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Judgment Title: Finnegan v J & E Davy

Neutral Citation: [2007] IEHC 18

High Court Record Number: 2002 7884P

Date of Delivery: 26 January 2007

Court: High Court

Composition of Court: Smyth J.

Judgment by: Smyth J.

Status of Judgment: Approved

Neutral Citation Number: [2007] IEHC 18

2002 7884P

THE HIGH COURT

DUBLIN

EAMON FINNEGAN PLAINTIFF

and

J & E DAVY DEFENDANT

APPROVED JUDGMENT OF MR. JUSTICE T.C. SMYTH

DELIVERED ON FRIDAY, 26TH JANUARY 2007

JUDGMENT OF MR. JUSTICE T.C. SMYTH DELIVERED THE 26TH

DAY OF JANUARY 2007

The Plaintiff who qualified as an accountant, decided

on the completion of his articles not to remain in

professional practice. He came to be employed with the

Defendants after an interview with a Mr. Robbie

Kelleher. He was employed initially for what was in

effect a probationary period of one year and in this

regard he was given in writing a document dated 13th

September 1990 incorporating the terms of his

engagement.

There is a conflict in the evidence on the recollection

of the parties to the interview. Mr Kelleher candidly

said he did not remember the details of the

conversation and that his remembrance of employing the

Plaintiff was vague. The Plaintiff on the other hand

was firm that he asked about the bonus situation, by

which expression I understood to be, in the nature of a

general enquiry that an intending employee to a

business might make - in short an exploratory enquiry

as to the future financial prospects he might have with

his prospective employer. While I accept that there

are many aspects to the business of stockbroking, it is

a business very largely concerned with the buying and

selling of stocks and shares for customers or clients.

From such trading are profits made and I think it most

probable that a young, qualified accountant would, on

interview, have an eye to future prospects and be

conscious that commission is charged on deals and be

concerned that if he generated some multiples

of his salary his services might be recompensed in some way,

by way of increase in salary, some percentage of the

commissions earned directly or indirectly, or some

perquisite(s) which might flow from his successful

endeavours or that of the firm as a whole. The Plaintiff

said he was informed at the interview that there was a year-

end bonus scheme which would depend on how the business did

and how successful he was if he took up employment. Mr.

Kelleher said he did not believe that he could have given the

Plaintiff any such indication, as his recollection was that

there was no bonus scheme in operation until 1991. I believe

some form of incentive was given to the prospective

employee. Mr. Kelleher opines it might have been a

salary or general performance review, as in the case of

a Mr. Conway who was employed with the Defendants.

While undoubtedly the Plaintiff may have had an

interest in conveying his recollection of the interview

- he was the person immediately concerned about his

future prospects and Mr. Kelleher's recollection, he

fairly states as "vague". Even if bonuses only first

became payable by the Defendants in 1991 - this could

have been put beyond yea or nay at the end of the

Plaintiff's case when both the Plaintiff and Mr. Conway

had given evidence, by the production of documentary

evidence by the Defendants (the subject of some cogent

criticism by Mr. Hugh O'Neill SC for the Plaintiff) - rather

than relying on a recollection, which as to its details

referable to the Plaintiff, was vague. Even if Mr.

