Defended Asset Management Firm Against Wrongful Dismissal Suit by Ex-Employee, Significantly Reducing Damages Sought

Introduction to the Case

We represented an international asset management company (the “Defendant”) in a dispute with an ex-employee (the “Plaintiff”). The Plaintiff commenced legal proceedings against our client, seeking a six-figure sum for damages incurred due to wrongful dismissal, entitlement to revenue-sharing along and reimbursement claims. 

Our Dispute Resolution team successfully obtained a Court ruling in favour of our client, the Defendant, resulting in the Court awarding the Plaintiff only nominal damages of S$1,500 and partial reimbursement claims of S$278.16, a significant reduction from the original claims. The Court also awarded costs of $24,000 in favour of the Defendant.

Background of the Case

The Plaintiff, an experienced financial advisor and wealth manager, was engaged in discussions with our client for his team to join our client.  

On 10 January 2019, the Plaintiff received a rough draft of the Memorandum of Understanding (“MOU”) by email from the Chief Executive Officer (“CEO”), which stated that once parties agreed on all points, he would get the Defendant’s lawyers to draft it up. A second draft was sent by the Plaintiff’s business partner in response, and the CEO confirmed that he did not see any issues with the proposed amendments. However, neither drafts of MOU were ever executed nor was there a finalised or formal MOU drafted by solicitors. 

On 4 March 2019, the Plaintiff was appointed as the Managing Director with a Letter of Appointment, which included terms for the remuneration to the Plaintiff, as well as a contractual clause for a one month notice or payment in lieu of the event of dismissal of employment.  

On 2 August 2019, our client’s Chief Executive Officer (“CEO”) called the Plaintiff into a meeting room where a disagreement occurred, where the Plaintiff had forcefully slammed his hand on the table, where the CEO was seated across him. 

On 5 August 2019, a dismissal letter was issued to the Plaintiff informing him that he had been terminated with immediate effect due to his violent and aggressive behaviour towards the CEO and the threats of violence made against the CEO.  

On 22 November 2019, the Plaintiff commenced the present suit. The Plaintiff claimed that he had loss control of his clients to the Defendant, and the Defendant had wrongfully deprived the Plaintiff of the moneys and benefits he would have otherwise earned under an alleged verbal agreement. 

There were several issues to be determined in this Case: 

1. Whether there was a binding Agreement between parties, and whether the Plaintiff was a partner or employee of our client; 
   
   
2. Whether the Plaintiff was wrongfully dismissed;
   
   
3. If the Plaintiff was wrongfully dismissed, the quantum of damages that he is entitled to;
   
   
4. Whether the Plaintiff is entitled to be reimbursements for the categories of payments he had purportedly made on behalf of our client. 

Determining the Relationship between Parties

The Plaintiff alleges that he was a partner rather than an employee. The Court agreed with our position that he was an employee and not a partner, nor were there any other binding Agreements made prior to the Appointment Letter, which provides for the Plaintiff to be an employee of our client.

Referring to the precedent set by the seminal case of Foley v Classique Coaches Ltd [1934], where the Court emphasised, that incomplete agreements could not form a binding contract, the Court determined that an Agreement had not been formed between the parties, as neither of the MOUs had been executed.  

The only agreement that had been entered into between parties was the Appointment Letter, which explicitly states that the Plaintiff was offered “employment as a Managing Director” of our client, with a clause stating that the Plaintiff’s “Employment will commence on 4 March 2019.” The Court also noted that across all documents submitted by both parties, the term “partner” was never used in any communications.  

Determining Wrongful Dismissal

As the Appointment Letter was the only binding agreement in place between the parties, the Court examined it to ascertain the Plaintiff’s rights with respect to the dismissal. However, the Appointment Letter did not have a clause relating to misconduct nor did it have a clause expressly granting our client the right to summarily dismiss the Plaintiff.  

Thus, the Court referred to common law, where a well-established principle that a contract may be terminated by one party either in accordance with contractual provisions within, or under common law principles following a repudiatory breach by the other party similarly extends to employment contracts.  

As the Plaintiff was determined to be an employee, the Employment Act would apply, where Section 14(1) states that an employer may, after due inquiry, dismiss without notice an employee employed by the employer on the grounds of misconduct.  

