Tort Law

Citation(2006) 7 SAL Ann Rev 421
Date01 December 2006
Published date01 December 2006
Breach of Confidence

22.1 In Vestwin Trading Pte Ltd v Obegi Melissa[2006] 3 SLR 573, the plaintiffs” action arose from affidavits which had been filed on behalf of several defendants in a separate suit for the enforcement of a New York judgment against, inter alia, PT Indah Kiat Pulp & Paper Corporation (‘PT Indah Kiat’). The plaintiffs were not parties to that suit. However, their gravamen was that the affidavits exhibited certain documents in respect of which the plaintiffs claimed confidentiality. The documents were obtained as a result of the defendants engaging private investigators to locate assets in Singapore belonging to PT Indah Kiat. The investigators had made almost daily trips to the building where the plaintiffs” offices were located and had retrieved the plaintiffs” trash bags from the building”s common rubbish dump.

22.2 Andrew Ang J, following Williams v Phillips(1957) 41 Cr App Rep 5, held that at common law, the act of putting out rubbish for collection did not amount to an abandonment of property in the rubbish because there was no intent to relinquish the goods absolutely but only conditionally for the purpose of such collection. If the defendants” contention was that the plaintiffs intended a different legal effect by their act in putting out the rubbish for collection, the burden was on the defendants to adduce evidence of the factual basis to support the assertion that the plaintiffs were prepared to permit all and sundry to have access to their rubbish. Consequently, in his Honour”s view, it was unarguable that the investigators had surreptitiously and improperly obtained the documents by criminal means (ie, theft) and unlawful means (ie, conversion).

22.3 Citing the landmark case of Coco v A N Clark (Engineers) Ltd[1969] RPC 41, Ang J reiterated the elements required for an action in breach of confidence, namely: (a) that the information in question must be of a

confidential nature; (b) the information must have been communicated in circumstances importing an obligation of confidence; and (c) there must be an unauthorised use of the information.

22.4 On the first element, Ang J held that an obligation of confidence was capable of encompassing all information which any party had an interest in keeping confidential. Ang J held that the case of Tipping v Clarke(1843) 2 Hare 383; 67 ER 157 was clear authority that books of account and other internal financial and commercially-sensitive information of a business enjoyed protection under the law of confidence. In the present case, the documents obtained by the investigators contained information relating to, inter alia, the plaintiffs” financial affairs, management procedures and trading practices. In his Honour”s view, there was no denying that these documents were confidential in nature. This was not negated by the absence of any marking on the documents asserting their confidential nature, nor was the plaintiffs” act of disposing the documents in the trash a conclusive indication that the plaintiffs did not attach any importance to the confidentiality of the documents. Ang J highlighted that situations where a plaintiff/confider released information to a defendant/confide, without taking precautions to limit its use in the hands of the defendant, should be distinguished from a case such as the present involving surreptitious takings. In the latter case, the plaintiff had not entered into any dealings with the defendant nor released any information to him. Indeed, in many such cases, the defendant would be aware that the plaintiff had no desire at all to let him have access to the information in question and the defendant would be deliberately setting out to obtain the information, possibly using illegal means to do so.

22.5 On the second element, Ang J noted that there was no requirement for an intentional communication of the confidential information by a plaintiff to a defendant in order to found a cause of action. As Judith Prakash J noted in X Pte Ltd v CDE[1992] 2 SLR 996, this element was not limited to information being imparted in confidence. It would be satisfied if the information was received or learned in such circumstances where it was clear that a duty of confidentiality arose. Further, it was not necessary for the recipient of the information to have acted in bad faith or participated in the illegal procurement of the information in order to be bound by an obligation of confidence. What was required was an awareness that the information was confidential and that awareness included a situation where the recipient deliberately closes his eyes to the obvious. In the present case, Ang J held that even if it was accepted that the defendants had no knowledge of the investigator”s means of procurement of the information, the fact remained that: (a) the defendants specifically instructed the investigators to obtain

material not publicly available about the plaintiffs” business; and (b) the defendants were expressly put on notice by the plaintiffs” solicitors” letter prior to the commencement of the present proceedings, that the defendants were in possession of surreptitiously obtained confidential documents belonging to the plaintiffs. Therefore, it did not lie with them to deny that they had the requisite awareness.

