Latham v Credit Suisse First Boston

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 15 May 2000
• Neutral Citation: [2000] SGCA 26
• Date: 15 May 2000
• Subject Matter: Termination of appellant's employment,O 15 r 16 Rules of Court (1997 Rev Ed),Wrongful dismissal,Termination,Contract of service,Contractual notice period,s 18 Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed),Alleged oral agreement as to guaranteed bonus,Evidence,Defective notice of termination,Declaration,Employment Law,Whether declaration of appellant's wrongful dismissal necessary,Whether damages should include award of discretionary bonus,Discretionary bonus,ss 93 & 94 Evidence Act (Cap 97, 1997 Rev Ed),Whether dismissal wrongful,Requisite notice not given,Admissibility of evidence,Correct measure of damages,Damages,Whether oral evidence admissible,Whether dismissal carried out in bad faith
• Docket Number: Civil Appeal No 168 of 1999
• Published date: 19 September 2003
• Defendant Counsel: Andre Yeap and Lim Wee Ming (Allen & Gledhill)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Davinder Singh SC and Ajay Advani (Drew & Napier)

(delivering the grounds of judgment of the court): Introduction

This appeal was brought against the decision of Chan Seng Onn JC. The judicial commissioner had refused to order that the appellant, Scott Latham (`Latham`), was entitled to claim a bonus as part of his damages for wrongful dismissal from the employ of the respondents, Credit Suisse First Boston (`CSFB`). We dismissed Latham`s appeal and now give our reasons for doing so.

Background facts

Sometime in early 1997, Neil Harvey (`Harvey`), the managing director of the Emerging Markets Group (`EMG`) Asia at CSFB, began looking for someone to fill the post of Director of Global Emerging Markets. Harvey approached a head-hunting firm, Euro Search, to help him look around for a suitable candidate. Euro Search recommended Latham to Harvey and in the process, their representative, one Vincent Lowe, sent Harvey the following email on 18 March 1997:

Neil

I want to inform you of the break up of Scott`s salalry package when he was at BZW:

Base salary USD 150,000

Guaranteed bonus USD 350,000 (for 1996)

Housing USD 10,000/month

Car allowance Sing. 3,000/month

After negotiations took place between Latham and Harvey, Latham entered into a contract of employment with CSFB in April 1997 as the Director of Global Emerging Markets, whose function was to carry out relative value credit research in CSFB`s EMG Asia. His job included credit risk assessment and analysis of corporate, bank and sovereign entities in Asia. Latham was employed pursuant to a written contract of employment dated 26 March 1997, the salient parts of which stated:

Salary

Your starting salary will be USD150,000 per annum on a 12-month basis which will be paid to you in local currency of SGD210,795 per annum (at set conversion of US$1 [equals] S$1.4053) on a monthly basis. Salaries are reviewed on an annual basis, normally at the beginning of each calendar year and each review will be expressed in terms of US$. Your salary will then be converted to the S$ rate at the Company`s book rate at that time. The amount of your base salary will be reviewed in January 1998.

Bonus

In addition to your salary, a bonus may be paid to you at the end of each calendar year, based on Company profitability and your performance during the year. The first bonus payment for which you will be eligible for consideration will be for calendar year 1997.

...

Notice Period

Either party may terminate the employment by giving one month`s notice in writing. During probation, the notice period will be one week. However, should the reason for the Company terminating your employment be gross misconduct of any type, then no notice will be given.

The contract was signed by Latham on 7 April 1997 and backdated to 2 April 1997. Latham commenced work at about the same time.

Latham claimed however that, in addition to this written contract, the terms of his employment were also constituted by an oral contract made between him and Harvey, on behalf of CSFB, prior to his signing of the written contract. This oral contract allegedly guaranteed that Latham would receive, in addition to his salary, a bonus of US$500,000 if EMG Asia achieved its minimum target budget of US$60,000,000. Furthermore, as the bonus was dependent on profitability, Latham could expect to get more than the guaranteed sum of US$500,000 if the profit exceeded the target budget. Latham said that Harvey had explained that this latter entitlement was subject to the condition that the agreement about the guaranteed bonus remained oral. This was because, if the bonus guarantee was in writing, Latham would not get more than what was stated, even if the profit exceeded the target budget. The minimum guaranteed bonus of US$500,000 was pleaded by Latham as an essential term in a part oral/part written employment agreement.

