Omae Capital Management Pte Ltd v Tetsuya Motomura

• Jurisdiction: Singapore
• Judge: Pang Khang Chau J
• Judgment Date: 18 June 2020
• Neutral Citation: [2020] SGHC 126
• Citation: [2020] SGHC 126
• Court: High Court (Singapore)
• Published date: 25 June 2020
• Docket Number: Suit No 1053 of 2014
• Plaintiff Counsel: Arvind Daas Naaidu (Arvind Law LLC)
• Defendant Counsel: Walter Ferix Silvester (Silvester Legal LLC)
• Subject Matter: Employment Law,Pay,Recovery,Contract of service,Termination without notice,Legal Profession,Discharge of counsel,Civil Procedure,Vacation of trial dates,Trial,Plaintiff refusing to participate
• Hearing Date: 16 July 2019,26 August 2019,18 July 2019,29 January 2020

Pang Khang Chau J: Introduction

When this case came up for trial, the plaintiff declined to participate in the trial. I proceeded to hear the defendant’s evidence in the plaintiff’s absence, dismissed the plaintiff’s claim and gave judgment for the defendant’s counterclaim. The plaintiff has appealed against my decision.

Background

The plaintiff is a Singapore-incorporated company that was a Registered Fund Management Company (“RFMC”) pursuant to para 5(1)(i) read with para 5(7) of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations (Cap 289, Rg 10, 2004 Rev Ed), a subsidiary legislation of the Securities and Futures Act (Cap 289, 2006 Rev Ed). To commence business as an RFMC, the plaintiff had, in May 2013, submitted Form 22A to the Monetary Authority of Singapore to verify that, inter alia, the plaintiff, its shareholders, directors and representatives were fit and proper persons in that within the past ten years, none of them had been the subject of disciplinary or criminal proceedings. The plaintiff obtained its RFMC registration in August 2013.¹

The defendant was employed by the plaintiff in March 2013 as the latter’s Executive Director and Chief Investment Officer.² He had previously been employed as the Managing Director and Head of Global Financial Markets Trading of Centrale Raiffeisen Boerenleenbank BA (“Rabobank”) in Tokyo.³ In 2010, the US Department of Justice began investigations into Rabobank for manipulation of the US dollar and Japanese yen London Interbank Offered Rate.⁴ On 13 January 2014, a US Magistrate Judge sitting in the Southern District of New York signed a criminal complaint against the defendant, formally charging him with conspiracy to commit wire fraud and bank fraud.⁵

The plaintiff alleged that the defendant deliberately concealed the ongoing Rabobank investigations to obtain a job with the plaintiff, and the plaintiff was thereby deceived into submitting a Form 22A which was untrue.⁶ According to the plaintiff, upon being confronted on 14 January 2014 by the plaintiff’s Chief Executive Officer, Mr Masao Omae (“Mr Omae”), about the charge faced by the defendant in the US, the defendant abruptly resigned and left Singapore.⁷ The plaintiff claimed that, as a result of the defendant’s deceit and abrupt departure, the plaintiff was compelled to cease business as an RFMC.⁸ The plaintiff therefore claimed damages from the defendant amounting to $17,593,867.70, which included $750,000 for the initial capital to establish the plaintiff, $5,780,000 for “expectation loss” and $11,000,000 for “reputational loss”.⁹

According to the defendant, at the time the Form 22A was submitted, he did not know that he was under any investigation. It was only on 11 November 2013 that he found out there was a possibility that he could be charged. He immediately informed Mr Omae, who unexpectedly terminated the defendant’s employment on 5 December 2013 without notice.¹⁰ In any case, the plaintiff ceased business as an RFMC not because of the defendant’s departure but because the plaintiff had run out of funds and was unable to attract investors, maintain the minimum capital required to operate as an RFMC and attract suitable candidates to replace the defendant.¹¹ The defendant counterclaimed $93,500 for arrears in salary as well as salary in lieu of notice and $18,030 for reimbursement of expenses.¹²

Relevant procedural history

At a pre-trial conference (“PTC”) before the learned Assistant Registrar Justin Yeo (“the AR”) on 11 April 2019, parties were informed that the suit was fixed for trial from 16 to 19 July 2019. Parties were also directed to exchange their affidavits of evidence-in-chief (“AEICs”) by 30 May 2019 and set down for trial by 1 July 2019. (The deadline for exchange of AEICs was eventually extended by consent of parties to 18 June 2019, while the deadline for setting down was subsequently extended by me to 8 July 2019.)

The plaintiff was calling one witness of fact, Mr Omae, and one expert witness, Ms Katherine Ann Colchester (“Ms Colchester”). The defendant was similarly calling one witness of fact (the defendant himself) and one expert witness, Mr Tan Boon Hoo (“Mr Tan”).