Kelleher's recollection as to the beginning of the

payment of bonuses beginning in 1991 is correct such

would be referable to the previous year's

performance. While I accept his evidence that a person

merely 'in the door' could not expect to participate in the

bonus scheme (however structured), nevertheless a person who

had given satisfactory service during a probationary or

first fixed year contract and thereafter, continuing to

be employed, could reasonably expect some improvements

in his rewards. Furthermore if bonuses were first paid

in 1991 and it was determined in late 1991 or early

1992 its applicability I consider as a probability was

held out to the anticipated beneficiaries in either

January 1990 or January 1991, whichever is the

applicable 'starting date' and it is in my opinion

probable that it was discussed with the potential staff

ahead of either date i.e. in or about the time of the

interview and engagement of the Plaintiff in

August/September 1991. While not making adverse

findings on the evidence of the Defendant's witnesses I

think it more probable than not that the incentive of

the payment of a bonus in the future was discussed at

the interview and that the component basis described by

the Plaintiff is credible. Whether bonuses would be an

important element of the Plaintiff's remuneration is a

relative expression, however the fact of the

possibility of bonus payments was a relevant matter. I

am satisfied that salary, bonus, holidays and

conditions of employment was the totality of what would

be held out to a person going to work - a view

confirmed by

Mr. McLaughlin in his evidence. (T2 p98 Q348/9)

In the events the Plaintiff was engaged as an equity

research analyst and at the end of the fixed term

contract, and it contains no reference to bonus, he was

kept in the employment by the Defendants. The

Plaintiff began his employment in late October/early

November 1990 and on the expiry of the fixed term

contract he carried on as a research analyst until

1995; and, towards the end of that year he moved to the

equity desk. At the end of the calendar year or

perhaps January 1992 the Plaintiff avers that he had a

meeting with Mr. Kelleher and was told that his bonus

for the year was £3,000 and also he received an

increase in salary. (T1 p17 Q12) Thereafter bonus

payments accrued over the years in the amount set out

in the document referred to as 'salary and bonus data

for the period 1991 - 2000', the accuracy of the

information therein was not seriously contested nor was

the fact that the Plaintiff's claim was to an

entitlement of £65,000 in respect of bonus payments due

from the year ended 31st December 1998 and £140,000 in

respect of the year ended 31st December 1999 measured

in the statement of claim as €260,296.31.

Prior to the transfer to the equity desk of which the

Plaintiff's immediate superior was one Ronan Godfrey,

the Plaintiff said he spoke with the overall head of

the Equities Division, Mr. Kyran McLaughlin, and that

when he sought an increase in salary he was informed by

Mr. McLaughlin that he would revert to him on the issue

at the bonus time. The Plaintiff said on enquiry, as

to the source of the bonus, that he was told it would

come from the equity desk and not to be concerned about

the bonus issue.

In late 1995, early 1996 the Plaintiff met with

Mr. McLaughlin and was given an increase in salary to

£40,000 and a bonus of £35,000. The following year the

lot of the Plaintiff improved when his salary increased

to £45,000 and his bonus to £40,000.

The calendar year 1997 was the first full year of the

Plaintiff on the equity desk, which he considered had

been quite successful as a result of his efforts and he

had estimated in his own mind that his bonus would be

of the order of £90,000 to £110,000. His basis for the

estimation was on his own performance and the

performance of the company - which he averred was the

basis indicted to him by

Mr. Kelleher.

When the time came to discuss the amount of the bonus

to be paid to the Plaintiff he met with Mr. McLaughlin

who informed him that the bonus for the calendar year

1997 was going to be £50,000. The Plaintiff considered

this unreasonable.

Mr. McLaughlin contacted the Plaintiff the following

morning and told him his bonus for the year would be

double what he had offered the previous day, i.e.

£100,000. The Plaintiff was told that £60,000 of the

figure would be paid as normal in the new year but that

£40,000 of it would be deferred for one year, but if he

left the employment of Davys he (the Plaintiff) would

not receive the £40,000. Queried further by the

Plaintiff on this Mr. McLaughlin informed him that if

he joined a competitor of Davys he definitely would not

receive the money, but if he left to pursue some other

career he probably would receive the money. Therefore,
such funds/moneys were not available for the purposes

of helping to finance the recruitment of new employees

to be replace those that resigned (one of the grounds

of justification for the deferral or retained elements

of the bonuses). I do not, therefore, accept that the

imposed condition was necessary to protect some

proprietary interest of the Defendant.

