Piattchanine v Phosagro Asia: Wrongful Termination & Expense Claims Dispute

Iouri Piattchanine sued Phosagro Asia Pte Ltd in the High Court of Singapore, before Justice George Wei, on 9 October 2015, claiming sums due after his termination as Managing Director. Piattchanine advanced claims for sums due under the contract and damages for breach of contract. Phosagro Asia counterclaimed for sums allegedly wrongfully paid to Piattchanine via expense claims. The court found that Phosagro Asia was liable to pay Piattchanine one year's salary and three months' salary, but also that Piattchanine had made some wrongful expense claims, and thus the counterclaim succeeded in part.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff in part; Defendant's counterclaim succeeds in part.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Iouri Piattchanine sues Phosagro Asia for wrongful termination. The court addresses contract breaches and expense claims.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
IOURI PIATTCHANINEPlaintiffIndividualJudgment for Plaintiff in partPartialEugene Thuraisingam, Jerrie Tan
PHOSAGRO ASIA PTE LTDDefendantCorporationCounterclaim succeeds in partPartialAndrew Ang, Andrea Tan

3. Judges

Judge NameTitleDelivered Judgment
George WeiJudgeYes

4. Counsels

Counsel NameOrganization
Eugene ThuraisingamEugene Thuraisingam LLP
Jerrie TanEugene Thuraisingam LLP
Andrew AngP K Wong & Associates LLC
Andrea TanP K Wong & Associates LLC

4. Facts

  1. Iouri Piattchanine was the Managing Director of Phosagro Asia Pte Ltd.
  2. Piattchanine's employment was terminated on 28 February 2014.
  3. Phosagro Asia alleged Piattchanine made unauthorised expense claims.
  4. Piattchanine claimed sums due under the employment contract and damages for breach of contract.
  5. Phosagro Asia counterclaimed for the allegedly wrongful expense claims.
  6. Piattchanine had wide-ranging powers to run the Defendant’s business and entertain actual or potential business partners.
  7. The Defendant had no regulations that governed the accounting practices of the company or the entertainment and expense claims of directors.

5. Formal Citations

  1. Piattchanine, Iouri v Phosagro Asia Pte Ltd, Suit No 404 of 2014, [2015] SGHC 259
  2. Piattchanine, Iouri v Phosagro Asia Pte Ltd, Civil Appeal No 200 of 2015, [2016] SGCA 61

6. Timeline

DateEvent
Share purchase agreement signed between Plaintiff and Phosint Trading Limited
Employment Contract commenced
Plaintiff's employment terminated
Defendant sent a second letter to the Plaintiff regarding termination
Plaintiff's solicitors sent a letter to the Defendant claiming for a sum of S$1,946,400
Proceedings commenced by the Plaintiff
Judgment reserved
Appeal to this decision was allowed in part by the Court of Appeal

7. Legal Issues

  1. Wrongful Termination
    • Outcome: The court found that the termination was not wrongful but was a contractual termination under cll 2 and 14 of the Employment Contract.
    • Category: Substantive
    • Sub-Issues:
      • Breach of contract
      • Summary dismissal
      • Contractual interpretation
  2. Breach of Contractual Duties
    • Outcome: The court found that the Plaintiff breached his express contractual duty in cl 3 of the Employment Contract, his implied contractual duty to serve the Defendant with good faith and fidelity, and his fiduciary duty to act in the best interest of the Defendant.
    • Category: Substantive
    • Sub-Issues:
      • Duty of good faith
      • Fiduciary duty
      • Duty of care
  3. Expense Claims
    • Outcome: The court found that the Plaintiff made some wrongful expense claims, and thus the counterclaim succeeded in part.
    • Category: Substantive
    • Sub-Issues:
      • Unauthorised expenses
      • Reimbursement
      • Personal vs. business expenses

