CASTILLON SECURITY (S) PTE. LTD. v MUHAMMAD SHAUN ERIC BIN ABDULLAH

Facts

Castillon Security (S) Pte Ltd employed Mr Muhammad Shaun Eric bin Abdullah (Mr Eric) from 1 April 2015 as Business Development/Operations Director to run its events security business, until it summarily dismissed him on 9 March 2021. An addendum to his letter of appointment split the gross operational profit of the events business between them, adjusted in January 2017 to 60% for Castillon and 40% for Mr Eric. Mr Eric also bought 5% of the shares in Spearpoint Security Group Pte Ltd, Castillon's majority shareholder, from Mr Edward Devereux, a director of Castillon, who later sought to buy those shares back under the Spearpoint shareholders' agreement.

In Suit No 385 of 2022, Castillon said it had mistakenly overpaid Mr Eric $111,550.12 by including shares of Wage Credit Scheme and Special Employment Credit grants in his profit share, and claimed $14,946.97 as his share of losses for early 2021, which he later admitted. Mr Eric counterclaimed against Castillon and Mr Devereux for his share of further government grants, including Job Support Scheme grants, for loss on an aborted property purchase, for wrongful dismissal, and for unlawful means conspiracy or a declaration about the share buyback.

Issues

1. Whether Castillon had paid Mr Eric his share of the WCS and SEC grants by mistake
2. Whether Mr Eric was entitled to a share of further government grants and, if so, how much
3. Whether Castillon was entitled to dismiss Mr Eric summarily
4. Whether Mr Eric's claims for the aborted property purchase, conspiracy and the share buyback succeeded

Holding

The High Court allowed both the claim and the counterclaim in part. Castillon recovered the admitted $14,946.97 but its claim for $111,550.12 was dismissed. Mr Eric was awarded $751,744.24 for further grants, leaving a balance of $736,797.27 after set-off, with interest at 5.33% per annum from 20 July 2021 to judgment. His other claims, and all claims against Mr Devereux, were dismissed. Castillon was ordered to pay Mr Eric costs of $58,800, with no order as to costs between Mr Eric and Mr Devereux.

Reasoning

On the grants, entitlement arose from the employees Castillon employed, so for profit-sharing the grants had to be apportioned between the events and static divisions; otherwise the events profit would be understated against the parties' agreement. Even if grants were not revenues, they offset wages and so raised gross operational profit. The earlier payments were therefore his entitlement, not mistakes.

On further grants, the court found Mr Eric had pleaded entitlement under the addendum, and in any event the issue had been fully engaged at trial. It took Castillon's Job Support Scheme figure of $737,793.44, based on a government breakdown, and reduced his WCS and SEC claims to the same 83.36% proportion. Only Castillon was liable, as the contract was with it, and the court did not accept that Mr Devereux made the alleged promises.

On dismissal, Mr Eric did not dispute repeated incidents in which the required notice to the Police Licensing and Regulatory Department under s 16 of the Private Security Industry Act 2007 was not given before officers were deployed. These breached his letter of appointment, and earlier leniency did not bar dismissal, so clauses 4.2 and 4.4 allowed summary termination.

The property claim failed because, on his own pleading, it was his dismissal that made him abandon the purchase. The conspiracy claim fell with the lawful dismissal, and the rule in Said v Butt [1920] 2 KB 497 protected Mr Devereux, who was also entitled to treat Mr Eric as a defaulter under the shareholders' agreement. On costs, Mr Eric was the overall winner, reduced by 30% for the issues he lost.

From the judgment