Mr. McLaughlin said in evidence that there was no need

to discuss the question of retention or deferment of

elements of the bonus with the Plaintiff prior to 1997

because the Plaintiff's bonus would not have exceeded

100% of his salary, and that the need to inform the

Plaintiff did not arise "until it actually arose for

him". (T2 p55 Q201).

In the course of his submissions Mr. O'Neill, with some

justification, described this attitude as somewhat

Dickensian for not only had Mr. Finnegan, like Oliver

Twist in effect to say "Please, Sir, may I have some

more?"; he also had to make a case as to why he should

get more, but unlike Bob Cratchit Mr. Finnegan could

not and would not be patronised. The Plaintiff's case,

though not related in amount to the year 1997, has its

origin in what he says was an attempted retrospective

unilateral amendment of his terms of employment and the

deferral in the bonus scheme of which he was given no

notice was therefore ineffective. The Plaintiff

enquired if the amount of £40,000 could be reduced and

received no for an answer, but that it would earn

interest on his behalf until paid. The Plaintiff

considered that as he had earned the bonus he should be

paid it as it was his money and he said he could not

accept this mode of operation which he considered was

totally wrong. Mr. McLaughlin informed the Plaintiff

that this scheme of things had been introduced and

insisted upon by the Bank of Ireland who had acquired

90% of Davys in 1991. The matter was unresolved at the

time and the Plaintiff was, as is clear from his

evidence, sceptical of this policy being imposed by the

Bank, whom he believed owned 91% of the equity in Davys

but only 49% of the voting rights, so that the bank did

not have operational control of Davys. It is

unnecessary for me in this case to decide the veracity

of either point of view in this particular.

The Plaintiff said he could not "walk away" from

£40,000, he and his wife had a young baby and he had

just moved house. In short while he objected to what

was imposed upon him he could not in economic terms do

anything about it and furthermore having worked for

seven years with Davys was getting close to the senior

bonus pool within the firm. In addition to the

foregoing his appreciation of his position then was

that at the age of 32/33 he had ahead of him a maximum

of 10-15 years as a dealer, and that there were limited

opportunities in Dublin - but there were no

opportunities then available. When he did leave Davys

in 2000 it was because a "gap" in the market arose and

he took his opportunity.

In 1998 the Plaintiff's bonus was £200,000 but on this

occasion the Plaintiff was informed that he was going

to have imposed upon him a one-third split. The

Plaintiff I am satisfied objected to the split,

protesting that he was being in effect required to work

for an additional two years before he could actually

receive and have possession of money he had already

earned. Equally I am satisfied that he said he was not

accepting the imposition which he considered

unreasonable. It is common case that retained or

deferred monies attracted interest which was paid to

the Plaintiff, but he did not have the use of his own

money which he had earned. Whenever he may have wished

to invest at his own absolute discretion or to make

such purchases as he may have wished or to repay such

debts as he may have had, in short he had no control

over money which he reasonably believed he had earned,

it being retained over a period of time to ensure in

effect that he would not leave the firm and go to work

for a competitor of Davys.

I find as a fact that in 1997, 1998 and 1999 the

Plaintiff felt that he had to tolerate the position,

but he certainly did not accept it. I do not accept

that the Plaintiff did in any meaningful way acquiesce

in the arrangement. In my judgment the cases of

O'Reilly -v- Irish Press [1937] ILTR 194, decided

before the last World War, and Cowey v Liberian

Operations Ltd. [1996] 2 Lloyd's Rep. 45 are not

applicable in the light of my findings of fact in the

instant case.

