GRANT DAVID VINCENT WILLIAMS v. JEFFERIES HONG KONG LTD

HCA 320/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 320 OF 2011

____________

BETWEEN
	GRANT DAVID VINCENT WILLIAMS	Plaintiff
and
	JEFFERIES HONG KONG LIMITED	Defendant
____________

Before: Deputy High Court Judge Seagroatt in Court

Date of Hearing: 8 July 2013

Date of Decision on Costs: 8 July 2013

Date of Handing Down Reasons for Decision on Costs: 12 July 2013

________________________________________________

R E A S O N S   F O R   D E C I S I O N   O N   C O S T S

________________________________________________

1. The plaintiff seeks an order for indemnity costs in this action, the judgment in which I delivered in two parts on 20 June and 8 July 2013.

2. As the authorities clearly indicate, such an order is to compensate the successful and not to punish the losing party. Factors to be taken into consideration include the nature of the proceedings and the attributes of the parties as well as the conduct of the litigation.

3. In this action an essential part of the factual matrix to be considered is the fact that an individual, who has been virtually unemployed for over 2½ years as a result of the action of his former employer who dismissed him summarily for alleged gross misconduct, had to bring an action in Hong Kong against the company which is a subsidiary of a large group in the financial world based in New York.  He sought vindication in order to restore his reputation and be treated on his merits in the employment market place.  He has achieved that without even the slightest degree of diminution in his standing.  In the context of what must have been for him a stressful, drawn-out piece of litigation, he came across, in my view, as an essentially reasonable and honest man of no little ability.

4. In Society for the Protection of the Harbour Ltd v Town Planning Board [2003] 4 HKC Chu J (as she then was) held that:

“Plainly, the circumstances in which an indemnity costs award may properly be made are not limited to cases amounting to an abuse of process, or brought or defended with an ulterior motive or for an improper purpose.”

The very fact that the purpose of such an order is to indemnify the successful party, makes it clear that no windfall is involved but simply an indemnity “as to the costs actually incurred.”

5. Lord Woolf MR in Petrograde Inc v Texaco Ltd [2002] 1 WLR 947 considered the appropriateness of indemnity costs order as a matter of exercising fairness to parties in litigation, albeit in the context of Part 36 offer under the English Civil Procedure Rules:

“63. The ability of the court to award costs on an indemnity basis and interest at an enhanced rate should not be regarded as penal because orders for costs, even when made on an indemnity basis, never actually compensate a claimant for having to come to court to bring proceedings. The very process of being involved in court proceedings inevitably has an impact on a claimant, whether he is a private individual or a multinational corporation. A claimant would be better off had he not become involved in court proceedings. … In the case of an individual proceedings necessarily involve inconvenience and frequently involve anxiety and distress. These are not taken into account when assessing costs on the normal basis. …

64. The power to order indemnity costs … is a means of achieving a fairer result for a claimant.  …”

6. I have cited those two paragraphs, with omissions that relate to Part 36 offers, because they encompass the approach that I should adopt as well as being the general rationale behind such order.  They also reflect the human factors which I have earlier set out as being an aspect which must properly be considered.

7. Earlier Lord Woolf emphasized that an order for indemnity costs does not produce “penal consequences”:

[from §62] “An order for indemnity costs does not enable a claimant to receive more costs than he has incurred. Its practical effect is to avoid his costs being assessed at a lesser figure. When assessing costs, on the standard basis [read as: ‘party and party’] the court will only allow costs ‘which are proportionate to the matters in issue’ and ‘resolve any doubt which it may have as to whether costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party’. On the other hand, where the costs are assessed on an indemnity basis, the issue of proportionality does not have to be considered. The court only considers whether the costs were unreasonably incurred or for an unreasonable amount. The court will then resolve any doubt in favour of the receiving party. Even on an indemnity basis, however, the receiving party is restricted to recovering only the amount of costs which have been incurred.”

8. There are many well-known cases whose facts and conduct have given rise to orders for indemnity costs.

9. In the Bank of Baroda v Panessar [1987] Ch 335 — an authority cited by the Deputy High Court Judge in Cooper v P & O Stena Line Ltd [1999] The Times 8 February 1999 — was established an approach that if a person conducted himself on a wholly false basis, the true state of affairs being within that person’s knowledge, or at least capable of ascertainment if properly investigated, and the proceedings were thereby significantly prolonged and the costs commensurately increased the court was entitled to order that the person so adversely affected by that conduct should receive its costs on an indemnity basis.  Walton J held that “the defences of the defendants … were persisted in to an extent which was totally and utterly unreasonable”.

10. The learned Deputy Judge in the P & O Stena case held that if the case had been properly investigated by P & O “it seemed very unlikely that liability would have been defended at all.”

11. There is in the judgment of Langley J in Amoco (UK) Exploration Co v British American Offshore Ltd (No 2) [2001] ALL ER(D) 327 a statement particularly apposite to the circumstances of the case tried before me:

“There is in my judgment a sound basis for concluding that [the Plaintiff] conducted itself throughout the relevant events on the basis that its commercial interests took precedence over the rights and wrongs of the situation and that it was prepared to risk the outcome of litigation should the Defendant resist the pressures upon it and take on the challenge … If a party embarks on or brings upon itself and pursues litigation of the magnitude of this litigation in such circumstances and suffers a resounding defeat, involving the rejection of much of the evidence adduced in support of its case, in my judgment that provides a proper basis on which it is appropriate to award costs on an indemnity basis.”

12. I have had regard to other cases and authorities before me which reflect the principles and approach set out in the ones I have reviewed.  Each has a different set of facts or circumstances to justify the order made for indemnity costs.

13. My judgments on liability and quantum have already highlighted the shortcomings of the defendant in what I acknowledge are critical and unflattering terms.  Therefore I will not repeat them in extenso. Instead I will highlight the features which in my view establish the justification for an order for the defendant to pay the plaintiff’s costs on an indemnity basis. 

14. None of the directors or executives at the “damage control” centre in New York came to give evidence at the trial.  Mr Michael Alexander was clearly not the real decision maker but was linked with Mr Jason Griffith in that he agreed with the decision to dismiss the plaintiff summarily for gross misconduct.

15. He, and I am sure the principal decision-makers, proceeded on the basis that the plaintiff was the author of the subtitles to the video.  Perhaps the others simply adopted Mr Alexander’s misconception, and felt that to do so would make their decision appear more reasonable.

16. Every effort was made to heap blame upon the plaintiff for the publication when it was obvious that it had been distributed as a result of an error, which was not the plaintiff’s.

17. Allied to this was a “back-sliding exercise” in which they made concerted efforts through a pleading, which they verified, and witnesses who were remote from the decision making, to dilute or misrepresent a vetting or checking process which they had so clearly established after much consideration.

18. I am satisfied that they have withheld e-mail communications and/or other records dealing with the heart of the matter.  One e-mail made a very belated appearance in the proceedings and it tellingly illustrated the complete catalogue of errors or distortions committed by them.

