I-Admin (Singapore) Pte Ltd V Hong Ying Ting & Others [2020] SGCA 32: Modifying The Test For Breach Of Confidence

• Published date: 12 May 2020
• Author: Anthony Soh and Marc Goh
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Taylor Vinters

In the recent case of I-Admin (Singapore) Pte Ltd v Hong Ying Ting & Others 2020 SGCA 32 involving breach of confidence, the Court of Appeal departed from the test formulated in the English case of Coco v AN Clark (Engineers) Ltd 1969 RPC 41 ("Coco") and adopted a modified approach in order to better protect employers against the misuse of their confidential information.

Background

The appellant, I-Admin (Singapore) Pte Ltd ("I-Admin"), is a Singaporean company in the business of payroll and human resources information systems. The 1^st Respondent ("Hong") was previously an employee of I-Admin, whilst the 2^nd Respondent ("Liu") was previously an employee of its subsidiary in Shanghai. The 3^rd Respondent, Nice Payroll Pte Ltd ("Nice Payroll"), is a Singaporean company set up by Hong and Liu.

Whilst employed by I-Admin, Hong and Liu developed a payroll system and set up Nice Payroll. Thereafter, they left their respective jobs to join Nice Payroll full-time. Subsequently, I-Admin discovered Nice Payroll's website advertising systems similar to its own in areas overlapping with the geographical scope of its business. Further, it discovered that Hong and Liu were the directors of Nice Payroll.

After successfully obtaining a search order against the Respondents, it was uncovered by I-Admin that the Respondents had its confidential documents in their possession and had circulated the same to each other by email. This gave rise to an action against the Respondents in the High Court for, inter alia, breach of confidence.

The High Court Decision

At the High Court, I-Admin's claim for breach of confidence was dismissed. In arriving at its decision, the Court relied on the three-part test laid down in Coco and applied recently in the case of Clearlab SG Pte Ltd v Ting Chong Chai & Others 2015 1 SLR 163. In order to succeed in an action for breach of confidence under this approach, a plaintiff would be required to demonstrate the following:¹

• the information in question possessed the necessary quality of confidentiality;
• such information was imparted under circumstances importing an obligation of confidence; and
• there was an unauthorised use of such information to the detriment of the party from whom the information originated.

Whilst the Court found that first two parts of this test had been satisfied,² it held that there was no unauthorised use of I-Admin's confidential information to its detriment. In this instance, the detriment was the creation of material to be...