Mr. McLaughlin accepted that the deferral was a

material factor in the scheme. While he accepted that

the bonus was in relation to work done; he said that

the purpose of the deferred elements in the bonus "was

to incentivise him [the Plaintiff] going forward as

apart from remuneration for past services. It was also

to incentivise him for "future years". (T2 p99 Q355)

He explained the manner in which the system worked in

this way; senior management (specifically this included

Mr. McLaughlin) sought the permission from the Bank of

Ireland, the major shareholder at the relevant time in

Davys, to permit some of the profits of Davys to be

applied to and distributed to staff at a certain level

and number in the stockbroking firm. The Bank agreed

to this (and later enlarged the amount) on condition

that no individual employee could get more than 100% of

his salary in the first year and if the bonus in total

was greater than 300% of his salary one third of the

bonus would be paid in each year over a three year

period. (While such a deferred bonus scheme apparently

operated in Bank of Ireland Asset Management and is

common in the stockbroking business in London there was

no such custom in the business or trade or profession

in the Irish context). The purpose, as was deposed by

Mr. McLaughlin, for spreading the payment of the earned

bonus:

"to try and generate loyalty...and in
addition it guaranteed a situation that
whereby if...there was a poor year the
following year, at least the employees
had an incentive to work for the full
amount knowing there was a payment at
the end of that year or the following
year."
(T2 p55 Q203)

If, as I understand the notion of an incentive, is

something that incites to action, then I have great

difficulty in understanding how following one's own

1 money in order to recover it and to ensure it is not

forfeit or lost falls within the concept. I can well

understand a bonus earned and paid in full would be an

incentive to future performance.

I found the analogy of Mr. McLaughlin between a share

option scheme - a right conferred dependent on or which

would only vest upon a future event (a known condition

subsequent to the conferring of the option) and a bonus

already earned declared and set aside in a specific

account as a result of past endeavours which had vested

and notwithstanding that vesting became conditional

upon future commitment to other endeavours in the

future, quite unconvincing.

Mr. McLaughlin's evidence was that -

"It was critical from our point of view
to try and incentivise people going
forward and to generate loyalty to try
and keep key employees."

(T2 p57 Q204 L1-3)

Further that only three people knew how the bonus

scheme worked (and that did not include the Plaintiff)

and that one of the factors in determining the amount

of the bonus for any particular person (and that did

not include the Plaintiff) was -

"Whether we thought they were likely to
move or not to move, how competitive we
had to be to hold them and so on."

(T2 p57 Q206 L19-26)

The foregoing bears out the submissions of Mr. O'Neill

for the Plaintiff that the real purpose (which I find

as a fact) of the deferral or retention of the elements

of the bonus was to create a financial and practical

restriction on employees who wished to continue to act

as stockbrokers going to another firm of stockbrokers.

Furthermore the fact that such employees as left the

employment of Davys when outstanding elements of

bonuses had not been paid, but did not go into

competition, were paid such outstanding monies gives

point to the notion and submission that if in effect

the provision was as part of a contract it was a contract in

restraint of trade. The evidence, I am satisfied, bears out

the contention that the Defendant paid all outstanding bonus

entitlements to persons (other than the Plaintiff) who left

the employment of he Defendant between the period 1996 and

2001 who did not go into another stockbroking firm.

The question as to whether a bonus was discretionary or

otherwise was agitated by the parties. I find as a

fact that over a period of years the Plaintiff could

have had a legitimate and reasonable expectation that

if the firm thrived and his efforts were fruitful a

bonus would come to him as it did to a number of other

employees. It was certainly discretionary as to amount

because each year's trading would differ and there had

to be an assessment of his success or otherwise in each

year, but I am satisfied that the Plaintiff could

reasonably expect as a matter of principle built up

from a number of years of consistent conduct in the

payment of bonuses and the matter of discretion never

having been mentioned to him at any stage that some

bonus would be payable - the amount only dependent on

the trading activities of the firm and his own

performance.

In Clark -v- Nomura [2000] IRLR 766 it was held that in

assessing individual performance the employer was not

entitled to take into account factors such as the need

to retain and motivate the employee and thus to refuse

a bonus on the basis that the employee was leaving.