19. Mr Alexander was eventually constrained to admit that had the newsletter not been distributed the plaintiff would not have been dismissed.  He compounded the gross errors, and in my view they were undoubtedly such, by broadcasting the decision, and the explanation put forward for it, to clients of the defendant company.  It appears that he must have included in that briefing his own misconception concerning the authorship of the subtitles.

20. Amongst the many distorting aspects of the defendant in relation to their conduct vis-à-vis the plaintiff was the excessive, perhaps obsessive preoccupation with a fear of offending an American banking icon, or rather its Chief Executive Officer.  I have used several epithets to describe those aspects of the defendant’s behaviour and will not repeat them. 

21. The evidence given on behalf of the defendant disclosed that its main concern was with a perception that the J P Morgan CEO had been vilified or insulted by what it had done in respect of the publication of the newsletter.  Perhaps it was a belated realisation that such a thought was itself irrational which led to some perverse thinking which sought to taint or smear the plaintiff with tags of racism and anti-semitism.  I have dwelt enough on that earlier.  My reference earlier to part of Langley J’s judgement in the Amoco case illustrates the defendant’s failing in this regards.

22. The defendant’s case at trial disclosed some extremely unpleasant features.  It was not a pretty picture, although Mr Maurellet did his very best to dissipate the effects and put a different complexion on the actions.

23. However even Mr Maurellet could not sanitise the picture which emerged from the pre-action correspondence which was disclosed to me for the purposes of this hearing on costs. 

24. There had been, as one would have expected, efforts to settle this action but the defendant’s approaches or reactions seemed to me to be utterly unrealistic, even to the point of suggesting direct contact between the plaintiff and an unidentified (at first) member of the Jefferies Group. The later identified employee of the defendant, being part of the caucus which had dismissed him but not one responsible for the decision, was unsurprisingly unacceptable as a realistic “negotiator” — if that was the intention of the defendant.  Wasteful and unconstructive as the defendant was in these manoeuvrings in response to the plaintiff’s extremely reasonable proposals, they added yet another unattractive dimension to the scene.

25. They pressed for security for costs from the plaintiff and in support of a proposed application for such, submitted a Skeleton Bill of Costs.  I have perused this with some care.  I am not unaware of the level and extent of professional work required for such a case.  Suffice it to say that the alleged hours for aspects of work are grossly over and above what is reasonably necessary with a significant duplication of manpower.  The total of the bill is HKD1,815,360 — nearly twice the annual salary to be paid to the plaintiff.  I do not believe that inflation, even in Hong Kong, could justify such a claim.  I have concluded that this exercise was being used to try and overawe the plaintiff.  This is another, though perhaps less significant feature, of the defendant’s conduct of this litigation which makes an order for indemnity costs in the plaintiff’s favour, the appropriate one.  I have so ordered.

26. As far as the costs of some belated re-re-amended pleadings are concerned, they are included in the order for the Plaintiff’s costs.  The Plaintiff’s counsel put his case necessarily on the revised basis.  The Defendant’s response was cosmetic and barely necessary save for completeness.

	(Conrad Seagroatt)
	Deputy High Court Judge

Mr Ashley Burns, SC, instructed by Howse Willams Bowers, for the plaintiff

Mr Jose Maurellet, instructed by Simmons & Simmons, for the defendant

HCA 320/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 320 OF 2011

____________

BETWEEN

	GRANT DAVID VINCENT WILLIAMS	Plaintiff
and
	JEFFERIES HONG KONG LIMITED	Defendant

____________

Before: Deputy High Court Judge Seagroatt in Chambers

Dates of Hearing: 11, 13-14, 17-19 June 2013

Date of Delivery of Judgment on Liability: 20 June 2013

Date of Delivery of Judgment on Damages: 8 July 2013

__________________________

JUDGMENT ON DAMAGES

__________________________

1.  The successful plaintiff’s claim for damages has two aspects, the first of which is hardly controversial in view of my decision that he was wrongly, unfairly dismissed. I will deal with them under separate headings.

CONTRACTUAL LOSS OF EARNINGS AND BENEFITS

2.  Had the defendant given proper notice, this would have been for six months under clause 13.1 by which either party had to give such period of notice.  It was due to change to three months on 31 March 2012, a little over fifteen months in the future so that does not affect the position.

3.  The six monthly loss is an agreed figure of HK$1,017,434.81.  I have left this unconverted into Singaporean or United States dollars simply because it is claimed in Hong Kong currency.

4.  Clause 3.3 provided for a grant of shares in the Jefferies Group of US$250,000.00 value subject to certain sub‑clauses which relate to certain circumstances of disentitlement.  They do not apply in this case.  The plaintiff is entitled to that sum.

5.  Clause 4 sets out the entitlement to a Retention Bonus on or before 31 December 2010.  Again it provides for circumstances in which the bonus would not be payable.  Again they do not apply in these circumstances.  In any event, it specifically provides for payment of this sum if the defendant company were to terminate the employment other than for cause before 31 December 2010.  (The plaintiff’s employment was terminated on 8 December 2010.)

6.  Finally under this aspect, there is by clause 5, a Guaranteed Bonus for the fiscal year 2011 payable on 12 March 2012.  That date for payment is now long past by some fifteen months.  This is also in the sum of US$250,000.00. There are provisions for disentitlement to this bonus but if employment was terminated other than for cause before 31 March 2012, the bonus will still be “immediately paid”.  There is therefore, no valid exclusion of the plaintiff from this guaranteed bonus.

7.  The total sums due to the plaintiff to cover the six‑month period from 8 December 2010 to 7/8 June 2011 are HK$1,017,434.81 and US$750,000.00.

DAMAGES FOR BREACH OF THE IMPLIED TERM OF TRUST AND CONFIDENCE

8.  This implied term which applies to every contract of employment is not in any way or to any extent affected by the particular terms of his contract of employment.  Adopting part of the speech of Lord Steyn in Malik (and another) v Bank of Credit and Commerce International S A [1998] A C 20:

“The evolution of the implied term of trust and confidence is a fact. It has not yet been endorsed by your Lordships’ House. It has proved a workable principle in practice. It has not been the subject of adverse criticism in any decided cases and it has been welcomed in academic writings. I regard the emergence of the implied obligation of mutual trust and confidence as a sound development.”

9.  Earlier in his speech, Lord Steyn expressed the term as “imposing an obligation that the employer shall not:

“without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.” (see Woods v W M Car Services (Peterborough) Ltd [1981] CR 666, 670 (Browne‑Wilkinson, J) )”

10.  Lord Steyn furthermore adopted the statement of Mr Douglas Brodie of Edinburgh University in his article “Recent cases, Commentary, The Heart of the Matter: Mutual Trust and Confidence” (1996) 25 1 L J 121:

“In assessing whether there has been a breach, it seems clear that what is significant is the impact of the employer’s behaviour on the employee rather than what the employer intended. Moreover, the impact will be assessed objectively.”

11.  I now go on to consider objectively both what the defendant employer did and the effect it had upon the plaintiff employee.

