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Grounds publishedDecided 29 Jan 2015
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High Court

Leong Hin Chuee v Citra Group Pte Ltd and others

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[2015] SGHC 30Case no. Suit No 454 of 2012

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  1. Tan Siong Thye J:

  2. Introduction

  3. [1] Leong Hin Chuee (“the plaintiff”) received a monthly salary of S$25,000 pursuant to an Employment Agreement dated 1 August 2007 (“the EA”) signed with the Transpacific Group (a group of companies owned by Suganda Setiadikurnia (“D7”)) (“the Group”) from 1 August 2007 to July 2010. Under the EA, he was also entitled to bonuses, share rewards and reimbursements which were due to him if certain conditions were fulfilled. The plaintiff alleges that he had not been paid these other benefits under the EA. Thus he sues the defendants in these proceedings for breach of EA. He alleges that he had not been paid the following sums under the EA:

  4. (a) US$4,663,020 in respect of Project Gibson being completed, which is the reverse takeover (“RTO”) of PT Royal Oak Development Asia (”RODA”);

  5. (b) US$4,511,250 in respect of Project MP being completed, which is the RTO of PT Citra Kebun Raya Agri (“CKRA”);

  6. (c) US$1,138,315.22 in respect of fund raising activities for Project Gibson and Project MP; and

  7. (d) S$1,852,000 in respect of fund raising activities for the acquisition of properties at 21 Anderson Road (“the 21 Anderson Properties”).

  8. [2] In addition, the plaintiff also claims S$54,004.52 for reimbursements for expenses he incurred in the course of his employment from 2008 to 2010. Therefore, the plaintiff’s total claim is for US$10,312,585.22 and S$1,906,004.52.

  9. [3] The defendants dispute the plaintiff’s claims. First, they contend that they were not parties to the EA. According to the defendants, the plaintiff should have sued PT Transpacific Securindo (“PT Securindo”) which they say was his official employer. Second, they contend that the plaintiff was not entitled to the bonuses since the bonuses were not an absolute entitlement. The plaintiff was also not entitled to the share rewards with respect to Project Gibson and Project MP as the projects were incomplete. Finally, they contend that the plaintiff was not entitled to the balance of the expenses incurred in the execution of his duties as there is no proof that they were incurred in accordance with the EA’s terms.

  10. [4] Besides disputing these claims, Citra Group Pte Ltd (“D1”), Cozmo Properties Pte Ltd (“D3”), Forever Prosperous Pte Ltd (“D5”) and Fortune International Trading Pte Ltd (“D6”) (collectively “the Four Counterclaimants”) also counterclaim against the plaintiff for his alleged breach of directors’ duties and breach of confidentiality.

  11. The background

  12. [5] Prior to his EA with the defendants, the plaintiff was the Executive Vice-President and Head (Business Development and Investor Relations) in Lereno Bio-Chem Ltd (“Lereno”), a Catalist-listed company. It was at Lereno that he met D7, the Vice-Chairman of Lereno on 20 November 2007, after the latter had subscribed for a significant number of Lereno shares.

  13. [6] Subsequently, D7 resigned from Lereno’s board when he failed to secure majority control of Lereno. He also fell out with the other leading shareholders of Lereno. However, as D7 found the plaintiff to be “shrewd and capable”, D7 offered to employ him on a full-time basis so that the plaintiff could assist him with the RTO of two public-listed Indonesian companies: RODA, a suspended company listed on the Indonesian Stock Exchange (“IDX”), and CKRA, another suspended company listed on the IDX. The plaintiff agreed and resigned from Lereno on 31 August 2007.

  14. The Employment Agreement

  15. [7] The plaintiff entered into the EA after some negotiations with D7. It was signed by D7 on behalf of the Group, which was described in the EA as “a Group of companies incorporated in Indonesia and Singapore with its principal place of business at the 18th floor of Menara Imperium, Jakarta Indonesia”. Subsequently and pursuant to the EA’s terms, the plaintiff was appointed to different positions in the companies controlled by D7. His appointments included, inter alia,:

  16. (a) directorships in Cozmo International Pte Ltd (“D2”), D3, Fook Yuan International Pte Ltd (“D4”) and D6;

  17. (b) the Deputy President Director of RODA; and

  18. (c) the President Director of CKRA.

  19. [8] Under cll 5.3, 5.4, 5.5 and 5.9 of the EA, the plaintiff is entitled to receive Annual Bonuses, Periodic Bonuses, share rewards and reimbursement of expenses under cll 5.3, 5.4, 5.5 and 5.9 of the EA. The relevant clauses are set out as follows:

  20. It is important to note that with respect to the share rewards, cll 5.4 and 5.5 were amended by having “1.5% for 100%” scribbled next to them and D7 countersigning at the side (“the Handwritten Amendments”). In this regard, the plaintiff also makes reference to Table 1 (exhibited in Annex A of this judgment) to submit that the share rewards are essentially a “loyalty device” and the price to be paid for the share rewards should be in accordance with Table 1. The plaintiff interpreted this to mean that he would get 1.5% of the RODA and CKRA shares or their cash equivalent when Project Gibson and Project MP were completed.

  21. [9] While it is undisputed that the Handwritten Amendments were made by D7, the parties disagreed on: (a) when completion took place; (b) what were the circumstances under which the share rewards were to be granted; and (c) the implication of the Handwritten Amendments to those clauses. The plaintiff’s view is that Project Gibson and Project MP were successfully completed and that he was instrumental to their success. He also submits that he was instrumental in raising funds successfully for the acquisition of the 21 Anderson Properties and thus entitled to the sums claimed for. The defendants’ view is that Project Gibson, Project MP and the acquisition of the 21 Anderson Properties failed. The plaintiff was merely a liaison officer to obtain the loans for the various companies from the banks. For these services, the plaintiff was already paid a salary under the EA. Therefore, the defendants submit that the plaintiff is not entitled to his claims.

  22. [10] Given the very different interpretation of the facts taken by the plaintiff and the defendants, it is useful to look at the three abovementioned fund raising activities and the way the parties viewed them.

  23. Project MP

  24. [11] Project MP was an initiative under the Bio-Resources Division of the Group and it involved the RTO of CKRA. CKRA was a company engaged in the planting, processing, trading and transportation of agricultural and plantation products and palm oil processing.

  25. [12] Project MP was to be executed in the following manner:

  26. (a) The first step was to issue CKRA shares. CKRA would conduct a rights issue and the money raised would be used to purchase mandatory exchangeable bonds (“MEB”) issued by PT Kurnia Selaras (“PTKS”).

  27. (b) PTKS would pay 1% interest to CKRA every year for five years until the bonds matured on 28 January 2013. Upon maturity, the MEB would be exchanged for 70% equity in PT Transpacific Agro Industry (“TPAI”) and PT Citra Indoniaga (“CIN”), two palm oil companies in Indonesia. Upon the maturity of the MEB, CKRA was envisaged to become the indirect owner of the palm oil plantations owned by TPAI and CIN. The first rights issue was conducted in January 2008.

  28. (c) After the first CKRA rights issue was conducted and the acquisitions made, a second rights issue was conducted with 78% of the proceeds funding the purchase of PT Horizon Agro Industry (“HAI”). HAI owned a number of palm oil plantation-owning subsidiaries. It was also in the process of constructing a starch products factory. 22% of the proceeds would be used for CKRA’s working capital needs.

  29. (d) Finally, D1 would be incorporated as an investment holding company to be the standby buyer underwriting the second CKRA rights issue. To fulfil its underwriting obligations, D1 later entered into a loan facility with the Singapore branch of the Raiffeisen Zentralbank Oesterreich AG (“RZB”) for the sum of US$111,663,482.44 (“the First RZB Loan”).

