Stephen Tang Nian v RBC Merchant Bank (Caribbean) Ltd
| Jurisdiction | Trinidad & Tobago |
| Judge | Madam Justice Margaret Y Mohammed |
| Judgment Date | 19 February 2020 |
| Neutral Citation | TT 2020 HC 69 |
| Court | High Court (Trinidad and Tobago) |
| Docket Number | No. CV 2017-02181 |
| Date | 19 February 2020 |
IN THE HIGH COURT OF JUSTICE
The Honourable Madam Justice Margaret Y Mohammed
No. CV 2017-02181
Mr. Michael Walede Coppin Attorney at law for the Claimant.
Mr. Christopher Sieuchand instructed by Ms. Shivangalie Ramoutar Attorneys at law for the Defendant.
The banking industry in this jurisdiction is competitive and to remain competitive the employees of a bank play an important role. In order to attract and retain the most productive and innovative employees, banks often offer attractive compensation packages. Banks also bestow on the employees incentives such as bonuses, short-term incentives and other rewards in recognition for high performance. The main issue in this matter concerns a bonus plan, which was introduced by the Defendant in 2012.
The Claimant instituted the instant action in 2017 while he was still employed by the Defendant as Manager (International Sales). He is seeking certain declarations but more importantly, damages for breach of contract for the failure of the Defendant to pay him the sum of TT$623,311.00 as his supplemental bonus earned under the Sales and Trading Supplemental Bonus Plan (“the SBP”) for the period October 2015 to September 2016.
The Claimant contends that he had a contract of employment (“the contract”) with the Defendant and it was governed by inter alia the Sales and Trading Supplemental Bonus Plus—Programme Guide (“the Guide”). It was an expressed term of the contract that he would be paid an annual salary of $373,800.00. The implied terms of the contract were:
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(i) the Defendant would not act in a way to undermine the relationship of mutual trust and confidence between employer and employee;
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(ii) the Defendant had to provide for the Claimant's economic security;
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(iii) the Defendant would carry out its obligations under the contract with good faith; and
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(iv) the Claimant would be paid a non-discretionary supplemental bonus once the SBP was triggered.
The Claimant contends that the expressed terms of the SBP are:
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(a) The objective is to reward participating employees in addition to their regular Short Term Incentive (STI).
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(b) The Manager-Institutional Sales (T&T) is one of the positions in the Sales & Trading Unit (“the Unit”) and is eligible for the payment of a supplemental bonus under the SBP.
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(c) The SBP is triggered once the Unit target/plan revenue attains the Threshold Value of 105% or higher.
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(d) The formula for calculating the supplemental bonus payable to the Unit was total salaries of the plan participants by the percentage of the Funding.
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(e) The percentage of the Funding was calculated in line with the “Threshold Achievement above Plan” outlined in Appendix 1 of the SBP.
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(f) The “Threshold Achievement above Plan” was capped at 50% with the corresponding percentage Funding at 250%.
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(g) The plan participants are entitled to be equally rewarded.
The Claimant contends that it was the practice of the Defendant that the Senior Management would set the Threshold Value for the Unit at the beginning of each fiscal year and that this target would be communicated to the plan participants. In conformity with this practice, the Threshold Value was set at US$2,000,000.00 for the fiscal year 2015–2016 and communicated to the plan participants in or around 31 October 2015 by Head Sales and Trading, Mr Andy Jogie.
The Threshold Value for 2016 was US$2,100,000.00 and the maximum Threshold Valve Above Plan was 50% of US$2,000.000.00 or US$1,000.000.00 and the maximum Threshold Value was 150% of US$2,000,000.00 (i.e. US$3,000,000.00). For the fiscal years 2016, the plan participants made US$3,915,350.63, which was over the maximum Threshold Value.
The plan participants at the beginning of fiscal year 2015–2016 were Ameen Ho Sing Loy, Anganie Sookoo and the Claimant but by the end of December 2015 Anganie Sookdeo had resigned.
The Claimant contends that based on the formula from the Guide, he was entitled to be paid a supplemental bonus of TT$934,500.00 for the fiscal year October 2015 to September 2016 which was 2.5 times the Claimant's salary of TT $373,800.00. However, he was only paid TT $311,189.00.