12.  We start with the e‑mail issued by Mr Bob Albano on 8 December, following the reaction at the centre of decision — “Damage control will be directed by New York”, indicating something of an emergency as viewed by Mr Bob Albano, and others.  His response had been triggered by a communication from Laurin Scoran:

“This is awful, vile and an extreme embarrassment for the firm. Inge sent this out without checking to see it was approved. We should never have permitted Grant Williams to write this garbage in the first place.”

13.  It is difficult to know what is meant by the written “garbage” unless it is a reference to the English sub‑titles to the Hitler video which Michael Alexander behaved to have been created by the plaintiff.  That notion — bizarre as it was — was thus shared by others in New York as I surmised earlier.

14.  The e‑mail sent out by Ms Inge Ivechenko on the same date went to all clients and perhaps wider still.  I have referred to it in the first part of my judgment.  It bears repetition:

“Please be aware that we inadvertently distributed Grant Williams’ 7 December 2010 edition of ‘Things That Make You Go, Hmmm. . .’ before it was properly vetted. That piece contained third party material from a website that we do not condone. . .We sincerely apologise for the inadvertent distribution of this material.”

15.  The blame was put squarely on the plaintiff’s shoulders.  The defendant was doing its utmost to distance itself from its employee. In effect it was denying it as a corporate publication.  It incorrectly stated that it “contained. . . material from a website that we do not condone”.  It contained a reference to “material from a website”.  It had all the signs of an ill‑considered, hasty and inaccurate attempt to shuffle off responsibility.  It was extremely damaging to the plaintiff.

16.  Coupled with the cessation of the daily newsletter (which would have been noticed by at least 900 people in the financial world) and the virtually immediately dismissal of the plaintiff for gross misconduct, the position would have become readily apparent to a much wider audience.  I have to bear in mind that some of that audience, if not the majority of it with a degree of intelligence above the average, would have wondered why on earth the newsletter had occasioned such an extreme reaction.  They may have understandably queried, in their own minds at least, whether there was something else behind the decision which did not reflect well upon the plaintiff and was perhaps the real cause for his peremptory dismissal.  We have also not been able to see any record of other communications between the senior personnel in New York which reflected their discussions and thinking.

17.  What we do have, as aggravating factors, are the perceptions that the reference to the Hitler video somehow denoted racism, anti‑Semitism, and, the product of an inaccurate but nonetheless over‑sensitive line of thought, sexism.  These perceptions aggravated the errors of the decision‑making body, however wide that may have been, but more importantly for the plaintiff, they had the potential to aggravate the reaction against him.  It is not known how many shared Mr Alexander’s deluded belief that the plaintiff in fact, created the offending sub‑titles.  If that belief permeated the thoughts and expressions of others, then the barriers being raised for the plaintiff were becoming considerable.  Mr Alexander’s own statement says that “his [plaintiff’s] name came up a few times in client meetings in the first few months following his dismissal, and I addressed [them] by saying that ‘the newsletter was entirely inappropriate and we had to dismiss him because of this unacceptable conduct’.” Whether by then Mr Alexander had disabused himself of his fundamental misunderstanding of the origin of the English sub‑titles is not known but he may well have passed his original error onto clients — and thereby most probably a wider audience.

18.  The plaintiff’s evidence concerning the problems he had experienced in obtaining employment, or even access to the means of obtaining opportunities to explore was entirely reasonable and I accept it.  I do not need to repeat it.  I think too his evidence about what Michael Alexander said to him after the short dismissal encounter, to the effect that he expressed some degree of regret or sympathy in view of what had happened, has the ring of truth about it.  Michael Alexander had brought the plaintiff and others with him to Jefferies from another financial concern in 2010.  Whether Mr Alexander ever communicated to his superiors his own misunderstanding, when he realised it, is something we shall not know.

19.  “Head hunters” are no doubt a special breed but if one finds it difficult or impossible to place a client who has been dismissed allegedly for gross misconduct by a well‑known large group in the financial world which would require detailed explanation (if a candidate was able to proceed as far as an interview for a vacancy) then others would find a similar difficulty.  I readily accept that instructing more than one such agency in this cross‑fertilising world, would be counter‑productive.  Advice to the effect that it would be better to wait for “it all to blow over” or “go away”, though unpalatable and certainly not re‑assuring, would be almost inevitable and leave the plaintiff in limbo.

20.  Evidence was given concerning the special treatment accorded to another employee of the defendant who had appeared in court in Hong Kong for an offence of violence, when in drink, against a police officer.  He received support from the defendant company and not only retained his liberty but also his employment.  The defendant’s terms of employment categorised such behaviour as justifying instant dismissal.  The contrast between his treatment by his employers and their treatment of this plaintiff would have left anyone in the financial trading milieu with the entirely unwarranted impression that Grant Williams’ behaviour must have been particularly heinous.

21.  I accept the plaintiff’s evidence concerning how he viewed the stigma.  I consider it a matter of reality. A vindication of his position and a declaration that he should be free of that stigma, and the other taints or smears, is the essential basis for a return to normality and he now has that.  In view of his ability as recognised by the defendants when they took him on fortified even by their recognition of the newsletter as an attractive marketing tool, it is virtually unarguable that his inability to gain worthwhile employment commensurate with his ability is not entirely due to the treatment he received at the hands of the defendant company and the Group.

22.  He has obtained limited employment with a significantly reduced income, which the plaintiff believes will be or can be equally remunerative once the stigma, etc, are removed.  Mr Ashley Burns SC on behalf of the plaintiff argues that it would be reasonable to take the loss under this head as terminating at the 31 July 2013.  I think he is right.  That represents a period of a little over two years since the termination of the six‑month period of notice which forms the basis of the first period of loss.  Credit will of course have to be given for any earnings between 8 June 2011 and 31 July 2013, which is conceded.

BONUSES AND THE CULTURE

23.  It has been argued that by reason of the troubles experienced in the financial world, remuneration and bonuses are, to use a colloquial phrase, not what they were.

24.  The meaning of bonus seems to have changed significantly over the past decade or so.  Entitlement to bonuses in one form or another has been built into contracts as a matter of course.  They have ceased, it appears, to be dependent upon performance over and above that for which high levels of remuneration, in themselves generous, are paid.  There may be some tax advantage to employer or employee, in devising pay packages along these lines, I do not know, but the public at large has come to recognise that bonuses are not synonymous with success but are paid regardless of success or failure.

25.  No evidence has been called before me to suggest that any of the bonuses (however described) to which the plaintiff was entitled under his contract of employment are no longer payable or, rather, were not payable in 2011 to 2013.  Nor is there any to suggest that the level of principal remuneration has been reduced, or that the pay structure of anyone of the status or position of the plaintiff in 2010, has been varied or reduced in any way.  No comparables have been put forward.  I am not prepared to be influenced by some vague or anecdotal suggestion that the financial world has had a difficult time in terms of remuneration, over the past few years — if indeed it has.

