Georg Alexander Höptner v Three Fins Pte Ltd

Facts

Georg Alexander Höptner (the claimant) was employed from 1 January 2021 by Three Fins Pte Ltd (the defendant), a Singapore subsidiary of the group running the BitMEX crypto-products trading platform, as Group Chief Executive Officer under an agreement dated 27 September 2020. Clause 4.3 promised him an amount equal to US$5.3m less the compensation already paid if he completed two years, or if he was terminated before then otherwise than by Termination for Cause, meaning termination where the defendant reasonably considered he had materially failed to comply with his obligations. Either side could end the contract on six months' notice.

The claimant worked from Germany and Hong Kong, then relocated to Singapore on 5 March 2022 and to Germany on 7 July 2022. After the group began cost-cutting in 2022, the Head of Human Resources sent one of the founders a summary of what the claimant would be owed, noting it would not be payable if he were terminated for cause. By letter dated 20 October 2022, the defendant dismissed him for cause, accusing him of unauthorised relocation to Germany, dishonestly misappropriating some US$230,000 to fund it, falsely claiming approval and hiding the move from the board. The claimant sued for wrongful dismissal in Originating Claim No 469 of 2022. The defendant counterclaimed for allegedly unauthorised expenses and repayment of a loan.

Issues

1. Whether the claimant could rely on an unpleaded implied duty of due inquiry under ss 8 and 14 of the Employment Act 1968.
2. Whether there was a Termination for Cause within cl 4.3(c), so that the termination bonus was not payable.
3. Whether summary dismissal under cl 11.2 was justified by the relocations, the expenses or an alleged lie about approval.
4. What damages the claimant should receive.

Holding

The court allowed the claim, entering judgment for the claimant for US$2,464,354.84 with interest at 5.33%, comprising the termination bonus, six months' salary in lieu of notice and allowances for the notice period. It entered a consent judgment for the defendant on its counterclaim for US$85,795.95, and ordered costs of $150,000 to the claimant on the claim and $10,000 to the defendant on the counterclaim, plus disbursements.

Reasoning

The claimant could not rely on an implied duty to hold a due inquiry because it was never pleaded, and in any event he had been asked to explain the expenses.

The Termination for Cause provision was penal and had to be read strictly, so the defendant itself had to make the determination. It did not: the decision was made by Reed, a founder who was chairman of the parent's board but not a director of the defendant, and the defendant's board never met. A director's affidavit saying the defendant reasonably considered there was cause was found untrue. The termination bonus was therefore payable.

Summary dismissal was not justified either. The lack of formal board approval for the relocations was at most a technical breach, since the court accepted that in practice the claimant needed only to inform the parent's chairman and proceed if there was no objection. It found he had told the successive chairmen, Wong and Hayes, neither objected, and Reed knew of the moves. The court drew adverse inferences from the defendant's failure to call Hayes and a finance employee. On expenses, there was a transparent process under which personal costs were paid first and then deducted from salary, with the financial controller deciding disputed items, so unpaid deductions were not the claimant's fault. Read in context, his message that he got approval from the discussions meant he had informed the chairman without objection, and he did not lie.

The court also found that Reed decided to dismiss the claimant to avoid the contractual payments. It disbelieved the HR head's attempt to retract his evidence of emails among the founders and the group's legal head about avoiding the bonus, and noted that questions about the German move began only after the summary of sums owed. As the dismissal was wrongful, it was treated as termination on notice. The termination bonus was reduced by wages for the full six-month notice period, and the damages were adjusted by consent to reflect a set-off against the counterclaim.

From the judgment