Magistrates' Court of Singapore

Singapore Productivity Centre Pte Ltd v Samuel Lam King Way
[2023] SGMC 92

Contract – Illegality and public policy – Restraint of trade

Employment Law – Employees’ duties

Intellectual Property – Law of confidence – Breach of confidence

7 November 2023

Judgment reserved.

District Judge Sim Mei Ling:

Introduction

1 The plaintiff is in the management consultancy business providing solutions to enterprises in the services sector to be more efficient and productive. The defendant was formerly employed by the plaintiff as its project manager and later, senior consultant[note: 1].

2 The plaintiff brought the present action for the defendant’s alleged breach of express confidentiality provisions, an equitable duty of confidence, an implied duty of good faith and fidelity, and a non-competition clause.

3 After considering the evidence and parties’ submissions, I find that:

(a) The defendant breached the confidentiality clauses in his employment agreement as well as an equitable duty of confidence, but only in respect of his retention and misuse of: (1) the plaintiff’s business plan / proposal in respect of one TheJellyHearts Pte Ltd (“TheJellyHearts”); (2) the plaintiff’s PowerPoint presentation for TheJellyHearts; and (3) the plaintiff’s PowerPoint Presentation in respect of one Pine Marketing Pte Ltd (“Pine Marketing”);

(b) The defendant did not breach his implied duty of good faith and fidelity; and

(c) The non-competition clause is unenforceable as a restraint of trade.

4 Although I have found in favour of the plaintiff for some of its claims, I only award the plaintiff nominal damages, and decline to award the plaintiff an injunction or an order for delivery up.

5 The reasons for my decision are as follows.

Brief background

6 By a letter of employment dated 26 September 2019 (“Agreement”)[note: 2], the defendant commenced employment with the plaintiff on 1 October 2019. As a consultant, his job was to source for potential clients interested in applying for the Enterprise Singapore’s Enterprise Development Grant (“EDG”), assist them with their EDG applications, and follow up with them on their projects post-grant.[note: 3]

7 The defendant resigned by way of a letter dated 6 July 2021, and his last day of service was 31 July 2021.[note: 4] He became a director and shareholder of one Capex Consulting Pte Ltd (“Capex”) on or around 30 August 2021.[note: 5] The defendant says that Capex is in the management consultancy business, focusing on transformation strategies for small and medium enterprises, and utilising EDG for funding support.[note: 6]

8 There is some dispute over when the defendant commenced working for Capex. The plaintiff says that this was even before he left his employment with the plaintiff. The defendant however says after he left the plaintiff, he was employed by one Sopexa Singapore from 1 August to 31 August 2021 as a senior project manager managing food-related commercial events and only assisted Capex on an ad-hoc basis. He only commenced full-time employment with Capex on 1 November 2021.[note: 7]

9 The plaintiff asserts that the defendant had, in the course of his employment with the plaintiff, access to various categories of confidential information, namely[note: 8]:

(a) The plaintiff’s client list and/or contact details relating to, inter alia, the plaintiff’s consultancy business;

(b) Email correspondence exchanged between the plaintiff and/or the defendant, with the plaintiff’s clients and Enterprise Singapore, in relation to EDG;

(c) Business plans / proposals and/or PowerPoint presentations in relation to the plaintiff’s clients; and

(d) Knowledge of the “crucial window”, being the period of time whereby the plaintiff would be awaiting the outcome of its clients’ EDG applications.

10 The plaintiff alleged that, after his employment with the plaintiff and without the plaintiff’s consent, the defendant wrongfully retained the “contact details of the [p]laintiff’s customers, as well as the [p]laintiff’s materials which included inter alia, all email correspondence, business plans/ proposals and/or PowerPoint presentations containing the same and utilised knowledge of the [c]rucial [w]indow.” [note: 9]

11 The plaintiff further alleged that the defendant wrongfully made use of the above allegedly confidential information to the benefit of Capex’s business, and had approached the plaintiff’s customers and persuaded them to divert their business to the defendant and/or Capex at the plaintiff’s expense.[note: 10]

12 The plaintiff therefore brought this action for breach of express confidentiality clauses in the Agreement, an equitable duty of confidence, an implied duty of good faith and fidelity, and a non-competition clause in the Agreement.

13 The plaintiff had also pleaded that the defendant breached several clauses relating to intellectual property (clauses 9.1, 9.3. 9.4 and 9.8 of the Agreement). The plaintiff has clarified that it merely included these clauses in response to the Defence suggesting that the defendant was the author of business plans / proposals and/or PowerPoint presentations, to argue that these had been developed during the defendant’s employment with the plaintiff.[note: 11] Ultimately, nothing turns on this as the plaintiff’s case is premised on misuse of confidential information and not infringement of intellectual property rights.

14 In its Statement of Claim, the plaintiff particularised the customers which the defendant allegedly approached and persuaded to divert their business as Prime Deli Trading Pte Ltd (“Prime Deli”), TheJellyHearts, Pine Marketing, and 14 other clients (“Other Clients”)[note: 12].

15 However, the plaintiff appears to be abandoning its claim in respect of Prime Deli and the Other Clients.

16 While the plaintiff continued to maintain in its closing submissions that a key factual dispute is whether the defendant had approached and persuaded Prime Deli to divert their business[note: 13], the plaintiff did not make any substantive submissions in respect of Prime Deli, other than pointing to the defendant’s failure to call a representative of Prime Deli as a witness and to produce his WhatsApp messages with Prime Deli. The plaintiff’s counsel did not cross-examine the defendant on his alleged misuse of confidential information relating to, or his alleged diversion of, Prime Deli. Further, the plaintiff itself accepts that the defendant failed to divert Prime Deli[note: 14]. The plaintiff has thus not put forward a damages claim in respect of Prime Deli.[note: 15]

17 As for the alleged diversion of the Other Clients, the plaintiff did not pursue this at trial or address this in its closing submissions. In any event, there is no evidence before the court as to the alleged diversion of these Other Clients, other than the fact that these Other Clients were listed as Capex’s clients in Capex’s PowerPoint presentations[note: 16] and on Capex’s website[note: 17]. The defendant’s explanation is that he had simply listed companies he worked with while under the plaintiff[note: 18]. He was not cross-examined on this. Further, no evidence was led on how the defendant allegedly wrongfully made use of the plaintiff’s confidential information in respect of the Other Clients.

18 In the circumstances, given the plaintiff’s narrowed down case, I will only need to consider whether the plaintiff has made out its case in respect of TheJellyHearts and Pine Marketing.

19 Specifically, in relation to the plaintiff’s claims for breach of express confidentiality clauses and breach of confidence, I only need to consider if the defendant had retained and/or misused the plaintiff’s client list and/or contact details, email correspondence, business plans / proposals and/or PowerPoint presentation, and used the crucial window, insofar as these relate to TheJellyHearts and Pine Marketing (collectively, the “Alleged Confidential Information”).

20 It is not disputed that TheJellyHearts and Pine Marketing eventually engaged Capex instead of the plaintiff.

21 The defendant argues, in a nutshell, that the Alleged Confidential Information is not confidential, and in any event he did not retain any of it after his employment ended. Insofar as he was in possession of business plans / proposals and PowerPoint presentations after his employment with the plaintiff ended, these had been given to him by TheJellyHearts and/or Pine Marketing. The defendant denies diverting TheJellyHearts and Pine Marketing, as it was them that had approached him. The defendant also contends that the non-competition clause is unenforceable. Lastly, the defendant contends that the plaintiff has in any event, failed to prove loss, as TheJellyHearts and Pine Marketing were not obliged to sign a contract with the plaintiff.

22 I will therefore be dealing with the following issues:

(a) Did the defendant breach the confidentiality clauses in the Agreement?

(b) Did the defendant breach an equitable duty of confidence?

(c) Did the defendant breach an implied duty of good faith and fidelity?

(d) Did the defendant breach the non-competition clause in the Agreement?

(e) What remedies are the plaintiff entitled to, if any?

Did the defendant breach the confidentiality clauses in the Agreement?

23 The plaintiff has relied on the following confidentiality clauses in the Agreement (“Confidentiality Clauses)[note: 19]:

6. Confidentiality

6.1 You shall not disclose to any person the secrets of SGPC or confidential information concerning the SGPC or its clients. This obligation to maintain confidentiality of the SGPC’s information continues even after termination of your employment

[...]

7. Confidentiality

7.1 You shall not during or after your employment with SGPC directly or indirectly disclose to any person whatsoever or otherwise make use of any information of a confidential nature or information in respect of which SGPC owes an obligation of confidence to any third party (“Confidential Information which was disclosed to you or which you had access to.”)

7.2 You must, if requested by SGPC, delete all Confidential Information from any reusable material and destroy all other documents (including copies thereof) and tangible items which contain or refer to any Confidential Information which are in your possession or in your control, or return to SGPC, in any event and without prejudice to clause 5.4, upon termination of your employment, all such material, documents, copies of such documents and tangible items which belong to SGPC.

7.3 You shall not remove from SGPC premises any materials including without limitation drawings, documents, models, apparatus or other electronic devices which contain confidential information or make copies thereof otherwise in the course of carrying out your duties.

7.4 This restriction shall continue to apply without limit in point of time but shall cease to apply to Confidential information which may properly come into the public domain through no fault of yours. The obligations set out in this clause 7 shall survive the termination of your employment.