22.6 On the third element, his Honour held that it was clearly made out and there was no assertion by the defendants otherwise. Considering the further question as to whether this element of the tort included a requirement that the unauthorised use must have been to the detriment of the plaintiffs, Ang J noted, upon reviewing the case authorities, that on balance, this issue had been left open. Nevertheless, his Honour opined that there are at least some situations where the insistence upon the presence of detriment would be ‘inappropriate if not unjust’. In the present case, to insist upon proof of detriment would ‘send a wrong signal encouraging vigilantism’ (at [75]). However, in any event, Ang J was satisfied on the facts that the plaintiffs had suffered detriment through the use of the confidential information. In the circumstances, the plaintiffs” claim for summary judgment seeking permanent injunctive relief was allowed. The defendants have appealed.

22.7 In QB Net Co Ltd v Earnson Management (S) Pte Ltd[2007] 1 SLR 1 (‘QB Net’), the plaintiff offered QB House Pte Ltd a licence to operate 10-minute haircut salon outlets called ‘QB House’ in Singapore. Subsequently, the relationship between the parties started to sour. QB House Pte Ltd alleged that the plaintiff had given inadequate support to its operations, and that the licence fees and royalties under the licence agreement were overly high and the cost was bleeding the company. Around this time, the first defendant company entered into a sale and purchase agreement with QB House Pte Ltd to acquire the business assets and staff of QB House Pte Ltd. The second defendant, who had been the de facto mind and will of QB House Pte Ltd, was appointed as a consultant to the first defendant. The third defendant was a management consultant who incorporated the first defendant company and was also its sole non-executive director. The plaintiff brought an action against all three defendants for, inter alia, breach of confidence.

22.8 The plaintiff”s confidential information was said to comprise various elements in relation to its ten-minute haircut salons, namely: (a) basic business operation manual; (b) sales and administrative and liquidation manual; (c) equipment and fixture installation manual; (d) cleaning manual;

(e) design manual; and (f ) other start-up information, experience, advice, supervision, guidance and know-how with respect to the management, operation and promotion as part of the QB House system.

22.9 Lai Siu Chiu J accepted the general principles that: (a) mere simplicity of an idea would not detract from its confidential nature; and (b) the confidential nature of the information could derive from the information taken as a complete package even if it was doubtful whether each document was confidential when taken separately. Therefore, while the components of the QB House system may not be confidential in themselves, the manner in which they were combined and the technical know-how in relation to its operation could potentially be confidential in nature. However, on the facts of the case, Lai J held that the QB House system and its concept of the ten-minute express haircut service was information that was unmistakably in the public domain. There was hardly any secrecy in the procedures of the system, the layout of the outlets or the components of the system as all of this could be easily observed by any member of the public who visited the outlet. The availability of numerous publications describing the plaintiff”s QB House system supported the fact that the information was available in the public domain. Further, the information sought to be protected had been disclosed in the plaintiff”s patent applications. Therefore, Lai J held that viewed in its entirety, the QB House system could not be said to comprise confidential information.

22.10 Further Lai J was also not satisfied on the evidence that the first and third defendants could be said to have received the information in circumstances importing an obligation of confidence or that there had been a misuse of the information by the defendants.

Breach of statutory duty

22.11 In Sim Cheng Soon v BT Engineering Pte Ltd[2007] 1 SLR 148 (‘Sim Cheng Soon’), the court considered the respondents” liability for breach of statutory duty. It was held that both respondents, as employer and occupier respectively, were affected by the Factories Act (Cap 104, 1998 Rev Ed) and the Factories (Shipbuilding and Ship-repairing) Regulations (Cap 104, Rg 11, 1999 Rev Ed). In particular, reg 4(1) imposed a duty on ‘every occupier, contractor or employer to comply with the requirements of the...

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