  30. [13] The plaintiff envisaged that under this plan, CKRA would become a multi-billion dollar company in three years. There were three eventual scenarios contemplated by the parties in relation to Project MP:

  31. (a) The best-case scenario envisaged that up to 300bn rupiah would be raised from interested investors in the second CKRA rights issue.

  32. (b) The expected scenario was that up to 200bn rupiah would be raised from interested investors.

  33. (c) The worst-case scenario was that no money would be raised from interested investors, thus necessitating a pledge of 400bn rupiah worth of shares to RZB in order to secure 100bn rupiah worth of loans.

  34. [14] As matters transpired, the second CKRA rights issue was a total failure, necessitating D1’s use of the money raised from the First RZB Loan to underwrite the share issuances.

  35. The plaintiff’s position

  36. [15] The plaintiff submits that Project MP was completed because D1 successfully held 78.76% of CKRA as of 31 December 2010 with CKRA’s shares being freely tradable, showing that the asset injection and monetisation were successfully completed. His role was to raise funds for the project and through his efforts, RZB was convinced that the collateral which D1 had in place was acceptable under the proposed financing structure and it therefore granted D1 credit facilities up to US$111,663,485.44 for Project MP. Therefore, the plaintiff alleges that he is entitled to:

  37. (a) the Annual Bonus under cl 5.3 of the EA;

  38. (b) the Periodic Bonuses under cl 5.3 of the EA worth 0.5% of the US$111,663,485.44 raised; and

  39. (c) 3% of the CKRA shares under cl 5.4 of the EA in relation to Project MP and pursuant to an alleged oral agreement by D7 to increase his entitlement from 1.5% to 3% of the CKRA shares.

  40. The defendants’ position

  41. [16] The defendants disagree for three reasons. First, they submit that Project MP was uncompleted as it entailed the completion of the proposed rights issue and the total divestment of the CKRA shares by D1 to third parties. Since the divestment did not take place until after some major restructuring which took place after the plaintiff resigned, Project MP was never completed during the plaintiff’s tenure.

  42. [17] Second, they submit that no fresh funds were raised for CKRA. In fact, losses were made when the Group (and/or D7) was unable to pay the interest due on the First RZB Loan, forcing RZB to sell the shares pledged to it in order to reduce CKRA’s interest liability. The plaintiff is therefore not entitled to the bonuses under cl 5.3 of the EA.

  43. [18] Third, the defendants submit that the First RZB Loan was only granted because of a pledge of CKRA shares in RZB’s favour. The plaintiff had merely liaised with RZB, for which he had been remunerated. Therefore, the plaintiff was not instrumental in obtaining the First RZB Loan.

  44. Project Gibson

  45. [19] Project Gibson involved the RTO of RODA, a company engaged mainly in the building and development of housing projects for the middle class. It envisaged, inter alia, the Group and/or D7 injecting assets into RODA and subsequently monetising those assets so that RODA could take over several companies and stabilise its revenue stream. Project Gibson was to be executed in the following manner:

  46. (a) D5 would be incorporated as an investment holding company. It would then subscribe for and hold shares in RODA. RODA would also conduct a rights issue in or around January 2008 and the proceeds would be used as follows:

  47. (i) 40% of the proceeds would go towards acquiring apartment and retail units in a property development known as the Oakwood Premier Cozmo Jakarto (“the Oakwood units”) from PT Adhisakti Kreasi Persada (“AKP”); and

  48. (ii) 50% of the proceeds would go towards buying shares in PT Transpacific Mutual Capita (“TMC”), which in turn owned other property development projects.

  49. (b) As RODA’s rights issue subscription had to be in cash under IDX regulations and the purchasing parties did not have sufficient cash to effect the purchase, a loan was taken from the Development Bank of Singapore (“DBS”) to enable D5 to subscribe for RODA shares. Eventually, D5’s purchase of RODA’s shares was done by borrowing US$115,999,561.97 from DBS under a one-day loan facility agreement.

  50. [20] Ultimately, the parties envisioned that RODA would be relisted, the assets owned by the injecting Indonesian companies would be monetised, and D5 would prosper from the increase in the value of the RODA shares. To achieve that goal, it was envisioned that D5 would be able to sell its RODA shareholding to third parties in the future. That, however, did not materialise. Additionally, neither AKP nor RODA obtained title to the Oakwood units as (a) the Oakwood units were earlier pledged to the Hong Kong and Shanghai Banking Corporation under an earlier financing agreement so that the developers would finish the property development; and (b) there were insufficient funds to redeem the Oakwood units from the existing pledge. Consequently, AKP had to cancel its sale and purchase agreement with RODA.

  51. The plaintiff’s position

  52. [21] The plaintiff submits that he is entitled to be remunerated as he was instrumental to Project Gibson’s success since he had successfully obtained the DBS loan for D5. It was because of his discussions with DBS that DBS was satisfied with the collateral provided under the financing structure that he had developed. As a result, funds were available for purchasing RODA shares. That constituted successful fundraising as funds were successfully raised for Project Gibson’s execution. Thus D5 successfully obtained 50.2% of the RODA shares, with the balance of the freely-tradable shares held by other entities of the Group. The plaintiff is therefore entitled to receive:

  53. (a) the Annual Bonus under cl 5.3 of the EA;

  54. (b) the Periodic Bonuses under cl 5.3 of the EA worth 0.5% of the US$115,999,561.97 raised; and

  55. (c) 3% of the RODA shares under cl 5.4 of the EA and pursuant to an alleged oral agreement by D7 to increase his entitlement from 1.5% to 3% of the RODA shares.

  56. The defendants’ position

  57. [22] The defendants disagree on three grounds. First, they submit that Project Gibson had envisaged that property assets would be injected into RODA. However, the intended property asset injections were unsuccessful and incurred losses. Therefore, there was neither injection of assets nor enhancement of RODA’s assets that would have led to an increase in RODA’s share value. Consequently, no interested parties invested in RODA and Project Gibson failed.

  58. [23] Second, the defendants submit that Project Gibson was left uncompleted as it entailed the completion of a second rights issue and the total divestment of the RODA shares by D5 to third parties. Since no fresh funds were received by RODA for its working capital and the funds were “round-tripped”, no real money was received by the injecting companies. Therefore, Project Gibson was incomplete and the plaintiff cannot claim the sums allegedly owed to him.

  59. [24] Third, the defendants disagree that the plaintiff was instrumental to DBS loan being obtained and assert that the loan was secured only because the acquired RODA shares were pledged to DBS as collateral. D7 claims that DBS granted the loan because of his own good standing and not the plaintiff’s proposed loan structure. The plaintiff’s task was merely to liaise with DBS and he had been duly compensated by his monthly remuneration under cl 5.1 of the EA. Hence, the plaintiff is not entitled to the sums claimed.

  60. The 21 Anderson Properties

  61. [25] After the EA was signed, the plaintiff submits that D7 directed him to raise funds for the acquisition of the 21 Anderson Properties pursuant to the EA’s terms. This was a subsequent addition to Project Gibson and the plaintiff was appointed as the main liaison with various banks to raise funds for the acquisition of the 21 Anderson Properties. The plan was that D6 would secure a loan and it would then lend the sum to D3 and Springfield Ventures Group Ltd (“Springfield”), another company used for the acquisition of the 21 Anderson Properties, for them to purchase the 21 Anderson Properties.

  62. [26] D6 eventually raised S$170.4m via RZB (“the Second RZB Loan”) and the purchase of the 21 Anderson Properties was completed on 15 April 2010 after D6 disbursed the loan to D3 and Springfield. Here, the plaintiff asserts that he had played an instrumental role in obtaining the Second RZB loan by providing a personal guarantee for it. He alleges that D7’s wife, Elsie Wijaya, was unwilling to give a personal guarantee to RZB, which was a condition that RZB was not prepared to forego. During cross-examination, the plaintiff described his guarantee as technically “credit enhancement”. Hence, the plaintiff claims that funds were successfully raised and he is entitled to 0.5% of S$170.4m raised.

