"Participation: 3.5% initial stake, which may reach 5.0% within one year. Entry bonus: Payment of 1 million dollars net, as a signing fee, to compensate the losses with leaving [GP]. Persio [Arida]and Daniel [Dantas] are responsible for the payment."
"This is to inform you that the Company decided to revoke your employment agreement from February 4, 1999 on, with immediate dismissal, without attending the period of previous notice, which will be indemnified in accordance with section 487, paragraph first, of the CLT, eg. Labor Law Statement."
"Since the hearing in the Court of Appeal, Opportunity has amended its pleading in the action in the Grand Court. It now pleads an oral agreement that if Mr Demarco should cease for any reason to be employed by the Company as a deal-maker he would relinquish his interest in the Company 'at its then value.' It also pleads that, so long as he was so employed, he would be incrementally entitled to become a 3.5% shareholder over a period of 5 years. Thus the Company has variously alleged (i) that Mr Demarco's shareholding belongs beneficially to Opportunity (ii) that there was an oral understanding that if he were dismissed for misconduct or bad performance he would transfer it to Opportunity at par (iii) that it was orally agreed that if he ceased for any reason to be employed as a deal-maker he would relinquish his interest at its current value, presumably (if the Company was likely to continue to carry on business in the foreseeable future) on a going concern basis. The action is due to be heard in April of this year, and accordingly their Lordships content themselves with observing that Opportunity's latest version of what was orally agreed between the parties sits uneasily with its contention that it was unreasonable of Mr Demarco to refuse its offer to buy his shares on a different and less favourable basis."
"The Demarco memorandum is not part of an exchange of correspondence. No other memorandum, letters or other communications relating to the negotiations were put in evidence. In fact the Plaintiff failed to provide me with a single piece of paper to corroborate any of the terms of the oral contract the Plaintiff alleges was made."
"In his opening [leading counsel for OEP] invited me to keep in mind, when listening to the evidence, whether the Plaintiff's version of the oral agreement was more likely than the Defendant's to be the truth. It seems to me that it was highly unlikely that a contract as complex as that alleged by the Plaintiff would have been made orally. That is even more the case when the Plaintiff is a sophisticated business entity which inter alia has an in house legal department."
"There can therefore be only one conclusion. Demarco did begin to work for the CVC Companies in mid-October and there was a two-week delay in paying the million dollar fee."
"As neither [OEP] nor CVC/Brazil paid Demarco any money by way of dividends or bonus, neither Dantas nor his sister seemed to regard the specifics of the formula as an important part of their story (which is also the point of view taken by the amended statement of claim). In that they were both wrong. The mechanics of the formula turned out to be vitally important. The inability of either Dantas or his sister to provide a coherent explanation of how the formula was intended to work contributed to my conclusion that the oral contract which the Plaintiff relies on was never made. It also led me to the conclusion that the evidence given by Dantas and his sister was manufactured and false."
"On this subject the evidence of Dantas and his sister may be accurately described as a moving target."
"When asked to give examples of how this 'small mathematical formula' would work in order to make his evidence understandable, Dantas proceeded to tie himself in knots."
"In support of his allegations that Demarco was dismissed for 'bad performance' the plaintiff called a number of witnesses all of whom testified that Demarco had botched the Plaintiff's acquisition of a Soccer Club (Esporte Clube Bahia). I need not refer to any of this evidence in detail as I am satisfied that the contract alleged by the Plaintiff was not made and in any event 'bad performance' is a criterion which is too vague to be enforceable even if the Plaintiff and Demarco had agreed that he was to be employed on that basis."
"(1) the trial judge intervened excessively in the proceedings, with the result that the trial was not fair; (2) the trial judge usurped the role of counsel and 'descended into the arena,' which denied the appellant the opportunity to present its full case, with the result that the trial was not fair; and (3) the conduct of the trial judge was such that a reasonable bystander would not have regarded the Court as impartial and/or would have apprehended the Court to be biased."
"By the end of the trial the parties seem to have been agreed that Mr Demarco's employment started on about October 13, 1997. It was common ground that the agreement was oral, but there are documents dealing with proposed terms said to have been written both before and after that date."
"Had the judge had these documents before him he could not have made findings that obviously influenced him in rejecting the evidence of Daniel and Veronica Dantas in its entirety, in stating that Mr Dantas was 'simply making it up as he went along', and in characterising the company's evidence as 'manufactured and false in all its material respects.'"
