Ashlock William Grover v SetClear Pte Ltd and others

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 19 March 2012
• Neutral Citation: [2012] SGCA 20
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 66 of 2011
• Published date: 10 April 2012
• Year: 2012
• Hearing Date: 24 October 2011
• Plaintiff Counsel: Kelvin Tan and Natasha Sulaiman (Drew and Napier LLC)
• Defendant Counsel: Alvin Yeo SC, Sim Bock Eng and Lee Ee Yang (WongPartnership LLP)
• Subject Matter: Contract,Conflict of Laws
• Citation: [2012] SGCA 20

Chao Hick Tin JA (delivering the grounds of decision of the court): Introduction

This was an appeal against the decision of the High Court judge (“the Judge”) in Originating Summons No 118 of 2011 (“the Singapore Action”): see SetClear Pte Ltd and others v Ashlock William Grover [2011] SGHC 130 (“the GD”) where he ruled in favour of the plaintiffs on the construction of an agreement and in consequence thereof he issued an anti-suit injunction against the defendant. In the Singapore Action, William Grover Ashlock (“the Appellant”) was the defendant while SetClear Pte Ltd, CLSA Limited, SetClear Inc, Credit Agricole Securities (USA) Inc (Formerly known as Caylon Securities (USA) Inc) and IX Net Holding Limited (individually the “1st Respondent”, “2nd Respondent”, “3rd Respondent”, “4th Respondent” and the “5th Respondent” respectively, and collectively “the Respondents”) were the plaintiffs.

The appeal was heard on 24 October 2011. After hearing submissions of the parties, we dismissed the appeal with costs. We now give the grounds for our decision.

The background to the dispute

In August 2005, the Appellant, together with one Jonathan Slone (“Slone”), were the co-founders of a start-up business operated in New York by the 5th Respondent. Although Slone and the Appellant each initially held 50% of the equity shares in the 5th Respondent, their equity shareholding was, for reasons which were immaterial to this appeal, subsequently diluted and agreed to be not less than 4% each (“the Founder’s Equity” or, interchangeably, “the founder benefits”).¹ The 2nd Respondent subsequently invested in the 5th Respondent’s business on terms that Slone would be in the 2nd Respondent’s employment while at the same time retaining his equity shares in the 5th Respondent.

In March 2006, the Appellant was designated as Chief Operating Officer of the 5th Respondent and concurrently seconded to the 4th Respondent in New York.² In a letter from the 1st Respondent dated 10 May 2007, the Appellant was offered to come under the employment of the 1st Respondent.³ The Appellant accepted the offer, as a result of which the Appellant re-located to Singapore but continued to shuttle between Singapore and New York from time to time. One of the provisions in the said letter stated:

Founder Status: In light of your [ie, the Appellant’s] effort and contribution to the initial set up and establishment of the [1st Respondent], you will be recognised as one of its founders and be eligible for consideration for additional “founder” benefits, if any, subject to negotiation with Bloomberg Tradebook. and on terms to be mutually agreed between you and the [1st Respondent].

In his first affidavit filed in the Singapore Action, the Appellant averred that the provision for “Founder Status” in the letter served to reiterate his original entitlement to the Founder’s Equity.⁴ The Respondents, however, claimed that no agreement was reached or even alleged to be reached between the Appellant and the 1st Respondent as to the founder benefits.⁵

In or around late June 2008, the Appellant was put on a few weeks’ “leave” after a disagreement arose between him and Slone on certain plans regarding the 1st Respondent’s business. On 17 July 2008, while the Appellant was on “leave”, he was asked to meet one Mr Laurie James Young (“Young”) who was then Acting on behalf of the 1st Respondent. At the meeting, the Appellant and Young signed an agreement providing for the cessation of the Appellant’s employment with the 1st Respondent (“the 17 July 2008 Agreement”).⁶ Clause 14 of the 17 July 2008 Agreement (“cl 14”) provided as follows:

14. Final Settlement By signing this letter and accepting the abovementioned payments, this represents full and final settlement of all and any claims against [the 1st Respondent] and its affiliated companies.

Additionally, it confirms that you [ie, the Appellant] agree not to pursue any future claim against [the 1st Respondent] and its affiliated companies.

Subsequent to the signing of the 17 July 2008 Agreement, the Appellant sent an email to Young on the same date stating:⁷

Laurie,

I want to go on record with you that it is my understanding that by signing the resignation agreement today that I am Acting in good faith that a subsequent agreement will be reached in terms of my resignation with CLSA and insurance for 2009 as well as my founder status. I signed the agreement believing that Section 14 does not preclude an agreement or possible Actions should we not be able to reach an agreement. Please let me know if this understanding differs from yours.

