Phosagro Asia v Piattchanine: Termination of Employment Contract for Serious Misconduct

In Phosagro Asia Pte Ltd v Iouri Piattchanine, the Singapore Court of Appeal heard an appeal regarding the termination of Iouri Piattchanine's employment contract as Managing Director of Phosagro Asia. The court considered whether Piattchanine's expense claims and accounting practices constituted 'serious misconduct' or 'wilful breach' under the contract, justifying termination without benefits. The court allowed the appeal in part, finding that Piattchanine's actions did constitute serious misconduct, but dismissed the appeal regarding the reimbursement of personal claims.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal allowed in part; the court found the Respondent guilty of serious misconduct, reversing the lower court's decision on this issue, but affirmed the lower court's decision regarding the reimbursement of personal claims.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The Singapore Court of Appeal addressed whether an employee's actions constituted 'serious misconduct' justifying termination without benefits.

1.7 Decision Date

27 October 2016

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
PHOSAGRO ASIA PTE LTD	Appellant, Defendant	Corporation	Appeal allowed in part	Partial	Tan Beng Hwee Paul of Rajah & Tann Singapore LLP Arthi Anbalagan of Rajah & Tann Singapore LLP
IOURI PIATTCHANINE	Respondent, Plaintiff	Individual	Appeal dismissed in part	Partial	Eugene Thuraisingam of Eugene Thuraisingam LLP Jerrie Tan Qiu Lin of Eugene Thuraisingam LLP Damien Yeo of Eugene Thuraisingam LLP

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Phang Boon Leong	Judge of Appeal	Yes
Judith Prakash	Judge of Appeal	No
Tay Yong Kwang	Judge of Appeal	No

4. Counsels

Counsel Name	Organization
Tan Beng Hwee Paul	Rajah & Tann Singapore LLP
Arthi Anbalagan	Rajah & Tann Singapore LLP
Eugene Thuraisingam	Eugene Thuraisingam LLP
Jerrie Tan Qiu Lin	Eugene Thuraisingam LLP
Damien Yeo	Eugene Thuraisingam LLP

4. Facts

Iouri Piattchanine was the Managing Director of Phosagro Asia Pte Ltd.
Piattchanine used a credit card for both corporate and personal expenses.
Piattchanine submitted monthly credit card expenses with receipts to Tricor Singapore Pte Ltd.
Piattchanine signed a cheque to himself as reimbursement for his expenses.
Tricor would identify expense claims that Piattchanine was not entitled to and seek reimbursement from him.
This expense accounting practice was carried over from Asiafert, where Piattchanine was the sole shareholder and director.
Phosagro Asia Pte Ltd terminated Piattchanine's employment, alleging serious misconduct.

5. Formal Citations

Phosagro Asia Pte Ltd v Piattchanine, Iouri, Civil Appeal No 200 of 2015, [2016] SGCA 61

6. Timeline

Date	Event
2013-02-26	Phosint entered into a share purchase agreement for the purchase of Asiafert Trading Pte Ltd.
2013-03-01	Phosagro Asia Pte Ltd hired Iouri Piattchanine as its Managing Director pursuant to the Employment Contract.
2014-02-01	Iouri Piattchanine became aware that Sergey Sereda would be appointed to the Appellant’s board of directors.
2014-02-26	Iouri Piattchanine forwarded legal advice to Phosint’s solicitors.
2014-02-27	Andre Guryev emailed Iouri Piattchanine.
2014-02-28	Iouri Piattchanine received a termination letter from Phosagro Asia Pte Ltd.
2014-03-18	Iouri Piattchanine received a second letter from Phosagro Asia Pte Ltd, summarily terminating his employment.
2014-04-04	Iouri Piattchanine’s solicitors sent a letter to Phosagro Asia Pte Ltd claiming there was no basis for the allegations made in the 18 March 2014 Letter.
2014-04-14	Iouri Piattchanine commenced Suit No 404 of 2014.
2015-01-01	High Court judge’s decision reported as Piattchanine, Iouri v Phosagro Asia Pte Ltd [2015] 5 SLR 1257.
2016-08-18	Court of Appeal hearing.
2016-10-28	Judgment reserved.

7. Legal Issues

Serious Misconduct
- Outcome: The court found that the Respondent's actions did constitute serious misconduct, reversing the lower court's decision.
- Category: Substantive
- Sub-Issues:
  - Breach of contractual duty
  - Breach of fiduciary duty
  - Improper expense claims
Wilful Breach
- Outcome: The court found that the Respondent's actions did not constitute wilful breach.
- Category: Substantive
- Sub-Issues:
  - Intentional violation of contract terms
  - Deliberate non-compliance
Burden of Proof
- Outcome: The court held that the Appellant failed to establish a prima facie case that all expense claims were personal in nature.
- Category: Procedural
- Sub-Issues:
  - Establishing a prima facie case
  - Shifting the burden of proof