  63. [27] Subsequently, things did not go smoothly for the 21 Anderson Properties purchase. It is here that material differences in the events leading up to the eventual sale of the 21 Anderson Properties manifest.

  64. The plaintiff’s position

  65. [28] The plaintiff submits that it was a term of the Second RZB Loan that D6 kept within the maximum loan-to-value ratio which was approved by the RZB Board, failing which D6 would be deemed to be unable to repay the loan sum. Since D6 breached the loan-to-value ratio under the loan agreement, it was deemed to be unable to repay the loan by 31 March 2011. As a result, RZB decided to sell the 21 Anderson Properties to reduce the interest payable on the loan by D6 since it was of the view that D6 could not repay the principal amount together with the accrued interest.

  66. [29] As a result, the plaintiff was specifically assigned to raise more funds. According to him, he managed to liaise with Arch Capital Management Co Ltd (“Arch Capital”) and Arch Capital Asian Partners LP (“Arch Asian”) (collectively “ARCH”), two private equity investors, to obtain funds to repay the Second RZB loan. This was to be done via Arch Asian purchasing the Properties for S$200m. This constituted funds raised for the Group and/or D7. The plaintiff submits that he is entitled to the 0.5% of S$200m raised.

  67. [30] In total, the plaintiff claims 0.5% of S$370.4m raised, amounting to S$1.852m.

  68. The defendants’ position

  69. [31] The defendants’ position is that the fund-raising in respect of the 21 Anderson Properties acquisition was not a “Fund Raising Activity” as per cl 5.3 of the EA. They submit that even if it was, the money was obtained due to D7’s good relationship with his ARCH contact and it was also due to this that the 21 Anderson Properties were sold to Arch Asian at S$200m. Even though this sum went towards repaying the Second RZB Loan, D3 and Springfield suffered a total loss of S$20m. Since no funds from investors had been raised, D7 had no reason to declare any bonus in favour of the plaintiff.

  70. [32] In oral submissions, the plaintiff submitted that he no longer wanted to pursue his 21 Anderson Properties claim. Nevertheless in the interest of completeness and in view of the extensive written submissions that have already been made, I will address this head of the claim in my judgment.

  71. The plaintiff’s resignation

  72. [33] The plaintiff eventually resigned in July 2010 as Project Gibson and Project MP were in a mess. He submits that this was largely attributable to D7, who had asked him to “falsify accounts to show that the Transpacific Group was generating sufficient cashflows and could service the interest payments that were due.” As he could not take part in such a morally reprehensible act, he chose to resign. Furthermore, his salary for December 2009 was unpaid while his 2010 salary was paid late.

  73. [34] It was also around this time that the plaintiff asked DW1, Angel Setiadikurnia, D7’s daughter, to reimburse his expenses amounting to S$79,113.67. In return, he would waive his claim for the bonuses and entitlements which according to him totalled more than S$10m. However, he was only reimbursed S$25,109.15. The plaintiff submits that since he was not reimbursed in full, he now claims for his bonuses, share rewards relating to Project MP and Project Gibson, and the balance of the expenses not reimbursed to him under the EA.

  74. The counterclaims

  75. [35] In response to this suit, the Four Counterclaimants allege that the plaintiff was in breach of his directors’ duties towards D3 while he was its director. They also allege that the plaintiff had breached his duty of confidentiality to all of them when he removed documents belonging to them without their prior approval and subsequently used those documents to commence the present suit.

  76. The issues

  77. [36] The following issues arise for my consideration:

  78. (a) are the defendants party to the EA;

  79. (b) does the contra proferentem rule apply against the plaintiff since he admitted that he drafted the EA;

  80. (c) is the plaintiff entitled to be reimbursed for the balance of his expenses incurred in the discharge of his duties under cl 5.9 of the EA;

  81. (d) is the plaintiff entitled to the Periodic Bonuses in relation to “Fund Raising Activities” under cl 5.3 of the EA; and

  82. (e) is the plaintiff entitled to the share rewards in relation to Project Gibson and Project MP under cll 5.4 and 5.5 of the EA.

  83. [37] The Four Counterclaimants raise the following issues:

  84. (a) was the plaintiff in breach of directors’ duties to D3 under s 157 of the Companies Act (Cap 50, 2006 Rev Ed) (“Companies Act”); and

  85. (b) was the plaintiff in breach of his duty of confidentiality to the Four Counterclaimants.

  86. I shall first deal with the plaintiff’s claims before addressing the counterclaims.

  87. Who are the parties to the EA?

  88. [38] When an employee contracts with a corporate group, the legal question that inevitably arises is who he is contracting with: Ravi Chandran, Employment Law in Singapore (LexisNexis, 3rd Ed, 2011) at para 1.73. In this case, the plaintiff and the defendants take opposing views as to who are the parties to the EA. At the start of the proceedings, the plaintiff’s position was that all the defendants were parties to the EA. At the closing submissions, he submitted that his counterparty was D7. On the other hand, the defendants submit that the plaintiff’s counterparty was PT Securindo.

  89. [39] It is important to note that the Group is neither incorporated nor registered in Indonesia or Singapore. Hence, it is not a legal entity and is non-existent in law, having neither legal rights nor obligations. This is also why the plaintiff did not sue the Group, although it is named as the counterparty in the EA.

  90. The plaintiff’s case

  91. [40] The plaintiff’s initial case was that all the seven defendants fell within the scope of the EA. He relied on Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029 (“Zurich Insurance”) where the Court of Appeal had endorsed the contextual approach to contractual interpretation, holding that the “first and foremost consideration in approaching any written contract must be the essence and attributes of the document being examined” (at [110]). Therefore, as long as extrinsic evidence is relevant and reasonably available to both parties and goes towards showing the parties’ objective intentions, it should be admitted subject to the requirements under the Evidence Act (Cap 97, 1997 Rev Ed) (at [125]). It was pursuant to this that the plaintiff sought to admit extrinsic evidence to prove which defendants were parties to the EA.

  92. The plaintiff’s case in relation to D1 to D6

  93. [41] The plaintiff’s case in relation to D1 to D6 is as follows. First, D1 to D6 were incorporated as part of the Group on D7’s directions for holding various assets and investments belonging to the Group. Second, the reason why there was no specific corporate entity with which the plaintiff contracted was because it would not have been possible to list the names of all the companies forming part of the Group then. Third, it was the mutual intention of the plaintiff and D7 that there would be no specific company under which D7 was to serve. This was evident in cross-examination, where the plaintiff stated that:

  94. [42] The plaintiff later conceded that his case against D1 to D6 was weak and his primary case was against D7. Also, he did not pursue his case in relation to D2, D3, D4 and D6 in his closing submissions, which was built around negating the defendants’ case that companies under the Group must have the “Transpacific” pre-fix in their names.. Moreover, he only submitted that D1 and D5 had ratified the EA by paying the plaintiff’s salary from December 2009. Nevertheless since much time and effort was spent litigating the matter, I shall still address the parties’ submissions in relation to D1 to D6.

  95. The plaintiff’s case in relation to D7

  96. [43] With respect to D7, the plaintiff first submits that D7 was party to the EA based on the indicia in Chew Swee Hiang v Attorney-General and another [1990] 2 SLR(R) 215. The question there was whether the employer of a government-aided school teacher was the government or the school’s management committee. In arriving at his decision, A P Rajah J held at [43] that the following indicia were relevant in establishing a contract of service:

  97. (a) the employer’s power of selection of his employee;

  98. (b) the payment of wages or other remuneration;

  99. (c) the employer’s right to control the method of doing the work; and

  100. (d) the employer’s right of suspension or dismissal.