24 It is not clear from the pleadings how exactly the defendant is said to have wrongfully used the Alleged Confidential Information after his employment with the plaintiff.

25 The plaintiff has however clarified in its opening statement that its case is that the defendant had used the plaintiff’s client list and/or contact details to get in touch with TheJellyHearts and Pine Marketing, reproduced the plaintiff’s work as contained in the business plans / proposals and/or PowerPoint presentations, and used the email correspondence and crucial window to ascertain the appropriate juncture for diverting them.[note: 20]

What information is protected under the Confidentiality Clauses?

26 The causes of action based on breach of express confidentiality provisions in a contract and a duty of confidence in equity are distinct.

27 Where express confidentiality clauses exist, the question is whether the information which the plaintiff seeks to protect fall within information which parties agreed the defendant should not disclose or misuse. This turns on a construction of the express terms, to determine the existence and scope of the contractual obligations. So long as the information in question falls within information which parties agreed to treat as confidential, this would be protected even though it may not have the necessary quality of confidence: Adinop v Rovithai [2019], 2 SLR 808 (“Adinop”) at [38], [40]).

28 The defendant argues in respect of clause 6, that post-termination, he is only prohibited from disclosing any confidential information concerning the plaintiff, but not confidential information concerning the plaintiff’s clients.[note: 21] The defendant has not elaborated why this is so.

29 I agree with the plaintiff that reading clause 6 in its entirety, the “obligation to maintain confidentiality of the [plaintiff’s] information” ought to include both confidential information concerning the plaintiff as well as its clients.

30 This would be apparent from how the first sentence of clause 6.1 prohibits the defendant from disclosing to any persons “the secrets of [the plaintiff] or confidential information concerning the [plaintiff] or its clients”, and this is not confined to when he was employed by the plaintiff. In any case, clause 7.1 goes on to prohibit the defendant from, during or after his employment with the plaintiff, directly or indirectly disclosing to any person whatsoever or otherwise making use of any information of a confidential nature or information in respect of which the plaintiff owes an obligation of confidence to any third party. In other words, even if not caught by clause 6.1, the defendant would still be prohibited under clause 7.1 from disclosing or making use of confidential information of the plaintiff’s clients post-termination.

31 To sum it up, by the Confidentiality Clauses, the parties agreed that the following would be treated as confidential under the Agreement, whether during or after the defendant’s employment:

(a) “secrets of the plaintiff”;

(b) “confidential information concerning the plaintiff or its clients”;

(c) “information of a confidential nature or information in respect of which [the plaintiff] owes an obligation of confidence to any third party”.

(collectively “Protected Information”).

32 There is no further elaboration in the Agreement as to what each of the above descriptions would capture.

33 The plaintiff does not appear to be mounting the case that the Alleged Confidential Information amounted to “secrets” of the plaintiff. Instead, it contends that the Alleged Confidential Information is not readily accessible and concerns its clients / Enterprise Singapore, and which is information for which the plaintiff owes an obligation of confidence to third parties.[note: 22]

34 On his part, other than the argument at [28] above, the defendant has not put forward any arguments why the Alleged Confidential Information does not fall within Protected Information, apart from asserting that it is “unclear” how it does.[note: 23]

Client list and/or contact details

35 The plaintiff has produced a 3-page extract of a client list, which it says was available on Microsoft SharePoint, and which the defendant had access to in the course of his employment.[note: 24]

36 The defendant has taken issue with this extract, albeit in the context of its submissions on why the client list does not possess the necessary degree of confidence required under the plaintiff’s claim for breach of an equitable duty of confidence. I will however deal with it at this juncture given this relates to the same document.

37 First, the defendant takes issue with the fact that the plaintiff has only produced a redacted extract.[note: 25] However, the defendant has not filed a notice to dispute its authenticity and is thus deemed to have admitted its authenticity.

38 It is in any case, clear from the extract, that in relation to TheJellyHearts and Pine Marketing, the names of their respective contact persons, Mr Darren Loh (“Mr Loh”) and Mr Ong Tian Hock (“Mr Ong”) as well as their email addresses can be found therein. I accept that this list would not be publicly available. While this may not strictly amount to information concerning clients (given that TheJellyHearts and Pine Marketing did not sign project agreements with the plaintiff), the contact details of their representatives would be information for which the plaintiff owes an obligation of confidence to a third party.

39 The defendant further asserts that the plaintiff has failed to show that the client list is a company-wide, rather than team, document. [note: 26] The assertion that this was a team document is at odds with the defendant’s pleading that no client list exists in which client’s details could be found together with their contact details[note: 27]. In any case I do not see how anything turns on this. Even if it were a team document, it would still by nature of the information therein, amount to Protected Information.

40 I therefore find that the client list and/or contact details of the representatives from TheJellyHearts and Pine Marketing amount to Protected Information.

Email correspondence

41 The plaintiff has produced its emails in relation to TheJellyHearts[note: 28] and Pine Marketing[note: 29], which it says amount to Protected Information.

42 The email correspondence contains information such as (1) explanations of how the EDG will be utilised; (2) the proposed plan to secure the EDG; (3) the suggested equipment suppliers for executing the proposed plan; and (4) the status of the EDG. This would allow a party to ascertain whether the EDG was progressing smoothly, required further information or refinement for its success or whether the application was successful. This is not information in the public domain.[note: 30]

43 At the very least, it would amount to confidential information in respect of which the plaintiff owes a third party a duty of confidence. The email correspondence contains information on how the EDG applicants intend to secure the EDG and utilise the EDG in their business.

44 I therefore find that the email correspondence relating to TheJellyHearts and Pine Marketing amount to Protected Information.

Business plans/proposals and/or PowerPoint presentations

45 The plaintiff has produced the business plans / proposals[note: 31] and PowerPoint presentations[note: 32] which it had prepared for TheJellyHearts and Pine Marketing.

46 The business plans / proposals were propositions by the plaintiff for the application of the EDG. They contain information such as TheJellyHearts’ and Pine Marketing’s client base, competition, unique selling points and future development and growth plans. The business plans / proposals also contain information regarding their projects which was required for the EDG to be approved. This included: (1) the status of the project and the reasons for embarkment; (2) what the project aims to achieve; (3) the benefits of the proposed project; (4) the project’s methodology; (5) scope and schedule; (6) the costs involved; and (7) the overall market strategy.

47 The PowerPoint presentations contained information regarding the projects for the EDG such as the projects’ preliminary diagnosis, scope, deliverables, duration and the fees involved.

48 All of this is not publicly available information.[note: 33] At the very least, it would amount to confidential information concerning TheJellyHearts and Pine Marketing and information for which the plaintiff owed them a duty of confidence.

49 I therefore find that the business plans / proposals and PowerPoint presentations which the plaintiff produced for TheJellyHearts and Pine Marketing amount to Protected Information.

Knowledge of the crucial window

50 The plaintiff has pleaded that the “crucial window” is the period of time whereby the plaintiff would be awaiting the outcome of the EDG application. The potential clients would then decide, upon receiving the outcome, whether to proceed with the plaintiff’s recommendations. It has not identified any specific documents which would contain this, other than the email correspondence between the plaintiff and the EDG applicant, and between the EDG applicant and Enterprise Singapore.

51 The fact that TheJellyHearts and Pine Marketing were awaiting the outcome of their EDG applications made under the plaintiff’s advice, would be information only known to them and the plaintiff. At the very least, it would amount to confidential information concerning TheJellyHearts and Pine Marketing and information for which the plaintiff owed them a duty of confidence.

52 I therefore find that knowledge that TheJellyHearts and Pine Marketing were awaiting the outcome of their EDG applications (or what the plaintiff terms as the crucial window) would amount to Protected Information.

Did the defendant breach the Confidentiality Clauses?

53 The defendant raised a pleading objection that it is not clear how exactly the defendant is said to have breached the Confidentiality Clauses.[note: 34] However, as noted at [25] above, the plaintiff has clarified that its case is that the defendant had used its client list and/or contact details to get in touch with TheJellyHearts and Pine Marketing, substantively reproduced its business plans / proposals and/or PowerPoint presentations in respect of TheJellyHearts and Pine Marketing for Capex, and used the email correspondence and knowledge that they were in the crucial window to ascertain the appropriate juncture for diverting them.

54 Given that the plaintiff’s case was clarified by way of its opening statement and Ms Teo Hwee Cheng Magdalene (“Ms Teo”)’s affidavit of evidence-in-chief (“AEIC”), I find that allowing the plaintiff’s arguments on how the defendant allegedly misused its Protected Information would not cause irreparable injustice or prejudice to the defendant. I therefore proceed to consider if the plaintiff has established its case as clarified.

55 The plaintiff argues that the defendant would not have been able to conclude or execute agreements with TheJellyHearts or Pine Marketing within such a short time without the plaintiff’s confidential information. The plaintiff further argues that by virtue of the defendant’s allegedly overlapping employment with the plaintiff and Capex on or before 29 July 2021, information would have been disclosed to Capex whether directly or indirectly.[note: 35] Mere assertions are not enough. It is for the plaintiff to prove that the defendant had committed the breaches as pleaded.

