Humming Flowers & Gifts Pte Ltd v Lek Gwee Noi
| Jurisdiction | Singapore |
| Judge | Loo Ngan Chor |
| Judgment Date | 17 August 2015 |
| Neutral Citation | [2015] SGDC 233 |
| Court | District Court (Singapore) |
| Docket Number | District Court Suit No. 2635 of 2012, District Court Appeal No. HC/DCA 13 of 2015 |
| Year | 2015 |
| Published date | 28 August 2015 |
| Hearing Date | 16 July 2014,16 April 2015,24 September 2014,23 September 2014,11 March 2015,15 April 2015,03 August 2015,16 June 2015,12 March 2015,29 October 2014,17 August 2015,15 July 2014,13 January 2015 |
| Plaintiff Counsel | Mr Lok Vi Ming S.C , Mr Tan Yee Siong and Mr Alvin Liong (M/s Rodyk & Davidson LLP) |
| Subject Matter | Detinue, conversion, trespass,alleged theft and retention,cogent evidence of probability required,circumstantial evidence |
| Citation | [2015] SGDC 233 |
Introduction:
These are the grounds of my decision to dismiss the plaintiff’s claim against the defendant.
The plaintiff’s claim alleged that the defendant had “during her period of employment with the plaintiff, wrongfully removed” so-called “Customer Refer Lists, which was the plaintiff’s property, from the plaintiff’s possession without the consent of the plaintiff, and thereafter retained the Customer Refer Lists in her possession and control.” “Customer Refer Lists” will be referred to as “CRLs” in this judgment. The plaintiff’s causes of action were for wrongful detention, conversion and trespass. It sought:
Background facts:
The defendant’s brothers, Lek Sek Kwee (“SK Lek”) and Lek Kwee Cheung (“KC Lek”) together Mdm Joyce Yuen Wei Mun (“Joyce”) had been partners from the late 1980’s in businesses selling flowers/wreaths, gifts and festive hampers. In 2000, they incorporated Humming House Flowers and Gifts Pte Ltd (“Humming House”). Humming House grew to be a market leader in the Chinese community for its business. The defendant joined the business in 1991 as a sales clerk and rose to be a sales manager in Humming House from 2000 to January 2008. She is the younger sister of SK Lek and the elder sister of KC Lek. Around 1996, Joyce’s elder sister, Florence Yuen Wai Fong (“Florence”), was hired as a general clerk.
Alfred Wong Siu Hong (“Alfred”) started a sole proprietorship in 1976 in the gifts and hamper business. In 1983, he incorporated the business. In time, this business grew to become Noel Gifts International Ltd which was first listed on Sesdaq in 1993 and on the main board in 2008.
Noel Gifts took over the assets of Humming House using the plaintiff, a wholly-owned subsidiary of Noel Gifts, as the corporate vehicle. The plaintiff was incorporated around 28th December 2007.
Pursuant to a sale and purchase agreement dated 7th January 2008, the purchase price was $1,823,000. One item comprised in the price was “customer lists” for which a sum of $607,000 was stated.i
Pursuant to the purchase, the Lek brothers and Joyce made the move over to the plaintiff. SK Lek was general manager and Joyce the second general manager. KC Lek was production manager.
The defendant is about 53 years old. She too joined the plaintiff on 7th January 2008, as sales manager. On 1st November 2011, the defendant tendered her resignation and officially left the plaintiff on 31st December 2011. She was placed on garden leave from 10th November 2011.
The defendant wroteii to the plaintiff on 3rd January 2012 informing it of her intention to set up a business selling flowers and gifts. The plaintiff repliediii to the defendant on 13th January 2012 objecting to her doing so on account of a restrictive covenant at clause 13 in her employment agreement.iv
The defendant filed OS110 of 2012 in March 2012 in the (then) Subordinate Courts. In the meantime, the defendant set up Stamford Flowers & Gifts Pte Ltd. In the appeal to the High Court, which was heard in May 2013, Coomaraswamy JC held that clause 13 was an unreasonable restraint of trade and unenforceable. It was the opinion of the High Court that clause 13 contained “cascading covenants” which had an “
The plaintiff did not pursue its appeal to the Court of Appeal in CA 109/2013. This left the defendant free to carry on with her business.
The pleadings:
According to the Statement of Claim, the defendant, as sales manager, “had primary access to 96 plastic folders/files for the purpose of contacting the customers of the plaintiff to generate sales and revenue”. The “folders/files” are referred to in this judgment as “folders”. These folders were “the only physical records of the customers’ buying patterns, customer information, and contacts.” In or around 2009, owing to the defendant being on leave from time to time, “the plaintiff made 2 additional sets of keys” to “the cupboards” (in this judgment called “the cabinets”) for Joyce and Florence. Joyce and Florence only accessed the cabinets when the defendant was not around.