"The judge in our view erred in concluding: (i) that the shareholders' and director's agreements together constituted complete agreements containing all the terms of Mr Demarco's employment; (ii) that these agreements limit the grounds on which his employment might be terminated; and (iii) that they have the effect, by application of the parol evidence rule, of rendering unenforceable any previous oral terms on which he received his signing-on benefits."
"The judge's conclusion that the questioned documents, even if prepared by Ms Dantas at the dates they bear, were nevertheless forged, and that their use amounted to uttering false documents, must be based on rejection of the evidence of Daniel and Veronica Dantas with respect to the terms on which the money was invested. It is a conclusion that could not have assisted the judge in deciding whether to accept their evidence on that important point."
"The evidence of Ms Dantas in this regard is sometimes contradictory, and sometimes makes little sense, but Ms Dantas here found herself in a legal maze through which counsel themselves had some difficulty in finding their way. The judge in the end accepts (at p49) that Mr Demarco's employment was terminated on February 4, 1999, when it must be taken that he was at least constructively dismissed. The judge adds that the dismissal was 'without cause and without notice, i.e. he was arbitrarily dismissed.' We do not understand that anything turns, so far as these proceedings are concerned, on the fact that Mr Demarco's dismissal may have been 'arbitrary,' without notice or without 'cause' – that is to say without proof of such conduct as would entitle the company to terminate without notice under clause 9 of the director's agreement."
"The intent of the 'solomonic solution' which she described, involving half of the million dollars being in Mr Demarco's hands and half being invested in the company's mutual funds, was initially equally obscure. Ms Dantas suggested that each$500,000 was in the nature of an 'escrow', held to ensure performance. From the evidence as a whole a coherent explanation may be said to emerge. She says that the money was intended to secure Mr Demarco against the possibility of dismissal otherwise than for misconduct or bad behaviour before he received his share of profits, anticipated or actual, generated through his efforts. That was, of course, a real possibility."
"Resolution of the dispute regarding entitlement to the signing-on benefits appears in the end to have involved three questions: (i) did the oral agreement entered into in October, 1997, require that Mr Demarco repay the outstanding balance of the signing-on benefits if dismissed for 'bad performance'; if so, (ii) what is the meaning of 'bad performance', and (iii) was Mr Demarco in fact dismissed in February, 1999, for 'bad performance'?"
"These documents show negotiations in progress between Mr Demarco and the company between October 21 and 24, 1997, ten days after the date at which Mr Demarco said that all terms were settled, and a week before payment of any signing-on money. The documents discussed terms in many respects similar to those on which the company's witnesses said that the parties later agreed, and all take the form of draft agreements. Had counsel been aware of the importance that these documents would assume, no doubt they would have been brought to the judge's attention. As has been mentioned, the first two were omitted from the affidavit which refers to them, and of which they must be regarded as part, when that affidavit was entered as an exhibit at trial by counsel for Mr Demarco. It was an unfortunate omission, which resulted in the judge reaching important but erroneous conclusions. These documents were repeatedly referred to by Ms Dantas in evidence, and had earlier been produced in Court, but were not marked and bound with the trial exhibits. Perhaps because the terms they proposed do not fully support the case of either side, they were not referred to in argument.
"to the extent that the judge made any finding of fact that the dismissal was not justified by bad performance, that must, of course, have followed from his rejection of the evidence of the company's witnesses, on every material issue, as 'manufactured and false.'"
"The judge rejected the company's evidence, on this as on all other material points, as a result of his conclusion on credibility, and accepted Mr Demarco's evidence that he received an immediate unconditional 3.5% beneficial shareholding when he signed on, a finding of fact based on a conclusion as to credibility that contains the flaw we have described."
"And then the discussions went on and in the beginning of October – I think it was Thursday night, Thursday night or Friday night – October 9 or 10, I was invited to go to Rio to the offices of Opportunity and I was waiting – the office also have a very nice bay view in the twenty-eighth floor and I was waiting for Persio. Persio came and said, Demarco, we want to have you here, but 5% is too much because the others have 1%. So, I waited and he said, I can give you 3.5%, which was a kind of the middle between what I asked and what he had and the one million dollars I asked, he said the million dollars, let me check and he left the room."
"The Demarco memorandum is not part of an exchange of correspondence. No other memorandum, letters or other communications relating to the negotiations were put in evidence. In fact the Plaintiff failed to provide me with a single piece of paper to corroborate any of the terms of the oral contract the Plaintiff alleges was made."