56 The defendant’s main contention is that there was simply no breach of the Confidentiality Clauses as he did not retain or disclose any Protected Information to third parties. The defendant also claims that he had not been requested by the plaintiff to delete any information upon his termination and that he had not removed any materials from the plaintiff’s premises. Any business plans / proposals and PowerPoint presentations were given to him by TheJellyHearts and/or Pine Marketing.[note: 36]

57 However, this argument ignores clause 7.2, which obliges the defendant to return to the plaintiff, upon termination of his employment, all material, documents, copies of such documents and tangible items which contain confidential information and belong to the plaintiff. This is not contingent on a prior demand. Further and in any event, the plaintiff had in its letter of demand issued on 22 November 2021, demanded the defendant to delete all confidential information[note: 37].

58 I now deal with the evidence in respect of TheJellyHearts and Pine Marketing.

TheJellyHearts

59 The documentary evidence before the court is as follows:

(a) On 29 July 2021, the defendant emailed Mr Loh informing him that he was leaving the plaintiff, and that the plaintiff’s Thomas Chia would be taking over[note: 38].

(b) On 24 August 2021, Mr Loh forwarded an email from Enterprise Singapore requesting further information to the defendant at his Capex email address.[note: 39]

(c) On 25 August 2021, the defendant replied Mr Loh’s email, appending a proposed reply to Enterprise Singapore, and annexing amongst other things, a business plan / proposal and a PowerPoint presentation[note: 40].

(d) On 7 October 2021, the defendant, under Capex, signed a project agreement with TheJellyHearts for the same project scope that was to be undertaken by the plaintiff.[note: 41]

60 I will first deal with the issue of client list / contact details, email correspondence and knowledge of the crucial window. The plaintiff says that the defendant retained and/or misused its client list and contact details because he was able to continue contacting Mr Loh even after leaving the plaintiff’s employment.[note: 42] The plaintiff says that the defendant was clearly aware from the email correspondence and knowledge of the crucial window that TheJellyHearts was waiting for its EDG application to be approved, and was therefore able to divert TheJellyHearts.[note: 43]

61 The plaintiff has not adduced any evidence that after the defendant’s employment with the plaintiff ended, the defendant retained the plaintiff’s client list or its email correspondence with TheJellyHearts.

62 Ms Teo conceded that the plaintiff does not have evidence that the defendant took the client list, and it was possible that it was TheJellyHearts that reached out to the defendant.[note: 44]

63 That is in fact the defendant’s position. He says that after his email of 29 July 2021, Mr Loh called him to ask about his future plans. The defendant then mentioned that he would be working for another consultancy firm on an ad-hoc basis but did not ask Mr Loh to transfer his project to him / Capex. Subsequently, Mr Loh reached out to the defendant on his own in August 2021 to ask if Capex could take over as consultant for the project as he was dissatisfied with the plaintiff’s service.[note: 45]

64 The plaintiff has not produced any evidence that it was the defendant that approached TheJellyHearts to divert its business, and in the process misused its client contact details and knowledge of the crucial window. It was only on the stand that Ms Teo claimed that she had a call with Mr Loh, whereby he informed her that the defendant approached him to continue the project. She however accepted that she was not able to confirm whether it was Mr Loh that chose Capex or if it was the defendant that approached Mr Loh.[note: 46] Mr Loh was not called as a witness to these proceedings.

65 The plaintiff’s case largely rests, instead, on the defendant’s alleged lack of credibility.

66 First, the plaintiff argues that the defendant failed to produce relevant documents, in the form of his WhatsApp messages with Mr Loh. The defendant’s explanation is that he regularly deletes WhatsApp correspondence from his mobile phone every 1 to 2 months to free up storage space. [note: 47] His WhatsApp messages with Mr Loh between 1 August 2021 to 16 November 2021 were therefore last in his possession sometime between 1 September to 30 November 2021[note: 48].

67 The plaintiff has not provided any evidence to contradict the defendant’s explanation. It has merely made a bare assertion that the defendant must have deliberately deleted his WhatsApp messages in response to the plaintiff’s letter of demand sent on 22 November 2021.

68 I decline to draw adverse inferences against the defendant for not producing his WhatsApp messages with Mr Loh. I note he was also not able to provide any WhatsApp messages with Mr Loh from 1 February 2021 to 31 July 2021, which he says were last in his possession around 1 March to 30 September 2021, and which is consistent with his explanation that he regularly deletes WhatsApp correspondence to free up storage space. This pre-dates the plaintiff’s letter of demand. This is thus not a case of selective production of WhatsApp messages.

69 Next, the plaintiff argues that the defendant had lied that TheJellyHearts’ reason for not engaging the plaintiff was due to the plaintiff’s lack of promptness in following up.[note: 49] I do not see this as a lie. The defendant had explained that this was what he understood from Mr Loh.[note: 50] Under cross-examination, when shown various emails between the plaintiff and TheJellyHearts, the defendant was candid in accepting that the plaintiff did not in fact appear unresponsive[note: 51].

70 Lastly, the plaintiff asks that adverse inferences be drawn against the defendant for failing to call Mr Loh as a witness. In the first place, the plaintiff itself has not discharged its burden of proving that the defendant approached Mr Loh to divert TheJellyHearts’ business or misused the plaintiff’s client contact details, email correspondence or knowledge that TheJellyHearts was in the crucial window. Adverse inferences should not be drawn to shore up glaring deficiencies in the plaintiff’s case.

71 In summary therefore, I find that the plaintiff has failed to establish its case that the defendant misused the plaintiff’s client list, Mr Loh’s contact details, email correspondence relating to TheJellyHearts or knowledge that TheJellyHearts was within the crucial window.

72 In relation to the business plan / proposal and PowerPoint presentation for TheJellyHearts, the plaintiff has not produced any direct evidence that the defendant took these from the plaintiff. However, the business plan / proposal and PowerPoint presentation (dated 4 August 2021) which the defendant sent Mr Loh on 25 August 2021[note: 52] are very similar to what the plaintiff prepared for TheJellyHearts[note: 53]. The defendant conceded their similarity and that he had only amended 1 page of the business plan / proposal and changed the quotation in the PowerPoint presentation[note: 54].

73 The defendant’s explanation for the similarity is that he had obtained the plaintiff’s business plan / proposal and PowerPoint presentation from Mr Loh. I am not persuaded by this.

74 In his AEIC, the defendant only made a general assertion that any information from the materials about potential clients were due to the knowledge which he picked up working on them during his employment with the plaintiff, or were otherwise given to him by these potential clients after he left the plaintiff.[note: 55] It was only in cross-examination that the defendant claimed for the first time that Mr Loh had given him a copy of the business plan / proposal, a quotation for machines and information pertaining to TheJellyHearts in person, via a thumb drive, sometime in early August.[note: 56]

75 It is odd why Mr Loh had to provide the business plan / proposal to the defendant by way of a thumb drive, when the parties had been communicating via email, and the defendant had confirmed that his Capex email address was set up as of that date. The defendant was not able to provide any explanation.[note: 57] No thumb drive has been disclosed in these proceedings even though the defendant confirms that it is still in his possession[note: 58].

76 The defendant’s account of how he came to possess the business plan / proposal and PowerPoint presentation is rendered even less credible by the defendant’s failure to call Mr Loh. The defendant had initially, in his list of witnesses dated 12 May 2022, indicated Mr Loh as a witness.[note: 59] The defendant’s only explanation for Mr Loh’s absence was that Mr Loh was not comfortable giving evidence and the defendant was not aware that a subpoena could be issued to compel his attendance.[note: 60] Given that the plaintiff has prima facie established the defendant’s misuse of its business plan / proposal and PowerPoint presentation for TheJellyHearts, it would therefore be appropriate here to draw an adverse inference that Mr Loh’s evidence in this respect would be unfavourable to the defendant.

77 I do not see any basis for the defendant’s submission that I should instead draw an adverse inference against the plaintiff for failing to call Mr Loh as a witness. The plaintiff’s witnesses were not cross-examined on why the plaintiff did not do so. Ms Teo confirmed that TheJellyHearts is not a current client of the plaintiff and she did not have any form of working relationship or friendship with Mr Loh[note: 61]. The plaintiff’s failure to call Mr Loh as a witness is therefore not an unreasonable one.

78 In the circumstances, it is more likely than not that the defendant was able to produce for Capex, the business plan / proposal and PowerPoint presentation in respect of TheJellyHearts, because he had retained the plaintiff’s business plan / proposal and PowerPoint presentation for TheJellyHearts after his employment with the plaintiff ended. By reproducing these for Capex, he had misused the plaintiff’s Protected Information.

Pine Marketing

79 The documentary evidence before the court is as follows:

(a) On 29 July 2021, the defendant sent Mr Ong an email informing him that he was leaving the plaintiff, and in his absence his colleagues will be reaching out to him.[note: 62]

(b) On 3 August 2021, one Ms Januka Singam (“Ms Singam”) of SATO Asia Pacific Pte Ltd (“SATO”), a third party vendor providing a RFID Technology System for Pine Marketing’s project, emailed Mr Ong on a meeting scheduled for 5 August 2021. The defendant was copied via his Capex email address.[note: 63]

(c) On 4 August 2021, Mr Ong emailed the defendant at his Capex email address, a signed project agreement between Pine Marketing and Capex Consulting[note: 64].

