Chua Swee Ho v N8xt Aerospace Pte Ltd (formerly known as Stratech Aerospace Systems Pte Ltd)
| Jurisdiction | Singapore |
| Judge | Tan May Tee |
| Judgment Date | 18 September 2023 |
| Neutral Citation | [2023] SGDC 212 |
| Court | District Court (Singapore) |
| Docket Number | District Court Suit No 3199 of 2019 |
| Hearing Date | 21 April 2023,13 February 2023,14 February 2023,15 February 2023,16 February 2023,17 February 2023 |
| Citation | [2023] SGDC 212 |
| Year | 2023 |
| Plaintiff Counsel | Goh Hui Hua and Benaiah Lim Oon Kuan (Covenant Chambers LLC) |
| Defendant Counsel | Foo Yu Kang Wilson (Lexcompass LLC) |
| Subject Matter | Contract,Employment,Companies,pre-incorporation contract,ratification,Agency,apparent authority,Confidence,breach of confidence |
| Published date | 26 September 2023 |
This is an employment dispute. The plaintiff claims that she was employed by the defendant as its Senior Director of Human Resource for the period of 1 October 2018 to 30 September 2019.1 Her claim in this action is for the aggregate sum of $107,135.35 comprising a joining bonus, unpaid salaries and contributions to the Central Provident Fund (“CPF”) for the period of her employment.
The defendant disputes the plaintiff’s claim in its entirety. It says it could not have employed the plaintiff from 1 October 2018 as it was not even in existence then. It was only incorporated on 9 October 2018. The terms of the plaintiff’s employment were in discussion between the parties and agreed upon only in September 2019.2 However, the plaintiff unilaterally terminated her employment on 30 September 2019 by failing to turn up for work. She then instructed solicitors and commenced this action in October 2019.
One significant feature of this case is how the claim and defences have evolved over time. When the writ was first issued in October 2019, the plaintiff’s cause of action was premised on a written employment contract, namely the Letter of Appointment (“LOA”) which she claimed that she signed on 1 October 2018 with one Leong Sook Ching (“Leong”) who was acting on behalf of the defendant in her capacity as the defendant’s Chief Corporate Officer. As this pre-dated the incorporation of the defendant, it was then pleaded that the defendant ratified the LOA by paying the plaintiff’s monthly salary, transport allowance and mobile allowance pursuant to the terms of the LOA.
The defendant had initially admitted that Leong had signed the LOA but its defence was that Leong had immediately thereafter told the plaintiff that she was to shred it due to various inaccuracies therein. The defendant’s position was that the LOA relied by the plaintiff was the document that was supposed to have been shredded. After inspection of the documents was carried out, the defendant then mounted the defence that the LOA relied on by the plaintiff is a forgery. This was due to discrepancies noticed by Leong regarding the appearance of her signature on the document as well as details of the defendant’s Unique Entity Number (“UEN”), its address and telephone/fax numbers which were unknown/non-existent as of October 2018 and could only be attributed to the defendant much later.
Upon the amendments made to the defendant’s Defence, the plaintiff then obtained leave of the court to amend her statement of claim to plead a pre-incorporation oral agreement made with Leong which was subsequently ratified by
Having reviewed the evidence, I dismiss the plaintiff’s claim as it has not been proven on a balance of probabilities. The defendant had counterclaimed various sums from the plaintiff which appeared to have been a retaliatory move on its part. The bulk of these claims have also been dismissed due to lack of evidence. The reasons for my decision are set out herein.
Background factsThe defendant is described as a company incorporated in Singapore on 9 October 2018 and is in the business of developing systems for aviation and space flight.3 Its former name was Stratech Aerospace Systems Pte Ltd and the directors are Chew Rong-Qi Phoebe (“PC”) and Chew Rong-Jie David (“DC”).