This approach was approved by the Court of Appeal in

Cantor Fitzgerald v Horkulak [2004] EWCA Civ 1287 and

in Mallone -v- BPB Industries [2002] IRLR 452. In

Mallone share options vested in Mr. Mallone were

cancelled on his dismissal by the directors of the

defendant pursuant to "absolute discretion" in the

scheme rules. Rix LJ said:

"There is no valid reason for treating
the whole scheme as a sort of mirage:
whereby the executive is welcomed as a
participant, encouraged to perform well
in turn for a award, granted options in
recognition of his good performance,
led on to further acts of good
performance and loyalty, only to learn
at the end of his possibly many years
of employment when perhaps the tide has
turned and his powers were waning, that
his options, matured and vested as they
may have become, are removed from him
without explanation."

Mr. O'Neill submitted that in a context where bonus

payments are calculated by reference to profitability

of the Defendant in a calendar year and the individual

performance of the Plaintiff during that year, it was

arbitrary and irrational for the Defendant to seek to

make the payment of that bonus already quantified

conditional upon the Plaintiff remaining in the

employment of the Defendant for the following two

years.

To impose such a condition changed the criteria from

one of profitability and performance to one of loyalty

in the future. The bonus payment comprised a very

substantial part of the Plaintiff's remuneration

package which had been earned, evidenced by the fact

that the same when payable carried interest. The

unilateral imposition of the condition recognised by

the Court as a provision in restraint of trade can

hardly constitute the proper exercise of a discretion

as to the level of bonus to which the Plaintiff was

entitled and his entitlement to receive it when

ascertained and declared.

I accept this submission as warranted by the

authorities in the light of the facts as I find them.

Mr. Shipsey submitted for the Defendant, and very ably,

that the case law demonstrates clearly that the margin

of appreciation to be afforded to an employer in

exercising its discretion under a discretionary bonus

scheme is extremely wide. More particularly, it is

open to the employer to decide the criteria to be

employed in assessing whether to award any bonus and if

so in what amount. In this regard he relied on the

authority of Horkulak -V- Cantor Fitzgerald

International [2005] 1CR 402. In Horkulak the

particular bonus scheme had a number of features that

may be common in some respects to the Defendant's bonus

scheme. In particular, the Cantor Fitzgerald scheme

(as did the Defendant's) contained a proviso that the

employee continued to be employed at the payment date

of the bonus, which was deferred for a period after its

determination. In my judgment this is clearly

distinguishable from the instant case because Horkulak's

contract was (a) in writing and (b) the term was known to him

and it was known to him from the outset.

In the events in the instant case the Plaintiff went to

NCB stockbrokers in September 2000 and when he requested the

monies retained from already earned bonuses he was refused

payment by the Defendant. The terms of the Plaintiff's

engagement with NCB are nihil ad rem to the issues I have to

determine. If he received a form of premium to entice him to

join NCB that in some measure made up for the fact that even

though he had worked some part of the year of 2000 for

the Defendants he could not and did not expect any

bonus until the end of the year and he was not

completing a calendar year and therefore would have to

forego whatever the previous 8/9 months of the year

would otherwise have yielded. Such is not either a

matter of surprise or an issue requiring determination.

Also irrelevant in my judgment is how, having cut the

painter with the Defendant, he may have given a dusty

answer, he had decided that he was not going to stay

with Davys under a deferral system - and quoted figures

so high to Mr. McLaughlin to close the latter's enquiries.

Even if in negotiation with NCB the Plaintiff negotiated

with them to offer him a premium equivalent to the

total sum of the unpaid deferred elements of bonus for

1998 and 1999 in Davys and

I am satisfied and find as a fact that such were not

involved or calculated (T2 p46 Q164) and that a sum

that he might have anticipated he might on a quantum

merit basis have attracted for the 8/9 months of 2000

that was a price he put on his value to NCB, that he

was entitled to do so in negotiation with NCB. Even If

they paid him a premium to secure his future services

that was a commercial decision on their part; that in

my view has nothing to do with the monies earned by way

of bonus in the past with the Defendants.

