PATRICK MICHAEL KELLY v CLICKS2CUSTOMERS PTE LTD & 3 Ors

Facts

Patrick Michael Kelly provided marketing and business development services between 2011 and 2015 to Clicks2customers Pte Ltd (the first defendant, a Singapore company) and its South African parent, Incubeta Holdings (Pty) Ltd. The other defendants were directors. After a telephone call on 30 May 2011 the parties agreed orally that he would receive 70% of the gross profit from new clients he introduced, from June to 31 August 2011; in July 2011 emails, the fourth defendant wrote that this model applied until something was finalised. A memorandum of understanding signed in Johannesburg on 8 March 2012 then changed his commission to a "Net Gross Profit" basis, capped his monthly pay, made commission depend on "active involvement" in a client, and contained an equity clause marked for "Discussion". He was paid on that basis for years. In 2014 he was removed from the Standard Chartered Bank (SCB) account, and on 28 September 2015 his services were terminated.

In Suit No 218 of 2018 Mr Kelly claimed that the 70/30 model still governed, or alternatively damages under the MOU (including for a 35% equity interest), breach of fiduciary duty, conspiracy and wrongful termination without notice. The first defendant counterclaimed for alleged overpaid SCB commissions and set off sums it said were otherwise due. These grounds followed the defendants' appeal.

Issues

1. Whether the 2011 arrangements or the 8 March 2012 MOU governed the relationship, and whether the MOU's equity clause was binding
2. Whether the defendants owed the plaintiff fiduciary duties as a partner
3. Whether clause 5.6 of the MOU disentitled the plaintiff to SCB commissions, supporting the counterclaim
4. Whether reasonable notice of termination was required and what sum was due

Holding

The court allowed the claim in part and dismissed the counterclaim. All other claims and counterclaims were dismissed, but for termination without notice the plaintiff was awarded damages representing unpaid commission for 2015 plus interest, totalling $679,142 (S$503,398 and S$175,744 in interest), with interest running from when the claim accrued.

Reasoning

The MOU was the operative agreement despite its title, imperfections and the late countersignature: the parties intended to be bound, its operative terms were certain, the plaintiff's own email of 28 March 2012 stated that his "new arrangement commences March 1 2012", and he accepted Net Gross Profit payments for years. The equity clause was left for further negotiation, but the commission terms stood independently. The earlier 70/30 arrangement was displaced. There was no partnership or fiduciary relationship, since he did not share losses and relied on a single letter calling him a business partner.

Clause 5.6 required active involvement "whether it is in an acquisition or retention role", so involvement in acquiring SCB sufficed. Any ambiguity was construed against the defendants, who drafted and relied on the clause, and they had shifted position on the non-SCB accounts. The counterclaim and the set-off therefore failed.

Where a contract is silent on termination, reasonable notice is implied, following Eng Chiet Shoong and others v Cheong Soh Chin and others and another appeal [2016] 4 SLR 728. The directors' affidavits gave commercial reasons, not cause, and the fourth defendant's later denial in cross-examination was not believed. Three months was reasonable, so entitlement ran to December 2015.

On quantum, the court gave no weight to an email about SCB ending its engagement that was raised only in closing submissions, and disregarded post-trial material that went beyond its limited directions, including a new method deducting account managers' salaries, an unpleaded S$25,000 advance and recalculations of earlier periods. These looked like after-the-fact attempts to reduce the plaintiff's entitlement. The plaintiff's expert's figure for 2015 was accepted.

From the judgment