(d) Shortly after, on the same day, Mr Ong sent the letter of offer which Pine Marketing received from Enterprise Singapore on 25 May 2021 to the defendant at his Capex email address.[note: 65]

80 I first deal with the issue of client list / contact details, email correspondence and knowledge of the crucial window. The plaintiff says that the defendant retained and/or misused the client lists and contact details because he was able to continue contacting Mr Ong even after leaving the plaintiff’s employment.[note: 66] The plaintiff says that the defendant was clearly aware from the email correspondence and knowledge of the crucial window that Pine Marketing was waiting for its EDG application to be approved, and was therefore able to divert Pine Marketing.[note: 67]

81 As noted above, the plaintiff has not adduced any evidence that after the defendant’s employment with the plaintiff ended, the defendant retained the plaintiff’s client list. Neither has it adduced any evidence that the defendant retained its email correspondence with Pine Marketing.

82 The plaintiff asserts that the defendant must have directed Mr Ong to inform it on 18 August 2021[note: 68] that Pine Marketing was supposedly holding back on the EDG application due to the bad market, and this is because the defendant had diverted Pine Marketing unlawfully[note: 69]. This is mere speculation and was not put to either the defendant or Mr Ong in cross-examination.

83 In fact, Ms Teo conceded that the plaintiff does not have evidence that the defendant took the client list, and it was possible that it was Pine Marketing that reached out to the defendant.[note: 70]

84 Mr Ong corroborates the defendant’s account of how Pine Marketing became Capex’s client[note: 71]. They say that it was Mr Ong who called the defendant shortly after his email of 29 July 2021. Mr Ong asked him for advice on how to proceed and expressed worry that there would not be a proper handover. Mr Ong also asked if there would be any possibility for the defendant to continue as consultant for the project. The defendant mentioned that there was such a possibility as he would be working for Capex on an ad-hoc basis. The defendant says that it was through Mr Ong’s conversation with Ms Singam and one Ms Esther Tan (“Ms Tan”) of SATO that Mr Ong decided to proceed with the defendant, and it was on this basis that a meeting on 5 August 2021 was arranged to discuss next steps.[note: 72]

85 The plaintiff submits that no or little weight should be given to Mr Ong’s evidence, as there are doubts as to the accuracy of his memory. However, while there were details which Mr Ong had admitted he was not able to remember, this does not detract from the gist of his evidence, which he maintained on the stand, that he was the one who reached out to the defendant and that it was his collective decision with SATO to proceed with the defendant as consultant[note: 73].

86 As was the case for TheJellyHearts, the plaintiff’s case largely rests, instead, on the defendant’s lack of credibility. The plaintiff submits that the defendant’s account should not be believed as he has failed to disclose relevant documents or called material witnesses.

87 First, the plaintiff takes issue with the defendant’s non-disclosure of his WhatsApp messages with Mr Ong. The defendant’s explanation is that he regularly deletes WhatsApp correspondence from his mobile phone every 1 to 2 months in order to free up storage space. The WhatsApp messages between 1 August 2021 to 16 November 2021 were therefore last in his possession sometime between 1 September to 30 November 2021[note: 74].

88 The plaintiff has not provided any evidence to contradict this[note: 75] or to substantiate its bare assertion that this deletion was in response to the plaintiff’s letter of demand.

89 I accept the defendant’s explanation as it is consistent with how he has also not been able to provide his WhatsApp messages with Mr Ong from 1 February 2021 to 31 July 2021, which he says were last in his possession around 1 March to 30 September 2021, before the plaintiff’s letter of demand. This is again not a case of selective production of WhatsApp messages.

90 Insofar as the plaintiff argues that the defendant could have obtained the WhatsApp messages from Mr Ong himself, such that his failure to do so should result in adverse inferences against him, I decline to do so as to begin with, the plaintiff itself has not made out its claim on alleged retention / misuse of client list, client contact details, email correspondence or knowledge of the crucial window. In any event, the defendant called Mr Ong as his witness.

91 The next alleged non-disclosure relates to an email chain with Mr Ong[note: 76]. The plaintiff submits that as the subject of the email reads “Re…”, this suggests that this was in response to an email from the defendant that has not been disclosed[note: 77]. While the defendant initially gave an incredible explanation that he had inserted “Re” in Mr Ong’s email[note: 78], the defendant later conceded that he did not actually do so.[note: 79] I note the defendant’s submission that the full email chain in its original Outlook Message format had been furnished during discovery. [note: 80]

92 Next, the plaintiff argues that the defendant had lied that it was at a meeting of 3 or 4 August 2021 that Pine Marketing and Capex signed the project agreement in person.[note: 81] I am not able to accept the plaintiff’s argument that the document was signed digitally and not scanned. There is no evidence on this. Mr Ong could not remember how it was signed.[note: 82] That said, the defendant’s claim that the project agreement was signed in person at this meeting is at odds with his own evidence that as of that date, he had merely informed Mr Ong that there was a possibility that he could handle Pine Marketing’s project.[note: 83]

93 Nonetheless, this discrepancy in the defendant’s evidence does not tip the scales given that the plaintiff has not made out its case that the defendant misused the plaintiff’s client list, Mr Ong’s contact details, email correspondence relating to Pine Marketing or knowledge that Pine Marketing was within the crucial window.

94 I also did not draw any adverse inferences against the defendant for not calling Ms Tan or anyone from SATO. I do not see how their evidence is material, as Mr Ong, being the representative from Pine Marketing, is already called as a witness.

95 In relation to the business plan / proposal and PowerPoint presentation for Pine Marketing, the plaintiff has not produced any direct evidence that the defendant took these from the plaintiff.

96 It is not clear if the defendant prepared a business plan / proposal for Pine Marketing on behalf of Capex. No such business plan / proposal is in evidence. Accordingly, the plaintiff has not discharged its burden of proving that the defendant retained and/or misused the plaintiff’s business plan / proposal for Pine Marketing.

97 However, the defendant disclosed Capex’s PowerPoint presentation for Pine Marketing, dated 4 August 2021[note: 84]. Capex’s PowerPoint presentation for Pine Marketing is substantially similar to the plaintiff’s PowerPoint presentation for Pine Marketing[note: 85].

98 The defendant’s explanation for the similarity is that he had obtained the plaintiff’s PowerPoint presentation from Mr Ong. I am not convinced.

99 In his AEIC, the defendant only made a broad assertion that any information from the materials about potential clients were either due to the knowledge which he picked up working on them during his employment with the plaintiff, or were otherwise given to him by these potential clients after he had left the plaintiff.[note: 86] Further, in his AEIC, the defendant only claimed that there was a call with Mr Ong on 29 July 2021 and a meeting on 5 August 2021. It was only in cross-examination that the defendant claimed for the first time that Mr Ong had given him “the document” in person via a thumb drive, 1 or 2 days before the meeting with SATO on 5 August 2021[note: 87].

100 Again, it is odd why Mr Ong chose to provide the PowerPoint presentation to the defendant by way of a thumb drive, when the parties had been communicating via email, using the defendant’s email address with Capex. No thumb drive has been disclosed in these proceedings.[note: 88]

101 Mr Ong was not able to recall whether he had given the defendant a business proposal.[note: 89] (He was not asked if he had given the defendant the plaintiff’s PowerPoint presentation for Pine Marketing.) Mr Ong also could not recall if there was any meeting with the defendant between 29 July and 5 August 2021, but he did not think that there was[note: 90].

102 Considering the above in totality, it is more likely than not that the defendant was able to produce the PowerPoint presentation in respect of Pine Marketing for Capex, because he had retained the plaintiff’s PowerPoint presentation for Pine Marketing after his employment with the plaintiff ended. By reproducing these for Capex, he had misused the plaintiff’s Protected Information.

Conclusion on breach of Confidentiality Clauses

103 In conclusion therefore, I find that the plaintiff has made out its case only to the extent that the defendant retained the plaintiff’s: (1) business plan / proposal for TheJellyHearts; (2) PowerPoint presentation for TheJellyHearts; and (3) PowerPoint Presentation for Pine Marketing, and wrongfully made use of these to the benefit of Capex’s business.

104 This would be a breach of clauses 7.1, 7.2 and 7.3, which prohibit the defendant from making use of Protected Information, obliges him to return to the plaintiff on termination of his employment all such material containing Protected Information, and prohibits him from removing from the plaintiff’s premises any materials which contain Protected Information. To the extent that he has also misused these for the benefit of Capex, he has also disclosed this to Capex, and therefore is in breach of clause 6.1 as well.

Did the defendant breach an equitable duty of confidence?

What is the applicable test in determining whether there has been a breach of confidence?

105 The defendant argues that any obligations of confidence owed to the plaintiff have been set out in the Agreement, and he does not owe the plaintiff any additional obligations of confidence in equity. The defendant relies on Adinop for the proposition that where there is a stipulated contractual duty of confidence, the court will not ordinarily impose additional or more extensive obligations of confidentiality in equity (at [40]).

106 However, the defendant has omitted to cite the second part of that statement, that there are occasions that equity may step in to impose a duty of confidence, for instance where the contract does not necessarily assuage conscience, so that equity may yet give force to conscience. In Adinop, notwithstanding the existence of confidentiality clauses, the court went on to consider the plaintiff’s alternative cause of action for breach of confidence in equity.

107 In an action for a breach of an equitable duty of confidence, the relevant test to be applied depends on whether the plaintiff is seeking to protect a wrongful gain interest or a wrongful loss interest: Shanghai Afute Food and Beverage Management Co Ltd v Tan Swee Meng [2023] SGHC 34 (“Shanghai Afute”) at [100].

108 A wrongful gain interest is one whereby the defendant has made unauthorised use or disclosure of confidential information and thereby gained a benefit. A wrongful loss interest is where the plaintiff is seeking protection for the confidentiality of the information itself.

