]This proposed ground of appeal presupposes success in respect of at least some of the brokers on the issue of constructive dismissal. There being no such success, this ground is rejected.[2]The Part 20 claim[33]BGC’s Part 20 claim against Tullett was described by

the Judge in these terms (at paragraph 184):

“[It is a] claim for damages for inducing the Tullett Three … to renege on their forward contracts … and to decide to remain at Tullett when their existing contracts came to an end … Tullett deny that they did induce the Tullett Three to renege on their BGC contracts and assert that in each case the brokers decided for themselves not to go to BGC without inducement from Tullett. Tullett advanced a number of other defences. The defence which Tullett put first is that on any view BGC cannot establish any loss. Although it was put on behalf of Tullett as a separate defence, one aspect of whether BGC can show any loss is whether the brokers in question were entitled to terminate their contracts with BGC as they purported to do by their solicitors’ letters of 1 May 2009.”
[34]As with the issue of constructive dismissal, there was an extensive evidential and factual underlay to this issue which I shall again endeavour to keep to a minimum in this judgment. The grounds of appeal do not necessitate the repetition of all the evidence.[35]The Judge concluded (at paragraph 194) that Tullett did induce the Tullett Three to terminate their forward contracts with BGC. In the course of so doing, Tullett had agreed to provide the Three with indemnities in respect of action against them by BGC and to repay to BGC the monies which had been paid by BGC to the Three as signing-on payments. However, he held (at paragraph 200) that the forward contracts contained implied terms of trust and confidence and that (at paragraphs 205-206):
“… the conduct of Mr Verrier was such that the Tullett Three could have no trust and confidence in him and BGC as their future employer … BGC’s conduct showed a cynical disregard for the law and for employees’ duties … A person can have no trust or confidence in an employer who has recruited him in such a manner and should not be obliged to serve him. The Tullett Three were entitled to treat their obligation to join BGC when free to do so as ended. I therefore conclude that while Tullett induced the Tullett Three to end their contracts with BGC, the Tullett Three were entitled to do so; that is, Tullett induced them to do something which they were entitled to do.”
[36]BGC’s attack on these conclusions is partly factual but it embraces submissions on points of law which are logically prior questions to which I turn first. (1). The legal analysis[37]The fundamental submission of Mr Hochhauser is that at the material time BGC was under no obligation of trust and confidence to the Tullett Three. They remained the employees of Tullett. Trust and confidence obligations remained in respect of that relationship but would not arise as between BGC and the Tullett Three until they commenced employment with BGC. The Judge’s rejection of this submission is contained in a short passage in paragraph 200:
“I accept that [the obligation of trust and confidence] applied as between the brokers and BGC even though the brokers were not yet in BGC’s employment. It applied as appropriate taking account of that circumstance.” (Emphasis added)
[38]The case for BGC is that the obligation was not to be implied into the forward contracts which were not contracts of employment in any sense that necessitated such an implication. The Tullett Three were in continuing relationships of trust and confidence with Tullett and it was unrealistic and impossible for them to have had obligations of trust and confidence towards BGC at the same time.[39]I do not accept this analysis. Mr Hochhauser seeks to support it by reference to Symbian Ltd v Christensen, unreported, 8 May 2000, in which the issue was whether the obligation as to trust and confidence continued after an employee had ceased to work but was on garden leave. Sir Richard Scott, Vice-Chancellor, said (at paragraph 41):
“The contractual relationship continues but the employment relationship is destroyed, as it seems to me, by the garden leave notice. I do not think that thereafter there can subsist any implied obligation of good faith and fidelity between the parties.”
Mr Hochhauser seeks to apply to the pre-employment, forward contract period in the present case, that analysis of the post-employment period of garden leave.[40]The first question is whether the Vice-Chancellor’s analysis, which is not binding upon us, was correct. On appeal, [2001] IRLR 77, the point did not require decision, but Morritt LJ said (at paragraph 47):
“Counsel for Mr Christiansen confessed to some difficulty in seeking to justify that part of the Vice-Chancellor’s judgment … But, as we heard no argument on the point from counsel for Symbian and it is not necessary to deal with it, I say no more about it.”
