Tort Law

Citation(2008) 9 SAL Ann Rev 482
AuthorKumaralingam AMIRTHALINGAM PhD, LLB (Hons) (Australian National University); Professor, Faculty of Law, National University of Singapore. Gene KWEK LLB (Hons) (National University of Singapore); Advocate and Solicitor (Singapore).
Date01 December 2008
Published date01 December 2008
Breach of confidence

22.1 Obegi Melissa v Vestwin Trading Pte Ltd [2008] 2 SLR 540 was an appeal against the High Court”s decision in favour of the plaintiff (in Vestwin Trading Pte Ltd v Obegi Melissa[2006] 3 SLR 573). The plaintiff”s action was founded on, inter alia, breach of confidence in relation to, and conversion of, certain alleged confidential documents. The defendant had obtained these documents by retrieving the plaintiff”s trash from the common rubbish dump at the plaintiff”s office building (Orchard Towers).

22.2 Before the High Court (Vestwin Trading Pte Ltd v Obegi Melissa[2006] 3 SLR 573), Andrew Ang J granted summary judgment in favour of the plaintiff. However, in the present proceedings before the Court of Appeal, it was held that the case should have been allowed to proceed to trial instead of being summarily determined.

22.3 On the issue of whether the documents had been abandoned or converted, the court noted that Andrew Ang J had adopted applicable principles from the cases of Simpson v Gowers(1981) 121 DLR (3d) and Williams v Phillips(1957) 41 Cr App Rep 5. However, the court deferred from the High Court”s approach, declaring that ‘the law on abandonment has not been settled in Singapore’: Obegi Melissa v Vestwin Trading Pte Ltd[2008] 2 SLR 540 at [41]. The court also opined that the disposal of rubbish may raise the issue of protecting the privacy of individuals and business entities. This was a matter of considerable public importance and should not be decided summarily.

22.4 Further, the court held that there were several important findings of fact which had to be made before the plaintiff”s claim could be properly determined. These included the contractual terms on which the refuse collection company provided its services to Orchard Towers, as well as the relevant arrangements or terms between the plaintiff and other tenants of Orchard Towers on the one hand and the refuse

collection company and/or the managing agent of Orchard Towers on the other.

22.5 The court also noted that the alleged confidential documents had been retrieved and made use of in separate legal proceedings by the defendant to enforce a judgment against a company allegedly related to the plaintiff. It added that a full consideration of the facts may therefore present novel questions of law, such as whether the use of the alleged confidential documents in legal proceedings constituted a breach of confidence, or whether, in respect of documents which were arguably protected by the law of confidence, equity would continue to impose an obligation of confidence where the documents are surreptitiously withheld from a party who has a legitimate interest in seeking their disclosure. Such issues therefore justified an appropriate consideration and determination via a trial. Accordingly, the High Court”s decision was set aside and the defendant was granted leave to defend.

22.6 The Court of Appeal did not, however, adjudicate on the substantive merits of the case. This sets the stage for further development and clarification of the law in this specific area.


22.7 Orix Leasing Singapore Ltd v Koh Mui Hoe [2008] SGHC 211 and Orix Leasing Singapore Ltd v Koh Mui Hoe[2008] SGHC 212 arose from the same facts. The plaintiff leased some heavy commercial printing machines to a company named Rav Graphic Pte Ltd (‘Rav Graphic’) under hire purchase agreements. Rav Graphic defaulted in meeting its obligations under these agreements. Meanwhile, the plaintiff discovered that the machines leased to Rav Graphic had been removed from Rav Graphic”s premises without the plaintiff”s consent or knowledge. The plaintiff commenced actions against Rav Graphic under the hire purchase agreements, and against the two directors of Rav Graphic under the personal guarantees which they had provided in respect of the company”s obligations. Judgment was obtained against the two directors but could not be satisfied as the directors were subsequently made bankrupt by other creditors. Rav Graphic itself was put into liquidation before the plaintiff entered judgment against it.

22.8 The plaintiff”s evidence was that the first defendant, Mr Koh Mui Hoe, the director of and moving spirit behind the second defendant, Ink Trading Pte Ltd, had caused the machines to be removed from Rav Graphic”s premises and delivered to a third party who was going to remove the machines from Singapore, depriving the plaintiff of its rightful ownership. The actual removal of the machines was

undertaken by two logistics companies, Kenzone Logistics Pte Ltd (‘Kenzone’) and Tat Seng Machine Movers Pte Ltd (‘Tat Seng’).