109 In the case of wrongful gain interest, the traditional test in Coco v AN Clark (Engineers) Ltd [1969] RPC 41 applies (“the traditional approach”). The plaintiff has to prove 3 elements, namely:

(a) the information must possess the necessary quality of confidence;

(b) the information must have been imparted or received in circumstances importing an obligation of confidentiality; and

(c) there must have been unauthorised use of the information, and in appropriate cases, this use must be to the detriment of the party who originally communicated it.

110 On the other hand, if it is a wrongful loss interest that is sought to be protected, then the test in I-Admin (Singapore) Pte Ltd v Hong Ying Ting [2020] 1 SLR 1130 (“I-Admin”) applies. Once the plaintiff proves the first 2 elements (at [109(a) and (b)]), an action for breach of confidence is presumed. The legal burden is on the defendant to prove that its conscience was unaffected (“the modified approach”).

111 How then does one determine the interest that is sought to be protected? The plaintiff has not pleaded what this is. In closing submissions, it argues that it is claiming a wrongful loss interest and therefore the modified approach should apply, without elaborating further. The defendant has not taken a position as to which interest is sought to be protected, and simply submits that regardless of the test, there is no breach of duty of confidence as the Alleged Confidential Information did not possess the necessary quality of confidence and was not imparted in circumstances of confidentiality.[note: 91]

112 I express doubt as to whether the relevant interest the plaintiff is seeking to protect is in fact a wrongful loss interest.

113 The court in Shanghai Afute confirmed that the modified approach was intended to apply only to cases involving unauthorised acquisition of confidential information. In Shanghai Afute, even though the pleadings were not clear on the nature of interest relied on, the court found that the relevant interest was the wrongful gain interest because the plaintiff pleaded that the confidential information was provided to further a franchise arrangement, but the defendants subsequently used the information in a competing business without the plaintiff’s knowledge and thereby derived a pecuniary benefit (at [104]).

114 Applying the above analysis, it would seem that the plaintiff is seeking to protect a wrongful gain interest, and hence the traditional approach ought to apply. This is because the plaintiff asserts that the defendant had access to confidential information by virtue of his employment with the plaintiff, which he then retained after his employment without the plaintiff’s consent and wrongfully made use of it for the benefit of Capex. There is no assertion that the defendant was not authorised to acquire the information in the first place.

115 However, I say no more since the defendant has not taken any issue with the plaintiff’s characterisation of its interest as a wrongful loss interest.

Does the Alleged Confidential Information have the necessary quality of confidence?

116 The parties disagree on whether the Alleged Confidential Information has the necessary quality of confidence.

117 The plaintiff submits that the appropriate yardstick to determine whether information possesses the necessary quality of confidence is whether it would be just in the circumstances to require the party against whom a duty of confidentiality is alleged to treat the information as confidential. One key factor is whether the information has entered into the public domain, or whether it remains relatively secret or relatively inaccessible to the public as compared to information already in the public domain: Angliss Singapore Pte Ltd v Yee Heng Khay (alias Roger) [2021] SGHC 168 (“Angliss”) at [39].

118 I pause to note that not all information that an employee is obliged to keep confidential during his employment is information that is protectable as confidential information after he ceases to be employed. Only information which is of a sufficiently high degree of confidentiality as to amount to a trade secret would be protected after the termination of employment: Asia Petworld v Sivabalan s/o Ramasami & Anor [2022] 5 SLR 805 (“Asia Petworld”) at [42] – [43].

Client list and/or contact details

119 Customer information contained in customer lists has been held to constitute confidential information: Angliss at [41]. That said, as mentioned above, there is no evidence that the defendant had retained the plaintiff’s client list after his employment with the plaintiff. I accept the defendant’s account that it was Mr Loh and Mr Ong that reached out to him.

120 Where there was no evidence of information or documents being taken from a plaintiff at the end of employment, such information is simply knowledge and experience that a departing employee legitimately acquired while working for the plaintiff and is therefore not information possessing the requisite quality of confidence: Asia Petworld at [46], [54]. In that case, information such as the identity of suppliers was held not to possess the necessary quality of confidence.

121 Similarly, information as to the identities of Mr Loh and Mr Ong as representatives of TheJellyHearts and Pine Marketing would be information the defendant acquired as a result of working for the plaintiff. This is not information that possesses the necessary quality of confidence.

Email correspondence

122 The plaintiff states that these possess the necessary quality of confidence as they are marked with the statement: “Privileged/Confidential information may be contained in this message. If you are not the intended recipient, please notify the sender and delete it immediately. Do not copy, disclose or disseminate it or its contents in any form.”[note: 92] The plaintiff relies on Adinop for the proposition that the existence of confidentiality markings may indicate parties’ intention to treat the information as confidential (at [61]).

123 I do not find the existence of a confidentiality marking dispositive of whether the email correspondence possesses the necessary degree of confidence. First, the statement in the emails only states that they “may” contain privileged and confidential information.

124 Further, it is not clear to me that Adinop stands for the plaintiff’s proposition. Adinop concerned an express confidentiality clause which provided that disclosure of confidential information would only be protected under the confidentiality agreement if they are reduced to writing, marked “confidential” and sent to the receiving party (at [16], [64]). It was therefore on this factual basis, that the court found that certain lists which came with confidential markings, fell within the scope of the confidential agreement. In contrast, there is no such provision in the Agreement.

125 Having said that, there is High Court authority that the existence of a confidentiality statement marked on top of a document helped indicate its confidentiality (PH Hydraulics & Engineering Pte Ltd v Intrepid Offshore Construction Pte Ltd [2012] 4 SLR 36 (“PH Hydraulics”) at [45]). Unlike Adinop, this was a case where the confidentiality agreement in question did not specifically require confidentiality markings before the information would be deemed confidential. The court however stated that the mere existence of a confidentiality statement is, in any case, not conclusive.

126 I do not place any weight on the fact that the defendant adopted the same confidentiality language in Capex’s emails with its clients. The plaintiff relied on this to argue that the defendant himself takes the position that such information is confidential.[note: 93] Whether the information concerned possesses the necessary qualify of confidence is independent of the subjective intentions that a party may hold.

127 The defendant contends that the email correspondence cannot amount to confidential information because this was sent to TheJellyHearts or Pine Marketing, who are free to share them with other parties. [note: 94]

128 However, even though the email correspondence would be in the possession of TheJellyHearts or Pine Marketing, this does not render them in the public domain.

129 Information would not be regarded as being in the public domain just because a number of people know about it. Whether the information was published in a sufficiently widespread manner for it to lose confidentiality depends on various factors such as type of information, the section of public who have an interest in knowing about the information, the domain in which the publication occurred, the degree of publication in that domain, the form in which the information is published and the vigour with which the information is likely to be pursued within that domain: PH Hydraulics at [46].

130 The defendant has also not produced any evidence that TheJellyHearts or Pine Marketing widely disseminated the email correspondence thereafter to third parties.

131 Ultimately however, given the absence of evidence that the defendant retained the plaintiff’s email correspondence with TheJellyHearts and/or Pine Marketing at the end of his employment, the status of TheJellyHearts and Pine Marketing’s applications for EDG would be information the defendant acquired as a result of working for the plaintiff (see [120] above).

132 The email correspondence with TheJellyHearts and Pine Marketing therefore does not possess the necessary quality of confidence.

Business plans / proposals and/or PowerPoint presentations

133 The plaintiff states that the business plans / proposals and PowerPoint presentations possess the necessary degree of confidence as these were the product of the plaintiff’s consultants’ work in compiling data and doing the necessary calculations.[note: 95]

134 The defendant argues that the business plans / proposals and PowerPoint presentations do not possess the necessary quality of confidence as the information therein belongs to TheJellyHearts and Pine Marketing, and they are free to share these with other parties.[note: 96]

135 As noted at [129], the mere fact that some people were aware of the business plans / proposals and PowerPoint presentations does not render them in the public domain.

136 Further, information would possess the necessary quality of confidence if a plaintiff is able to show that the information was a product of some amount of labour and effort such that any other member of the public will have to go through a similar process of effort and labour to reach the same destination: Invenpro (M) Sdn Bhd v JCS Automation Pte Ltd [2014] 2 SLR 1045 at [130(c)].

137 I accept that the plaintiff’s business plans / proposals and PowerPoint presentations for TheJellyHearts and Pine Marketing were the results of the plaintiff’s consultants’ efforts in compiling data and were specifically curated for them based on their needs, as well as the plaintiff’s knowledge and expertise.[note: 97] The defendant agreed that he had consolidated the information and crunched the numbers in the business plans / proposals.[note: 98] The business plans / proposals and PowerPoint presentations therefore possess the necessary quality of confidence.

138 For completeness, I did not accept the plaintiff’s argument that the business plans / proposals must amount to property of the plaintiff and confidential to the plaintiff as they were prepared by the defendant while being paid a salary by the plaintiff.[note: 99] Not all work product produced by an employee in the course of his employment would necessarily amount to confidential information.

Knowledge of the crucial window

139 The plaintiff says that knowledge of the crucial window possesses the necessary degree of confidence as this was not in the public domain and accessible only to those with access to the relevant email correspondence.[note: 100]

140 The defendant disputes that there was such a crucial window or that it was crucial in any way, as it was not highlighted to employees that this period of waiting was confidential[note: 101].