8. Remedies Sought

  1. Monetary Damages
  2. Order for Account
  3. Payment of Sums Due

9. Cause of Actions

  • Breach of Contract
  • Breach of Fiduciary Duty
  • Recovery of Monies Paid

10. Practice Areas

  • Commercial Litigation
  • Employment Disputes

11. Industries

  • Fertiliser Trade

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Sports Connection Pte Ltd v Deuter Sports GmbHCourt of AppealYes[2009] 3 SLR(R) 883SingaporeCited to discuss the general right to terminate a contract for breach and what counts as a repudiatory breach.
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte LtdCourt of AppealYes[2007] 4 SLR(R) 413SingaporeCited to explain the situations in which a right to termination may arise.
Man Financial (S) Pte Ltd v Wong Bark Chuan DavidCourt of AppealYes[2008] 1 SLR(R) 663SingaporeCited to discuss how the court ascertains whether a contractual term is a condition.
Cavenagh v Williams Evans LtdEnglish Court of AppealYes[2013] 1 WLR 238EnglandCited to determine if the company elected to exercise its right of termination under the contract.
Shell Egypt West Manzala GmbH & Anor v Dana Gas Egypt LimitedEnglish High CourtYes[2010] EWHC 465 (Comm)EnglandCited for the principle that the critical question was whether the termination letter was to be read by a reasonable recipient as unequivocally communicating an election by Shell Egypt to terminate the contract under the contractual clause.
Boston Deep Sea Fishing and Ice Company v AnsellCourt of AppealYes(1888) 39 Ch D 339EnglandCited for the proposition that an apparently wrongful dismissal may be justified by an employer if the employer did indeed have a right to summarily dismiss the employee, even if it did not rely on or invoke that right or the facts supporting that right at the time of termination.
Goh Kim Hai Edward v Pacific Can Investment Holdings LtdHigh CourtYes[1996] 1 SLR(R) 540SingaporeCited to affirm the principle that an employer may raise instances of misconduct by the employee to justify its termination of the employment contract in a wrongful dismissal suit if it did not know about the misconduct at the time of the dismissal.
Cowie Edward Bruce v Berger International Pte LtdHigh CourtYes[1999] 1 SLR(R) 739SingaporeCited for the proposition that where an employee has in fact been guilty of uncondoned misconduct so grave as to justify instant dismissal, the employer can rely on that misconduct in defence of any action for wrongful dismissal even if at the date of the dismissal the misconduct was not known to him.
Aldabe Fermin v Standard Chartered BankHigh CourtYes[2010] 3 SLR 722SingaporeCited to submit that the general principle is that the employer can rely on any act of misconduct to justify summary dismissal notwithstanding that at the time of dismissal, the employer was not aware of that act and/or was aware of the act but did not rely on it.
Universal Cargo Carriers Corporation v CitatiQueen's BenchYes[1957] 2 QB 401EnglandCited for the proposition that a rescission or repudiation if given for a wrong reason or for no reason at all, can be supported if there are at the time facts in existence which would have provided a good reason.
Shepherd Andrew v BIL International LtdHigh CourtYes[2003] SGHC 145SingaporeCited to suggest that there may be some circumstances where grounds not relied upon at the time of termination may not be subsequently invoked as a defence to a claim by the other contracting party.
Alexander Proudfood Productivity Services Co S’pore Pte Ltd v Sim Hua Ngee AlvinCourt of AppealYes[1992] 3 SLR(R) 933SingaporeCited to clarify the correct measure of damages is the amount the employee would have earned or been entitled to under the contract for the period until the employer could lawfully terminate the contract.
Latham Scott v Credit Suisse First BostonHigh CourtYes[2000] 2 SLR(R) 30SingaporeCited to clarify the correct measure of damages is the amount the employee would have earned or been entitled to under the contract for the period until the employer could lawfully terminate the contract.
Amixco Asia (Pte) Ltd v Bank Bumiputra Malaysia BhdHigh CourtYes[1992] 2 SLR(R) 65SingaporeCited to note that the general principles are subject to certain exceptions.
Heisler v Anglo-Dal LtdCourt of AppealYes[1954] 1 WLR 1273EnglandCited to note that the general principles are subject to certain exceptions.
André et Cie v Cook Industries IncHigh CourtYes[1987] 2 Lloyd’s Rep 463EnglandCited to note that the general principles are subject to certain exceptions.
Panchaud Frères SA v Etablissements General Grain CoCourt of AppealYes[1970] 1 Lloyd’s Rep 53EnglandCited to note that the general principles are subject to certain exceptions.
Cerealmangimi SpA v Toepfer (Alfred C), The EurometalCourt of AppealYes[1981] 3 All ER 533EnglandCited to note that the general principles are subject to certain exceptions.
Davis (W) & Sons v AtkinsHouse of LordsYes[1977] AC 931EnglandCited to note that the general principles are subject to certain exceptions.
Sinclair v NeighbourCourt of AppealYes[1967] 2 QB 279EnglandCited to hold that even if the sums are eventually repaid, the very act of taking monies the employee is not entitled to, is also a breach of an employee’s implied contractual duties such as to justify summary dismissal.
Surteco Pte Ltd v Siebke Detlev KurtHigh CourtYes[2011] SGHC 74SingaporeCited to affirm that in each case, it is a matter of degree whether the act complained of is of the requisite gravity… it must be so serious that it strikes at the root of the contract of employment, that it destroys the confidence underlying such a contract.
Xuyi Building Engineering Co v Li AidongHigh CourtYes[2010] 4 SLR 1041SingaporeCited to be guided by the High Court’s holding in that a wilful breach is one that requires some form of intentionality or deliberateness in the commission of the breach.
DM Divers Technics Pte Ltd v Tee Chin HockHigh CourtYes[2004] 4 SLR(R) 424SingaporeCited to clarify that a director’s fiduciary duties at common law include the duty to act bona fide in the best interest of the company, and a duty not to exercise their powers for an improper purpose.
Asiawerks Global Investment Group Pte Ltd v Ismail bin Syed AhmadHigh CourtYes[2004] 1 SLR(R) 234SingaporeCited to clarify that all employees are expected to serve their employers diligently, honestly and loyally.
Konski v PeetEnglish High CourtYes[1915] 1 Ch 530EnglandCited as authority for the proposition that a term can be implied to pay salary in lieu of the stipulated notice.
Heron, Gethin-Jones & Liow v John ChongHigh CourtYes[1963] MLJ 310MalaysiaCited as authority for the proposition that the right to terminate by way of payment in lieu of notice cannot be implied even though cl 20 refers to payment in lieu of notice.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Expense Claims
  • Wrongful Termination
  • Employment Contract
  • Managing Director
  • Fiduciary Duty
  • Serious Misconduct
  • Wilful Breach
  • Expense Accounting Practice
  • Summary Termination

15.2 Keywords

  • employment
  • termination
  • contract
  • expense claims
  • fiduciary duty
  • Singapore
  • wrongful dismissal

16. Subjects

  • Employment Law
  • Contract Law
  • Corporate Governance

17. Areas of Law

  • Employment Law
  • Contract Law
  • Civil Procedure