Carlsberg South Asia Pte Ltd v Pawan Kumar Jagetia

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean JCA
• Judgment Date: 24 August 2023
• Neutral Citation: [2023] SGHC(A) 29
• Court: High Court Appellate Division (Singapore)
• Docket Number: Civil Appeal No 52 of 2022
• Hearing Date: 16 March 2023
• Citation: [2023] SGHC(A) 29
• Year: 2023
• Plaintiff Counsel: Poon Guokun Nicholas and Chan Michael Karfai (Breakpoint LLC)
• Defendant Counsel: Calvin Liang (Calvin Liang LLC) (instructed), Yu Kexin (Yu Law)
• Subject Matter: Employment Law,Contract of service,Breach,Contract,Contractual terms,Implied terms
• Published date: 24 August 2023

Debbie Ong Siew Ling JAD (delivering the judgment of the court):

This case involves an employment contract. AD/CA 52/2022 (“AD 52”) is an appeal against the decision of a Judge in the General Division of the High Court (“the Judge”) in HC/S 114/2020 (“Suit 114”). The Judge’s decision is published as Carlsberg South Asia Pte Ltd v Pawan Kumar Jagetia [2022] SGHC 74.

The appellant is Carlsberg South Asia Pte Ltd (“CSAPL”), an entity that is part of the global brewery group known as “the Carlsberg Group”. The respondent is Mr Pawan Kumar Jagetia (“Mr Jagetia”). Between 26 September 2014 and 26 June 2019, Mr Jagetia was employed by various entities within the Carlsberg Group. This culminated in his final appointment as Senior Vice President (“SVP”) of CSAPL between 1 April 2018 and 26 June 2019.

In the proceedings below, CSAPL sued Mr Jagetia to recover sums that were paid to him pursuant to an alleged implied term in his employment contract that obligated him and his family to relocate to Singapore. CSAPL also sought to recover these sums on an alternative ground of a claim in unjust enrichment. CSAPL alleged that it paid Mr Jagetia these sums on the basis that he and his family would relocate to Singapore, but that this basis had failed since Mr Jagetia and his family failed to relocate. We shall refer to this claim collectively as “the Relocation Claim”. Mr Jagetia denied that there was an obligation for him to relocate to Singapore and he further defended his entitlement to the sums received. He countersued CSAPL on several grounds. These included: (a) that his employment had been wrongfully terminated by CSAPL (“the Wrongful Termination Claim”); and (b) that CSAPL failed to pay him a short-term incentive (“STI”) that he had earned while employed by another entity within the Carlsberg Group (“the STI Claim”).

The Judge dismissed CSAPL’s claim and allowed both of Mr Jagetia’s counterclaims stated above. CSAPL now brings an appeal against the Judge’s decision on the Relocation Claim, the Wrongful Termination Claim and the STI Claim.

Having considered the parties’ submissions and the evidence, we allow CSAPL’s appeal in relation to the Relocation Claim and the STI Claim but not in relation to the Wrongful Termination Claim.

Background facts

Central to AD 52 is an employment contract between CSAPL and Mr Jagetia which we shall refer to as “the CSAPL Contract”. To understand the background behind the CSAPL Contract, it is necessary for us to briefly summarise Mr Jagetia’s employment history within the Carlsberg Group. We also set out a diagrammatic illustration of the corporate structure of the Carlsberg Group in Annex A of this Judgment.

Background to the CSAPL Contract

Prior to Mr Jagetia’s employment with CSAPL, he was employed as a Deputy Managing Director in one of CSAPL’s subsidiaries, Carlsberg India Pte Ltd (“CIPL”), between 26 September 2014 and 31 March 2018. Mr Jagetia’s employment with CIPL was governed by a contract we shall refer to as “the CIPL Contract”. In January 2018, Mr Jagetia began negotiations with representatives from CSAPL, Mr Low Chong Lim (“Mr Low”) and Mr Graham Fewkes (“Mr Fewkes”), pertaining to a new role as SVP with CSAPL. After negotiations, the CSAPL Contract was signed on 19 April 2018 and Mr Jagetia was appointed as SVP.

The CSAPL Contract

The CSAPL Contract provided that Mr Jagetia would receive as remuneration: a gross annual base salary of S$410,000; a STI; a gross annual benefits package of S$290,000 per annum (“Annual Benefits Package”); a one-time “Relocation Allowance” of S$5,000 to be paid with the first salary payout; and a “Repatriation Allowance” of S$5,000 to be paid at the end of the CSAPL Contract with the last salary payout.

It is pertinent that the CSAPL Contract also made multiple references to Mr Jagetia relocating and being based in Singapore. However, it did not go further to explicitly and specifically state that Mr Jagetia had to relocate to Singapore with his family. This ostensible ambiguity forms the factual backdrop of the parties’ dispute in the proceedings below and in AD 52.

The termination of Mr Jagetia’s employment with CSAPL

Unfortunately, issues soon arose within CSAPL and between CSAPL and Mr Jagetia. On 26 June 2019, Mr Troels Libak Stollberg (a CSAPL board member) (“Mr Stollberg”) proposed that Mr Jagetia’s employment be terminated with immediate effect for various reasons, including the fact that Mr Jagetia had failed to relocate to Singapore. A vote was called for Mr Jagetia’s employment to be terminated and was passed with a two-thirds majority.