  101. [44] On those factors, the plaintiff submits that D7 was party to the EA because he alone exercised significant power over important aspects of the plaintiff’s employment, viz:

  102. (a) Clause 2.1.1, which states that the plaintiff’s duties and powers were to be exercised “as directed by [D7]”;

  103. (b) Clause 2.1.2, which states that the plaintiff’s employment should accord with “all resolutions, regulations, policies and directions” given by D7;

  104. (c) Clause 2.1.3, which states that D7 would have sole direction of the location of the plaintiff’s employment; and

  105. (d) Clause 5.3, which allows D7 to decide which fund raising activities applied to the Periodic Bonuses and gives him “sole and absolute discretion” over the quantum of the said bonuses.

  106. [45] Second, the plaintiff submits that D7 was the party to the EA as he purported to act as the Group’s agent.

  107. [46] In support of his proposition, the plaintiff cited Kelner v Baxter (1866) LR 2 CP 174 (“Kelner”) (endorsed by the Court of Appeal in Quah Poh Hoe Peter v Probo Pacific Leasing Pte Ltd [1992] 3 SLR(R) 400 (“Probo Pacific”) at [18] and the English High Court in CIFAL Groupe SA and others v Meridian Securities (UK) Ltd and others [2013] EWHC 3553 (Comm) (“CIFAL”)) where the plaintiff had entered into an agreement with the defendant who had purportedly acted on behalf of an unincorporated company. It was held that as a matter of construction, the parties had intended for the defendants in that case to be personally bound.

  108. [47] The plaintiff submits that since the Group was non-existent and the EA had been performed on the basis that it was binding, a presumption arose that D7 intended to be personally bound by the EA. The plaintiff relies on the following facts in support of his position:

  109. (a) the plaintiff had entered into the EA with D7 who acted on behalf of the Group;

  110. (b) the Group had no legal capacity to enter into contractual relations; and

  111. (c) the parties were aware that the Group had no legal capacity.

  112. Therefore the plaintiff submits that the present facts are “on all fours” with Probo Pacific and the presumption has not been rebutted by D7. Further, any other interpretation would result in the EA being a nullity.

  113. The defendants’ case

  114. D1 to D6s’ submissions

  115. [48] D1 to D6 submit that they are not party to the EA. First, they submit that the plaintiff should not have brought an action against them. Counsel for D1 to D6, Ms Ho Pei Shien Melanie (“Ms Ho”), submits that the facts of this case are highly similar to Mohamed Bassatne and Others v Rifaat El Gohary and Others [2004] SGHC 63 (“Mohamed Bassatne”). The circumstances that point to PT Securindo being the true contracting party under the EA are:

  116. (a) both DW1 and DW2 understood that the plaintiff was appointed as a director in various companies and employed by PT Securindo;

  117. (b) D7 subjectively believed that he was signing the EA on behalf of PT Securindo; and

  118. (c) the objective indicia pointed towards the plaintiff being employed by PT Securindo:

  119. (i) PT Securindo applied for the plaintiff’s employment pass;

  120. (ii) PT Securindo paid for the plaintiff’s salary;

  121. (iii) PT Securindo together with RODA and CKRA reimbursed the plaintiff for his expenses;

  122. (iv) the plaintiff worked mainly at the premises of PT Securindo; and

  123. (v) the plaintiff admitted that he was employed by PT Securindo at least on a temporary basis.

  124. [49] Second, the defendants submit that there are cogent reasons why D1 to D6 were not parties to the EA. With respect to D1, D3 and D5, they were not even incorporated when the EA was signed. The mere fact that they were parties to the transactions and financing arrangements did not mean that they were parties to the EA. Also, they had not impliedly ratified the EA since their directors did not know of the EA’s existence until after the suit was commenced and no party had entered into the EA on their behalf.

  125. [50] Third, D7 submits that D1 to D6 do not fall within the Group as the “Transpacific group” refers to a group of Indonesian companies he owned and those companies have the prefix “Transpacific” in their names. Since D1 to D6 do not bear the name “Transpacific” and are Singapore-incorporated as opposed to Indonesia-incorporated, they are not part of the Group.

  126. D7’s submissions

  127. [51] D7 submits that he is personally not party to the EA. First, he submits that his being personally liable was not the position taken by the plaintiff in his Statement of Claim (“SOC”) which had indicated that the contracting party was the Group. Second, he submits that he had signed the EA on behalf of the Group, which he claimed was represented by PT Securindo. Third, he submits that the correct counterparty to the EA should be PT Securindo due to the reasons given in [48(c)(i)] to [48(c)(v)]. Fourth, D7 submits that the plaintiff had admitted to being employed by PT Securindo, and the plaintiff’s submission that it was merely on a temporary basis was just a mere assertion unsupported by the evidence.

  128. Three significant cases on which the parties’ submissions are based

  129. [52] I shall first discuss three cases which the parties made extensive submissions on. They are CIFAL, Probo Pacific, and Mohamed Bassatne.

  130. CIFAL

  131. [53] In CIFAL, Groupe CIFAL and the Meridian Group had signed a high-level Strategic Partnership Agreement (“SPA”). It was agreed that the Meridian Group would invest in suitable projects which would provide strong profits and a fast return on investment (at [29]) and that Groupe CIFAL would provide the expertise in identifying and developing those projects. The collaboration failed and the plaintiffs sued the defendants. In addition to three corporate defendants which formed part of the Meridian Group, the plaintiffs tried to make Meridian Group’s agent, Mr Feld, personally liable for the claims. They contended that since Mr Feld had purported to contract on behalf of Meridian Group, a non-existent principal, he should be made personally liable. They were unsuccessful.

  132. [54] First, the court held that the argument that Meridian Group was a non-existent entity was flawed as it would mean that the plaintiffs’ case against the three corporate defendants was misconceived. Second, the plaintiffs argued that Mr Feld failed to negate his personal liability as he had represented that the Meridian Group was a corporate entity. That argument also failed as there was no evidence that Mr Feld had represented that the Meridian Group was a corporate entity. In the SPA, the Meridian Group was merely described as having a registered office at the first corporate defendant’s address. That was insufficient to find that Mr Feld had represented that the Meridian Group was the name of a corporate entity (at [94]). Third, the court noted that an Agency Agreement signed prior to the SPA had identified the three corporate defendants as the entities within the Meridian Group (at [95]). Hence, Mr Feld had negated his personal liability as the corporate entities under the Meridian Group could be identified and he was contracting on their behalf.

  133. Probo Pacific

  134. [55] Probo Pacific concerned the lease of two yachts to an unincorporated entity, Container Manufacturing Consultant Services Pte Ltd (“CMCS”). CMCS had defaulted on its lease payment and when payment was sought, the plaintiff discovered that it was not an incorporated company. The plaintiff then sought to make the defendants personally liable.

  135. [56] In its judgment, the Court of Appeal considered Kelner and held that it did not stand just for implied ratification, but also the presumption that would arise when one party contracts as an agent for a non-existent principal and another party relies on that fact. The Court of Appeal cited the following passage from Black v Smallwood (1965–1966) 117 CLR 52 (Probo Pacific at [18]:

  136. [57] The Court of Appeal held that since the second defendant had acted as an agent for a non-existent principal, there was an unrebutted presumption that the second defendant intended to bind himself personally: Probo Pacific at [19]. Therefore, he was personally liable for the contractual payment.

  137. Mohamed Bassatne

  138. [58] The last case is Mohamed Bassatne. The plaintiffs had signed a Memorandum of Understanding (“MOU”) to establish a joint venture company with a party known as the “Bakri Group of Companies, Jeddah, Saudi Arabia” (“the Bakri Group”). It was their case that the second and third defendants, Bakri International Energy Co Ltd and the third defendant, Bakri Trading Company Inc, were both part of the Bakri Group and thus parties to the MOU. Similar to the present case, the plaintiffs in Mohamed Bassatne submitted that the Bakri Group referred to all companies bearing the “Bakri” name, set up by the Bakri family and based in Jeddah: see Mohamed Bassatne at [134].

