Appeals court reverses $600k award to ex-HP employee

A former sales specialist awarded over $600,000 by the High Court, after claiming that Hewlett-Packard (HP) owed the sum to her in commission, has seen the decision reversed by the Court of Appeal.

The apex court ruled that a $5.4 million contract she secured for the IT giant with e-payment provider Nets - won back from a rival firm - was not "new business", therefore she was not entitled to the full commission.

"There was no express promise by (Hewlett-Packard) that the Nets contract would be taken as 'new business'," said the court in judgment grounds released on Tuesday. "Indeed, there was no evidence to suggest that (Ms Chin) understood (her superiors) to be promising to take the Nets contract as 'new business'."

Ms Corinna Chin, 53, worked for Hewlett-Packard Singapore for seven years until 2012 when she took the company to court over the deal.

Her lawyer P.E. Ashokan, from KhattarWong, argued that she had won Nets back as a customer from rival IBM and therefore the contract qualified as new business.


Nets 'had one foot out of the door' but 'simultaneously had the other foot in (HP)'s door'.

THE COURT OF APPEAL, on why it considered Nets an existing client of HP.

But HP countered through its Rajah & Tann lawyer, Mr Gregory Vijayendran, that it had never lost Nets as a customer.

When Ms Chin joined HP in 2005, she was paid a basic salary and incentive compensation based on performance. But HP introduced a new way of measuring performance in the 2012 financial year for what was "new business".

Nets had been using a computer system from HP before buying new servers from IBM in 2010. Two years later, Nets switched back to HP thanks to Ms Chin's deal. However, the company did not recognise the contract as new business and calculated the commission owed to her as just over $229,000.

Ms Chin insisted the deal qualified as new business and said she was owed almost $628,000.

When the company refused to pay the full amount, she took them to the High Court to sue her former employer for the difference. She was retrenched in June 2012.

The High Court upheld her case last year, ruling that as the term "new end-user customer" was vague, it was construed to include a "win-back" customer like IBM.

The Court of Appeal disagreed, pointing out that the term was clear and as applied to the facts, made Nets an existing customer.

The appeals court found that HP never lost Nets, which had a simultaneous contractual relationship with both HP and IBM.

"Nets 'had one foot out of the door' but 'simultaneously had the other foot in (HP)'s door'," said the court, adding that Nets had still been using HP servers.

The "contra-proferentam rule" - whereby any unclear clause in a contract is held against the one who drafted the terms - did not apply here, said the Court of Appeal, which was made up of Judge of Appeal Andrew Phang, Chief Justice Sundaresh Menon and Judge of Appeal Chao Hick Tin.

"The court is not permitted to locate (or, rather, 'create') an ambiguity in the term or terms of the contract where none had existed before," wrote Judge of Appeal Phang.

A version of this article appeared in the print edition of The Straits Times on March 31, 2016, with the headline 'Appeals court reverses $600k award to ex-HP employee'. Print Edition | Subscribe