[41]In his helpful book Employee Competition: Covenants, Confidentiality and Garden Leave (OUP), Mr Paul Goulding QC suggests (at paragraph 4.111) that the approach of the Vice-Chancellor may apply only to the facts of a case where, during garden leave, the employee has no continuing involvement with the employer whatsoever. He further suggests that, as had been previously indicated in Balston v Headline Filters Ltd, (1987) 13 FSR 330, “the duty of fidelity or good faith may be attenuated during the period of garden leave depending on the factual circumstances”. I think this is the correct analysis of a garden leave case. However, that factual context is not precisely the same where the period under examination occurs before the actual commencement of employment but at a time of detailed contractual regulation between the parties. While the relationship at that time is not purely and simply one of current employment, it seems to me that, depending on the context, obligations of trust and confidence can arise, in the words of the Judge, “as appropriate, taking account of [the circumstances]”.[42]This analysis is illustrated by an example proffered by Mr Daniel Oudkerk QC. A secretary signs a contract of employment which requires her to start work in a week’s time. The day before she starts she is sexually harassed by her intended employer and accused of being underqualified for the job. Surely she is entitled to say that trust and confidence is at an end and that she will not be taking up her post the following day. However, on BGC’s case she must join the new employer and if she does not she will be in breach of contract. Mr Oudkerk submits that it would be surprising if that were the law. I am satisfied that it is not. Nor is the law a one-way street. Take, for example, a man who goes for a job interview and accepts an offer of employment on being told confidential details of the prospective employer’s business plan. He then returns to his current employer, intending to hand his notice in, but is persuaded not to move, whereupon he divulges the confidential details of the now rejected employer’s business plan to his present and future employer, a competitor. In those circumstances, it seems to me that he would be in breach of an obligation of trust and confidence vis-à-vis the rejected employer.[43]It may be that the debate on this issue is distracted by an overemphasis on taxonomy. For example, Mr Hochhauser’s submissions are founded in part on the notion that a forward contract is not a contract of employment and therefore does not include obligations of trust and confidence. In my judgment this is a sterile argument. For one thing, a contract obliging a person to commence employment on a future date is a contract of employment for the purpose of the jurisdiction of the Employment Tribunals: see Sarker v South Tees Acute Hospitals NHS Trust [1997] ICR 673, in which Keene J said (at page 678E):
“The mere fact that the duties would only be performed on a date subsequent to this contract having been entered into cannot take it outside the concept of a contract of employment. If it were otherwise, a very large number of contracts would not be contracts of employment, even though they were entered into perhaps only one day before the individual began actually performing his or her duties for the employer.”
[44]That the forward contracts in the present case were or strongly resembled contracts of employment is plain from their express terms. For example:
“Your employment under this Agreement will commence as soon as you are free and able to do so … Your employment is for an initial period of five years.”