  139. [59] Lai Siu Chiu J held that the second defendant was party to the MOU but not the third defendant. She noted three particular facts which pointed towards the second defendant being party to the MOU:

  140. (a) an internal memorandum from another Bakri-related entity to the second defendant referred to a joint venture between the plaintiffs and the second defendant;

  141. (b) it was the second defendant who appointed auditors to audit the joint venture company; and

  142. (c) when a letter of demand was sent to the second defendant in relation to the joint venture, there was no attempt made to dissociate the second defendant from the dispute.

  143. [60] Given that the three affirmative factors were absent where the third defendant was concerned, Lai J held that the plaintiffs had made out their case only in relation to the second defendant but not the third.

  144. My decision

  145. [61] It is trite that companies within a group are separate entities. Judith Prakash J held in Win Line (UK) Ltd v Masterpart (Singapore) Pte Ltd and another [1999] 2 SLR(R) 24 at [43] that:

  146. [62] Therefore, where a contract is signed on behalf of a corporate group, one should not automatically presume that all the group companies are jointly and severally liable. Faced with ambiguity, a court should consider extrinsic evidence in determining who the true contracting parties are. In my view, D7 was the plaintiff’s counterparty. I shall first explain why D1 to D6 are not party to the EA before explaining why D7 is party to it.

  147. D1, D3 and D5 were not party to the EA

  148. [63] In my view, D1, D3 and D5 were not party to the EA as they had not been incorporated when the EA was signed on 1 August 2007. They could not have had legal capacity to contract at that point in time.

  149. [64] Second, I am not persuaded that D1 and D5 ratified the EA. The common law position is that, prima facie, contracts entered into before a company is incorporated only confer rights on the actual makers of the contract, not the company. A company cannot ratify or adopt a contract made ostensibly on its behalf before its incorporation, since a legal person cannot make himself liable as a principal by a subsequent ratification if it was not in existence at the time of the original contract: Hugh G Beale, Chitty on Contracts vol 1 (Sweet & Maxwell, 31st Ed, 2012) at paras 9–012 to 9–014 and Walter Woon on Company Law (Tan Cheng Han gen ed) (Sweet & Maxwell, 3rd Rev Ed, 2009) (“Walter Woon”) at para 3.56. That pre-incorporation contracts cannot be ratified under the common law is seen in Kepong Prospecting Ltd and others v Schmidt [1968] 1 AC 810 where Lord Wilberforce held at 824 that:

  150. [65] Therefore, D1 and D5 did not ratify the EA at common law.

  151. [66] Third, the plaintiff seeks to rely on the doctrine of implied ratification under s 41 of the Companies Act (Cap 50, 2006 Rev Ed) to show that D1 and D5 impliedly ratified the EA. Section 41 reads as follows:

  152. [67] The plaintiff cites two cases in support of his submission: Cosmic Insurance Corp Ltd v Khoo Chiang Poh [1979–1980] SLR(R) 703 (“Cosmic Insurance”) and The Golf Cheque Book Sdn Bhd & Anor v Nilai Springs Bhd [2006] 1 MLJ 554 (“Nilai Springs”). He seeks to show that ratification can be implicit and that s 41 should be construed broadly since it is intended to be a remedial or saving provision where contracts are entered into before a company is incorporated. His case is that D1 and D5 impliedly ratified the EA as they paid for the plaintiff’s salary since December 2009. I do not agree for the following two reasons.

  153. [68] First, the position in s 41 is different from the common law position in Kelner. Cosmic Insurance, which was decided on the then s 35(1) of the Companies Act (Cap 185, 1970 Rev Ed) (which is in pari materia with s 41), shows this difference. There, the Privy Council appreciated that had the case been decided according to the common law position, a different conclusion might have been reached. Lord Roskill held (at [9]) that:

  154. [69] Similarly, Walter Woon at paras 3.56­­­–3.58 observes that s 41 was enacted to remedy the common law position such that the persons acting in the company’s name are bound by and entitled to the benefit of the contract until the company ratifies it. Two requirements are needed: (a) the contract must purportedly have been entered into by the company or by any other person on its behalf before incorporation; and (b) the company must ratify the contract after its formation: Cosmic Insurance at [10]. Once the company ratifies the contract, that ratification is effective as though the company had existed at the time of the contract.

  155. [70] On the facts, neither requirement was met. First, there is no evidence that D7 entered into the EA specifically on behalf of D1 and D5. In Cosmic Insurance, the court’s decision was based on a letter which showed that the parties’ intention was for the company to be bound post-incorporation. Also, there was a company resolution which was passed to bind the company to the pre-incorporation contract (at [13]–[15]). Under those circumstances, it was clear that the parties intended for the company to be bound upon incorporation. That is not the case here.

  156. [71] Instead, the facts here show that D7 had signed a contract on behalf of the Group but the plaintiff was unclear which companies fell within the Group. The plaintiff was also unsure which companies were bound by the EA and hence there is no evidence that D7 entered into the EA on behalf of D1 and D5.

  157. [72] Second, there is no evidence to suggest that D1 and D5 had impliedly ratified the EA after their incorporation. Implied ratification takes place only where the company does an unequivocal act indicating its willingness to be bound by the contract earlier entered into. Walter Woon at para 3.60 gives the example of a company using goods ordered under the pre-incorporation contract.

  158. [73] In Forman & Co Proprietary, Ltd v The Ship “Liddesdale” [1900] 1 AC 190 at 204, ratification was not found as the company’s conduct was interpreted in some other way which did not imply ratification. Similarly, it would be incredible if a finding is made that D1 and D5 impliedly ratified the EA based on the conduct relied upon by the plaintiff (see [42] above). There could be numerous reasons why D1 and D5 paid the plaintiff’s salary, especially in a situation where D7, who ultimately owned all the companies, was not doing well financially. Ipso facto, such conduct cannot affirmatively show that D1 and D5 impliedly ratified the contract. The facts are distinct from the facts in Cosmic Insurance, in which the conduct of the parties pointed unequivocally towards the contract being ratified. Therefore, I find that D1, D3 and D5 are not parties to the EA and D1 and D5 did not impliedly ratify the EA by conduct.

  159. D2, D4 and D6 are not party to the EA

  160. [74] The plaintiff’s evidence also does not establish that D2, D4 and D6 were parties to the EA for two reasons.

  161. [75] First, the plaintiff submits that D1 to D6 have a common owner, ie, D7. However, having a common owner is not a basis for binding a party to an agreement as each of the defendants is a separate legal entity.

  162. [76] Second, the plaintiff seeks to defeat the defendants’ position that the Group only consists of Indonesian-incorporated companies by relying on an MAS notice filed on MAS.net by Lereno, announcing D7’s appointment as a director. He submits that the MAS announcement did not contain the pre-fix “PT”, the Indonesian pre-fix for companies referring to Indonesian-incorporated companies. Since there was no pre-fix “PT” (which referred to Indonesian-incorporated companies) in the announcement, it is possible for Singapore-incorporated companies to be part of the Group and also for D2, D4 and D6 fall within the Group.

  163. [77] In my view, the plaintiff’s evidence is inconsistent. Initially, he insisted that there was no pre-fix “PT” in the MAS announcement and took the view that it was possible for Singapore-incorporated companies to be part of the Group. However, he changed his position when he realised that the MAS announcement contained the pre-fix “PT”. Once confident that the MAS announcement did not contain the pre-fix “PT”, he now takes the position that the MAS announcement is inaccurate and submits that he was made to believe that many companies under the Group did not have the “Transpacific” name. With such material inconsistencies, I find that the plaintiff has failed to prove that D2, D4 and D6 were parties to the EA. I should also state that I accept the defendants’ submission that companies which fall within the “Transpacific Group” will bear the word “Transpacific” in their names. Since D1 to D6 do not bear the word “Transpacific” in their names, they are not part of the “Transpacific Group”.

