SetClear Pte Ltd and others v Ashlock William Grover

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 24 May 2011
• Neutral Citation: [2011] SGHC 130
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 118 of 2011
• Year: 2011
• Published date: 23 April 2012
• Hearing Date: 06 May 2011
• Plaintiff Counsel: Alvin Yeo, SC, Monica Chong, Cheryl Fu and Lee Ee Yang (WongPartnership)
• Defendant Counsel: Kelvin Tan (Drew & Napier LLC)
• Subject Matter: Contract,Conflict of Laws
• Citation: [2011] SGHC 130

Woo Bih Li J: Introduction

This is an action by five plaintiffs against the defendant (“Mr Ashlock”). The first to fourth plaintiffs are part of a group referred to as the CLSA Group. The fifth plaintiff is beneficially owned by the second plaintiff.

Between 3 March 2006 and 28 February 2009, Mr Ashlock was employed by different companies in the CLSA Group as follows: by the fifth plaintiff pursuant to its letter of appointment dated 3 March 2006 and counter-signed by Mr Ashlock on 8 March 2006; and by the first plaintiff pursuant to its letter dated 10 May 2007 and counter-signed by Mr Ashlock on 13 May 2007.

By a termination agreement dated 17 July 2008 (“the TA”) between the first plaintiff and Mr Ashlock, Mr Ashlock’s employment with the first plaintiff was terminated.

Clause 14 of the TA states:

14. Final Settlement

By signing this letter and accepting the abovementioned payments, this represents full and final settlement of all and any claims against SetClear Pte Ltd and its affiliated companies. Additionally, it confirms that you agree not to pursue any future claim against SetClear Pte. Ltd and its affiliated companies.

The plaintiffs said that the terms of the TA were subsequently reaffirmed in two letters dated 9 October 2008 and 28 February 2009 which were counter-signed by Mr Ashlock.

On 20 January 2010, Mr Ashlock commenced proceedings against the five plaintiffs and one Jonathan Slone (“Mr Slone”) in Civil Action No 10-CV-0453(GBD) in the United States District Court, Southern District of New York (“the American Action”) based on various causes of action in respect of equity which has been referred to as “founder benefits” or “Founder’s Equity”. I will adopt the reference “founder’s benefits” for convenience.

The position of the five plaintiffs in the present action in Singapore (“the Singapore Action”) is that Mr Ashlock is precluded from commencing and continuing the American Action against them in view of the TA and, in particular, cl 14 thereof, which was subsequently reaffirmed by the two letters stated above. They sought the following primary reliefs in the Singapore Action: 1. A declaration that the Defendant is not entitled, under a severance agreement dated 17 July 2008 entered into between the 1st Plaintiff and the Defendant and reaffirmed by way of two letters from the 1st Plaintiff to the Defendant dated 9 October 2008 and 28 February 2009 (collectively the “Severance Agreement”), to bring any claim against the 1st Plaintiff and/or its affiliated companies, including but not limited to the 2nd to 5th Plaintiffs, in connection with and/or in relation to the Defendant’s employment and/or association with the 1st Plaintiff and its affiliated companies, such claims including but not limited to a claim for “founder” benefits which the Defendant alleges were conferred upon him by the 1st Plaintiff and/or its affiliated companies. 2. A declaration that the Defendant breached the Severance Agreement by commencing and maintaining Civil Action No. 10-CV-0453(GBD) against the 1st to 5th Plaintiffs in the United States District Court, Southern District of New York (“US Proceedings”) in respect of the Defendant’s alleged “founder” benefits. 3. An order that the Defendant do pay the Plaintiffs damages to be assessed in respect of all costs, expenses and losses incurred by the Plaintiffs arising out of or in connection with the Defendant’s breach of the Severance Agreement. 4. An order restraining the Defendant from continuing the US Proceedings or commencing any further or other proceedings in the United States of America or elsewhere against the Plaintiffs in respect of his alleged “founder” benefits.

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Mr Ashlock’s position was that the plaintiffs were not entitled to the declarations sought in prayers 1 and 2 or the order in prayer 3 or the anti-suit injunction sought in prayer 4 of the Singapore Action.

The court’s conclusion and reasons

Mr Ashlock sought to show that the American Action was in an advanced stage. The American Action was commenced on 20 January 2010. The third and fourth plaintiffs had already relied on the TA in their Answers filed in that action. The second plaintiff had been served with the papers in the American Action although it was contesting the jurisdiction of the US District Court over it. Mr Slone had been served and had filed an Answer in the American Action. Mr Ashlock had been advised by his US attorney that a substantial part of the pre-trial process had been concluded and all that remained was for depositions to be conducted. Thereafter the matter would proceed to trial.

Mr Ashlock said that the plaintiffs had delayed filing the Singapore Action until 17 February 2011. He suggested that the Singapore Action was filed because the second plaintiff was afraid that the outcome of its application to contest the jurisdiction of the US District Court might be unfavourable to it from a tax perspective.

The plaintiffs said that the American Action was at a preliminary stage. In addition to the second plaintiff’s contest of jurisdiction, the first and fifth plaintiffs had not even been served with the American Action although I should mention that this was because they refused to co-operate with Mr Ashlock on the issue of service.

It seemed to me that the American Action was not at the advanced stage that Mr Ashlock was saying. As mentioned above, the first and fifth plaintiffs had not yet been served and the second plaintiff was contesting the jurisdiction of the US District Court over it.

More importantly, it was irrelevant whether the American Action was at an advanced stage or not. Mr Ashlock did not apply to stay the Singapore Action or for an anti-suit injunction to stop the plaintiffs from continuing with the Singapore Action. In the circumstances, it was also irrelevant that the plaintiffs had filed the Singapore action only recently.

Accordingly, I had only to decide whether I could hear the action immediately or whether it should proceed to trial in Singapore at the same time as the proceedings in America were continuing.

Mr Kelvin Tan, counsel for Mr Ashlock, submitted that I had to consider a matrix of facts leading up to and subsequent to the signing of the TA in order to interpret cl 14 thereof: Mr Ashlock’s willingness to participate in the fifth plaintiff’s start-up in exchange for an equitable share in the business. The scope of discussions between Mr Ashlock and Mr Slone in respect of the founder’s benefits which purportedly led to an agreement thereon. The circumstances under which Mr Ashlock signed the TA. Email correspondence between Mr Ashlock and Mr Laurie James Young (the Managing Director – Organizational Development of the CLSA Group) after the signing of the TA. The conduct of the plaintiffs in the American Action.

In my view, sub-paras (a) and (b) of [15] above would not assist the court in interpreting cl 14. They would be relevant only if the court were to conclude that cl 14 does not preclude Mr Ashlock from pursuing his claims in respect of founder’s benefits against the five plaintiffs.

As for the circumstances under which Mr Ashlock signed the TA, he suggested that the court take into account two matters.

Firstly, since April 2008, he had been suffering from intense dizzy spells, loss of balance and severe loss of hearing in his right ear. In early August 2008, he was diagnosed with a brain tumour which was eventually found to be benign.

Secondly, he received a telephone call from Mr Young on 17 July 2008 to meet him at the lobby of the Fullerton Hotel for a discussion. However, instead of a discussion, Mr Young presented him with a copy of the TA and told him that he would either agree to it or be fired. Mr Ashlock had no other income to support his family and he was concerned that if a diagnosis revealed a serious medical condition, the medical bills would impose a tremendous financial burden on his family. In the circumstances, he said he had no choice but to sign the TA.

He also said he thought that the TA resolved issues pertaining to his employment only and...