26.  Accordingly, there is nothing reliable or even factual generally to justify my departing from an approach to the effect that the plaintiff would have, and should have continued to reap the same financial rewards from the defendant company over the interim period to date, consistent with the terms of his contract.

THE TAX POSITION

27.  Should any part of the award of damages (under either head) be subject to deduction for tax?

The six‑month period of notice award

28.  Prior to the 2012/2013 year of assessment in Hong Kong, payments made in lieu of notice in accordance with the contract of employment would not have been assessed for tax.  The six‑month period of notice would have expired on 7/8 June 2011 and since the plaintiff’s award under this head would not have been subject to tax at that time, the fact that he receives the award after 31 March 2013 does not affect its tax free status.  What follows also applies to this head.

The award as damages for breach of trust and confidence

29.  This head of damage is based on just over two years loss of salary and contractual benefits.  There is no evidence before me which supports any contention that tax, whether that applicable in Hong Kong or in Singapore, should be deducted from any sum which I order to be paid to the plaintiff as damages under this head, whatever the basis used for calculating the figure.  The figure is therefore to be paid gross and if the Inland Revenue were to claim any liability for tax, then that would be the responsibility of the plaintiff.  It is not appropriate for me to devise some notional rough and ready calculation where there is no clear contingent liability.  That would be to defeat the principle adumbrated by the Privy Council in Comptroller of Inland Revenue v Knight [1973] AC 428 at p 433.  The court held that where a payment was made in respect of the loss of employment it does not come within the ambit of a taxable payment. In Hong Kong, the Court of Final Appeal in Fuchs v Commissioner of Inland Revenue [2011] 2 HKC 422 considered very much the same situation.  Ribeiro PJ put it succinctly (at § 19):

“It is well‑established that damages obtained in a suit for wrongful dismissal or a payment under a settlement agreement reached in such a suit are not regarded as income from employment. Such a sum is properly regarded as deriving from a cause of action arising after the contract has been discharged by breach.”

That therefore is an end to the matter unless legislation changes the situation.

CONCLUSION

30.  The awards are as follows:

	HK$
6 months wages in lieu of notice	1,017,434.81
Restricted Stock Cash Grant	1,945,000.00
Retention Bonus	1,945,000.00
2011 Guaranteed Bonus	1,945,000.00
	___________ 6,852,434.81
Damages for breach of trust and confidence
Loss of salary – 8/9 June 2011 to 31 July 2013 @SGD344,250.00 per annum. 26 months: SGD745,875.00
Discretionary bonus for 2012 @US$250,000.00
Discretionary bonus for 7 months of 2013 @250,000.00: US$145,833.33

31.  I have left these figures in the currency set out in the claim and identified for the most part in the plaintiff’s contract.  Certain deductions have yet to be made to reflect the plaintiff’s earnings during the period up to 31 July 2013.  Once the parties have agreed those, and the currencies in which the judgment is to be given, I will approve that figure or those figures and incorporate them in the judgment.

	(Conrad Seagroatt)
	Deputy High Court Judge

 

Mr Ashley Burns SC, instructed by Howse Williams Bowers, for the plaintiff

Mr Jose Maurellet, instructed by Simmons & Simmons, for the defendant

HCA 320/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 320 OF 2011

________________

BETWEEN
	GRANT DAVID VINCENT WILLIAMS	Plaintiff
and
	JEFFERIES HONG KONG LIMITED	Defendant
____________________

Before: Deputy High Court Judge Seagroatt in Court

Dates of Hearing: 11, 13, 14, 17 and 19 June 2013

Date of Judgment: 20 June 2013

________________________

J U D G M E N T

________________________

 

Introduction

1.  The defendant is a Hong Kong company trading in the financial services industry.  It commenced its activity in Hong Kong in or about the early part of 2010 but although new on the scene then, it was a subsidiary of an international group apparently based in New York, USA with other established subsidiaries in the United Kingdom and elsewhere.  The extent of the network within the group has not been explored and is not relevant for the purposes of this action.  The group is nonetheless engaged in global securities and investment banking activities, having been established in 1962 in the USA.

2.  The personalities employed by the group who feature in the chain of command and decision relative to this matter are Brian Friedman, Chairman of Jefferies Executive Committee, Jason Griffith, Head of Global Equities in New York, John Noonan, Chief Operating Officer of Global Equities in New York, Thea Fforde, Managing Director and Head of International Compliance based in London and Michael Alexander, Chief Executive Officer of Jefferies Asia, employed by the defendant company, but responsible for the other offices including Singapore, Japan and India.  Most if not all of these Asian offices, including Hong Kong were in the early stages of developing the market for the group’s financial services.

3.  The plaintiff commenced employment with the defendant company on 26 August 2010 as Head of Equity Trading Asia with a title of Managing Director.  That title however did not carry with it a seat on the board. His letter of engagement was dated 19 July 2010.

4.  He had been working in this financial field for over 25 years, his previous employment having been in Singapore with a company entitled Bay Trading International Group.  During the course of that employment he had conceived the idea of publishing a daily newsletter and developed this accordingly.  The idea may not have been original but with the collation of publications in the financial world, and that means worldwide, he was no doubt able to impress his own stamp upon it.

5.  When he commenced working for the defendant company its Chief Executive Officer, Michael Alexander, had not yet arrived to take over the reins of the emerging company.

The daily newsletter

6.  The plaintiff brought this concept with him to the financial world of the Jefferies Group.  It did of course require the approval of his new employers and a clear‑cut mutual acceptance as to how its publication was to be effected.

7.  He described the publication, entitled “Things That Make You Go, Hmmm…”, as having an “edgy and colloquial tone and content” with the intention of “pushing the boundaries of edginess to maintain the integrity of the publication as well as the interest of ….. subscribers”.  It was, as both sides agree, intended to be a marketing tool.

8.  The plaintiff sent an example for the consideration of the group at a high level.  In response to the question “What do you think?” from Brian Friedman, Jason Griffith replied:

“Clients universally like it … We should brand it as a Jefferies product and start distributing to our clients.”

A little later — within an extremely short time‑scale — Jason Griffith added:

“This is mostly a market recap but it is a more interesting read for clients than most notes. Compliance can get comfortable but really wanted you to see the more irreverent tone … Clients love it.”

Approval in principle came quickly and unarguably with enthusiasm.  Minds then set to work on the procedure for review and approval of each daily newsletter before it was in fact published.

The review/approval system

9.  Much e‑mail contact was generated in the search or thinking to achieve an effective check on the content of the newsletter.  On 26 August 2010 John Noonan said to Jason Griffith:

“Until Mike Alexander lands in Asia we need a Europe-based equity supervisor to cover Grant [the plaintiff] and pre-view/ approve each daily note before it goes out.”

This was confirmed to Thea Fforde and others and Bob Albano replied:

“Once it’s approved in London it can be released globally …”

and another e‑mail from John Noonan said “Diamandis is on board to cover.”  Diamandis is Diamandis Karamagias, the Managing Director and Chief Operating Officer of the International Equities business of Jefferies International Limited, another subsidiary of the group, based in London.

