Aliev Firoudin v Kon Yin Tong & another
Jurisdiction | Singapore |
Judge | Judith Prakash J |
Judgment Date | 09 July 2013 |
Neutral Citation | [2013] SGHC 128 |
Court | High Court (Singapore) |
Docket Number | Originating Summons No 1015 of 2011 |
Year | 2013 |
Published date | 15 July 2013 |
Hearing Date | 24 October 2012,23 October 2012,22 October 2012 |
Plaintiff Counsel | Deborah Evaline Barker SC and Ang Keng Ling (KhattarWong LLP) |
Defendant Counsel | Ng Lip Chih (NLC Law Asia LLP) |
Subject Matter | Insolvency,Winding up,Liquidator |
Citation | [2013] SGHC 128 |
This originating summons was commenced by the plaintiff, Mr Firoudin Aliev, against the liquidators of his former employer, Agrosin Private Limited (“Agrosin”). The defendants are Mr Kon Yin Tong and Mr Aw Eng Hai (collectively, “the Liquidators”). They were appointed on 5 February 2010 by the court order that compulsorily wound up Agrosin.
By the application, the plaintiff seeks to:
Agrosin was a Singapore incorporated company that traded in fertiliser and chemical products. It started out as a joint venture between Russian and Singaporean parties but subsequently the Singaporeans divested their shares. Most of the executives in Agrosin were Russians and, at all material times, the managing director was one Mr Konstantin Khalimov (“Mr Khalimov”). However, during the material period, one Mr Nikolay Lukyanov (“Mr Lukyanov”) (his last name is also spelt “Loukianov” in many of the documents), who also had an interest in about 30% of the shares of Agrosin, wielded considerable power. Mr Lukyanov had been one of the persons who was instrumental in setting up Agrosin in the early 1990s and he was managing director of the company from 1992 to 2000 and its chairman from 2001 to 2007. Thereafter, although he left the board, he continued to give instructions to officers of Agrosin from time to time and generally these instructions were complied with.
The plaintiff was first employed by Agrosin as its executive director cum general manager in January 1993 at a generous monthly salary and with considerable fringe benefits. His area of responsibility was to bring new businesses and new products to Agrosin and to develop new markets. By January 2006, the plaintiff’s monthly salary was $21,850. This figure comprised the monthly salary of $20,650 based on a letter dated 20 July 2005 plus an additional $1,200 per month in lieu of Central Provident Fund contributions. The Liquidators do not dispute this quantum.
From about 2005 onwards, Agrosin faced severe financial problems. As a consequence, at a board meeting held on 13 January 2006, the directors resolved to adopt various cost cutting measures. These included the following:
Shortly thereafter, on 20 January 2006, Mr Khalimov sent out a memorandum to all the staff of Agrosin informing them of the tight cash flow situation and that all benefits like gasoline, parking etc would be cancelled. The memorandum said that Agrosin had incurred a loss for the financial year 2005 and there would be no bonus payments in 2006. It was further stated that the stringent measures would take effect from 1 January 2006 but that staff benefits would be restored when better times returned.
From January 2006, Agrosin stopped paying the plaintiff his monthly salary. He, however, remained in its employment and attended at the office as usual. On 1 August 2007, Agrosin served a notice of termination (the “2007 termination notice”) on the plaintiff giving him notice that, in accordance with the two month notice requirement in his contract, his employment would end on 30 September 2007. According to the plaintiff, in September 2007, Agrosin retracted the 2007 termination notice. In this regard, the plaintiff relies on a letter dated 1 September 2007 signed by Mr Khalimov and purportedly from Agrosin (“the September 2007 letter”). The Liquidators dispute the validity of the September 2007 letter. As will be seen below (see [24]–[25]), the plaintiff continued to be involved with the affairs of Agrosin after September 2007.
On 14 August 2009, a second letter of termination (“the 2009 termination notice”) was purportedly issued by Agrosin to the plaintiff terminating his employment with immediate effect. The Liquidators dispute the validity of this letter as well whilst the plaintiff says that his employment was again reinstated by Mr Khalimov and he continued to work till 18 September 2009 at which time he was denied access to Agrosin’s premises.
In the meantime, it had been discovered that one of the causes of Agrosin’s difficulties was the defalcations of one of its former directors, one Mr Igor Martynov (“Mr Martynov”), who was a director between March 1993 and February 2007. Agrosin sued Mr Martynov in the High Court and was eventually granted interlocutory judgment for damages to be assessed. The plaintiff stated that he spent much of his time after August 2007 assisting Agrosin prosecute its legal action against Mr Martynov.
The plaintiff complained that apart from failing to make payment of his salary from January 2006 onwards, Agrosin also failed to pay him his annual wage supplements (“AWS”) for the years 2005, 2006, 2007 and 2008. Further, it failed to make full reimbursement of expenses incurred by the plaintiff which it was obliged to pay for pursuant to the terms of his employment contract dated 2 January 1993.
The plaintiff started this action in November 2011. Various affidavits were filed in support of the plaintiff’s case as well as the Liquidators’ defence. Due to factual disputes that were revealed by the affidavits, an order for cross-examination of the deponents was made. In October 2012, the following persons were cross-examined:
The plaintiff signed the Proof of Debt on 9 March 2010 and submitted it to the liquidators the following day. He gave the following particulars of his total claim of $1,126,468.88:
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The Notice of Rejection rejected the plaintiff’s claim to the extent of $1,076,460.61. The Liquidators admitted only the sum of $458,850 being the plaintiff’s unpaid salary for the period from January 2006 to September 2007. The grounds for rejecting the remaining claims were stated to be as follows:
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