"In his opening [leading counsel for OEP] invited me to keep in mind, when listening to the evidence, whether the Plaintiff's version of the oral agreement was more likely than the Defendant's to be the truth. It seems to me highly unlikely that a contract as complex as that alleged by the Plaintiff would have been made orally. That is even more the case when the Plaintiff is a sophisticated business entity which inter alia has an in-house legal department."
"And those emails that – you see that they change over time because they were not the final agreement."
"Well, after this initial difficulty, I came to Persio Arida one day and said, Persio, look, I left a very significant job for me because you said I could trust your word and now Veronica Dantas is trying to change the deal we made so, I will leave if this continues to be. And he said, No, no, no. Let me deal with that. And he came back to me and said OK, OK, Demarco, I will pay you what we agree it with you. Everything will be honoured. It is just because people is busy and all this kind of excuses that are typical of Opportunity. But, Persio said to me you will be honoured. The only thing I would like to ask you is that to demonstrate confidence in the company, it is a – let's say, it is a culture here that the partners, the principals, they invest some amount of money at Opportunity. I remember I said to him, I have already invested in the Opportunity Fund. So, would you mind to invest half of your signing-on bonus, signing-on fee - to the Opportunity Fund. And I said, No. That's fine. So, he paid me$500,00 in my New York bank account and$500,000 I could invest in the Opportunity Fund, as Mr Andrade had also invested in the Opportunity Fund and several other people of Opportunity have invested in the Opportunity Fund. Q. Was there any discussion about your participation in the company? A. Not at all. Not at all. The 3.5% was always sacred."
"The advance will be deducted from dividends and future bonuses, the deductions equivalent to 20% of the amount of the respective dividends and bonuses."
"In attempting to explain the formula Dantas said that, if for example, Demarco earned$500,000 in a year, a percentage of that amount (he used 20% for convenience) would be$100,000 . As Demarco had earned more than$300,000 he would be entitled to a credit against the$1m of$100,000 and would thereafter only be required to return to the Plaintiff$900,000 if he were dismissed for bad performance. The example was then changed to a scenario in which Demarco earned$350,000 in a year. Dantas explained that in those circumstances 20% of$350,000 would be$70,000 and if that were deducted from$350,000 [an agreed correction to the written judgment] Demarco would have earned less than$300,000 . Nevertheless in those circumstances Demarco would be entitled to a credit of$50,000 against the$1m . This of course makes no sense at all. In the first example Demarco is entitled to a credit of only 50% of the excess of his earnings over the$300,000 limit and in the second example he is entitled to a credit of 100% of that excess. There is no question to my mind that Dantas was simply making it up as he went along, although he was testifying under oath."
"Rosangela Browne, she worked in the office of Opportunity, Sao Paulo and she was a sales officer for the offshore funds and she call me and she ask me for a favour. She said, Karine, I am going to fax you a subscription form and you should give this subscription to Veronica and it is confidential so go to the fax now. I went to the fax and I took the subscription and I gave it directly to Veronica."
"Q So, there was a whole series of accounts that Veronica Dantas had the power to sign for, even though they weren't in her name? A That's correct. The amount, I don't know. Q Yes. Yeah, sure. And you presumably didn't hold a power of attorney, a copy of any power of attorney or a copy of any mandate for each of those accounts, did you? A I don't think so. No, I don't recall. Q So, there was a general instruction, right, in relation to the 368, her signature was okay? You don't need to check with the person who is named as a shareholder; that's right, isn't it? A That's correct."
"I told him that, pursuant to his agreement with the Plaintiff, the investment was to be under our custody: accordingly, I would have to sign the subscription form. This was because I thought that the signing subscriber for the shares would be the controlling party. Louis Demarco did not disagree with me, in fact I remember him saying, 'okay'. I therefore completed and signed a fresh form, a true copy of which is exhibited as the second document at 'VVDR-5' to my first affidavit [1323]. I did not fill in any of the banking details on the left-hand side of the form, because I thought this was unnecessary: the details of OAM were obviously known to the Opportunity Fund's administrators. The subscription agreement was signed in the name of OAM rather than the Plaintiff because the Plaintiff had only just started trading, it had not yet received any income by way of its first instalment of management fees, and consequently the subscription had to be made with the benefit of a loan from OAM. Until this loan was repaid, I thought that it would be better for the funds to remain under the control of OAM. I put the Defendant's name on the subscription agreement as subscriber, in order to segregate the investment, because the defendant would be entitled to choose what sub funds to invest, and it would be simpler to calculate the value of these investments. I used OAM to sign the form, so that only OAM could redeem or transfer any share and would have the full control of the money invested. I did not realise that by doing so, the Defendant would be entered as registered shareholder of the shares and thereby be legal owner of the shares. I took no Cayman Islands legal advice on what I thought was an administrative matter."