  164. Was D7 the counterparty to the EA?

  165. [78] I find that it is more probable that D7 was the plaintiff’s counterparty. There are two possible interpretations of the facts:

  166. (a) the plaintiff could have contracted directly with D7 and PT Securindo used as a means to give effect to the EA; or

  167. (b) the plaintiff could have contracted with PT Securindo with D7 contracting on its behalf.

  168. [79] I will first address the plaintiff’s objection based on the defendants’ failure to plead their case adequately before giving the reasons why I prefer interpretation (a).

  169. (I) Did the defendants’ plead their case sufficiently?

  170. [80] In his submissions, the plaintiff submits that the defendants did not plead that PT Securindo was the plaintiff’s counterparty to the EA. Therefore the defendants cannot now seek to prove that PT Securindo was the plaintiff’s counterparty. I disagree as I find that while the defendants might have failed to plead the fact that PT Securindo was the plaintiff’s counterparty, the plaintiff did not appear to have been taken by surprise at trial and had therefore waived or consented to the defendants’ departure from their defence.

  171. [81] In Sheagar s/o T M Veloo v Belfield International (Hong Kong) Ltd [2014] 3 SLR 524 at [94], Sundaresh Menon CJ held that in an adversarial system, the general rule is that parties and the court are bound by the pleadings, which serve the function of upholding the rules of natural justice. Menon CJ stated at [94]:

  172. [82] In Superintendent of Lands and Surveys (4th Div) & Anor v Hamit bin Matusin & Ors [1994] 3 MLJ 185 (which was cited in Singapore Civil Procedure 2015 vol 1 (G P Selvam gen ed) (Sweet & Maxwell, 2015) at para 18/7/12), Peh Swee Chin SCJ held that:

  173. [83] I find that the defendants merely denied that they were party to the EA and put the plaintiff to strict proof in their pleadings. The relevant portions are reproduced as follows:

  174. [84] It is clear from the above that the defendants’ pleaded defence is founded on negating the plaintiff’s claim and not on proof that PT Securindo was the real counterparty under the EA. Be that as it may, the plaintiff did not object to the adducing of evidence with respect to PT Securindo being the plaintiff’s counterparty and does not appear to have been taken by surprise in the proceedings before me. His conduct suggests that he has waived or consented to the defendants’ departure from their pleaded defence. Thus, his objection based on the defendant’s failure to plead cannot succeed.

  175. (II) Do the surrounding circumstances at formation point to the plaintiff’s counterparty being D7?

  176. [85] Moving to the issue proper, having gone through the facts of CIFAL, Probo Pacific and Mohamed Bassatne (see [53]–[59] above), the legal position is that a party is presumed to have contracted personally if the entity he is signing on behalf of is non-existent or he has not rebutted the presumption that he is personally liable by showing that he was signing on behalf of corporate entities under an unincorporated group. Ultimately, the parties’ intentions must be construed. On the facts, I find that it was D7 who was party to the EA and not PT Securindo.

  177. [86] The evidence indicates that when the plaintiff entered into the EA, he did not know how many companies were within the Transpacific Group. Even if he knew, he had no idea which company he was to work for. He only knew that he was to work for the Group under D7’s control. In contrast, D7 knew which companies were within the Group and which company the plaintiff was to work for. In fact, under cross-examination, D7 admitted that his intention was for the plaintiff to work in PT Securindo:

  178. [87] That being the case, it is surprising that D7 did not specifically identify PT Securindo in the EA. Instead D7 signed on behalf of the Transpacific Group. Why was it so difficult for him to name PT Securindo as the entity that he was contracting on behalf of if it was indeed his intention that the plaintiff was to be employed by PT Securindo?

  179. [88] During oral submissions, the defendants made continuous reference to the fact that the plaintiff changed his position several times under cross-examination. They submit that he could not give a clear answer as to who he was contracting with and thus that his testimony cannot be believed. However, I find that it was not and would not be easy for the plaintiff, a non-legally trained person, to respond to a legal issue of legal personality, especially when he now found out that the entity he had been contracting with had no legal personality.

  180. [89] Ms Ho submits that the plaintiff knew of PT Securindo’s existence by relying on a document produced by the plaintiff which referred to D7 as the “founder of the PT Transpacific Group of companies which includes stock broking, insurance, consumer financing, banking and property development.” Additionally, she submits that under cross-examination, the plaintiff admitted to knowing that PT Securindo formed part of the Group. The relevant portion she relies on are as follows:

  181. [90] I do not think that the above can be relied on to show that the plaintiff had knowledge of PT Securindo when the EA was signed. The plaintiff did not specify whether his knowledge about PT Securindo came about at the time he signed the EA or after. When he was cross-examined, he already had the benefit of working in the Group for a substantial period of time and his knowledge was with the benefit of hindsight. The above passage is therefore insufficient to warrant a finding that the plaintiff had knowledge of PT Securindo when the EA was signed. Instead, from the circumstances, I find that the parties’ intentions must have been for the plaintiff to contract with D7 and subsequent to the signing of the EA, the plaintiff would be assigned by D7 to work in one of the Group companies. This interpretation makes sense, and is corroborated by cl 2.1.1 of the EA, which reads:

  182. (III) Does the subsequent conduct of the parties’ evidentially show that the plaintiff’s counterparty is D7?

  183. [91] Next, the parties’ subsequent conduct, which can be considered if evidentially probative (see V K Rajah, “Redrawing the Boundaries of Contractual Interpretation” (2010) 22 SAcLJ 513 at para 48), indicates that the plaintiff’s counterparty is D7.

  184. [92] First, the plaintiff primarily took instructions from D7, who admitted to being the CEO mentioned in the EA during cross-examination. D7 controlled key aspects of the plaintiff’s employment, including accommodation, expenses, what he could or could not do, the direction of the projects, where he was posted to work, determined his bonuses and paid his salary.

  185. [93] Second, although the plaintiff’s work permit was issued under the name of PT Securindo, in reality, it was a means by which the plaintiff effected the implementation of the EA. D7 admitted under cross-examination that at the time of signing the EA, there were more than ten companies “under the Transpacific umbrella” and he was not too sure which was the most applicable to the plaintiff. In fact, the plaintiff admitted in cross-examination that he was only temporarily employed by PT Securindo because the parties had to meet regulations set by Badan Pengawas Pasar Modal & Lembaga Keuangan, also Indonesia’s stock market regulator. Thereafter, he was deployed wherever D7 intended for him to be deployed. Eventually, he was placed in RODA and CKRA, companies which did not exist at the time the EA was signed. He was also appointed as the director of D2, D3, D4 and D6. The facts thus point towards D7 being the party to the EA while the employment pass with PT Securindo was merely a means to effect the parties’ mutual intention for the plaintiff to work in Indonesia for various companies under the Group.

  186. [94] Therefore I find that while the EA did not state D7 as the contracting party, he was in fact the contracting party to the EA. There was no specific identification of the corporate entities from the Group in the EA when it was signed. For all intents and purposes, D7 had in his mind the knowledge that he was contracting with the plaintiff with a view that he would be assigned to work in one of the Group’s companies.

  187. [95] In the premises, I hold that the plaintiff has no course of action against D1 to D6 in this suit as they are not parties to the EA. However, I find that D7 is party to the EA. I shall proceed to address whether D7 is liable to the plaintiff for the various claims sought. I note that the defendants have raised the issue of whether the contra proferentem rule should apply so that the terms of the EA are construed against the plaintiff. They also raised the issue of whether the plaintiff had waived his claim for the bonuses and share rewards. I shall first consider whether the contra proferentem rule should apply in interpreting the contractual clauses before proceeding to consider the plaintiff’s substantive claims.