8. Remedies Sought

Damages for breach of contract
Salary and bonuses for the remainder of the contract term
Reimbursement of personal expenses

9. Cause of Actions

Breach of Contract
Breach of Fiduciary Duty

10. Practice Areas

Commercial Litigation
Employment Disputes
Contract Disputes

11. Industries

No industries specified

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Piattchanine, Iouri v Phosagro Asia Pte Ltd	High Court	Yes	[2015] 5 SLR 1257	Singapore	The High Court's decision which was appealed against in this case.
Cavenagh v William Evans Ltd	English Court of Appeal	Yes	[2013] 1 WLR 238	England and Wales	Discussed in relation to the principle of whether an employer can rely on misconduct discovered after termination.
Boston Deep Sea Fishing and Ice Company v Ansell	Court of Appeal	Yes	(1888) 39 Ch D 339	England and Wales	Cited for the principle that an employer can invoke previously unknown misconduct as a defense to a wrongful dismissal claim.
Goh Kim Hai Edward v Pacific Can Investment Holdings Ltd	High Court	Yes	[1996] 1 SLR(R) 540	Singapore	Application of the principle in Boston Deep Sea Fishing.
Cowie Edward Bruce v Berger International Pte Ltd	High Court	Yes	[1999] 1 SLR(R) 739	Singapore	Application of the principle in Boston Deep Sea Fishing.
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and another appeal	Court of Appeal	Yes	[2007] 4 SLR(R) 413	Singapore	Cited for the principles relating to discharge by breach (repudiatory breach).
Sinclair v Neighbour	English Court of Appeal	Yes	[1967] 2 QB 279	England and Wales	Cited as an example of serious misconduct justifying summary dismissal.
Man Financial (S) Pte Ltd (formerly known as E D & F Man International (S) Pte Ltd) v Wong Bark Chuan David	Court of Appeal	Yes	[2008] 1 SLR(R) 663	Singapore	Cited for factors to consider in determining whether a contractual term is a 'condition'.
Sports Connection Pte Ltd v Deuter Sports GmbH	Court of Appeal	Yes	[2009] 3 SLR(R) 883	Singapore	Cited for guidance on determining whether a breach deprives a party of substantially the whole benefit of a contract.
Xuyi Building Engineering Co v Li Aidong	High Court	Yes	[2010] 4 SLR 1041	Singapore	Cited for the interpretation of 'wilful breach'.
Shepherd Andrew v BIL International Ltd	High Court	Yes	[2003] SGHC 145	Singapore	Held that an employer cannot rely on an employee's repudiatory breaches as a defense to the latter's claim for severance payments under the contract.
White and Carter (Councils) Ltd v McGregor	House of Lords	Yes	[1962] AC 413	United Kingdom	Cited in relation to the distinction between an accrued debt and damages arising from a breach of contract.
MSC Mediterranean Shipping Council SA v Cottonex Anstalt	English Court of Appeal	Yes	[2016] EWCA Civ 789	England and Wales	Cited in relation to the legal principle in White and Carter.
Public Prosecutor v Chee Cheong Hin Constance	High Court	Yes	[2006] 2 SLR(R) 24	Singapore	Cited for the application of Section 108 of the Evidence Act.
PP v Abdul Naser bin Amer Hamsah	Court of Appeal	Yes	[1996] 3 SLR(R) 268	Singapore	Cited for the application of Section 108 of the Evidence Act.
Surender Singh s/o Jagdish Singh (administrators of the estate of Narindar Kaur d/o Sarwan Singh, deceased) v Li Man Kay	High Court	Yes	[2010] 1 SLR 428	Singapore	Cited for the application of Section 108 of the Evidence Act.
Gan Soo Swee and another v Ramoo	Federal Court of Malaysia	Yes	[1968–1970] SLR(R) 324	Malaysia	Cited for the definition of a prima facie case.
Re Nalpon Zero Geraldo Mario	High Court	Yes	[2012] 3 SLR 440	Singapore	Cited for the definition of a prima facie case.
Boniface v SMEC Services Pty Limited and anor	New South Wales Industrial Relations Commission	Yes	[2007] NSWIRComm 301	Australia	Cited regarding the obligation of a director to maintain proper records of expenses.
Surteco Pte Ltd v Siebke Detlev Kurt	High Court	Yes	[2011] SGHC 74	Singapore	Affirmed the holding in Cowie Edward Bruce.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Serious misconduct
Wilful breach
Expense accounting practice
Repudiatory breach
Prima facie case
Condition
Accrued debt

15.2 Keywords

employment contract
serious misconduct
termination
breach of contract
fiduciary duty
expense claims
Singapore
Court of Appeal

17. Areas of Law

Area Name	Relevance Score
Employment Law	95
Contract of service	90
Termination	80
Misconduct	75
Contract Law	70
Breach of Contract	60

16. Subjects

Employment Law
Contract Law
Civil Procedure
Termination of Employment
Fiduciary Duty