Procedural history

On 11 November 2019, CSAPL commenced Suit 114 against Mr Jagetia. CSAPL claimed that it was an implied term of the CSAPL Contract that Mr Jagetia would relocate to Singapore with his family (“the Relocation Obligation”), and that he had breached this term. From this, CSAPL claimed a total of S$367,500 (“the Relocation Sum”). This consisted of the sums paid pursuant to the Annual Benefits Package from 1 April 2018 to 30 June 2019 and the Relocation Allowance. Alternatively, CSAPL claimed that the Relocation Sum was owing to it because there had been a total failure of basis (given that Mr Jagetia had failed to relocate) and that Mr Jagetia had been unjustly enriched.

On 4 December 2019, Mr Jagetia filed his Defence & Counterclaim. Therein, the existence of the Relocation Obligation was denied, and Mr Jagetia averred that he was never told that he and his family would be required to become ordinarily resident in Singapore. Further, Mr Jagetia sued CSAPL on several grounds. What is of relevance to AD 52 are his counterclaims that: (a) under the CSAPL Contract he was entitled to the STI he earned while employed with CIPL amounting to S$114,800 (“the CIPL STI”); and (b) there were no grounds for his termination, and thus he was entitled to three months’ salary in lieu of notice and the Repatriation Allowance (see [4] above).

Decision of the Judge

The Judge dismissed CSAPL’s claim for the Relocation Sum (henceforth referred to as “the Relocation Claim”), and partially allowed Mr Jagetia’s counterclaim. On appeal, CSAPL has only challenged the Judge’s decision on the following: Mr Jagetia’s claim for the CIPL STI from CSAPL – the STI Claim; the Relocation Claim; and Mr Jagetia’s entitlement to three months’ salary in lieu of notice and the Repatriation Allowance because of his wrongful termination by CSAPL – the Wrongful Termination Claim. We now set out in brief the Judge’s decision on these three claims.

The STI Claim

With respect to the STI Claim, the parties did not dispute that Mr Jagetia was entitled to receive the CIPL STI. Instead, the two issues that arose for consideration were: (a) whether it was CIPL or CSAPL that ought to pay this sum to Mr Jagetia; and (b) what the exact quantum of the CIPL STI ought to be.

The Judge found that it was CSAPL and not CIPL that was obligated to pay the CIPL STI. The Judge observed that on a textual interpretation of the CSAPL Contract – specifically Clauses 1.2, 1.3 and 7.1 – payment of the CIPL STI was not excluded from the CSAPL Contract and this was fortified by contemporaneous evidence. The Judge referenced an email of 17 April 2018 from Mr Fewkes to Mr Jagetia (“the 17 April Email”) which, in her view, expressly represented that the CIPL STI was incorporated into the CSAPL Contract. The Judge also observed that: (a) Clause 4.3 of the CIPL Contract prohibited Mr Jagetia from claiming the CIPL STI from CIPL after he left CIPL’s employment; and (b) CSAPL was of the view that there was no intention for Mr Jagetia to forfeit the CIPL STI. The Judge found that the upshot of these observations was that “CSAPL had undertaken CIPL’s liability for the CIPL STI”.

As for the quantum of the CIPL STI, the Judge accepted Mr Jagetia’s proposed calculations, noting that the 17 April Email (partly reproduced at [37] below) suggested that the CIPL STI would “simply be pro-rated”. She also considered that CSAPL’s conduct showed that it did not object to the method of calculation.

For these reasons, the Judge allowed Mr Jagetia’s counterclaim for the CIPL STI for the sum of S$114,800.

The Relocation Claim

With respect to the Relocation Claim, the Judge found that the Relocation Obligation could not be implied because there was no “true gap”. While the Judge observed that the parties had contemplated the Relocation Obligation, she was of the view that the parties “chose not to clearly provide any term requiring relocation”. The key issue was thus whether the parties had reached a common understanding that Mr Jagetia was contractually obligated to relocate with his family to Singapore. The Judge found that this question was answered in the negative for four reasons: First, the language of the CSAPL Contract contradicted such a common understanding. Second, the Annual Benefits Package was not solely for the purpose of compensating Mr Jagetia and his family for their relocation to Singapore. Third, Mr Low had explained to Mr Jagetia that the Annual Benefits Package was structured as a cash benefits package in order to provide Mr Jagetia with flexibility on how best to meet his personal needs. In other words, there was no explicit communication that the Annual Benefits Package was tied to the Relocation Obligation. Fourth, CSAPL’s representatives had agreed during cross-examination that there were certain components of the Annual Benefits Package, such as pension benefits, that did not relate to the cost of living in Singapore.

As for the alternative claim in unjust enrichment, the Judge found that the Annual Benefits Package was not tied to Mr Jagetia and his family relocating to Singapore and the claim therefore failed on this basis. In relation to CSAPL’s claim for the Relocation Allowance, the Judge accepted that payment of this sum was contingent upon...