KANAN PACKRISAMY V HERBAL PHARM PTE. LTD. & 3 ORS

Facts

Mr Kanan Packrisamy, an accountant, did bookkeeping for a group of herbal products businesses controlled by Mr Vejaiyan s/o Gunasagran before becoming chief operating officer of Herbal Pharm Pte Ltd (HP) in 2018. He later became chief executive officer of HP and of Herbal Pharm+ Asia Pacific LLP (HP+) on salaries of $6,000 each, with an annual growth incentive bonus from HP calculated by formula. He was the most senior officer after Mr Vejaiyan, could approve payments of up to $30,000, and was trusted with the group's bank tokens.

In May 2023 Mr Kanan transferred a $10,000 advance to himself for a work trip to Africa. When Mr Vejaiyan questioned this in December 2023, Mr Kanan produced an account of his spending, repaid $4,555 and was handed a letter demoting him and cutting his salary. He objected, and on 11 December 2023 his employment was terminated without notice. He sued HP, HP+, Herbal Pharms Direct LLP and Mr Vejaiyan in Originating Claim No 293 of 2024 for wrongful dismissal, notice pay, leave and unpaid bonus. Several group entities and Mr Vejaiyan counterclaimed $502,369.56, alleging that over 49 transactions he had caused unauthorised payments to himself or for his benefit.

Issues

1. Whether Mr Kanan was separately employed by Herbal Pharms Direct LLP.
2. Whether he took the $10,000 advance without approval and falsely accounted for it, and whether his dismissal without notice was lawful.
3. Whether he caused unauthorised or improper payments to himself, as counterclaimed.
4. Whether HP could unilaterally cut his salary or forfeit bonus already agreed.

Holding

Audrey Lim J allowed Mr Kanan's claim only in part. The wrongful termination claim and the claims for notice pay and leave were dismissed, and no separate employment with Herbal Pharms Direct LLP was found. HP and HP+ were each ordered to pay him $2,000 in unpaid December salary, and HP to pay $183,510 in agreed but unpaid bonus. The counterclaims were allowed except for one $26,000 cash withdrawal not proved to have reached him, with sums ordered to eight counterclaimants. Costs were reserved.

Reasoning

The judge found no contract with Herbal Pharms Direct LLP. Mr Kanan could not produce one, he accepted the monthly payments from it were part of his bonus, and he had called them profit sharing when questioned.

On the advance, there was no evidence of the prior approval he admitted he needed. He did not account for the money for months, gave shifting explanations and, when confronted, put forward a breakdown he knew was partly untrue. This breached the contractual duty to follow company policies, permitting dismissal without notice. It was also a repudiatory breach destroying trust and confidence. The employers could further rely on the misappropriation found later. There was no contractual duty to hold an inquiry first, and guidelines from the Ministry of Manpower had not been pleaded.

On the counterclaim, Mr Kanan admitted collecting cash on 20 occasions but had no record of handing it to Mr Vejaiyan, which the judge found implausible for an experienced accountant. He also could not show approval for an $11,000 car repair payment or 27 payments to his credit card and other recipients. The judge preferred the bonus statements and slides Mr Kanan himself prepared over his claimed handwritten running record, rejecting his bonus figure of $1,060,308.12. He was found to have misappropriated those sums in breach of contract, his director's duties under s 157(1) of the Companies Act 1967 and fiduciary duties. The $26,000 item failed because there was no proof he received the cash.

On remedies, a general right to modify terms did not clearly extend to salary. Signing the demotion letter was mere acknowledgement, so full salary was due to the termination date. Bonus already agreed could not be forfeited without a clause allowing it.

From the judgment