Some five months after Latham started working at CSFB, he was told to leave CSFB on 17 September 1997. Negotiations subsequently took place between Latham and CSFB as to how he was to be compensated for his dismissal. During the course of these negotiations, CSFB purportedly terminated Latham`s contract of employment through a letter by their solicitors dated 15 October 1997 giving him one month`s remuneration in lieu of notice. On 16 December 1997, the United States office of CSFB filed the Uniform Termination Notice for Securities Industry Registration (`U-5 form`) electronically in the United States. This form stated that Latham was discharged because `management determined that Mr Latham wasn`t performing to their expectations.`

Unhappy with what had happened, Latham commenced an action against CSFB claiming, inter alia, for:

(a) a declaration that Latham was wrongfully dismissed by CSFB on 17 September 1997;

(b) damages comprising $20,600 for the period after 17 September 1997 during which Latham was unemployed and bonus in the sum of US$2m or to be ascertained;

(c) Latham`s copy of the U-5 form; and

(d) an enquiry or account of CSFB`s EMG dealings for 1997.

Latham alleged that he had been wrongfully dismissed by CSFB as CSFB were unhappy with him for complaining about certain incidents that took place at work. First, he had discovered that some of his colleagues were unlawfully using inside information for trading activities for the benefit of CSFB and secondly, he had complained about the fact that the chief trader at CSFB, Charlie Chan (`Chan`), was engaging in the practice of deliberate mis-marking of CSFB`s trading books by grossly undervaluing the assets held in these books in order to avoid paying taxes. In any event, his dismissal was also wrongful because CSFB had not given him the requisite one month`s notice according to the written terms of the contract and there were insufficient grounds for an immediate dismissal.

The decision below

The judicial commissioner substantively dismissed Latham`s claim, although he did hold that Latham had been wrongfully dismissed on the technical ground that the requirement of one month`s notice was not given. Although CSFB ostensibly terminated Latham`s contract of employment by giving him one month`s notice in lieu of remuneration on 15 October 1997, the judicial commissioner was of the opinion that Latham`s services were in reality terminated on 17 September 1997. On that day, Latham was informed that CSFB had lost trust and confidence in him, he was escorted out of the office, his access card to the office was taken from him, and he was effectively barred from entering CSFB`s office. Moreover, the fact that the termination could be nothing but immediate was evident by the tone and language used by Harvey in relation to the matter.

On the issue of the damages to be awarded to Latham, however, the judicial commissioner felt that the sum already paid by CSFB to Latham of one month`s remuneration was sufficient compensation for Latham`s wrongful dismissal. He did not think that he should order the further payment of one month`s salary for breach of the notice provision by CSFB. The judicial commissioner dismissed Latham`s claim both for the alleged guaranteed bonus, or for a sum to be assessed based on the contractual discretionary bonus. In his opinion, Latham`s claim for the guaranteed bonus of at least US$500,000 failed due both to the operation of ss 93 and 94 of the Evidence Act (Cap 97) as well as on the balance of probabilities. The judicial commissioner was of the view that the written employment contract dated 26 March 1997 was a very formal document encompassing all the agreed terms of employment, including that in relation to the bonus. According to this written contract, the bonus was entirely at the discretion of CSFB. As such, he felt that he could not allow Latham to tender oral evidence of the verbally guaranteed bonus to prove the existence of an oral term that directly contradicted the written terms of the contract. In the judicial commissioner`s mind, the written employment agreement was the entire agreement, where all the terms agreed to had been reduced to writing and the exceptions to the rule in ss 93 and 94 did not apply to the facts of this case.

The judicial commissioner also considered in any event that Latham had failed on a balance of probabilities to show that Harvey had promised him the oral guaranteed bonus in the terms alleged. This conclusion was reached due to:

(a) Latham`s lack of credibility, evidenced by his representations about his previous salary, particularly his continual reliance on the Euro Search figures when they did not represent a true reflection of his remuneration package, and the circumstances in which he left his previous job at BZW;

(b) the fact that Latham was not in a position to demand such a large guaranteed bonus as he had already left his previous company at the material time and had no other firm job offers;

(c) Latham`s assertion that he had never directly demanded the guaranteed bonus from Harvey;

(d) the fact that there was no clear agreement on how any potential increase in the bonus would be computed;

(f) the fact that Harvey was in no position to offer any guaranteed bonus as he had to go through several levels of approval involving more senior management than Harvey before doing so;

(g) a contemporaneous email from Harvey to Mohan Kumar (`Kumar`), the Head of Research of CSFB`s EMG in London, which stated unequivocally that Harvey had told Latham that no guaranteed bonus would be offered;

(h) the fact that neither CSFB`s hiring authorisation form nor the confirmation of employment form indicated that Latham would be receiving a guaranteed bonus;

(i) another email from Harvey to Dave Basile (`Basile`), the Director of CSFB`s EMG in London, on 28 August 1997 stating that the tentative bonus allocated to Latham was US$400,000 which did not mesh with the alleged promised bonus of US$500,000 and;

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