141 The fact that a company which applied for the EDG has to wait for the outcome of the EDG application before deciding whether to proceed with the plaintiff on its recommendations would constitute knowledge and experience that an employee acquires during his employment, which is not protectable confidential information: Asia Petworld at [43].

142 Additionally, given the absence of evidence that the defendant retained the plaintiff’s email correspondence with TheJellyHearts and/or Pine Marketing at the end of his employment, knowledge that TheJellyHearts and Pine Marketing were awaiting the approval of their EDG applications would be information solely residing in the defendant’s head which cannot constitute information possessing the necessary quality of confidence (see [120] above).

Was the Alleged Confidential Information imparted in circumstances such as to give rise to an obligation of confidentiality?

143 The test is whether any reasonable person in the shoes of the recipient would have known on reasonable grounds that the information was confidential and given to him in confidence: Adinop at [88].

144 The defendant argues that there were no circumstances importing an obligation of confidence because he did not retain any of the Alleged Confidential Information, and only came into possession of the business proposals / plans and/or PowerPoint presentations relating to TheJellyHearts or Pine Marketing as he received them directly from Mr Loh and Mr Ong.[note: 102]

145 However, information would be imparted in circumstances giving rise to an obligation of confidentiality if this was imparted from an employer to employee, which relationship entails good faith, loyalty and fidelity: Asia Petworld at [38].

146 The defendant accepts that an employee owes a duty of good faith and fidelity to his employer.[note: 103] Neither does the defendant dispute that he had access to TheJellyHearts and Pine Marketing’s contact details, business plans / proposals and/or PowerPoint presentations and email correspondence (and thus knowledge of which potential clients were awaiting the outcome of their EDG applications), in the course of his employment with the plaintiff.[note: 104] This would therefore render the Alleged Confidential Information as being imparted in circumstances giving rise to an obligation of confidence.

147 Whether the defendant did in fact also obtain the business proposals / plans and/or PowerPoint presentations from TheJellyHearts or Pine Marketing subsequently would only go towards the third element in a breach of confidence claim – whether there had been unauthorised use of the information, or in the case where the modified approach applies, whether the defendant’s conscience was unaffected.

Has the defendant proven that his conscience was unaffected

148 To sum it up at this point, I find that an action for breach of confidence is presumed only in respect of the plaintiff’s business plans / proposals and PowerPoint presentations for TheJellyHearts and Pine Marketing.

149 On the basis that the modified approach applies, I find that the defendant has not discharged his burden of proving that his conscience was unaffected insofar as the business plan / proposal and PowerPoint presentation for TheJellyHearts and the PowerPoint presentation for Pine Marketing are concerned. For the reasons set out earlier, I do not accept the defendant’s claim that he only obtained these from Mr Loh and Mr Ong.

150 I therefore find in favour of the plaintiff on its breach of confidence claim, but only in respect of (1) the business plan / proposal for TheJellyHearts; (2) the PowerPoint presentation for TheJellyHearts; and (3) the PowerPoint presentation for Pine Marketing.

Did the defendant breach any implied duty of good faith and fidelity?

151 The plaintiff’s claim for breach of implied duty of good faith and fidelity appears premised on the following 3 aspects:

(a) The defendant’s alleged retention of the Alleged Confidential Information after his employment with the plaintiff and misuse to divert TheJellyHearts and Pine Marketing[note: 105];

(b) The defendant’s alleged diversion of TheJellyHearts and Pine Marketing to Capex while he was still employed by the plaintiff[note: 106]; and

(c) The defendant’s alleged failure to make any effort to persuade TheJellyHearts and Pine Marketing to stay with the plaintiff or inform the plaintiff of his conversations with Mr Loh and Mr Ong so that the plaintiff could rectify the situation.[note: 107]

152 The defendant accepts that during the course of his employment, he owes the plaintiff a duty of good faith and fidelity.[note: 108] However, he denies having breached this duty and has also raised a pleading objection to the third aspect of the plaintiff’s claim. [note: 109] I will deal first with the pleading objection.

153 I agree that while the plaintiff did plead that the defendant had diverted TheJellyHearts and Pine Marketing, it did not further plead that the defendant failed to make effort to retain them for the plaintiff or inform the plaintiff of his conversations with them.

154 Even in the plaintiff’s opening statement, all the plaintiff said was that the defendant had diverted the plaintiff’s clients, and preferred his own interest over the plaintiff’s[note: 110]. It was not put to the defendant in cross-examination that the defendant failed to make effort to retain TheJellyHearts and Pine Marketing or to inform the plaintiff of his conversations with them.

155 In relation to the alleged retention and misuse of the Alleged Confidential Information, the defendant argues that the plaintiff’s own pleading is that the wrongful act of retention took place after the defendant’s employment with the plaintiff. It cannot be the case that an ex-employee owes his former employer a duty of good faith and fidelity.[note: 111]

156 I agree. The plaintiff has not put forward any basis for arguing that an implied duty of good faith and fidelity exists post the termination of employment.

157 Further, for the reasons earlier, I find that the plaintiff has only proven that the defendant retained and misused the business plan / proposal and PowerPoint presentation for TheJellyHearts and the PowerPoint presentation for Pine Marketing after his employment with the plaintiff. There is no evidence that the misuse took place during the defendant’s employment with the plaintiff.

158 Lastly, in relation to the alleged diversion of TheJellyHearts and Pine Marketing, soliciting an employer’s customers would be in breach of an employee’s duty of good faith and fidelity. This includes soliciting customers to transfer their custom to an employee after his employment with the employer was terminated: Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart [2012] 4 SLR 308 (“Smile Inc”) at [67] – [70]. On the other hand, the taking of mere preparatory steps would not amount to a breach of the duty of good faith: Smile Inc at [65].

159 The plaintiff relies on one Rina Lim’s email of 29 July 2021[note: 112] to argue that the defendant already had an email address with Capex on 29 July 2021, and was requesting a client’s branding proposal on behalf of Capex. However, the mere existence of an email address with Capex is not enough. It is not clear, and the defendant was not asked, why he had requested this proposal. In any event, this proposal related to Prime Deli, which the plaintiff admits the defendant did not divert.

160 There is no evidence that the defendant was already working for Capex full-time since 29 July 2021. While the defendant has not produced his employment contract with Sopexa Singapore, the defendant has provided his letter of employment with Capex which shows his commencement date as 1 November 2021.[note: 113] It is in any event not the plaintiff’s pleaded case that the defendant was already working full-time for Capex during his employment with the plaintiff. The plaintiff had in fact pleaded that the defendant was employed and/or engaged or assisted Capex since 30 August 2021.[note: 114]

161 Neither is it sufficient that TheJellyHearts and Pine Marketing eventually signed project agreements with Capex on 7 October 2021 and 4 August 2021 respectively. I accept the defendant’s account that it was Mr Loh and Mr Ong that reached out to him (see [63] and [84] above).

162 In the circumstances, I find that the plaintiff has not discharged its burden of proving that the defendant had diverted TheJellyHearts or Pine Marketing in the course of his employment.

Did the defendant breach the non-competition clause in the Agreement?

163 Clause 8 states:

8. Covenant Not to Compete

8.1 You shall not, for a period of one year after leaving the employment, engage directly or indirectly, either personally or as an employee, associate partner, partner, manager, agent, or otherwise, or by means of any corporate or other device, in the consultancy business within Singapore. Nor shall you for such period and in such locality solicit orders, directly, or indirectly, from any customers of SGPC, or from any customers of its successor, for such products as are sold SGPC or its successor, either for himself as an employee of any person, firm, or corporation.

8.2 The term “not to compete” as used herein shall mean that you shall not own, manage, operate, consult or to be employed in a business substantially similar to, or competitive with, the present business of SGPC or such other business activity in which SGPC may substantially engage during the term of employment.

164 The plaintiff claims that the defendant breached clause 8 of the Agreement, because he has been employed and/or engaged by Capex, or has otherwise assisted Capex in their business, since 30 August 2021, soon after leaving the plaintiff’s employment and before the cessation of one year.[note: 115]

165 Though clause 8 is titled “covenant not to compete”, there are arguably two distinct obligations: first, not to be engaged in a consultancy business in Singapore for 1 year, and second, not to solicit customers of the plaintiff or its successor for 1 year. The plaintiff thus appears to be proceeding on the first obligation only (“Non-Compete”)[note: 116].

166 All covenants in restraint of trade are prima facie void and unenforceable. The plaintiff accepts that it has to show that the restraint protects a legitimate proprietary interest and that it is reasonable in the interests of both the parties and the public: Smile Inc at [19].

Does the Non-Compete protect a legitimate proprietary interest

167 The plaintiff submits that it has a legitimate interest to be protected, in the form of client and trade connections.[note: 117]

168 The defendant has raised a pleading objection, in that the plaintiff had not pleaded or particularised the legitimate interest it seeks to protect[note: 118].

169 However, in 3D Networks Singapore Pte Ltd v Voon South Siong & Anor [2022] SGHC 167 (“3D Networks”) at [35], the court rejected the defendant’s objection that there was no pleading on the legitimate proprietary interest to be protected by a non-compete clause, as the enforceability of a non-compete is a matter of law that does not have to be pleaded. What matters, for the purpose of enabling the defendants to know the case brought against them, are the underlying relevant facts (which in that case was the position of the employee viz the plaintiff’s clients and suppliers). The court found that it was sufficient that these underlying facts were adequately pleaded, and the plaintiff’s case on the legitimate proprietary interest was set out clearly in its opening statement.