Regards,

Bill

To which Young replied:⁸

Bill,

Sorry for the delay in responding; I was travelling back to Hong Kong.

I believe our conversations over the last few days have been conducted in a very constructive and cordial manner. I will continue to search for a mutually acceptable agreement covering a future relationship with CLSA and medical coverage in the US

Clause 14 of the separation agreement must stand on its merits Bill as was the intention of the document you signed.

Have a good weekend Bill; I’ll be in touch with you in the coming weeks.

Laurie

The Appellant subsequently reaffirmed the terms and conditions set out in the 17 July 2008 Agreement by signing two letters (dated 9 October 2008 and 28 February 2009) sent by the 1st Respondent.⁹ The letter dated 9 October 2008 stated:¹⁰

Dear Bill,

Further to our letter dated 17 July 2008, I am writing to confirm the following:

• You will remain on the SetClear Pte. Ltd. payroll through until 30 June 2009; • The Company will continue to reimburse you the cost of maintaining your Cobra medical insurance up to and including 30 June 2009 as per Cobra Scheme rules.

These additional arrangements are provided to you in good faith by the Company to assist you as you work through this difficult period.

We are proposing this strictly on condition that you confirm that the terms and conditions which have been previously agreed by you, per your separation agreement dated 17 July 2008, remain in full force and effect and are re-confirmed by you.

Yours sincerely,

[signature]

Toni Carroll

For and on behalf of

SetClear Pte. Ltd.

I hereby agree and accept the terms and conditions as set out above:

[signature]

Name: Mr. Bill Ashlock

Date:

The letter dated 28 February 2009 stated:¹¹

Dear Bill,

Following your recent conversation with Laurie Young I am writing to confirm that your final day of employment with SetClear Pte Ltd will be 28 February 2009.

As agreed, your salary and benefits have been calculated and paid up to 31 December 2008 and you have been on unpaid leave up to and including 28 February 2009.

All other terms agreed with you and confirmed in our letters dated 17 July 2008 and 9 October 2008 remain unchanged.

Yours sincerely,

[signature]

Toni Carroll

For and on behalf of

SetClear Pte Ltd

I hereby understand and agree to the terms and conditions that are set out above.

Signed: [signature] Date: 28/02/09

Bill Ashlock

On 20 January 2010, the Appellant commenced proceedings (“the American Action”) against the Respondents and Slone in the United States District Court, Southern District of New York (“the New York court”) claiming “violations of New York State Labor Laws, breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, quantum meruit, breach of fiduciary duty, promissory estoppel, constructive trust, and for an Accounting”.¹² Essentially, the American Action was brought to seek relief in respect of the founder benefits.

On 17 February 2011, the Respondents commenced the Singapore Action with the following prayers:¹³ 1. A declaration that the [Appellant] is not entitled, under a severance agreement dated 17 July 2008 entered into between the [1st Respondent] and the [Appellant] and reaffirmed by way of two letters from the [1st Respondent] to the [Appellant] dated 9 October 2008 and 28 February 2009 (collectively the “Severance Agreement”), to bring any claim against the[1st Respondent and/or its affiliated companies, including but not limited to the 2nd to 5th Respondents], in connection with and/or in relation to the [Appellant’s] employment and/or association with the [1st Respondent] and its affiliated companies, such claims including but not limited to a claim for “founder” benefits which the [Appellant] alleges were conferred upon him by the [1st Respondent] and/or its affiliated companies; 2. A declaration that the [Appellant] breached the Severance Agreement by commencing and maintaining Civil Action No. 10-CV-0453(GBD) against the [Respondents] in the United States District Court, Southern District of New York (“US Proceedings”) in respect of the [Appellant’s] alleged “founder” benefits; 3. An order that the [Appellant] do pay the [Respondents] damages to be assessed in respect of all costs, expenses and losses incurred by the [Respondents] arising out of or in connection with the [Appellant’s] breach of the Severance Agreement; 4. An order restraining the [Appellant] from continuing the US Proceedings or commencing any further or other proceedings in the United States of America or elsewhere against the [Respondents] in respect of his alleged “founder” benefits; 5. An order that the costs of and incidental to the application be paid by the [Appellant] to the [Respondents]; and 6. Such further reliefs that [the High Court] deems fit.

The Judge who heard the Singapore Action ordered prayers 1, 2 and 4 in terms and with costs fixed at $15,000 inclusive of disbursements.¹⁴ As regards prayer 4, the Judge further clarified that “[f]or the avoidance of doubt, nothing in these orders prohibits the [Appellant] from commencing or continuing any Action against Jonathan Slone”.¹⁵ As a result of the Judge’s decision, the...