SAIS Ltd v Hardman: Contractual Damages for Non-Delivery of Shares under Employee Incentive Scheme

SAIS Limited and Kaddra Pte Ltd appealed a decision in favor of Michael Jon Hardman and Nicolas Jack Leon Finck regarding contractual claims for damages resulting from the non-delivery of shares under an employee share incentive scheme. The Appellate Division of the High Court of Singapore partially allowed the appeal, modifying the damages awarded to Finck but upholding the damages awarded to Hardman. The primary legal issue concerned the interpretation of the share incentive plan and the obligations of the appellants to deliver shares to the respondents.

1. Case Overview

1.1 Court

Appellate Division of the High Court of the Republic of Singapore

1.2 Outcome

Appeal allowed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding contractual claims for damages from non-delivery of shares granted under an employee share incentive scheme. The court partially allowed the appeal.

1.7 Decision Date

19 September 2022

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
SAIS Limited	Appellant, Defendant	Corporation	Appeal partially allowed	Partial	Leong Li Shiong of Withers KhattarWong LLP Goh Peizhi Adeline of Withers KhattarWong LLP
Kaddra Pte Ltd	Appellant, Defendant	Corporation	Appeal partially allowed	Partial	Leong Li Shiong of Withers KhattarWong LLP Goh Peizhi Adeline of Withers KhattarWong LLP
Michael Jon Hardman	Respondent, Plaintiff	Individual	Judgment affirmed	Won	Samuel Richard Sharpe of Sharpe & Jagger LLC
Nicolas Jack Leon Finck	Respondent, Plaintiff	Individual	Judgment varied	Partial	Samuel Richard Sharpe of Sharpe & Jagger LLC

3. Judges

Judge Name	Title	Delivered Judgment
Woo Bih Li	Judge of the Appellate Division	Yes
Quentin Loh	Judge of the Appellate Division	No
Kannan Ramesh	Judge of the High Court	No

4. Counsels

Counsel Name	Organization
Leong Li Shiong	Withers KhattarWong LLP
Goh Peizhi Adeline	Withers KhattarWong LLP
Samuel Richard Sharpe	Sharpe & Jagger LLC

4. Facts

Respondents were granted restricted share units under an employee share incentive scheme.
SAIS Limited was listed on the TSX-V.
Respondents' employment contracts were terminated.
A Change of Control event occurred with the sale of Sarment Wines.
Appellants failed to deliver shares to the respondents according to the RSU Plan.
Hardman agreed to receive bonus units in lieu of a cash bonus.
Finck's termination letter stipulated he would receive 12,753 shares.

5. Formal Citations

SAIS Ltd and another v Hardman, Michael Jon and another, Civil Appeal No 27 of 2022, [2022] SGHC(A) 32
Hardman, Michael Jon and another v SAIS Ltd and another, Suit No 651 of 2020, [2022] SGHC 38

6. Timeline

Date	Event
2017-08-28	Michael Jon Hardman commenced employment with Sarment Pte Ltd.
2017-08-10	Nicolas Jack Leon Finck commenced employment with Sarment Pte Ltd.
2017-12-01	Kaddra Pte Ltd was incorporated.
2018-08-21	SAIS Limited was listed on the TSX-V.
2018-09-21	Nicolas Jack Leon Finck received a letter informing him of restricted share units grant.
2019-02-28	Nicolas Jack Leon Finck signed the agreement form for the restricted share units grant.
2019-03-29	Michael Jon Hardman signed a similar form for the restricted share units grant.
2019-05-29	Senior management of SAIS Limited announced consideration of selling wine and spirits distribution business.
2019-07-01	Michael Jon Hardman and Nicolas Jack Leon Finck's contracts with Sarment Pte Ltd were terminated.
2019-07-29	SAIS Limited announced a sale and purchase agreement for Sarment Wines.
2019-08-30	Shareholders approved the sale and change in shareholding at a general meeting.
2019-09-05	Nicolas Jack Leon Finck was informed his employment contract would be terminated.
2019-09-06	Nicolas Jack Leon Finck's employment with Kaddra Pte Ltd ended.
2019-09-13	SAIS Limited obtained TSX-V approval for the sale of Sarment Wines and announced the closing of the sale.
2019-10-04	Michael Jon Hardman received shares in SAIS Limited.
2019-10-15	Mark Joseph Irwin obtained shares from El Greco and CDE.
2019-10-16	SAIS Limited announced Mark Joseph Irwin held 53.5% of its shares.
2019-12-09	Michael Jon Hardman executed the Bonus Units Agreement.
2020-01-01	Michael Jon Hardman was informed he would be made redundant.
2020-01-15	Michael Jon Hardman tendered his resignation.
2020-01-29	Kaddra Pte Ltd issued a letter to Michael Jon Hardman regarding terms of resignation.
2020-02-19	SAIS Limited announced it had filed an application to delist its shares from the TSX-V.
2020-03-05	Application to delist shares from TSX-V was approved.
2020-03-16	SAIS Limited's last trading day.
2020-06-17	Michael Jon Hardman's solicitors wrote to Kaddra Pte Ltd regarding the delay in providing shares.
2020-07-17	Michael Jon Hardman and Nicolas Jack Leon Finck commenced suit.
2020-09-21	SAIS Limited unilaterally issued shares in Michael Jon Hardman's name.
2022-08-19	Judgment reserved.
2022-09-20	Judgment delivered.

7. Legal Issues

Breach of Contract
- Outcome: The court found a breach of contract for failure to deliver shares under the RSU Plan and Bonus Units Agreement.
- Category: Substantive
- Sub-Issues:
  - Failure to deliver shares
  - Repudiatory breach
Contractual Interpretation
- Outcome: The court interpreted the RSU Plan clauses regarding vesting, settlement, and the effect of a Change of Control event.
- Category: Substantive
- Sub-Issues:
  - Interpretation of vesting clauses
  - Interpretation of settlement obligations
  - Interaction of different clauses within the RSU Plan
Effect of Termination on Share Entitlements
- Outcome: The court considered the impact of terminating an employee's contract before a Change of Control event on their share entitlements.
- Category: Substantive
- Sub-Issues:
  - Termination before Change of Control
  - Impact of termination letter

8. Remedies Sought

Monetary Damages
Specific Performance (delivery of shares)

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation
Contract Disputes

11. Industries

Wine and Spirits Distribution
E-commerce

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Hardman, Michael Jon and another v SAIS Ltd and another	High Court	Yes	[2022] SGHC 38	Singapore	The judgment under appeal in the present case.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd	Court of Appeal	Yes	[2008] 3 SLR(R) 1029	Singapore	Cited for the principle that specific provisions override general provisions in contractual interpretation.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Restricted Share Units
RSU Plan
Vesting Date
Change of Control
Termination Date
Settlement
Moratorium
Bonus Units Agreement

15.2 Keywords

contract
shares
employee
incentive
scheme
breach
damages
RSU
vesting
termination
control

17. Areas of Law

Area Name	Relevance Score
Contract Law	95
Restricted Share Unit Plan	90
Employee Share Incentive Scheme	85
Damages	80
Measure of Damages	70
Company Law	60
Commercial Disputes	50

16. Subjects

Contract Law
Employment Law
Corporate Law
Share Incentive Schemes