10.  Thea Fforde, also in London, e-mailed to the plaintiff (on 27 August 2010):

“Please make sure you adhere to that guideline (sourcing data/charts copyrights etc.) when producing your note as that will make it easier for the reviewer/approver …

The supervisor who will review and approve your piece is Diamandis Karamagias … (he) has been briefed on the requirements for this piece.  It would be helpful … for you, me and Diamandis … to go through protocol.”

Four days later her e‑mail contained the following:

“When you send the note to Diamandis tomorrow for review/ approve … Diamandis will review your piece for inappropriate language, slurs, rumours, excessive promises, etc. …

Once Diamandis has reviewed your note he’ll e‑mail you to let you know it is okay to go out … Robin (Greenwood) and Toni (Rizk) are members of the London compliance team and will conduct spot checks (post approval/distribution) of your piece.”

11.  In accordance with this protocol — the term used by Thea Fforde — publication proceeded on a daily basis with the newsletter sent from Hong Kong by the plaintiff to New York and London, with approval awaited from London to Hong Kong and New York, from where it would be distributed in accordance with a list of recipients.  On one occasion Diamandis Karamagias corrected a reference to the leader of North Korea from “North Korean Dictator” to “North Korean Head of State”.  Some might regard that adjustment as somewhat pedantic, at best cosmetic, but, in any event, inconsequential.  It did however indicate that the reviewer certainly took his job seriously in the Anglo‑Saxon diplomatic tradition.

The issue of 7 December 2010

12.  This issue was e‑mailed to Inge Ivechenko, the Personal Assistant of Jason Griffith in New York and to Diamandis Karamagias in London in accordance with the protocol established in late August.  The e‑mail message from the plaintiff accompanying it was:

“I am travelling so Inge, would you mind sending this out for me today? I will send you the latest dist[ribution] list by separate e‑mail. D[iamandis] Can you please reply to all so Inge knows when this can be sent out?”

13.  This edition of the newsletter consisted of 31 pages, which with the exception of the introductory fly‑sheet and three pages of editorial introduction, comprised a series of articles and/or extracts from other publications.

14.  By error it was published to the subscribers without review/approval by Diamandis Karamagias. Events then took a drastic turn within an extremely short time even allowing for the time lag between three continents.  I need to consider these before I return to the publication itself.

The “fallout”

15.  The newsletter was released to the 900 or so subscribers in accordance with the distribution list.  Unfortunately Inge Ivechenko in New York set the release mechanism in motion before receiving approval from Diamandis Karamagias in London.  In her e-mails she readily acknowledged that it was her fault.

16.  However the senior personnel at Jefferies in New York decided that the plaintiff was at fault.  It is obvious that there must have been some exchanges between them, and perhaps, with senior colleagues in London, but if these were in e‑mail — and I anticipated that some of them must have been — they have not seen the light of day in this action.  Furthermore, none of those primarily responsible for making the decisions which have led to these proceedings have given evidence in this case, although Mr Alexander said that he was involved in the decision.

17.  There is an e‑mail from Jason Griffiths to Michael Alexander (the latter did give evidence) dated 8 December 2010 (Hong Kong time 12:29am) which said simply:

“We have a serious problem re: the one sent out today with a Hitler video.”

18.  It is significant how loose the language was.  The newsletter did not go out “with a Hitler video”.  It made an incidental reference to the existence of a “Hitler video” without any comment save as to an unambiguous and sensible warning concerning its use of many expletives.  It left it to the reader of the newsletter to make the effort to look at the video depending on whether he or she wanted to.  The reference is no different from the reference to a magazine, book or film.  Access to the material happened to be more immediate as a result of modern electronic advance.  Nothing suggested an association of Jefferies with the content or purpose or identity of the parody contained within it.   It has been argued that because the words “Hitler video” had a degree of highlighting in blue — minimal as I find it to be — it somehow was tantamount to a promotion or invitation.  I reject that.

19.  Three minutes after the e‑mail from Bob Albano to Michael Alexander the former sent the following e‑mail to Thea Fforde and Diamandis Karamagias:

“[for your information] … ‘damage control’ will be directed by NY [New York]. Will keep you informed.”

20.  Just over an hour later Mr Albano sent an e‑mail to others but linking in Thea Fforde and Diamandis Karamagias:

“Change of plan. Think in terms instead, of sending the ‘message’ below to all recipients of the original piece. Stop working on the recall line.”

21.  However the “message” is not identified on the copy of the e‑mail disclosed in this case.  It may be that which features in an e‑mail from Inge Ivechenko under the heading — “A message from Jefferies” — sent by her, it appears, on the instructions of Michael Roca, Senior Vice‑President in the Compliance Department following Albano’s change of plan:

“Please be aware that we inadvertently distributed Grant Williams’ December 7, 2010 edition of ‘Things That Make You Go, Hmmm …’ before it was properly vetted. That piece contained third-party material from a website that we do not condone. To the extent that piece is still in your inbox, we would ask you to delete it. We seriously apologise for the inadvertent distribution of this material.”

22.  It is safe to assume that Miss Ivechenko did not draft this.  Once again a factual error of some importance was included — “That piece” did not contain third‑party material.  Furthermore the “material” was not distributed.  It contained a reference to the existence of a piece of material.  The distinction is not a pedantic one.  It was also described as “Grant Williams’ … edition”.  Though he was the editor/author, it was a Jefferies publication.  At the same time she sent e‑mails unequivocally indicating that it was her fault and that she would be “taking that bullet”, to which a Chris Shute replied “Absolutely not — I will have a word with Grant re content.”

23.  A series of e‑mails passed between Inge Ivechenko in New York and the plaintiff in Hong Kong, once the time zone differences had been ironed out, in which it is clear that Miss Ivechenko was reassuring the plaintiff of how favourable the readership was to his style and content and how she had tried to clarify that it was not his fault but hers because she had not waited for approval to come through (from Karamagias in London).

24.  At 8:48pm Hong Kong time, the plaintiff had sent the newsletter through to Miss Ivechenko in New York (7:48am) and Diamandis Karamagias in London (12:48pm).  It had actually been sent out to subscribers 10 minutes later by accident.

25.  By 5pm Hong Kong time, the following day, Michael Alexander, having been tasked with the burden from New York, met the plaintiff and summarily dismissed him for gross misconduct.  He handed to the plaintiff a letter emanating from Nicola Hardy in Hong Kong, no doubt on instruction from New York, the relevant part of which reads:

“... Your employment with us is hereby summarily terminated on the grounds of your unacceptable and entirely inappropriate misconduct. The detail of this has been discussed with you by Michael Alexander and Shahina Kasak.”

The letter did not articulate reasons probably because it was impossible to do so intelligibly.