22.9 Not having achieved tangible success against Rav Graphic or its directors, the plaintiff commenced the present actions against the defendants for conversion of the machines. Separate actions were commenced against the first and second defendants on the one hand and Kenzone and Tat Seng on the other. Judith Prakash J accepted the plaintiff”s evidence and held that the second defendant, Kenzone and Tat Seng were all liable for conversion.

22.10 In the case of the first and second defendants, Prakash J held on the evidence that at all material times the first defendant was acting as the agent of the second defendant. There was no plea that the first and second defendants acted jointly or were co-conspirators. Accordingly, Prakash J held that liability attached to the second defendant corporately as opposed to the first defendant personally. Although it was not clear whether the defendants were buyers, sub-sellers, or merely middlemen for a third party purchaser, Prakash J held on the evidence that the defendants were clearly involved actively in the removal and delivery of the machines to the third party. These cases reaffirm some important principles of the tort. Prakash J reaffirmed the principle that a defendant will be liable for conversion if he takes an active part in delivering another”s goods to a third party in a manner which is adverse to the rights of the true owner. As long as the defendant”s conduct is a deliberate act, he will be liable even if his act was done in ignorance of the true owner”s rights and without intending to challenge those rights.

22.11 In the case of Kenzone and Tat Seng, they had argued, inter alia, that their acts of carriage and storage of the machines were merely ministerial in that they were mere transporters who had simply moved the machines from one location to another. Here, Prakash J reaffirmed the principle that dealing with goods without changing the property in them would not amount to conversion, regardless of the authority of the person giving instructions to the dealer. However, the important limitation on this principle was that the onus was upon the dealer to show that he acted in good faith without knowledge of the adverse claim. On a thorough assessment and consideration of the evidence, Prakash J was not satisfied that Kenzone and Tat Seng had given the court a full and frank account of their role in the transactions involving the machines. Prakash J held that Kenzone and Tat Seng had not satisfactorily shown that they had acted in good faith and were unaware that they were aiding Rav Graphics in disposing of the machines, and accordingly, they too were liable for conversion.


22.12 In Chun Cheng Fishery Enterprise Pte Ltd v Chuang Hern Hsiung[2008] SGHC 135, the plaintiff was a Singapore company engaged in the import and export of marine products and other frozen seafood. The first defendant was the plaintiff”s group president and chief executive officer, whom the plaintiff”s board of directors had allowed practically free reign in the day-to-day running of the plaintiff. The second defendant was the plaintiff”s vice-president of development. He was also the first plaintiff”s eldest son.

22.13 The plaintiff sued the defendants for, inter alia, conspiracy to injure and to cause loss to the plaintiff by unlawful or lawful means. The actions complained of included: (a) the first defendant”s failure, as the plaintiff”s contact person vis-à-vis its bankers, to clarify the plaintiff”s financial position, and instead to cause rumours to be passed to the plaintiff”s bankers which shook their confidence in the plaintiff, leading to a suspension of credit facilities to the plaintiff; (b) the first defendant”s refusal to accept offers of credit from the bankers, and refusal to allow his pre-signed remittance instruction forms for payment to suppliers to be used, thereby restricting the plaintiff”s cashflow and affecting the plaintiff”s financial position; (c) the first and second defendants overstocking of inventory in the plaintiff”s subsidiary despite the warning from the board of directors, incurring high receivables owing to the plaintiff by its subsidiary; (d) the second defendant”s payment of substantial funds from the plaintiff”s subsidiary to its banker instead of the usual practice of first remitting funds to the plaintiff, thereby diverting the plaintiff”s funds at a time when it was in need and specifically when the plaintiff was anxiously awaiting payment of outstanding receivables from the subsidiary. These acts were done on the first defendant”s instructions without informing the plaintiff”s board of directors or the senior manager of finance/accounts; and (e) the second defendant assisting the first defendant to gain unauthorised access to the various e-mail accounts of the board of directors as well as other key personnel without their knowledge or consent.

22.14 Following the plaintiff”s termination of their employment, the first and second defendants promptly incorporated a company of their own, running a business almost identical to that of the plaintiff”s.

22.15 On the facts, Andrew Ang J rejected the defendants” contention that the plaintiff had not proven the existence of the requisite agreement or arrangement between the defendants. Ang J also...

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