There followed detailed provisions about remuneration, hours of work and other matters.[45]Moreover, whilst it is true that in some cases involving an issue about the implied term of trust and confidence the courts have distinguished between contracts of employment and, for example, commercial contracts (Bedfordshire CC v Fitzpatrick Contractors Ltd (1998) 62 CmLR 64) or franchise agreements (Jani-King (GB) Ltd v Pula Enterprises Ltd [2007] EWHC 2433 (QBD)), a forward contract such as the ones in the present case is on any view more akin to a contract of employment than to a purely commercial agreement. The situation is equally one in which there is “an overarching obligation implied by law as an incident of the contract”, as Lord Steyn said when dealing with a contract of employment in the strict sense (Johnson v Unisys Ltd [2003] 1 AC 518, at paragraph 24). The fact of the continuing contracts of employment between the Tullett Three and Tullett may have an effect on the “attenuation” of the obligation as between the Tullett Three and BGC, but there is no legal or logical inconsistency about the concurrence of the obligations, whatever difference there may be in relation to the respective contents. In short, the Judge’s “as appropriate” formulation was entirely appropriate.[46]Assuming the existence of the obligation, what then is the correct analysis of the question of breach? It is that, provided the Judge’s approach to the facts withstands scrutiny, BGC committed an anticipatory and repudiatory breach of the forward contracts of the Tullett Three in accordance with the principle expounded in the well-known case of Hochster v De La Tour (1853) 2 E&B 678. Perhaps the clearest modern formulation is that of Buckley LJ in Gunton v Richmond Borough Council [1980] 3 WLR 714, 729A-B:
“The basis of the doctrine is that where a party to a contract before the date for performance has arrived evinces an intention not to perform his part of the contract, he has committed no breach until the date for performance arrives. Nevertheless the innocent party will be relieved of his obligations under the contract, if he so chooses, so as to render him free to arrange his affairs unhampered by the continued existence of those obligations. It is for the innocent party to elect whether he wishes to be so relieved, which he does by accepting the repudiatory act of the guilty party as a repudiation of his, the guilty party’s obligations under the contract.”
[47]The Judge held that, on the facts, that is essentially what happened in the present case, with the “illegal and dishonest conduct” of BGC amounting to such a repudiatory breach. Against this background, I now turn to the factual issues arising on the Part 20 appeal. (2). The factual matrix[48]The Judge found that, in his dealings with the Tullett Three, Mr Verrier had stopped short of openly persuading them to break their contracts with Tullett by simply walking out. The evidence of the Tullett Three (for example Mr Stevenson) was that Mr Verrier’s approach at the meeting at the Bleeding Heart Restaurant on 26 January was to encourage them to make a note of any bad behaviour on the part of Tullett which should be reported to Mr Marshall, Mr Verrier’s solicitor, so that, when appropriate, they could terminate their contracts with Tullett by acceptance of Tullett’s repudiatory breaches. That was but one part of the evidence. When the Judge came to consider the Part 20 claim, he set it and Tullett’s defence to it in a wider context. He said (at paragraph 201-202):
“In looking at BGC’s conduct for this purpose [viz the issue of repudiatory breach of the forward contracts by BGC] I should concentrate mainly on illegal and dishonest conduct. I summarise the relevant matters for this purpose as follows: (1) The use of Mr Hall by Mr Verrier to bring over his desk. (2) The attempt by Mr Verrier through Mr Hall to get the brokers to write letters complaining about their white board meetings, which contained matters which the brokers thought untrue and which were untrue, I refer in particular to the spicing up of the letters by BGC. (3) The intention of Mr Verrier to ‘blow the whistle’ and have all the brokers leave Tullett regardless of whether they had honest claims for constructive dismissal. (4) The use by Mr Verrier of Mr Marshall as the adviser to the brokers, when Mr Marshall’s loyalties were divided and in some respects he was assisting Mr Verrier rather than representing the interests of his clients. I should enlarge on the third of these, which may be the most important.”