26.  There had been no such discussion of detail and that is common ground. Mr Alexander says in his statement that he informed the plaintiff that he was summarily dismissed for gross misconduct, and handed him the letter.  He added that the plaintiff told him that the newsletter had been sent to Mr Karamagias for prior approval before it was sent out and that he had not sent it out himself.  Mr Alexander refused to discuss it further.  The plaintiff was asked to hand over his “Blackberry” — and perhaps other items such as keys and access codes.

27.  At 5:32pm Hong Kong time, Mr Alexander reported back to Jason Griffith by e‑mail:

“I have just finished speaking to Grant and he has left the building.”

28.  If the e‑mail said more than that, we have not had the opportunity of reading it. The meeting in the office had thus taken little more than two minutes.  The messenger had done little more than convey the decision from on high.  No opportunity was afforded to the plaintiff to discuss or say any more than a basic fact.  A mere 20 hours 44 minutes had elapsed since the newsletter had gone to the United Kingdom for review.  The independent subjective observer would reasonably inquire, why had it led to this?

The review system

29.  It was decided to establish this in order to approve the content of the newsletter that the plaintiff brought with him before it was published as a Jefferies communication to their clients, existing or potential.  Contact between New York and London resulted in Diamandis Karamagias being designated as the man with the responsibility for ensuring that the newsletter met the concerns of the Jefferies Group which was to publish it.  It was to be a corporate publication.  Extracts from the series of e‑mails set the scene for the thinking and the ultimate decision:

“Who will review and approve?”	14/8/2010
“… and get it signed off by the appropriate supervisor in London prior to each distribution.”	16/8/2010
“… as we work out guidelines and process for your piece.”	25/8/2010
“Who [is] the business supervisor … Who will review and approve each piece before it is put in motion?”	25/8/2010
“Who in Asia could do it?”	25/8/2010
“Asia: Michael Alexander or Chris Shute (both scheduled to join in mid Oct. or later)” “U.K.: … [2 persons named] or Diamandis Karamagias …”	26/8/2010
“We need a Europe-based equity supervisor to cover Grant and pre-view/approve each daily note before it goes out.”	26/8/2010
“Who will be the supervisor/reviewer?”	27/8/2010
“We need an equity supervisor based in the U.K. to pre-view the note in the U.K. morning/Asia evening.”	27/8/2010
“I made the decision that once it’s approved in London it can be released globally.”	27/8/2010
“… call with Diamandis … and get them to agree to sign off on ‘Hmmm’ starting Monday.”	27/8/2010
“Already done.  Diamandis is on board to cover.”	27/8/2010
“Done.  Diamandis will cover … will relay to Grant that he is good to go.”	27/8/2010
[To the plaintiff:] “Please make sure you adhere to that guideline (data/chart copyright etc.) when producing your note as that will make it easier for the reviewer/approver.  At the initial stage, the supervisor who will review and approve your piece is Diamandis Karamagias … [he] has been briefed on the requirements for this piece.  It would be helpful … for you, me and Diamandis … to go through protocol.”	27/8/2010
“Diamandis … please connect with Grant and review and approve the substance today. Grant — You are clear to proceed on producing the daily note with daily pre-approval by Diamandis.”	27/8/2010
[Finally again to the plaintiff:] “When you send the note to Diamandis tomorrow for review/approval … Diamandis will review your piece for inappropriate language, slurs, rumours, excessive promises etc. … once Diamandis has reviewed your note he’ll e‑mail you to let you know it’s okay to go out … Robin and Toni are members of the London compliance team and will conduct spot checks (post approval/distribution) of your piece.”	31/8/2010

30.  Those e‑mails, essentially passing between New York and London, in a little over a two week period, were concerned with the setting up of a review/approval system for the newsletter to prevent the substance, i.e. the content, containing “inappropriate language, slurs, rumours etc” quite apart from copyright concerns.  A protocol was in force.  This was by no stretch of the imagination to be a cursory check or “negative vetting”, whatever that term may mean.  These words do not appear in the careful consideration given to achieve what was regarded as very necessary and may be simply the products of advocacy designed to weaken the ground so as to lend some arguable force to what the defendant company contended was the prime and ultimate responsibility for a system which failed, viz the plaintiff’s.  Even the term “spot-checks” is inapposite save by reference to some form of “post facto” exercise after approval/distribution. 

31.  Mr Karamagias, in his statement, suggested that “… it was never intended that I would conduct a thorough review of the Daily Newsletter … This was not what Ms Fforde asked me to do.”  Ms Thea Fforde does not support him on this.  He modified this stance in his evidence.  I do not accept what he says.  It flies in the face of the protocol established and all that had preceded it.  His decision in one newsletter to change the description of the leader of North Korea, from “North Korean Dictator” to “North Korean Head of State” indicates a somewhat pedantic approach which belies the nature of the review he tried to portray as his limited responsibility.  There are other aspects of his evidence which indicate, sadly, an unrealistic approach.  I accept however that in the light of some of his evidence he would not have approved this newsletter but that is not relevant to the issues in this action.

32.  Even Mr Alexander sought to fly in the face of the obvious when he suggested that it was not an approval process by the management.  He it was who used the odd phrase, in the context of this publication, ‘negative vetting’, as the exercise to be carried out.  It would surprise him, he said, to know that there was an approval/review process.  He thought that it was more concerned with style.  He was however aware that it was not the plaintiff’s fault that it had gone out.  And yet at the meeting at 5pm on 8 December in his office he refused to discuss the reasons for the plaintiff’s dismissal.  All this confirms that whatever he discussed and concluded with Jason Griffith as to how to deal with the plaintiff had severe and obviously unreasonable limitations.  The plaintiff felt he had been “thrown to the wolves”.  In my view he was more of a sacrificial lamb on the altar erected metaphorically, to J P Morgan.

33.  The Jefferies Group intended to establish an overall system to prevent any contentious and/or embarrassing material slipping through.  Theirs was no half‑hearted exercise.  But it failed through simple human error, aided or abetted by an electronic system which is probably unforgiving in its rapid mechanical operation.

The newsletter

34.  One has only to be reminded of the views of the senior executives or officers of the group as reflected by the e‑mails to appreciate their acceptance of it as a marketing tool for the group benefit, hence their ready adoption of it as a Jefferies’ publication, and their knowledge or awareness of its style:

“Good e‑mail.  Needs to be vetted.”	Jason Griffith
“Love the irreverent insights.”	John Noonan
“The analysis and commentary are fine.”	Bob Albano
“A lot of clients have given a very positive feedback … This is the kind of note that clients like to read and I think we should allow him to continue to publish it.”	Jason Griffith
“Clients universally like it and I think we need more differentiated content to become top of mind with our customers globally … We should brand it as a Jefferies product …”	Jason Griffith
“… will he [the plaintiff] express views inconsistent with our strategists, economists and analysts?”	Brian Friedman
“He may express views that are inconsistent with our research, strategists, etc. but that is no different than desk notes that are published by our traders and salespeople … It is more interesting read for clients than most notes.  Compliance can get comfortable but really wanted you to see the more irreverent tone  … Clients love it … would like to continue it for now with the possibility of potentially wrapping it into our daily product distribution in some form …”	Jason Griffith

35.  The fact that Jason Griffith emerges, at least on record, as demonstrating enthusiasm on his own part as well as reflecting the interest of Jefferies’ clients, does not hide that, with full knowledge of an irreverent tone — and “that compliance can get comfortable” — a general welcome was given to the newsletter.