The particulars of breach set out by the Claimant are:
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(i) On 1 December 2016, Mr Andy Jogie summoned the Claimant to a meeting, where he was informed that the Defendant would be unilaterally varying the terms of the SBP and it would inform him of the final amount that would be paid. Mr Mitoonlal Persad, Ms Stephanie Hareword and Mr Ameen Ho Sing Loy were also in the said meeting
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(ii) The Claimant was informed by letter dated 5 December 2016, that he would be paid a supplemental bonus of TT$311,189.00 for the period 1 November 2015–31 October 2016. The bonus was paid on 12 December 2016.
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(iii) It was never the parties' intention on entering and performing the SBP that changes could be made retroactively without the consent of the plan participants with the effect that they would be denied their full supplemental bonus after achieving the target set at the beginning of the financial year by the Defendant.
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(iv) No consent was ever sought by the Defendant or given by the Claimant to reduce the supplemental bonus owed to him.
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(v) The Defendant's actions breached the implied term of the contract not to act in such a way to undermine the relationship of mutual trust and confidence between employer and employee.
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(vi) The Defendant's actions are also a gross violation of its Code of Conduct which states that the Defendant's culture is that of acting with integrity and doing what is right.
Based on the aforesaid facts, the Claimant contends that the Defendant remains indebted to him in the sum of TT$623,311.00, and he has made numerous requests for the payment of the balance of the supplemental bonus, but it still remains outstanding.
The Claimant caused a Pre-Action Protocol Letter dated 30 January 2017 to be sent to the Defendant. The Defendant requested numerous extensions of time, and finally it responded on 31 May 2017 denying that the aforesaid sum is due to the Claimant.
The Defendant's position is as follows:
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(a) The SBP was a discretionary reward programme for which the Claimant gave no consideration.
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(b) There was no implied duty on the Defendant to provide for the Claimant's economic security.
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(c) The terms of the SBP were fully set out in the Guide and which provided for the exercise of discretion by the Defendant to make payments under the SBP.
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(d) The appropriate procedure for the setting of the plan targets for the SBP was not followed for the 2015–2016 fiscal year.
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(e) The Defendant exercised its discretion to adjust the payment made to the Claimant in accordance with the SBP in circumstances in which it was entitled to do so and/or in accordance with its reserved right to modify the SBP.
The Claimant replied that:
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(i) The SBP had a discretionary component, but this was only limited to windfall transactions.
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(ii) Senior Management set the plan targets for the SBP.
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(iii) There was a change in the composition of the Claimant's Unit, and this made it more difficult to achieve the plan targets under the SBP.
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(iv) The bond trading option offered to the Claimant's Unit did not constitute a windfall transaction.
The issues to be determined in this matter are:
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(a) Was the payment of a supplemental bonus under the SBP an implied term of the contract?
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(b) If the answer to (a) is yes, did the Defendant breach the contract by exercising its discretion by failing to pay the Claimant the balance in the sum of TT$623,311.00 as the supplemental bonus earned for the period October 2015 to September 2016?
At the trial, the Claimant alone gave evidence in support of his case. He had issued a witness summons to have Mr Gerald Vincent (“Mr Vincent”), an employee of the Defendant to give evidence on his behalf at the trial. Although Mr Vincent appeared on the morning of the trial, the Claimant chose not to call him to give evidence in support of his case. Upon the Claimant closing his case, the Defendant opted to call no witnesses and instead Counsel indicated to the Court that it was his intention to make a no case submission on the basis that the Claimant had failed to make out his case and therefore there was no case for the Defendant to answer.
In the closing submissions, Counsel for the Claimant argued that the Court ought to make an adverse inference by the failure of the Defendant to call witnesses. On the other hand, it was submitted on behalf of the Defendant, that it was entitled after hearing the Claimant's witness to elect not to call any witnesses as there was no need to examine them and in those circumstances the Court ought not to make any such adverse inference against the Defendant since its position was that there was no case to answer.
Counsel for the Defendant also submitted that it was more reasonable for the Court to make an adverse inference with respect to Mr Vincent since it was the Claimant's decision not to call Mr Vincent in circumstances where the Claimant's evidence amounted to an impeachment of the Summary of Plan Targets prepared by Mr Vincent.
In Surujbally Samaroo v Kishore Ramsaroop and Ann—Marie Ramsaroop 1 Rahim J explained the approach the Court must take before drawing an adverse inference for not calling a witness at a trial. At paragraph 58 he stated:
“Thus the Court must be satisfied first that a prima facie case had been made out on a material issue or that there is a case to answer on that issue. It is then for the Court to consider whether the proposed witness may have been expected to give material evidence on that issue. If the answer is yes, the Court must then have...
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