170 Similarly, the plaintiff here has, in its opening statement, identified the legitimate proprietary interest it was seeking to protect.[note: 119] It has also pleaded that the defendant, as the plaintiff’s senior consultant, had been assigned to specific projects and/or clients to manage the projects and work with them directly.[note: 120]

171 I pause to note that where an employer’s confidential information or trade connections are already covered by another clause in the contract, the employer has to show that the restraint of trade clause in question covers a legitimate proprietary interest over and above the protection of confidential information or trade connections: Man Financial (S) Pte Ltd v Wong Bark Chuan David [2008] 1 SLR(R) 663 (“Man Financial”) at [92]. Given the existence of the Confidentiality Clauses, the plaintiff has, rightly, not asserted that the legitimate interest sought to be protected was its confidential information.

172 However, as noted above, clause 8 does have a non-solicitation aspect (which the plaintiff has not pursued). Insofar as client and trade connections are arguably already covered by the non-solicitation obligation, it ought to be, following the principle in Man Financial, for the plaintiff to show a legitimate interest over and above client and trade connections warranting the Non-Compete. However, as the defendant has not made this argument, I say no more.

173 Coming back to trade connections, this has been recognised as a legitimate proprietary interest meriting protection where there is personal knowledge of (and influence over) the customers of the employer: Man Financial at [93]. The defendant was a senior consultant with the plaintiff, whose job was to source for potential clients interested in applying for an EDG, assist them with their EDG applications, and follow up with them on their projects post-grant.[note: 121] I am therefore satisfied that the extent of the defendant’s knowledge of and influence over the plaintiff’s customers, means that the plaintiff has a legitimate interest in protecting its trade connections.

Is the scope of the Non-Compete reasonable?

174 Having said that, I am not satisfied that the scope of Non-Compete is reasonable.

175 I agree with the defendant’s submission that whether the defendant personally finds the restraint reasonable is irrelevant as that is not the legal test. In Man Financial, the court held that an express clause by which the individual agreed that the restraint was reasonable, did not contribute anything of substance to the inquiry into the reasonableness or otherwise of the restraint. If it did, it would mean sanctioning a covenant in restraint of trade which would otherwise be contrary to public policy (at [146] – [149]).

176 First, the activity restriction is overly broad. While it is confined to businesses substantially similar to or competitive with the plaintiff or such business which the plaintiff may engage in during the defendant’s employment, it does not merely restrict the defendant from working for a rival in the same or similar capacity as that which the defendant was working in when he was employed by the plaintiff. Instead, it applies regardless of the scope of his work with his new employer. Such a restriction would be unreasonably wide: Powerdrive Pte Ltd v Loh Kin Yong Philip and others [2019] 3 SLR 399 (“Powerdrive”) at [39] – [46]. Here, the plaintiff’s business extends beyond consultancy services relating to EDG, and includes conducting training sessions, and assisting companies seeking funding under Workforce Singapore with job redesign consultancy and the service and job transformation leadership programme.[note: 122]

177 Further, the Non-Compete goes beyond protecting customers that the defendant has personal knowledge of and/or influence over, as it simply prevents the defendant from working in a business substantially similar to or competitive with the plaintiff or such business which the plaintiff may engage in during the defendant’s employment.

178 As for the duration of the restriction, the plaintiff says that 1 year is reasonable because the consultancy for Pine Marketing took 1 year from the first correspondence to when it obtained the EDG, while it took about 8 months for TheJellyHearts.[note: 123] There is however no evidence from the plaintiff’s witnesses as to why the plaintiff took the view that 1 year was appropriate. That there were 2 projects taking 8 months to 1 year is neither here nor there, and the defendant’s evidence is that there are other cases that take a shorter amount of time.[note: 124]

179 Lastly, the defendant relies on Ms Teo’s evidence that every staff of the plaintiff would have a similar contract prohibiting competition. [note: 125] Where there was clear evidence that the employer had applied a restraint of trade clause to all its employees regardless of seniority, scope of work and access to confidential information, this would arguably not be reasonable in the interest of the public. An indiscriminate application to all employees would suggest that the true purpose of the provision was to restrain competition rather than protect a legitimate interest of an employer (Powerdrive at [27]). However, there is no clear evidence whether every employee of the plaintiff would in fact have a non-compete clause and whether the precise scope of the restriction is the same.

180 In any event, I have already found that the Non-Compete is unreasonable for the other reasons mentioned above.

Can the doctrine of severance apply?

181 The plaintiff submits that in the event I find the Non-Compete unreasonable, I can consider the doctrine of severance to uphold the reasonable part of the clause. The plaintiff did not make any submissions as to how it should be severed.[note: 126]

182 Where a restraint of trade clause is found to be unreasonable, the court should still consider whether the doctrine of severance could apply so that the reasonable part of the clause can be upheld, and even in the absence of submissions from the plaintiff on severance: 3D Networks at [43] - [44].

183 However, the perquisites of severance are as follows (3D Networks at [44]:

(a) The unenforceable provision must be capable of being removed without adding to or modifying the wording of what remains with the remainder continuing to make grammatical sense;

(b) The remaining contractual terms must continue to be supported by adequate consideration; and

(c) The severance must not change the fundamental character of the contract between the parties.

184 The notional severance approach, whereby the court is entitled to not just delete the parties’ words, but also to alter or even insert words, has not been accepted into Singapore law (3D Networks at [45]; Smile Inc at [32] –[35]).

185 This is not a case where severance would be appropriate. It is not possible to cut down the scope of the activities which the defendant is restricted from undertaking in a new employer or the duration of the restriction, without adding to or modifying the wording of clause 8.

What remedies are the plaintiff entitled to, if any?

Is the plaintiff entitled to damages or an account of profits

186 The plaintiff pleaded that it has suffered loss of least $29,500 as a result of the defendant’s breaches. It particularised this as the amount of consultancy fees it would have received from TheJellyHearts and Pine Marketing (being $25,000[note: 127] and $14,000[note: 128] respectively, less the sum of $9,500 which it would have had to pay to one GL Consulting Pte Ltd as an Associate Consultant Fee for work for TheJellyHearts.)[note: 129] It had also sought, further and/or in the alternative, damages to be assessed, an inquiry as to damages, or at the plaintiff’s option, an account of profits.[note: 130]

187 While the plaintiff has made a general statement that there should be an order in terms of the reliefs sought[note: 131], it only made submissions on its damages claim of $29,500.[note: 132] It was only in reply submissions that the plaintiff argued that even if the defendant succeeds in arguing that the breaches did not cause the loss, the plaintiff has pleaded a claim for an account of profits.[note: 133] The plaintiff did not give any basis for why an account of profits would be appropriate. It has not even sought to quantify how much should be disgorged from the defendant as representing his profit from the breaches.

188 Crucially, on the damages claim, the plaintiff did not have any signed agreement with TheJellyHearts or Pine Marketing. Insofar as the plaintiff has relied on Sng Jing Xiang Benjamin t/a Blink! Events & Entertainment v Xie Shun Heng and others and another suit [2021] SGDC 248, to argue that the lack of a contract should not preclude the grant of reliefs, the facts are very different. The defendant there had admitted that the plaintiff was entitled to payment from the client and there was clear evidence that it was the plaintiff that secured the client’s project (at [74] – [76]).

189 In contrast, Ms Teo confirmed that there were no signed agreements in relation to pre-EDG application work, and furthermore, there was no legal basis for the plaintiff to expect payment for pre-EDG application work.[note: 134]

190 To establish loss of profits, the plaintiff must show that it would as a matter of certainty, albeit on a balance of probabilities, have obtained the contract but for the defendant’s breach: Angliss at [146]. There is no evidence that but for the defendant’s breaches, TheJellyHearts or Pine Marketing would have signed project agreements with the plaintiff. The evidence of the plaintiff’s other witness, Mr Chan Kwan Hong, is that even after Enterprise Singapore awards a letter of offer, the potential client can still change consultants[note: 135]. Further, it was TheJellyHearts and Pine Marketing themselves who decided to go with Capex instead of the plaintiff.

191 Even if the plaintiff is able to show that it would have obtained the contracts with TheJellyHearts and Pine Marketing but for the defendant’s breach, it would have to prove that it suffered loss of profits of $29,500 as a result. In this regard, while it has accounted for the fees it would have had to pay GL Consulting Pte Ltd, it has not accounted for the costs that it would have to incur to perform the services for TheJellyHearts and Pine Marketing, such as its consultant’s transport costs.[note: 136] It is unclear how much this would amount to, and therefore the amount that it should ultimately be entitled to.

Is the plaintiff entitled to an injunction or order for delivery up

192 The plaintiff had pleaded for an injunction restraining the defendant, his affiliates, agents and/or servants from dealing in any way with the plaintiff’s confidential information and/or materials, and an order that the defendant, by his affiliates, agents and/or servants, deliver up and forfeit to the plaintiff all hard and soft copies of the plaintiff’s confidential information and/or materials and any of the plaintiff’s confidential information and/or materials that has been obtained, modified or adapted by them, and to destroy all copies in their custody, power and control.[note: 137]

193 While the plaintiff has made a general statement that there should be an order in terms of the reliefs sought[note: 138], the plaintiff has not elaborated further on why an injunction or order for delivery up ought to be made.