  188. Should the contra proferentem rule apply against the plaintiff?

  189. [96] The defendants submit that the contra proferentem rule should apply against the plaintiff such that the clauses relied on by the plaintiff are interpreted against him. They submit that the rationale of the rule supports its application in the present case as the EA was drafted by the plaintiff and he is now relying on it to assert his claim against the defendants.

  190. [97] The plaintiff opposes the application of the contra proferentem rule because he says that the EA was negotiated on an equal footing between himself and D7. His argument is that the rule does not apply to negotiated contracts and should only apply to situations where the parties are not of equal bargaining power. The plaintiff’s oral submissions are as follows:

  191. [98] Two questions must be considered when applying the contra proferentem rule: (a) was there any ambiguity in the EA; and (b) if so, who was the party against whom the clauses were sought to be interpreted against: LTT Global Consultants v BMC Academy Pte Ltd [2011] 3 SLR 903 (“LTT Global”) at [56]–[57]. Tam Wing Chuen v Bank of Credit and Commerce Hong Kong Ltd (in liq) [1996] 2 BCLC 69 (“Tam Wing Chuen”) at 77 gives the rationale for this:

  192. [99] In LTT Global at [56], Prakash J held that there must first be an “ambiguity in the contract which cannot be resolved by interpreting the term in the context of the overall contract.” It is my finding that certain clauses relied upon by the plaintiff here are ambiguous for the following reasons:

  193. (a) Clause 5.3 did not make clear the fund-raising activities which the plaintiff was to undertake. The scope and context of the activities were also ambiguous.

  194. (b) Clauses 5.4 and 5.5 did not mention what was meant by and what constituted 1.5% of 100%.

  195. [100] The second stage involves identifying the person against whose interests the ambiguous term should be read: LTT Global at [57]. In dealing with this issue, I have to consider which parties were involved in the drafting of the EA. However, the circumstances leading up to the eventual signing of the EA are disputed.

  196. [101] The plaintiff submits that he used the employment contract of his former university classmate, Mr Wan Kum Tho (“Mr Wan”), when Mr Wan considered taking up the job offer from D7, as a template. He also submits that D7 is a “sophisticated corporate financier well-schooled in the ways of the business world and corporate finance". Thus D7 would not sign the EA if he disagreed with its conditions.

  197. [102] On the other hand, the defendants submit that it was the plaintiff who drafted the EA. They note that the plaintiff had shifted his position regarding the circumstances leading up to the eventual EA being signed. Initially, the plaintiff denied that he was involved in the preparation of the draft EA but later admitted to his involvement in the drafting and incorporation of amendments to the draft EA based on D7’s instructions. D7 also testified that it was the plaintiff who had drafted most of the disputed clauses and he buttressed his position by saying that (a) the Group did not have the competency to draft such a detailed EA in English; and (b) he only had a basic command of English. Since it was the plaintiff who drafted the clauses in question, D7 submits that the ambiguities should be construed against the plaintiff as he must be taken to have looked after his own interests: Tam Wing Chuen at [77].

  198. [103] It is trite that the contra proferentem rule serves the basic purpose of protecting weaker parties faced with an inequality of bargaining power. In Kim Lewison, The Interpretation of Contracts (Sweet & Maxwell, 5th Ed, 2011) (“The Interpretation of Contracts”) at p 362, the author comments that “[t]he origin and first purpose of the principle is to limit the power of a dominant contractor who is able to deal on its own take-it-or-leave-it terms with others.” He helpfully points to Oxonica Energy Ltd v Neuftec Ltd [2008] EWHC 2127 (Pat) where Peter Prescott QC at [90] observed that the principle is one imported from Roman law which sought to protect parties in situations where they do not have any opportunity to negotiate the terms of the agreement. It is therefore hard to apply the contra proferentem where contracts are bilaterally negotiated on an equal footing (LTT Global at [58]) and John W Carter, The Construction of Commercial Contracts (Hart Publishing, 2013) at p 149, comments that the rule should only be relevant in order to keep the clause from being void for certainty.

  199. [104] I do not think that the contra proferentem rule should be applied against the plaintiff for the following three reasons. First, I find that the EA was to some extent bilaterally negotiated. While D7 did not agree to the terms of the plaintiff, the original EA was modified as evinced by the Handwritten Amendments. In the words of Prakash J in LTT Global at [59], “[t]his was not a case of a standard form contract which the defendant had no choice but to take or leave.”

  200. [105] Second, both the plaintiff and D7 are commercial men and have the ability to protect their own interests. While D7’s poor command of English was raised as a reason for why the contra proferentem rule should be applied against the plaintiff, I am not convinced. During the course of the court proceedings, D7 was able to testify in English. While not entirely fluent, he was at least coherent and could understand the questions that were posed to him by counsel. His language handicap was not as great as he made it seem to be.

  201. [106] Third, the plaintiff submits in his reply submission that:

  202. If D7 did not understand any of the terms in the EA, I am confident that being the experienced and successful businessman that he is, he would have asked or at least sought clarification as to the terms before he signed the EA. For the foregoing reasons, I hold that the contra proferentem rule should not be applied against the plaintiff.

  203. Is the plaintiff entitled to the remainder of his expenses?

  204. [107] Coming to the plaintiff’s claims proper, the plaintiff first seeks the remainder of his expenses claim on the basis that they were “incurred in the course of and for the purposes of the Plaintiff’s employment”. The breakdown of his full reimbursement claim is as follows:

  205. (a) telephone bills from March 2008 to July 2010 amounting to S$29,285.52;

  206. (b) flights from January 2009 to June 2010 amounting to S$35,470.89;

  207. (c) fees for Indonesian visa applications amounting to S$860.00;

  208. (d) reimbursement for the purchase of equipment and payment of intern allowances amounting to S$6,962.50; and

  209. (e) entertainment and other expenses necessarily incurred amounting to S$6,534.76.

  210. [108] Although the plaintiff’s full claim was for S$79,113.67, he seeks to claim only S$54,004.52 in the present action as he had already been paid S$25,109.15 in 2010. The claim process was as follows. First, he submitted his claims to DW1, also D3’s director. In processing the claims, she would ask the plaintiff for the invoices and other supporting documents, which were provided to her. She would then group the documents by year and ascertain whether the expenses were reasonable. Finally, the Human Resources Department of PT Securindo would decide whether the claims were work-related before the board gave its approval. Eventually, only S$25,109.15 of the plaintiff’s total reimbursement claims was approved. D7’s position is that he had not seen the plaintiff’s claim for the other expenses and that he should not be liable for them.

  211. [109] I find that the plaintiff is not entitled to the remainder of his expenses claim as he has not proven his case on the balance of probabilities. The right to reimbursement of the plaintiff’s expenses is not an unconditional one. According to cl 5.9, they must be “incurred in or about the discharge of [his] duties” and must be reasonable. While the plaintiff submits that he incurred the expenses, he did not produce evidence to show that the expenses were incurred in the discharge of his duties or that they were reasonable. Furthermore, under normal circumstances, I would have expected the plaintiff to claim for reimbursement as and when expenses were incurred. However there is no evidence to indicate whether he had made any claim for reimbursement in the past. There was also no explanation for why he accumulated his reimbursement claims over such a prolonged period and only lodged these claims when he was about to resign. There is also no evidence that he or his staff kept proper and accurate records of his official expenses in the course of his employment.

  212. [110] I am thus not satisfied that the expenses were incurred “in or about the discharge of [his] duties”. That being the case, I hold that the plaintiff is not entitled to claim for the remainder of his expenses which were not approved by DW1.