"Then, in the Defendant's presence, I erased the$500,000 figure on the subscription form with liquid paper and filled in the new figures as requested by the Defendant: that is why it can be observed from the first document at 'VVDR-5' that a part of the line opposite the 'money market' row has been erased [1323] I then had Daniel countersign the form, which I then sent by fax to Midland.'"
"Veronica Dantas well knew that Demarco had to be shown as the subscriber so that he would receive (as he did) the frequent statements issued by Opportunity Fund concerning the balances from time to time in his investment account otherwise he would have discovered the fraudulent scheme. He expected to receive those reports and statements and he did. They gave no indication whatever that the investment belonged to the Plaintiff and not to Demarco, nor do they provide the slightest indication that [OEP], OAM or anyone else had an interest in or control over these investments."
"As a result the shareholders' agreement was reduced in whole or in part to an agreement to agree. Either way it can accommodate all of the elements of Demarco's version of his oral contract with [OEP] but not all of the elements of the Plaintiff's version."
"The employment of the Director shall be terminated: 9.1 upon the dissolution of the Partnership; 9.2 by the Company without notice if the Director is guilty of any breach of a fiduciary duty, fraud, bad faith, gross negligence or wilful malfeasance in connection with or affecting the business of the Company or in the event of any breach or non-observance by the Director of any of the stipulations contained in this Agreement which is materially detrimental to the Company's interests; 9.3 by either party upon giving the other not less than 3 days' notice in writing; 9.4 upon the Director ceasing to be a Director of the Company; 9.5 if the employment of the Director causes the Company to become subject to taxation in any jurisdiction; 9.6 in the circumstances set out in clause 8.3 [180 days' absence]"
"The effect of clause 9 of the director's agreement of December 30 1997, is to limit the company's common law implied right to dismiss Mr Demarco without notice to specific situations there described, to permit his dismissal immediately on notice being given in cases of extended absence and to otherwise entitle him to three days' notice . . . Thus the contractual issue of consequence was not whether the Company could dismiss for 'bad performance', which it plainly could, but whether the parties agreed that the$1m signing-on payment was repayable in the event he were dismissed for that reason."
"(1) On the hearing of any appeal, the Court may, if it thinks fit – (a) set aside a verdict, finding or judgment of the court below; or (b) make such other order as could have been made by the Lord Chancellor and the Court of Appeal in Chancery on an appeal from a judgment of the Court of Chancery prior to the coming into force of the Supreme Court of Judicature Act, 1873 of the United Kingdom. (2) A new trial shall not be ordered on the grounds of misdirection, the improper admission or rejection of evidence or because the verdict of the jury was not taken upon a question which the Judge at the trial was not asked to leave to them, unless in the opinion of the Court some substantial wrong or miscarriage has been thereby occasioned."