PC and DC are the children of Chew Khien Meow David (“Chew”) and Leong. Chew was the founder of the Stratech group of companies in 1989. The parent company, The Stratech Group Limited (“TSGL”), was previously a listed entity on the mainboard of the Singapore Exchange with Chew and Leong as its controlling shareholders.4
In the first few years after its public listing in 2000, the Stratech group was involved in various multi-million-dollar local and foreign government projects. In Singapore, these included the Online Certificate of Entitlement (“COE”) Bidding System, the Vehicle Entry/Exit Permit System at the Singapore causeways and the Medical Claims Proration System for the Prime Minister’s Office for online processing of medical claims of civil servants and their dependents. At its peak, the Stratech Group employed more than 250 employees and occupied 1½ floors of about 40,000 square feet at The Strategy, 2 International Business Park Road, Singapore 609930.5
The main operating company of the group was Stratech Systems Ltd (“SSL”) and one of its more significant subsidiaries was Stratech Aerospace Pte Ltd (“SAPL”). Leong, who is legally trained, served as SSL’s Chief Corporate Officer from about 1995. After its public listing and with its growth, the Stratech Group decided to employ an experienced human resource (“HR”) practitioner cum administration manager to perform and manage all its HR roles and functions and also to manage the administration functions of the listed entity which included management of its various facilities, procurement, logistics and inventory / assets.6
The plaintiff applied and was hired by SSL as its General Manager, Human Resource & Administration in May 2002 at a monthly salary of $10,527 pursuant to a written letter of appointment. She reported directly to Leong. In September 2002, she was promoted to Senior Vice-President of HR & Administration at a salary of $11,000 and was subsequently redesignated as Director of HR & Administration.7 At some point during her tenure with SSL, the plaintiff had a team of up to four HR executives, an administrative manager, one administrative executive, up to five administrative assistants and several project administrators reporting to her.8
The plaintiff left SSL on 11 October 2006 to pursue other opportunities.9 According to Leong, the plaintiff and her husband had been declared bankrupt due to her husband’s failed business ventures and she left SSL in order to handle their personal matters.10
In 2010, when Leong learnt that the plaintiff was back in Singapore and working part-time for a non-profit organisation, she offered the plaintiff who accepted the position of SSL’s Human Resource Manager at a monthly salary of $6,800 comprising a fixed basic salary of $6,120 and a monthly variable component (“MVC”) of $680.11 Over time, the plaintiff received salary increments when her job scope was expanded to include both HR and administration including procurement, logistics and inventory/asset control. In November 2016, her salary had increased to $10,580. This sum comprised a basic salary of $8,820, MVC of $1,080, monthly transport allowance of $600 and a mobile allowance of $80.12 At that time, the Stratech group had about 100 to 150 employees.13 The group was handling various projects for the sale and installation of its proprietary products to customers in Singapore and overseas among which was a contract with the Singapore Changi Airport totalling over S$30 million including options and long-term maintenance.
On 1 June 2017, the plaintiff was promoted to the position of Senior Director, HR & Administration with a promise that her remuneration package would be reviewed in the next few months on account of the company’s financial situation.14 This did not materialise as the company’s financial situation in fact worsened.
The Stratech group experienced cashflow problems. The listed entity, TSGL, applied to the High Court for protection from its creditors and had submitted a proposal for a scheme of arrangement with a promise of injection of capital by a Taiwanese investor, Boulevard Capital. Despite these attempts, TSGL and SSL were wound up on 17 September 2018. As both Chew and Leong had taken loans and/or provided personal guarantees to help fund the Stratech companies, consequent on the winding-up order, they faced impending bankruptcy actions as well as the foreclosure of their properties which had been mortgaged to their financiers as security.15
Upon the winding-up, the court-appointed liquidators took over the business and assets of TSGL and SSL. The employments of both Chew and Leong were terminated as well as those of many of their employees.
In the immediate aftermath of the winding-up order, Chew and Leong focused their efforts on trying to “revive” TSGL and SSL as this would give them the best chance to stave off the inevitable bankruptcy orders against them personally as well as eviction from their family home at Belmont Road. As there were ongoing projects and maintenance contracts which the liquidators were not interested to take over, they then suggested to Chew and Leong that the parties explore buying back the subsidiaries which had not been wound-up and all the remaining business and assets including the intellectual property.
However, due to the imminence of the bankruptcy applications against Chew and Leong, the liquidators expressed concern that should Chew and Leong be declared bankrupt, they would have no capacity to make any binding decisions. It was then proposed that they deal with PC and DC instead.
Although they were still students at the time, PC and DC were privy to their parents’ various meetings and discussions due to the family’s changed circumstances after the winding-up. PC had also been working on the ongoing project with the Changi Airport Group (“CAG”). According to PC, both she and DC decided to incorporate a new startup company, the defendant. On 8 October 2018, they went about to incorporate the defendant online and completed the process past midnight. The intention was to use this new company to negotiate with the liquidators for purchase of the assets.
Eventually, the plans to reverse the winding-up orders could not proceed and both Chew and Leong were adjudged bankrupts on 18 October 2018.16
In the process of winding up, the liquidators were also looking into the employment of selected employees whose services were needed for the completion of the CAG project. The names of these employees had been given to the...
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