The plaintiff averred that the defendant “had, during her period of employment with the plaintiff, wrongfully removed the [CRLs] which was the plaintiff’s property from the plaintiff’s possession without the consent of the plaintiff …”vi In two of the particulars provided, it was stated that “in or around February/March 2012, the plaintiff discovered that the 96 plastic folders consisting of the [CRLs] were missing from the 3 cupboards” and that the plaintiff’s investigations confirmed that Joyce and Florence did not remove the [CRLs] and/or were not in possession of them.
The Defence disputed the claim that the defendant had primary access to the 96 folders for the purpose of contacting the plaintiff’s customers except that the defendant could not recall the number of folders. Information in the CRLs pertaining to customers’ buying patterns and customer information and contacts had from August to September 2008 been “uploaded onto and stored in the plaintiff’s new computer system (the “SAP System”) and were continuously updated as and when …”vii The CRLs had become “obsolete and unreliable as they were not updated” by the time the defendant left the plaintiff’s employ in December 2011. As the sales manager, the defendant “was in charge of the review, updating and filing of the customers’ buying patterns, customer information and contacts in the SAP System”.
The Defence denied any removal of the 96 folders of CRLs by the defendant, adding, amongst other things, that “at all material times, the plaintiff had CCTV cameras at her office at 7 Tai Seng Drive #03-02 Singapore 535218.”
The plaintiff’s Reply was that the SAP System was installed “after the acquisition of Humming House’s business and assets to manage its business processes and operations such as accounting, inventory control and product sourcing.” The plaintiff maintained that the CRLs, more than just existing customers, had “information on prospective customers…” The CRLs were “continuously updated as and when the plaintiff received information on new prospective customers from the plaintiff’s existing customers. This happened each time an existing customer suffers a bereavement or celebrates a special occasion where the plaintiff would obtain the contact of new prospective customers to deliver wreaths and/or flowers.” The plaintiff admitted, without more, the installation of the CCTV cameras.viii
The trial:
At the trial, which was limited to liability only, it having been bifurcatedix, the plaintiff’s witnesses were the Yuen sisters, Alfred’s daughter, Kim Wong Lai Kuan (“Kim”) (the marketing manager), Koh Yee Joo (the operations manager) and Alfred. The defendant testified alone for herself. I shall say nothing more about the evidence of Koh Yee Joo or a supplementary affidavit of evidence-in-chief except at [113] below.
Joyce’s affidavit of evidence-in-chief stated that she pioneered a strategy in the late 1980’s, perhaps the only business that did so at that time, where they “would make outbound calls” to customers and seek referrals to their business contacts and associates for potential sales/revenue. “The referral contacts … were then retained and organized by alphabetical order (in accordance with our customer) in various hardcopy folders, generating [CRLs]. If the referral contact became a customer, we would also generate a new [CRL] with his own business contacts and associates. I saw this as a strategic form of marketing which involved building relationships/networks.”x
According to Joyce, the CRL strategy was “particularly successful” because “it allowed us to contact the business contacts and associates of an existing customer for orders when our customer’s representative suffered a bereavement and/or when the customer had celebrated a new launch/opening of a new branch or moved to new premises.” CRLs enabled Humming House and its predecessor to be quick off the block in securing orders against the competition.xi
Around 2009, the plaintiff moved to 7 Tai Seng Drive to be in the same building as Noel Gifts. In line with group policy, the defendant took Saturdays off after the move to Tai Seng Drive. So as to facilitate access to the CRLs by the Yuen sisters when the defendant was away on Saturdays or on leave, the defendant made spare keys for them.
The CRLs were one of the defendant’s key responsibilities. “CRL telemarketing” was one of the plaintiff’s three main marketing strategies, the other two being festive marketing and catalogue distribution. CRL telemarketing entailed proactively calling existing and prospective customers to see if they required our services… This would occur periodically throughout the year and would be headed by [the defendant] who would retrieve the CRLs from the [cabinets] and distribute them to the customer service officers for the outgoing calls. These lists would then be collected by [the defendant] before she returns them to the [cabinets].”xii
(During festive periods), as part of festive marketing, lists of customers in the previous year would be generated from Noel Group’s “centralized SAP system”, “an ERP (Enterprise Resource Planning) system, and emailed to the defendant, for Joyce, the defendant and customer service officers to make calls to these customers to solicit purchases. Hence, the SAP...
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