  213. Did the plaintiff waive his bonus payment and share rewards claims?

  214. [111] Turning to the plaintiff’s bonus payment and share rewards claims, the defendants submit that they should not be allowed because the plaintiff had waived those claims when he accepted his reimbursement for his expenses. In DW1’s affidavit, she referred to two emails sent to her by the plaintiff. The first email dated 17 July 2010 reads:

  215. [112] This was followed by an email on 27 July 2010 which states:

  216. [113] Pursuant to these emails, DW1 replied the plaintiff on 24 October 2010:

  217. [114] This cheque was collected and cashed by the plaintiff. Thereafter, the defendants thought that the plaintiff’s claims under the EA had been resolved until the plaintiff commenced this suit about one and a half years later.

  218. [115] In their defence, the defendants submit that the plaintiff had waived his other claims under the EA. This is because:

  219. (a) the plaintiff had been (and acknowledged that he was) well-compensated by his monthly salary and the perks received, receiving a generous pay package of S$25,000 per month with a serviced apartment and two company cars;

  220. (b) the plaintiff’s claims for performance bonuses and success fees are unmerited and his lack of belief in his claim of over S$10m can be seen from how ready he was to waive them; and

  221. (c) the plaintiff accepted the defendant’s counteroffer of S$25,109.15 for reimbursement of his expenses when he banked in the cheque for the said amount. Thus the defendants assumed that the plaintiff had agreed to waive his bonus and success fee claims.

  222. [116] The plaintiff agrees with the defendants to the extent that he was initially willing to waive his other claims when he sought reimbursement of his expenses as he had intended for a “clean break” from the “mess” so he could “move on”. However, he now submits that the defendants had not agreed to this as he was not paid in full for his claim of reimbursement. Therefore, he now wants to pursue his claims under the EA.

  223. [117] I shall now deal with the three grounds of waiver raised by the defendants.

  224. The plaintiff’s salary was irrelevant in considering the waiver issue

  225. [118] It is true that the plaintiff’s salary was very attractive. However, this may not be relevant as to whether he had waived his other claims. Waiver is premised on totally different grounds and the fact that he was well-remunerated cannot mean that he had waived his claim via estoppel or election.

  226. The plaintiff could not have honestly believed in his share rewards and bonus payment claims

  227. [119] I find that it is improbable that the plaintiff had any honest belief in his share rewards and bonus payment claims. He was clearly aware that he had sought a total reimbursement of S$79,113.67. In contrast, his other claims amount to well over S$10m. This was stated in his email dated 27 July 2010 to DW1 (see [112] above). As a commercial man, what could have gone through the plaintiff’s mind that caused him to waive such a huge claim in favour of heavily reduced sum?

  228. [120] The plaintiff submits that he chose to waive the other claims because he wanted a clean break from the defendants (see [114] above). However, I find it inconceivable that the plaintiff would be so generous if he genuinely believed that he was entitled to legitimate claims worth over S$10m. If the plaintiff was confident that his other claims of over S$10m legally belonged to him, why did he trade this huge sum for only S$79,113.67? Why was there a need to waive his other entitlements if he was of the opinion that the expenses incurred were reasonable and supported by documentary proof?

  229. [121] I also find that the plaintiff’s explanation of wanting a clean break from the defendants unsatisfactory. Giving up one’s legitimate claim is one thing, but I fail to see how it would enable him to effect a clean break from the defendants. If he truly wished to effect a clean break from the defendants, he could have pressed for all his claims and negotiated for a full settlement instead of waiving a claim of almost S$10m in favour of a much reduced sum.

  230. [122] On the evidence, I find that it is likely that the plaintiff was using his other claims as a bargaining chip to compel DW1 and D7 to reimburse his expenses. When he submitted his reimbursement claim, his relationship with D7 was not the best and he must have wanted to claim what he thought was rightfully his. The claim of S$79,113.67, on its own is a large sum of money and additionally, the reimbursement claim was for reimbursements stretching over a period of three years. There would have been issues of documentation and proof arising and the plaintiff must have known that he would encounter problems with his large reimbursement claim especially given his strained relationship with D7 and the fact that he had already indicated his wish to leave D7’s employment. Thus, it is probable that the plaintiff purported to waive his huge claims amounting to over S$10m so that his chances of a full reimbursement would be better. Unfortunately for the plaintiff, DW1 was not intimidated by the veiled threat of a potential huge claim and she processed his reimbursement claims accordingly. The plaintiff’s lack of belief in his entitlement to the bonuses and share payments will also be relevant later at [127] to [197] when I consider his entitlement to them. In the meantime, I shall focus on whether his offer to waive the other claims was accepted by D7.

  231. The plaintiff did not waive his share rewards and bonus payment claims

  232. [123] Third, I find that the plaintiff did not waive his share rewards and bonus payment claims. There are two forms of the waiver doctrine, viz, waiver by election and waiver by estoppel. The former arises in the context of a binding contract when a state of affairs results such that one party becomes entitled under the contract to exercise a right and he has to choose whether or not to do so. The latter arises when a person having legal rights against another unequivocally represents by word or conduct that he does not intend to enforce those legal rights. The other party acts or refrains from acting in reliance on that representation such that it would be inequitable for the representor to later enforce his legal rights inconsistently with his representation. Professor John W Carter makes this clear in his article “Waiver (of Contractual Rights) Distributed” (1991) 4 JCL 59 at p 65 where he comments that:

  233. [124] The Court of Appeal has also made important observations regarding the differences between waiver by election and waiver by estoppel. In Chai Cher Watt (trading as Chuang Aik Engineering Works) v SDL Technologies Pte Ltd and another appeal [2012] 1 SLR 152 at [33], Andrew Phang Boon Leong JA cited Lord Goff of Chieveley in Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp of India (The “Kanchenjunga”) [1990] 1 Lloyd’s Rep 391 at 397–399, holding that:

  234. [125] The evidence does not suggest a waiver by election in this case. When the plaintiff elected to waive his other claims by virtue of his 17 July 2010 email (at [111] above), it seemed to be waiver by election. However, it was unequivocally clear that the plaintiff’s waiver was conditional on DW1’s reimbursing him S$78,803.29. This was not done and since the condition was unfulfilled, there was no waiver by election.

  235. [126] An alternative interpretation of the facts can also be taken where the plaintiff made a representation to DW1 via his email (at [111] above). DW1, in reliance on that representation, then reimbursed the plaintiff such that it is now inequitable for the plaintiff to sue for the rest of his claims. This would seem to be waiver by estoppel. However, I find that the element of reliance is not made out. The S$25,109.15 reimbursement was not premised on the plaintiff’s representation but on the fact that DW1 agreed that the expenses that the sum was based on was incurred by the plaintiff in accordance with the EA’s terms. Therefore waiver by estoppel cannot be made out as well.

  236. Is the plaintiff entitled to the Periodic Bonuses?

  237. [127] The plaintiff submits that he is entitled to the Periodic Bonuses under cl 5.3 of the EA payable in relation to various “Fund Raising Activities”. He also submits that he has a right to the Annual Bonus as well as 0.5% of the funds raised for Project Gibson, Project MP and the acquisition of the 21 Anderson Properties. This claim is essentially an exercise in contractual interpretation.

  238. [128] Before turning to the claim, the parties made extensive submissions on whether a person can be entitled to bonuses as a matter of right. I shall address their submissions on this point first.

  239. The law on bonuses

  240. The plaintiff’s submissions

  241. [129] The plaintiff submits that Latham Scott v Credit Suisse First Boston [2000] 2 SLR(R) 30 (“Latham Scott”) at [57] makes clear that the matter is one of construction. In his view, this is also the approach adopted in the United Kingdom (“UK”): Saleem Khatri v Cooperatieve Centrale Raiffeisen-Boerenleenbank BA [2010] EWCA Civ 397 (“Khatri”) at [22]. Therefore, he submits that the fundamental duty of the court is to objectively ascertain the parties’ intentions at the time of the contract.

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