I should enlarge on the third of these, which may be the most important.”[49]Of the Tullett Three, Mr Comer referred to “getting more and more vibes that they would be leaving early”. He and Mr di Palma referred to Mr Verrier having talked at the Bleeding Heart Restaurant about “getting them out early”. Mr Stevenson described another dinner at Rules Restaurant on 11 March when “it was clear that there was an early exit strategy and … it was becoming increasingly clear that Mr Verrier was looking to lift a large number of brokers from Tullett, to try and cripple the company and upset Mr Smith (its Chief Executive Officer)”. The Judge accepted all this evidence.[50]The factual ground of appeal in relation to the Part 20 claim is that the outward manifestation of Mr Verrier’s position as presented to the Tullett Three was based on early departure on the basis of expected repudiatory breaches by Tullett; and that his subjective but uncommunicated intention to walk the brokers out regardless of whether they had a lawful basis for early departure was not a proper basis for a finding of repudiatory breach of the obligation of trust and confidence.[51]I have no hesitation in rejecting this wholly unmeritorious ground of appeal. The short answer to it is that it is based on a selective and blinkered representation of the evidence. However cunning and cautious Mr Verrier had been in his choice of words at the Bleeding Heart, it is clear from the Judge’s findings that then and afterwards he succeeded in communicating the reality that he and BGC were set upon bringing about a mass early departure, whether or not lawful grounds existed.[52]However, it is not necessary to approach this ground of appeal only on the basis of dissection of a few words in one short passage of a long judgment. There is no doubt that the aim of the BGC conspiracy was to get their catches out of Tullett at an early date and in concert or that that was communicated to the Tullett brokers, including the Tullett Three. What is implicit in the reference to the evidence of the Tullett Three in paragraph 202 of the judgment leaps off the page in paragraph 63(101), which refers to Mr di Palma’s evidence about a telephone conversation he had with Mr Hall on about 13 March:
“Mr Hall said to him: ‘I know exactly how you feel about this but I saw Tony [Verrier] yesterday and we are all thinking of leaving together … This is only going to work if we all start together at BGC.”

The Judge accepted this evidence.

[53]It is also instructive to stand back and understand the context of the Part 20 claim. As Mr Oudkerk submits, the subject-matter of the claim is “the very fruit of BGC’s unlawful conspiracy”. The prospective employer with whom the Tullett Three had entered into forward contracts was doing its utmost, by “illegal and dishonest conduct”, to “cripple” its competitor by which they remained employed. It is difficult to imagine circumstances affording greater justification for prospective employees at this level of the financial services sector seeing the conduct of their prospective employer as a repudiatory breach of the obligation of trust and confidence. BGC’s case denying repudiatory breach is built upon criticism of the Judge’s reference to Mr Verrier’s subjective intention in paragraph 201(3) of the judgment (see paragraph … , above). In the context of a catalogue of “illegal and dishonest conduct”, that is an exercise in cherry-picking, albeit of a somewhat putrid cherry, which goes nowhere. The Judge was entitled to see it (paragraph 202) as a point of importance. For the same reasons to which I referred when addressing the earlier issue of the relevance of the intention of the Tullett hierarchy to the question of constructive dismissal, Mr Verrier’s intentions (in this case to overstep legal boundaries to the extent necessary to achieve his conspiratorial aim) were relevant to the issue of his repudiatory breaches of the forward contracts of the Tullett Three. Moreover, and as I have said, the Judge did not limit his finding to uncommunicated intentions.[54]I should deal briefly with another complaint about the Judge’s approach to the Part 20 claim. It asserts inconsistency between the treatment of the Tullett hierarchy whose conduct “was not intended to attack the relationship between Tullett and the brokers but was intended to strengthen it” (paragraph 106) and the conduct of Mr Verrier and those who assisted him which was “illegal and dishonest” (paragraph 201). In a sense, this submission reflects a theme which surfaces at a number of points in BGC’s case, which seeks to suggest a factual, legal and moral equivalence between the behaviour of Tullett and that of BGC. In truth, there was no such equivalence. Mr Oudkerk puts it with restraint in his supplementary skeleton argument:
“The Judge was not bound to find that Tullett’s conduct in asking its own employers not to walk out [but] to stay in the face of a conspiracy was the same as BGC’s ‘illegal and dishonest’ conduct which was intended to ‘cripple Tullett’.”