The AEICs of Mr Omae, Mr Tan and the defendant were filed on 20 June 2019. At the judge PTC (“JPTC”) held before me on 24 June 2019, the plaintiff’s counsel explained that Ms Colchester’s AEIC was delayed because there were logistical difficulties getting her AEIC notarised as she was not located in London but (in the plaintiff’s counsel’s words) “way out in Suffolk”. Ms Colchester’s AEIC was eventually filed on 27 June 2019, less than three weeks before the commencement of trial.

Plaintiff missed the deadline for setting down

On 8 July 2019, the plaintiff filed a notice for setting down an action for trial without payment of the requisite fees. The notice was not accepted by the Registry for filing pending the payment of the said fees. The plaintiff was therefore deemed to have failed to set down by the 8 July 2019 deadline. On 10 July 2019, the Registry sent a reminder to the plaintiff to complete setting down prior to the PTC scheduled to be held before the AR on 11 July 2019.

About an hour after the reminder was sent, the plaintiff’s counsel wrote to court to inform that:

Unforunately [sic], the Plaintiff instructs that they [sic] unable to reach their expert (who is believed to be in the UK) without whom they are unable to proceed to [sic] the trial as fixed. In the premises, the Plaintiff instructs that they require additional time to reach their expert or to find a replacement expert.

The letter added that the plaintiff’s counsel had been instructed to bring this development to the AR’s attention at the PTC on 11 July 2019. The AR brought this letter to my attention, and I indicated that, if the plaintiff was unable to get in touch with its expert witness in order to bring her to Singapore before the trial commenced, the trial should still proceed on 16 July 2019 with the factual witnesses only. I also offered to see parties urgently for a JPTC on 12 July 2019, if required.

Plaintiff sought vacation of trial dates five days before trial

At the PTC on 11 July 2019, the plaintiff’s counsel explained that the plaintiff had not set the matter down for trial because the plaintiff’s expert was uncontactable and the plaintiff needed additional time to locate the expert. The plaintiff’s counsel further sought a vacation of the trial dates, explaining that he needed two to three weeks to ascertain what was going on, and to see whether Ms Colchester was still willing to come forward as the plaintiff’s expert witness.

The defendant’s counsel objected strongly. He explained that the defendant had already incurred tremendous costs in arranging for the attendance of his expert witness, booking the facilities for the defendant to give evidence by video-link from Japan, and arranging for the defendant’s Japanese lawyer to fly to Singapore to observe the trial. (I had, on 29 February 2019, granted leave for the defendant to give evidence by video-link from Japan, as the defendant feared being arrested for extradition to the US to face the charge referred to at [3] above if he were to travel to Singapore to attend trial. In doing so, I declined to follow the High Court’s decision in Anil Singh Gurm v J S Yeh & Co and another [2018] SGHC 221.)

When the AR put to the plaintiff’s counsel my suggestion for proceeding first with the factual witnesses as scheduled and then hearing the expert witnesses at a later tranche, the plaintiff’s counsel objected that this would not be feasible. He explained that his main witness was in fact the expert witness, as the crux of the plaintiff’s case lay in the construction of the various declarations found in Form 22A. The plaintiff’s counsel further explained that, as their expert witness had gone missing, they might need to find a new expert, and this might entail adjustments to the evidence of the plaintiff’s factual witness.

The plaintiff’s counsel added that he was not able to prepare for trial without the expert. So if the trial was not vacated he might be placed in a situation where he would have to discharge himself. Finally, the plaintiff’s counsel warned that, if he were to discharge himself, the plaintiff would need to find another lawyer as the plaintiff, being a body corporate, could not act without a lawyer.

The AR decided to direct parties to attend before me on 12 July 2019. He also indicated to the plaintiff’s counsel that if the plaintiff’s intention was to vacate the trial, the standard practice was for a summons for vacation of trial dates to be filed.

Plaintiff’s counsel applied to discharge himself

To my surprise, the plaintiff’s counsel turned up at the JPTC on 12 July 2019, not with a summons for vacation of trial dates, but with a summons for discharge of solicitor.¹³ Strangely, although the summons for discharge of solicitor was framed as an application by the plaintiff’s counsel to discharge himself, the application was supported, not by an affidavit from the plaintiff’s counsel, but by an affidavit from Mr Omae on behalf of the plaintiff. The affidavit explained that as the plaintiff had been unable to pay the plaintiff’s counsel’s fees and related charges, and as the plaintiff did not wish to “unfairly take advantage of their solicitors”, the plaintiff had on 11 July 2019 revoked the plaintiff’s counsel’s warrant to act.

I brought the case of Furniture & Households Square Ltd v Brosco International Pte Ltd [1997] SGHC 9 (“Brosco International”) to the plaintiff’s counsel’s attention and asked to be addressed on how the case might bear on the plaintiff’s counsel’s application to discharge himself in such circumstances. In that case, on the third day of trial, in the midst of the cross-examination of the plaintiff’s second witness, the defendant’s...