While our client was able to produce a CCTV Recording where the Plaintiff was seen slamming his hand unto the table, the Court ultimately found that there was insufficient evidence to show on a balance of probabilities that the Plaintiff had intended to hit the CEO, made a threat of violence, or exhibited violent behaviour during the meeting.  

Thus, the Court ruled that our client should have terminated the Plaintiff in accordance with the notice provisions of his Appointment Letter, which states a one-month notice period.  

Quantum of Damages

Revenue the Plaintiff Generated and Revenue Share

The Plaintiff claimed significant losses due to wrongful dismissal, seeking: 

1. Revenue he had personally generated during the course of his employment, totalling S$152,039;  
   
   
2. Future revenue for 12 months after dismissal until he found alternative employment;
   
   
3. A 10% share of his team’s revenue for 12 months, totalling S$85,483 based on his “reasonable expectation” of being a managing director of the Defendant.

The Plaintiff cited Clause 2 of the Appointment Letter, which mentioned revenue-sharing eligibility. However, the Court agreed with our position that Clause 2 was unenforceable due to the lack of certainty in material terms. It was clear from the evidence that the exact terms of revenue-sharing were intended for future negotiation and never finalized. Additionally, the Plaintiff’s rights as an employee of our client did not grant him the right to unilaterally decide his compensation.  

The Court dismissed claims for future revenue and team revenue, finding that the Plaintiff failed to substantiate his claims of actual financial losses with evidence or demonstrate any contractual entitlement to the revenue generated by his team.  

Ultimately, the Court agreed with us that the Plaintiff should only be awarded one month’s salary in lieu of notice. Due to the lack of certainty regarding the material terms in the contract, the Court had no basis to calculate or assess the remuneration for one month and therefore awarded the Plaintiff a nominal sum of $1,500.  

Reimbursement Claims for Business Expenses

Lastly, the Plaintiff pleaded that he was entitled to be reimbursed for costs he had incurred: 

1. GBP £ 21,000 in salary paid to an independent marketing contractor; and the Court dismissed this claim, agreeing with our position that the Plaintiff had personally entered a contract without authorisation from our client. Our cross-examination also led to the Plaintiff conceding that he was not an authorised signatory of the Defendant, nor was there any basis for our client to pay any monies to the contractor.
   
   
2. S$1,071.52 in Business Expenses. 

The Plaintiff makes this claim based on six separate payments. Based on our argument and evidence that the Plaintiff did not have the authority to make purchases on behalf of our client above GBP100, the Court dismissed three of these six claims. Ultimately, the Court awarded the Plaintiff only S$278.16 in reimbursement claims for valid expenses incurred. 

Cost and Offer to Settle

We assisted the Defendant in obtaining costs in this case, The Court had allowed the Plaintiff cost of $12,000, while our clients, the Defendant was allowed a larger sum of $24,000.

In determining the quantum for costs orders, the Court considered that:

1. The Plaintiff succeeded in making out the breach of employment agreement, but was only awarded nominal damages due to failure to prove loss.
   
   
2. The majority of the Plaintiff’s reimbursement claims was unsuccessful.
   
   
3. The Plaintiff had failed to prove the overarching agreement had been entered into.
   
   
4. The Plaintiff’s claim was above $250,000.
   
   
5. The Defendant had made an Offer to Settle before trial, which the Plaintiff did not accept. The Plaintiff ultimately received Judgment that was less favourable than the Offer to Settle.

Conclusion

Our Dispute Resolution team successfully secured a Singapore Court judgment in favour of our client. The Court confirmed that the Plaintiff was an employee, not a partner. Although the Court acknowledged procedural flaws in the dismissal process, it dismissed the majority of the Plaintiff’s claims for substantial damages arising from wrongful dismissal, citing insufficient evidence and ambiguous contractual terms.  

The Plaintiff was awarded only nominal damages of S$1,500 and partial reimbursement of S$278.16 for valid expenses. By recommending the Offer to Settle, we helped our client recover costs from the Plaintiff, resulting in an order for the Plaintiff to pay costs to our client. 

The Defendant was represented throughout the proceedings of Bryon James Murphy v Farringdon Asset Management Pte Ltd [2024] SGDC 288 by Amos Cai from our Disputes Resolution Practice.