The issue of 7 December 2010

36.  Over 40 issues of the newsletter adopted by the Group as its publication were published within the structure created for it.  On one previous occasion it slipped through without approval/review but nothing turns on this.  The detail of that circumstance has not been explored.  E‑mails record it as a fact.

37.  How did this particular issue, the last to go out to the Jefferies Group clients, come to excite so much reaction as a result of its premature unapproved distribution and lead to such a peremptory dismissal for its author?

38.  Because I have concluded that hypersensitive minds have led to a distortion of its content, it is important to repeat the opening paragraph before I comment on it:

“December 7^th is remembered, as ‘the day that will live in infamy’ and, as I wake this morning to see gold surging, silver making another 30-year high (closing above $30 in the process) and the alleged ‘conspiracy’ in the ‘other’ precious metal creeping so close to the mainstream as to have a ‘Hitler Video’ all of its own (warning: expletive subtitles a-plenty), I am left wondering whether we will see a few more days in the near future that are as significant in the field of finance as the events in Hawaii were for the entire world back on this day in 1941.”

39.  The Japanese attack on Pearl Harbour has been used, albeit perhaps with a degree of exaggeration, the licence of the commentator who wants to give stark relief to what may be a significant crisis in the financial world, in order to seize the readers’ interest.

40.  There is a reference to the “alleged conspiracy in the other precious metal” — no sides taken here or lack of objectivity — followed by a simple statement of fact, without recommendation or opinion or partisan, subjective view, that there exists in the public domain a “Hitler Video” in common with many other “Hitler videos”.  There is a language health warning — sensible and necessary — but it is left entirely to the reader as to whether he or she wishes to view the video, to see the form and context of the parody.  Human nature being as curious as it naturally is, means that the reader is more likely to view it than not, assuming he or she has not already seen it.

41.  Mr Karamagias said that the mere mention of Hitler’s name caused him to exclaim or think “Oh, my God!”.  That mere reference he said was inappropriate, although he seemed to try to tone that down by adding that he personally was not offended.  Then as a more extreme development of his thinking, he said the reference to the name of Hitler made him think Jefferies Asia was starting off on the wrong foot and that it raised the question of the suitability of Grant Williams for the Jefferies business.  Such a reaction is verging upon the absurd but I shall come to deal with the reasonable or unreasonable reactions to the name and its implications later when I consider the video itself.

42.  He also went on to say, and this seemed to form the core of his evidence concerning the, to him, objectionable nature of the “marketing material” sent out, that it promoted a joke about the Chief Executive Officer of J P Morgan, Mr Jamie Dimon.  In my judgment there is nothing in the newsletter which could in anyway be reasonably interpreted as constituting the promotion of a joke concerning that personality in the financial world.

43.  He also appeared to elevate to the level of significance, part of a discussion he had with the plaintiff concerning an occasion when the plaintiff had published a quotation[*] from Hitler’s early biography “Mein Kampf”, which had occasioned some adverse reaction by a reader.  That has no significance or relevance in this case.  I think Mr Karamagias has exaggerated what the plaintiff said to him in order to bolster the significance in his mind of the reference to Hitler.

44.  Ms Thea Fforde also thought that the mere mention of Hitler’s name was inappropriate in the newsletter.  I do not need to repeat my view of this which Ms Fforde expressed a little more vehemently than Mr Karamagias.

45.  To an outsider the format of the newsletter is attractive in its content and what I call the editorial or introduction is an interesting commentary on aspects of the financial scene.  It is easy to see why Jefferies found it something which could be used as a marketing tool, and why its clients found it stimulating.  It was no small achievement in my view to be able to put such a newsletter together on a daily basis.  The opening paragraph of this particular one is unexceptionable.

46.  The defendant’s witnesses sought to stress that the plaintiff’s editorial reference had no place in a corporate publication.  This argument, maintained by Mr Maurellet in his submissions, proceeds from the misconceptions which abound in the judgments they made and the errors of understanding and of fact in which they persisted.  There is no reason at all why a commentary on the ferments in the financial world should not be made in an in‑house newsletter.  In fact it would be a bland, anodyne publication if it did not contain this — it would not then be the “edgy” colloquial, irreverent publication that the New York managers knew their clients liked and whose enthusiasm they endorsed.  After all, compliance could become comfortable.

The Hitler video

47.  I find it necessary to deal with the video itself only because of the reaction of the decision‑making management and other employees who gave evidence and displayed significant errors of comprehension.

48.  This is one of numerous videos based on a few scenes from the film “Downfall” in which the Swiss actor Bruno Gant plays Adolf Hitler.  The usual scene is Hitler’s bunker in the last days of the war as the Russian armies move inexorably on Berlin.  It is of course a parody, the critical part being the English subtitles projected at the bottom of the screen to correspond to the soundtrack in German.

49.  Parody is an art form.  It has been with us since the Greek and Roman times, at least.  The theme or style, or both, of a person’s activity are exaggerated or applied to an inappropriate subject for the purpose of ridicule and effect.  It can be very savage.  It is used in literary articles, books, poetry as well as prose, plays, cartoons or caricatures, and films.  Its art form is not used to recommend, praise or condone the vehicle adopted to bring home to the observer or reader the message it seeks to convey.  It is the message, which often vilifies, which is the purpose.  In most cases humour is the potent force.

50.  This video was in the public domain.  It was not recommended or adopted in the editorial piece written by the plaintiff who simply referred to it in the context of a financial controversy.  At least one of the witnesses referred to the video as being “embedded” in the introductory commentary to the newsletter which I have referred to as the editorial.  It was not “embedded”.  That is one of many terms misused by the witnesses for the defendant company in this case.

51.  There is another misconception.  Mr Alexander said that he understood the plaintiff to be the author or creator of the video.  That is a fundamental error. What is also of concern is how many of the senior managers of the Jefferies Group were of the same opinion.  We do not know because they have not given evidence but Mr Alexander spoke of a discussion with Mr Jason Griffith about the newsletter and the video in which it was decided that the plaintiff would have to go, i.e. be summarily dismissed.  There had, he said, been discussions in New York involving a Mr Rich Handler understood to be the Chief Executive Officer in the Jefferies Group in New York.

52.  In view of Mr Alexander’s fundamental error in attributing the creation of the video to the plaintiff, it is reasonable to assume at the very least that others — Mr Jason Griffith in particular — thought likewise.  He described the language to Mr Alexander.  The two of them had discussed the newsletter and agreed the consequence for the plaintiff. Mr Alexander said that the mere mention of Hitler’s name in the reference to the video concerned him and raised problems.  I find that such a reaction just does not make sense.