I am satisfied that in each of the years 1997, 1998 and

1999 the Plaintiff did not consent to the unilateral

imposition of a term of his employment referable to the

bonus. If he did, or could be said to have acquiesced

at all, it was because he had a Hobson's choice of

either leaving Davys and discontinuing his career as a

stockbroker and receiving the money or proceeding to

sue Davys which was a completely unrealistic prospect

for him if he wished to continue to have employment

before finding another position, or take up, when the

occasion would present itself, a position in another

stockbroking firm and forfeit such elements of deferral

as were in the bonuses which he had earned in Davys and

which were retained from him. The attempted amendment

of the terms of employment and bonus scheme were in my

judgment as a matter of fact unilateral and while

effective in practice as a matter of fact, in that they

were withheld, were ineffective as a matter of law, not

only because they were not consensual (even if perforce

the Plaintiff had to abide or tolerate them) they were

made without notice much less notice in writing and if

not overtly stated to be a contract in restraint of

trade was in effect such. In my judgment the words of

Jonathan Sumption QC sitting as a High Court Judge in

the Chancery Division in Marshall -v- NM Financial

Management Limited [1995] 4 All ER785 at 791 are

apposite :-

"I do not think there can be any doubt
that proviso 1 is a restraint of trade.
It has been well established since the
decision of the Court of Appeal in
Wyatt -v- Kreglinger & Fernau [1993] 1
KB793, that there is no relevant
difference between a contract that a
person will not carry out a particular
trade and a contract that if he does
not do so he will receive some benefit
to which he would not otherwise be
entitled...it is, therefore, unlawful
unless it is justified as being
reasonable in the interests of the
parties and in that of the public."

In my judgment on Mr. O'Neill's analysis of the first

instance and the Court of Appeal decisions in

Marshall's case is correct. I accept his submission

that the fact that the Plaintiff has left the

employment of the Defendant and now works for a

competitor is immaterial. It does not impact on the

question as to whether or not the clause operates as

restricting trading.

See also to the like effect Sadler -v- Imperial Life

Assurance Co. [1988] IRLR 388 and Bull -v- Pitney-Bowes

[1966] 3 All ER384.

In Sadler's case the Plaintiff's contract provided that

his entitlements as an insurance agent to commission

would immediately cease if he entered into a contract

of service or for services directly or indirectly with

any limited company, mutual society, partnership or

brokerage operation involved with the selling of

insurance or would be in breach of any part of clause

9(a) thereof and were the contract still subsisting.

It was held that:

"The proviso in the insurance agent's
contract of employment which purported
to remove his entitlement to
post-termination commission if he
continued to work in the insurance
industry after he left the Defendant's
employment constituted an unlawful
restraint of trade. A financial
incentive to limit a former employee's
activities in accordance with the
decision in Wyatt -v- Kreglinger and
Fernau and Pitney-Bowes amounted to a
restraint of trade.

In my judgment the question in the instant case is as
to whether the deferral or retention provision is so

tainted as to be determined by its substance and effect

not merely by its form.

Mr. Shipsey for the Defendant submitted that the

structuring of the Defendant's bonus scheme does not

offend against the common law restraint of trade

doctrine for the simple reason that it places no

restraint on the Plaintiff's trade, and as such is

apparent from the Plaintiff's subsequent employment

history the Plaintiff was free at all times to leave

the Defendant's employment and to enter a contractual

relationship with any other employer, that at most the

bonus scheme provided an economic disincentive or

discouragement from leaving, or put positively,

providing an economic incentive to stay with the

Defendant company. It did not, however, restrain the

Plaintiff's employment or trading options in any way.

I am unable to accept this submission.

In my judgment there was, on the evidence, no genuine

proprietary interest of Davys that required the

imposition of the provision imposed upon the Plaintiff.