Although the Judge was also critical of the Tullett hierarchy in the way it defended itself, the turpitude and the obloquy were of a very different order and justified a different conclusion in respect of repudiatory breach.[55]It follows from what I have said that, in my judgment, the appeal in relation to the Part 20 claim falls at the first hurdle: as a matter of fact and law the Judge was right to conclude that BGC had committed repudiatory breaches of the forward contracts, as a result of which the Tullett Three committed no breach when terminating their contracts. In these circumstances, it is unnecessary to address Mr Oudkerk’s alternative submissions that, if the Tullett Three had indeed breached their forward contracts, Tullett still had good defences to the claim of inducement on the grounds of justification or no proven damage.[3]Renewed application for permission to appeal on other grounds[56]There are renewed applications to appeal on grounds which found no favour with the Judge or with Pitchford LJ who considered them on the papers. They were directed at the injunctive relief granted by the Judge following the trial. Mr Hochhauser made detailed submissions in support of these grounds in opening. However, after he had heard Mr Oudkerk’s devastating critique of them, built as it was on the full range of BGC’s discreditable conduct in this affair, he wisely decided to pursue them no further. It is unnecessary to say more.

Conclusion

[57]It follows from what I have said that I would dismiss BGC’s appeal on all grounds and I would refuse permission to appeal on those grounds which attracted renewed applications for permission. I understand that the Judge will hear the quantum trial in the near future.[58]I agree and add only this. Jack J found that forward contracts of the kind used in this case were not unlawful (paragraph 3 above). Although it is not necessary to resolve this issue for the purposes of this appeal, I would not wish it to be thought that I necessarily agree that the terms of the forward contracts and associated agreements of the kind used in this case are compatible with the employee’s duties to Tullett. The terms which, viewed cumulatively, give cause for concern are the following terms, against the background of an obligation to take up employment with BGC at some date well into the future. i) A requirement to “take all such lawful action (including resigning from your current employment) as shall be necessary to comply with your obligations under this agreement and commence your duties with [BGC] at the earliest possible time.” ii) The provision of an indemnity should the current employer take action against its employee for resigning in breach of the contract of employment between them. iii) The provision of substantial salary and commission payments together with substantial signing-on payments, as to which see paragraph 6 of the judgment of Maurice Kay LJ. iv) The obligation on the part of the person entering into a forward contract with BGC to pay a very substantial sum in liquidated damages should he not resign from his current employment when he was legally entitled to do so. (In the case of Mr Sully the agreed sum should he not resign from Tullett when entitled to do so appears to have been one year’s salary, a bonus payable to him and other benefits multiplied by 0.4, a minimum of over £325,000)[59]As to ii) I repeat what Jack J said (paragraph 142):
“But indemnities carry two dangers. A recruit who has an indemnity is more likely to break, or run the risk of breaking, his existing contract if he is covered by an indemnity. Second, the indemnity is likely to have a provision as here: ‘It is a condition precedent that the company has given prior approval to all and any steps taken in connection with this indemnity’, or to similar effect. While this does not enable the recruiting company to tell the employee what to do, it comes close to it. In cross-examination Mr Lynn accepted that BGC used an indemnity as a means of controlling the conduct of the employee with his current employer – Day 22.101. In his evidence Mr Smith said that he saw indemnities almost as a licence for wrongdoing by individuals – Day 11.108. In paragraph 64(8) above I have referred to the discussion which had taken place between Mr Verrier and Mr Marshall about the operation of the indemnity if BGC called on the brokers to leave Tullett.”
In paragraph 64(8) Jack J wrote:
“This confirms that Mr Marshall and Mr Verrier had discussed the operation of the indemnity in the context that BGC asked the brokers to walk out of Tullett. It appears that there was then to be an extension of the indemnity to cover the situation.”
[60]I note also what Jack J said about attempts by BGC to prevent Tullett from knowing about the forward contracts:
“Further, where as here, the recruit’s contract with his employer requires him to report an approach, encouraging the employee not to do so in knowledge of the term, will be inducing a breach of contract and tortious. Mr Verrier was familiar with the terms of Tullett contracts.”
[61]I too agree that the appeal and the renewed applications to add further grounds of appeal should be dismissed for the reasons given by Maurice Kay LJ.

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