194 A plaintiff is prima facie entitled to an injunction if barring any special circumstances, he establishes that: (1) there has been a wrongful interference with their legal or equitable rights; and (2) the defendant intends to continue this wrong: I-Admin at [69].

195 The plaintiff has however not asserted, much less produced any evidence, that the defendant is still relying on the business plan / proposal and PowerPoint presentation in respect of TheJellyHearts and the PowerPoint presentation in respect of Pine Marketing. Considering that it has been almost 2 years since the documents were prepared and since the letter of grant obtained from Enterprise Singapore, it is unclear if the defendant is still relying on these documents. There would therefore be little utility or justification for granting an injunction or an order for delivery up: I-Admin at [69] – [70].

Conclusion

196 In summary, I find that the defendant breached the Confidentiality Clauses and an equitable duty of confidence, but only in respect of his use of the plaintiff’s: (1) business plan / proposal for TheJellyHearts; (2) PowerPoint presentation for TheJellyHearts; and (3) PowerPoint presentation for Pine Marketing. I dismiss the plaintiff’s claims for breach of an implied duty of good faith and fidelity and for breach of the Non-Compete.

197 However, I decline to grant an account of profits, an injunction, or an order for delivery up as the plaintiff has failed to show that these are justified in the circumstances. As the plaintiff has failed to prove its loss, I award the plaintiff nominal damages of $1.

198 Unless the parties can agree on costs, they are to file brief costs submissions, limited to ten pages, within two weeks of the date of this judgment.[Context] [Hide Context]

^{[note: 1]}Statement of Claim (Amendment No. 2) (“SOC”) at [1] – [2]

^{[note: 2]}Bundle of Affidavits of Evidence-in-Chief Volume 1 (“1BA”) 54 - 65

^{[note: 3]}The defendant’s affidavit of evidence-in-chief (“AEIC”) at [10]

^{[note: 4]}Ms Teo Hwee Cheng Magdalene (“Ms Teo”)’s AEIC at [18]

^{[note: 5]}SOC at [2] -[3]

^{[note: 6]}Defence (Amendment No. 2) (“Defence”) at [3]

^{[note: 7]}The defendant’s AEIC at [13] - [14]

^{[note: 8]}SOC at [6A], [9]

^{[note: 9]}SOC at [16]

^{[note: 10]}SOC at [17]

^{[note: 11]}The plaintiff’s reply submissions (“PRS”) at [29]

^{[note: 12]}SOC at [17]

^{[note: 13]}The plaintiff’s closing submissions (“PCS”) at [9]

^{[note: 14]}PCS at [6]

^{[note: 15]}SOC at [25]

^{[note: 16]}SOC at 17D, 1BA 23 at [80]; 1 BA 34 at [129], 1BA 42 at [170]

^{[note: 17]}Reply (Amendment No. 2) (“Reply”) at [13]

^{[note: 18]}The defendant’s AEIC at [53] – [55]; Defence at [18A]

^{[note: 19]}1BA 54 - 65

^{[note: 20]}The plaintiff’s opening statement (“POS”) at [22] – [25]

^{[note: 21]}The defendant’s Closing Submissions (“DCS”) at [28(1)]

^{[note: 22]}PCS at [89]

^{[note: 23]}DCS at [27]

^{[note: 24]}Bundle of Affidavits of Evidence-in-chief Volume 2 (“2BA”) 675 – 677; Certified Transcripts (“CT”) 15:11 -19:28

^{[note: 25]}DCS at [33(1)]

^{[note: 26]}DCS at [33(2) and (3)]; The defendant’s reply submissions (“DRS”) at [22(3)]

^{[note: 27]}Defence at [12(a)] and [12i]

^{[note: 28]}1BA 220 - 236, 305-311, 346 - 356, 378 - 415 and 2BA 417 - 425

^{[note: 29]}2BA 506 - 508; 568 - 582; 584

^{[note: 30]}SOC at [9ii – 9v]

^{[note: 31]}1BA 357 – 376; 2BA 416 - 843

^{[note: 32]}1BA 260 – 277, 2BA 527 - 550

^{[note: 33]}SOC at [9vi – 9ix]

^{[note: 34]}DCS at [28]

^{[note: 35]}PCS at [71], [84]

^{[note: 36]}DCS at [28]

^{[note: 37]}The plaintiff’s Bundle of Documents (“PBD”) 11-13

^{[note: 38]}1BA 391

^{[note: 39]}2BA 417

^{[note: 40]}2BA 417 - 476

^{[note: 41]}2BA 486 – 491

^{[note: 42]}PCS at [75]

^{[note: 43]}PCS at [77]

^{[note: 44]}CT 35:8 - 27

^{[note: 45]}The defendant’s AEIC at [44] – [46]

^{[note: 46]}CT 62:7- 64:2

^{[note: 47]}CT 136:6 - 139:9

^{[note: 48]}PBD 34- 37

^{[note: 49]}Defence at [18], the defendant’s AEIC at [44] – [46]

^{[note: 50]}CT 126:17 – 127:4

^{[note: 51]}CT 130: 6 – 131: 6

^{[note: 52]}1BA 417 – 444

^{[note: 53]}Ms Teo’s AEIC at [124] – [127]

^{[note: 54]}CT 119:13 – 120:10; CT 125: 9 - 126:15

^{[note: 55]}The defendant’s AEIC at [32]

^{[note: 56]}CT 120: 11 -123:11; CT 124: 31 – 125:2

^{[note: 57]}CT 121:19 – 123:11

^{[note: 58]}CT 124:22 - 30

^{[note: 59]}PBD 42

^{[note: 60]}CT 110: 10 – 111: 7

^{[note: 61]}CT 59:9-13

^{[note: 62]}2BA 598

^{[note: 63]}2BA 601

^{[note: 64]}2BA 614 -620

^{[note: 65]}2BA 603 -612

^{[note: 66]}PCS at [75]

^{[note: 67]}PCS at [77]

^{[note: 68]}2BA 595

^{[note: 69]}PRS at [16]

^{[note: 70]}CT 35:8 - 27

^{[note: 71]}Mr Ong’s AEIC at [11] – [12], [15] - [16]

^{[note: 72]}The defendant’s AEIC at [51] - [52]

^{[note: 73]}CT 179: 25 - 180:29

^{[note: 74]}PBD 34- 37

^{[note: 75]}CT 136:6 - 139:9

^{[note: 76]}2BA 614 -620

^{[note: 77]}2BA 614

^{[note: 78]}CT 149: 9-30

^{[note: 79]}CT 169: 3-11

^{[note: 80]}DRS at [32(3)]

^{[note: 81]}CT 171: 27 -172: 6

^{[note: 82]}CT 182: 12- 25

^{[note: 83]}CT 147:18 – 148: 5

^{[note: 84]}2BA 622 - 644

^{[note: 85]}2BA 527 – 550; Ms Teo’s AEIC at [150], [166], [167]

^{[note: 86]}The defendant’s AEIC at [32]

^{[note: 87]}CT 140:29 – 142:32

^{[note: 88]}CT 165: 3-30

^{[note: 89]}CT 182: 26 – 183: 11

^{[note: 90]}CT 182:25-29

^{[note: 91]}DCS at [33]; DRS at [22(1)]

^{[note: 92]}See for example, 2BA 506

^{[note: 93]}See example at 2BA 417

^{[note: 94]}DCS at [33(5)]

^{[note: 95]}PCS at [96]

^{[note: 96]}DCS [33(6)]

^{[note: 97]}Ms Teo’s AEIC at [103] – [105]; [148] – [150]

^{[note: 98]}CT 111:17- 114:8

^{[note: 99]}PCS at [87]

^{[note: 100]}PCS at [100]

^{[note: 101]}2BA 761 at [35]

^{[note: 102]}DCS at [34]

^{[note: 103]}DCS at [37]

^{[note: 104]}Defence at [12]

^{[note: 105]}SOC at [14], [16]

^{[note: 106]}PCS at [67]

^{[note: 107]}PCS at [70] – [71]

^{[note: 108]}DCS at [37]

^{[note: 109]}DRS at [25]

^{[note: 110]}POS at [31]

^{[note: 111]}DCS at [38]

^{[note: 112]}PBD 3-4

^{[note: 113]}1BA 88

^{[note: 114]}SOC at [22]

^{[note: 115]}SOC at [22]

^{[note: 116]}SOC at [22]; PCS at [105] – [107]

^{[note: 117]}PCS at [105]

^{[note: 118]}DCS at [21]

^{[note: 119]}POS at [35]

^{[note: 120]}SOC at [7] and [8]

^{[note: 121]}The defendant’s AEIC at [10]

^{[note: 122]}CT 39:2 – 41:6

^{[note: 123]}PCS at [109]

^{[note: 124]}CT 161: 26-31

^{[note: 125]}DCS at [22(3)]

^{[note: 126]}PCS at [111]

^{[note: 127]}1BA 267

^{[note: 128]}2BA 541

^{[note: 129]}SOC at [25]

^{[note: 130]}SOC at [28 (1), (2),(6)]

^{[note: 131]}PCS [115]; PRS at [44]

^{[note: 132]}PCS at [112] – [115]

^{[note: 133]}PRS at [10]

^{[note: 134]}CT 10: 17- 13:8

^{[note: 135]}CT 75:1-5

^{[note: 136]}Defence at [28] – [29]

^{[note: 137]}SOC [28 (4) and (6)]

^{[note: 138]}PCS [115]; PRS at [44]