"1. The test to be applied is whether the excessive judicial questioning or pejorative comments have created a real danger that the trial was unfair. If so, the judgment must be set aside. 2. A distinction is drawn between the limits of questioning or comments by a judge when sitting with a jury and when sitting alone in a civil trial. Although there is no relevant distinction, in principle, between the judicial obligation to ensure a fair trial whatever the constitution of the court, greater latitude in questioning and comment will be accepted where a judge is sitting alone. This is because it is conventionally inferred that a trained judicial officer, who has to find the facts himself or herself, will be more readily able to correct and allow for preliminary opinions formed before the final decision is reached. 3. Where a complaint is made of excessive questioning or inappropriate comment, the appellate court must consider whether such interventions indicate that a fair trial has been denied to a litigant because the judge has closed his or her mind to further persuasion, moved into counsel's shoes and "into the perils of self-persuasion". 4. The decision on whether the point of unfairness has been reached must be made in the context of the whole trial and in the light of the number, length, terms and circumstances of the interventions. It is important to draw a distinction between intervention which suggests that an opinion has been finally reached which could not be altered by further evidence or argument and one which is provisional, put forward to test the evidence and to invite further persuasion. 5. It is also relevant to consider the point at which the judicial interventions complained of occur. A vigorous interruption early in the trial or in the examination of a witness may be less readily excused than one at a later stage where it is designed for the legitimate object referred to in Jones , namely of permitting the judge to better comprehend the issues and to weigh the evidence of the witness concerned. By the same token, the judge does not know what is in counsel's brief and the strength of cross-examination may be destroyed if a judge, in a desire to get to what seems crucial, at any stage prematurely intervenes by putting questions. 6. The general rules for conduct of a trial and the general expression of the respective functions of judge and advocate do not change. But there is no unchanging formulation of them. Thus, even since [ Jones in 1957 and the New South Wales case of Tousek v Bernat in 1959], at least in Australia, in this jurisdiction and in civil trials, it has become more common for judges to take an active part in the conduct of cases than was hitherto conventional. In part, this change is a response to the growth of litigation and the greater pressure of court lists. In part, it reflects an increase in specialisation of the judiciary and in the legal profession. In part, it arises from a growing appreciation that a silent judge may sometimes occasion an injustice by failing to reveal opinions which the party affected then has no opportunity to correct or modify. In part, it is simply a reflection of the heightened willingness of judges to take greater control of proceedings for the avoidance of the injustices that can sometimes occur from undue delay or unnecessary prolongation of trials deriving in part from new and different arrangements for legal aid. The conduct of criminal trials, particularly with a jury, remains subject to different and more stringent requirements."
"Where, as in the present case, a judge is confronted by a witness who is both deceitful and evasive, there is no principle that he is not at liberty to express his measured displeasure at being trifled with. There is no principle that he must endure the ordeal with ladylike serenity. Indeed in Vakauta (at 611; 635; 68, 939) Brennan, Deane and Gaudron JJ state that to maintain a total silence in such situations 'would not represent a model to be emulated'. More than that, a timely intervention serves the interest of the party leading such evidence, as it provides him with a chance to mend the damage already inflicted. In my view, if a reasonable disinterested bystander had heard the passage at arms complained of in the present case he would not have reasonably apprehended that the trial judge was prejudiced, he would only have noted that an exceptionally irritating witness had eventually succeeded in irritating the judge."
"Not long into [Ms Dantas's] evidence-in-chief the judge took over her questioning, and this was to continue. The judge conducted most of the examination-in-chief of Veronica Dantas (counsel 136 questions, we are told, court 313) and almost all of the examination-in-chief of Daniel Dantas (counsel 70 questions, we are told, court 381). The judge's remarks during their testimony exhibited at times a high degree of scepticism and disbelief. At the end of Ms Dantas's evidence the judge said: 'I am wondering why this witness was called, in the first place. Anyway she seems to have an overview of everything and a detailed knowledge of nothing.' Yet Ms Dantas was, of course, defending herself against allegations of forgery."
"All of you people know what the forgery issue is and I don't. I have no idea what it is. I don't know what the issue is and I am having trouble following the evidence for that reason."
"Assuming the observer to be a person knowledgeable in the field of trans-national dispute resolution, an important part of the administration of justice in the Cayman Islands, it seems likely that his or her reaction would be that the trial had been rendered unfair by reason of the combination of circumstances that we have described. These included adoption by the trial judge of the function of counsel in the extensive questioning of witnesses, and adverse comment by the judge during the evidence of one of the parties. That important documents produced in the action were not placed before and considered by the judge, despite the best efforts of a principal witness for one side who was unfamiliar with the process, and that this led to unusually sweeping condemnation of that party and its witnesses, would persuade such an observer that a fundamental failure of justice had in fact occurred."
"A. And that is what I said yesterday to My Lord. The Court: And he has said it again today. Q. But, there is not a single mention that you changed this to – and split it between$350,000 in one fund and$150,000 in another? This is the subscription agreement you are – The Court: With respect, [name of counsel], these paragraphs of this affidavit are directed to an entirely different point. Counsel: My Lord, no, they are not. The Court: Yes, they are."
"Counsel: My Lord, I would prefer, if I may, to cross-examine the witness. The Court: Well, you may cross-examine, but I don't think you can misstate the evidence to him. Counsel: My Lord, with respect, I am not misstating the evidence."
"Counsel: But – My Lord, let me just carry on, if I may?"