Costelloe J. (as he then was) said in John Orr Ltd. -v-

Orr [1987] ILRM702 as follows:-

"All restraints of trade in the absence
of special justifying circumstances are
contrary to public policy and are
therefore void. A restraint may be
justified if it is reasonable in the
interests of the contracting parties
and in the interests of the public.
The onus of showing that a restraint is
reasonable between the parties rests on
the person alleging that it is so.
Greater freedom of contract is
allowable in a covenant entered into
between a seller and a buyer of a
business than in the case of one
entered into between an employer and an
employee. A covenant against
competition entered into by the seller
of a business which is reasonably
necessary to protect the business sold
is valid and enforceable. A covenant
by an employee not to compete may also
be valid and enforceable if it is
reasonably necessary to protect some
proprietary interest of the covenantee
such as may exist in a trade connection
or trade secrets. The Court may in
certain circumstances enforce a
covenant in restraint of trade even
though taken as a whole the covenant
exceeds what was reasonable while the
severance of the void parts from the
valid parts."

In the instant case it was at most a matter of weeks

or, perhaps even imperceptibly and not pursued in

cross-examination, months that there was any such

reason to protect the information had by the Plaintiff

while in the employment of Davys. It is clear from the

correspondence the restraint to trade sought to be

imposed is an absolute bar to employment of any nature

in any location in the business of stockbroking. It is

difficult to see how such a restraint is in any way

necessary to protect any proprietary interest of the

defendant much less the public and even a fortiori the

Plaintiff. Furthermore there was no term of employment

that a condition would be imposed to effectively secure

future loyalty.

while considerable emphasis was placed by

Mr. McLaughlin, and Mr. Shipsey in his submissions,

that the quantum of bonus payment had a loyalty factor

built into it, this was not borne out by his own

evidence (T2 p79 Q269) when he agrees that the total of

bonus payments to all employees is the maximum the Bank

of Ireland would allow Davys to make. The quantum of

the bonus payments, the global quantum, has nothing to

do with loyalty. The loyalty issue in effect is a

non-compete issue that only came into the reckoning

having decided on the quantum of the bonus payment and

then a comparison is made to or with the salary.

Indeed in 1997 when the bonus offer increased from

£5,000 to £100,000 within 24 hours that was done on the

basis that the Plaintiff had made out a good case for

the £100,000. It was a mathematical sum and had

nothing to do with future loyalty. In my judgment

future loyalty was never mentioned in 1991 or until

very many years later.

To enforce a condition it must be fairly and reasonably

brought to the other party's attention. This is

especially so when in a contract the condition was

particularly onerous or unusual (as I find as a fact

the deferral and retention of appreciable percentages

of bonuses were) and was not known at all to the

Plaintiff until 1997 and the real and full impact only

known to him or impacting upon him until 1998.

In my judgment the deferral or retention clause

operated as a form of forfeit if the Plaintiff sought

to go to work for a competitor and not having been

timeously, i.e. on first taking up his employment or at

latest at the end of his probationary period or if

either differed from the first year in which the

bonuses were being paid then at such date in my

judgment Interfoto Pictures Library Ltd. -v- Stilleto

Visual Programmes Ltd. [1988] 1 All Eng 348 is applicable.

In this case the Defendant sought to unilaterally

retrospectively alter the Plaintiff's terms of

employment with (however the Defendants may have

understood as to encourage loyalty, i.e. to hold on to

staff in the future) a provision that was onerous and

even if not expressly designed to be a restraint was so

in effect. The Plaintiff had committed himself to some

six years at least to the Defendants before he was

informed even partially of the onerous condition and in

my judgment this was unreasonable.

Section 3 of the Terms of Employment (Information) Act

1994 has no retrospective effect, since its applicability to

the Plaintiff's employment was unfulfilled.

Whatever social cachet may have attached to his

avocation, whatever good refute for sophisticated

skills he may have had on the Exchange or in the world

of high finance, the Plaintiff's terms of engagement

were, in my judgment, on the facts, grievously marked

by a form of engagement redolent of the indentured

employment of another age.

The Plaintiff succeeds.

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