53.  One must necessarily understand and accept that many people — not just people of the Jewish faith but the Slavic ethnic groups and other central and eastern European peoples, Hitler’s “untermenschen” — recoil at the mention of his name.  It is synonymous with indescribable horror and evil.  Perhaps even the English language is not extensive enough in its vocabulary to afford an adequate description.  It is however not rational to impose a form of censorship in relation to his name.  The idea of expunging it and those of other individuals in the Nazi party, would cause rational commentators to underline the potential risk of consigning events associated with it or them to a degree of undesirable obscurity.  It is an offence in some countries to deny the Holocaust of which Hitler was the prime mover or architect.

54.  It is not sensible or realistic to censor his name out of a marketing publication.  Nor is it rational to suggest that the video itself, or the simple reference to it, denoted a racist or anti‑Semitic connotation.  Both Ms Fforde and Mr Karamagias said in their statements which they declared to be ones of truth, containing honestly held opinions, that the video was racist and anti-Semitic, and that it appeared that the newsletter was propagating such, or at least condoning it.

55.  It is a matter of some regret that able, experienced and intelligent, and obviously successful persons, caught up unwittingly in this panic‑stricken, hypersensitive corporate reaction, who ultimately conceded that the prime concern regarding the parody video itself was their view that Mr Jamie Dimon, the Chief Executive Officer of J P Morgan was being vilified, should associate themselves with the notion that the simple reference to the video made the plaintiff and/or the video published on behalf of Jefferies, racist and anti-Semitic.  Such a notion is utter nonsense.  Ms Fforde also thought that the video was sexist.  It was not.  I think she may in any event have confused the female characters in the video.

56.  These tags — racist and anti‑Semitic — are often used lightly without thought but are difficult to dislodge from people’s minds once used, especially when rumour and innuendo become accepted as fact or truth in the time it takes to “twitter” or “blog”.

57.  Some of the subtitles on the video are, to many, obscene and offensive.  Viewed objectively their at least excessive use, adds nothing to the parody.  But I have to bear in mind that later in time Mr Dimon’s own use of an obscenity as adjectival describing his country in a publicised interview, might certainly be taken to justify or encourage the use of the same obscenity in some form in a parody highlighting the controversy which involved him.  I put three possible explanations for his use of an obscenity to Mr Karamagias and he adopted two of them in the alternative — either he was speaking to an audience adjusted to such type of language, or he was using it for effect.  I do not think that he was addressing a trading floor.  One view is certainly that he demeaned himself by using such a term — that might also be construed as a lack of respect for his audience.  In that context the obscenities in the parody, though excessive, might be seen as familiar colloquial language by a wide audience.

58.  I have expressed some of my findings forcefully which may not find ready acceptance by those who have received them.  However in view of what I regard as irrational and patently unfair conclusions and expressions which have significantly affected a man in his career, it has been necessary to do so.

59.  The human error by an employee has been unreasonably used in order to blame the very person whom the system was in effect to monitor and has stood the system on its head.  The desire to protect the possible sensitivities of a client or business partner also described as a competitor, has distorted an ability to assess matters on a common sense and efficient basis, and deprived the plaintiff of the chance of persuading his employers to stand back and see the folly of their precipitate actions.  In the case which the defendant has constructed against the plaintiff I detect the heavy hand of corporate loyalty seeking to guide the evidence.

Summary

60.  The newsletter was adopted by the Jefferies Group and published by it in accordance with a review/approval system or protocol created by it.  The plaintiff was its editor (and original creator) but not its publisher.  It was collated and edited by him in the course of his employment.

61.  The issue of 7 December 2010 was distributed before it had been reviewed and approved.  That was as a result of human error or a defect in the system established by Jefferies, or a combination of both.  That has not been examined in this case save to disclose that the personal assistant of Mr Jason Griffith accepted that she was at fault.  Nothing suggests that it called for anything other than an informal reprimand in her case.  I have not been informed whether this was adopted or even considered.

62.  The consequence was that the plaintiff was summarily dismissed allegedly for gross misconduct.  The basis for this, according to the evidence from certain employees, is that in the newsletter was an inappropriate reference to Hitler and a reference to an inappropriate video known as a ‘Hitler video’.  There has been an unreasonable effort to “tar” him with overall responsibility because he was the creator or author of the newsletter, and its editor.

63.  Those directly responsible for his dismissal have not come to give evidence to explain or justify their decision and be subjected to cross‑examination.  They have sent others, more remote from their consideration and decision‑making, to try and support and explain it, including the messenger who delivered the decision to the plaintiff.

64.  The overwhelming inference to be drawn from the evidence given by Ms Thea Fforde and Mr Diamandis Karamagias is that the senior Jefferies executives were worried about the possibility that the Chief Executive Officer of J P Morgan might react to what might be perceived to be the adoption by Jefferies Group of the criticism in the financial world of his activities on behalf of J P Morgan.  The line of thinking, as I have indicated, lacks logic, and the direction of responsibility for the misconception at the plaintiff is irrational.  I have the feeling that there was an element of panic — perhaps even an hysterical reaction — by reason of the closeness of the Jefferies Group to Mr Jamie Dimon, or, what it perceived to be its relationship with him and/or J P Morgan.

65.  At some stage that prime concern was broadened into a suggestion — tantamount as I find to a taint or smear — that somehow the plaintiff through the reference to Hitler, and indirectly the Hitler video, was inferentially indulging in racism and/or anti‑Semitism.  I do not propose to repeat my consideration of this a little earlier in this judgment but I have concluded that the suggestion of racism and/or anti‑Semitism emerged as an ex post facto justification for the plaintiff’s dismissal perhaps to screen or act as a makeweight for the real reason to which I have referred a little earlier.

66.  There was simpliciter no justification for dismissal.  The publication was not his responsibility.  To the extent that it is necessary to consider — and I do not believe that it is — even the circumstances of his dismissal were palpably unfair.  A letter, which might be regarded as evasive and which was possibly drafted deliberately without detail, was presented at a meeting lasting two or three minutes in which the plaintiff was given no opportunity to understand the reasons for dismissal or put forward any argument.  The defendant is clearly in breach of the terms of the contract of employment dated 25 July 2010.

67.  The way the defendant handled the matter of the plaintiff’s dismissal, the explanatory e‑mail and the excision of the plaintiff from all contact with and association with the company was, for the reasons set out earlier, in clear breach of the implied duty of trust and confidence which they owed him.  He was left “high and dry” and I shall review this aspect in a little more detail when I come to consider the matter of damages.

68.  There will be judgment for the plaintiff for damages which I shall assess in due course, and costs to be taxed if not agreed.  I have delivered this judgment on liability separately so that the parties, the plaintiff in particular, know where they stand.  I understand that there will be an argument as to costs and I shall hear that after I have delivered the judgment on damages.

	(Conrad Seagroatt)
	Deputy High Court Judge

Mr Ashley Burns SC, instructed by Howse Williams Bowers, for the plaintiff

Mr Jose Maurellet, instructed by Simmons & Simmons, for the defendant