BAFCO Singapore Pte Ltd v Lee Tze Seng and others

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 22 December 2020
• Neutral Citation: [2020] SGHC 281
• Court: High Court (Singapore)
• Docket Number: Suit No 691 of 2020 (Summons No 3170 of 2020)
• Published date: 25 December 2020
• Year: 2020
• Hearing Date: 05 October 2020,25 November 2020
• Plaintiff Counsel: Thng Yu Ting Angelia, Tan Zhi Xin and Sim Wei Min Stephanie (Braddell Brothers LLP)
• Defendant Counsel: Luo Ling Ling and Sharifah Nabilah Binte Syed Omar (Luo Ling Ling LLC)
• Citation: [2020] SGHC 281

Choo Han Teck J:

This is the plaintiff’s application for interim injunctive relief and a disclosure order against the defendants, on the basis that the defendants misused and disclosed the plaintiff’s confidential information without the plaintiff’s consent.

The plaintiff is the Singapore subsidiary of the BAFCO group of companies, which is engaged in the business of developing, manufacturing and selling high-volume, low-speed (“HVLS”) fans. The first to third defendants (collectively, “the Former Employees”) are all former employees of the plaintiff. The first defendant (“Lee”) was previously the plaintiff’s Sales Manager for the Asia Pacific Region. The second defendant (“Rachel”) was formerly a Sales and Design Representative and Assistant Manager in the plaintiff’s Sales Department. The third defendant (“Teo”) was formerly a director of the plaintiff and was also the plaintiff’s Financial Controller and Company Secretary. Rachel was employed by the plaintiff from 2014 until 1 July 2019, whereas Lee and Teo were employed by the plaintiff from 2014 until 17 July 2020.

The fifth defendant (“Vortikul”) is a US-incorporated company which is also in the business of manufacturing and selling HVLS fans. Vortikul was founded by one David Williams, who is the plaintiff’s former Managing Director.

The fourth defendant (“D&Y”) is a company that was incorporated in Singapore in 2016. Lee and Rachel are presently directors of D&Y. The plaintiff alleges that (a) D&Y is distributing fans and cooling products, including HVLS fans manufactured by Vortikul; and (b) the Former Employees founded and were actively involved in D&Y while they were still employed by the plaintiff. Lee and Teo acknowledge that they incorporated D&Y during their employment with the plaintiff “as a hobby outside of work” but assert that D&Y is, and was at all material times, a dormant company because of their full-time job commitments.

The plaintiff commenced an action against the defendants in the underlying suit (Suit 691 of 2020) for, inter alia: the Former Employees’ breaches of their obligations owed to the plaintiff; D&Y’s and Vortikul’s wrongful inducement of the Former Employees’ breaches; and unlawful conspiracy between the Former Employees, D&Y and Vortikul.

The plaintiff’s US parent company has also commenced an action in the US against Vortikul and David Williams for unlawful competition.

In the present summons, the plaintiff seeks the following: an injunction to restrain the Former Employees from using and/or disclosing any of the plaintiff’s confidential information acquired by them during their employment with the plaintiff (until final determination of this action or further order) (“the Disclosure Injunction”); an injunction to restrain the Former Employees and D&Y from relying on the plaintiff’s confidential information to procure or do any business with third parties that will enable the defendants to carry out any business which is similar to the plaintiff’s business (until final determination of this action or further order or for a period of 12 months, whichever is earlier) (“the Procurement Injunction”); an injunction to restrain the Former Employees and D&Y from continuing communications with the plaintiff’s customers whom any of the defendants communicated with during the Former Employees’ employment with the plaintiff and up to 3 August 2020, with a view towards procuring or doing business for persons other than the plaintiff (until final determination of this action or further order or for a period of 12 months, whichever is earlier) (“the Communications Injunction”); an order (“Affidavit Order”) that the Former Employees and D&Y file a disclosure affidavit stating: the identities of the plaintiff’s customers whom any of them have sought to procure and/or do business with on behalf of D&Y and/or any parties from 16 May 2016 to 3 August 2020; and details of all confidential information disclosed by the Former Employees to D&Y and/or any other parties from 16 May 2016 to 3 August 2020.

As I understand it, the plaintiff’s case is that the defendants have misused the plaintiff’s confidential information in at least two different respects: first, by using the said information to divert business opportunities to themselves and the plaintiff’s competitors; and second, by using the said information to help a competing bidder secure a tender project known as the ‘Faber Peak Project’.

Before turning to consider the substantive merits of the plaintiff’s application, I will address the defendants’ objection that the relief sought by the plaintiff is “no longer relevant” in view of the fact that the Former Employees have given the following undertakings in their affidavits filed on 7 September 2020: Lee undertakes not to disclose information which he can recall from his employment with the plaintiff to the plaintiff’s competitors for a period of one year from 17 July 2020; Teo undertakes not to disclose financial information which he can recall from his employment with the plaintiff to the plaintiff’s competitors for a period of one year from 17 July 2020; Lee and Teo undertake not to communicate with the plaintiff’s customers known to them, or to carry on any business which is similar to the plaintiff’s business in Singapore for a period of one year from 17 July 2020; Rachel undertakes not to communicate with the plaintiff’s customers known to her, or to carry on any business which is similar to the plaintiff’s business in Singapore for a period of one year from 1 July 2020.

Counsel for the plaintiff, Ms Angelia Thng, argues that the defendants’ undertakings are unsatisfactory because they do not afford the protection that the plaintiff is seeking in the present application. I agree with this submission. It is evident that the scope of the undertakings given by the defendants does not correspond to the scope of the protection sought by the plaintiff in terms of subject-matter, time frame and the parties covered. For instance, the plaintiff seeks an injunction to restrain all of the Former Employees from disclosing “any” of the confidential information which they have acquired during their course of employment with the plaintiff. However, Rachel has not given any undertakings in relation to the non-disclosure of confidential information, and Teo’s undertaking is restricted to the non-disclosure of “financial information” only. Moreover, D&Y has not given any undertakings whatsoever. In the circumstances, I am of the view that the defendants’ undertakings do not adequately address the plaintiff’s concerns. It is therefore necessary to examine the substantive merits of the plaintiff’s application.

I turn now to the plaintiff’s application for interlocutory injunctive relief. Counsel for the defendants, Ms Luo Ling Ling, argues that the injunction sought by the plaintiff is a “springboard” injunction, the requirements for which are “more stringent than that of any other interim injunction”. A springboard injunction is one that is intended to restrain a wrongdoer from enjoying the fruits of a “head start” which he has unfairly obtained as a result of his unlawful acts (see QBE Management Services (UK) Ltd v Dymoke and others [2012] IRLR 458 (“QBE Management”) at [240]–[241]). The requirements for a “springboard” injunction in the context of a breach of confidence were distilled by Lai Siu Chiu SJ in Goh Seng Heng v RSP Investments and others and another matter [2017] 3 SLR 657 (“Goh Seng Heng”) at [67] as follows: confidential information has been misused or is at risk of being misused; such misuse of confidential information has given rise to an unfair competitive advantage to the defendant; the “unfair advantage” is still being enjoyed by the defendant (at the time the injunction is sought); and damages would be an inadequate remedy for the plaintiff.

Owing to the peculiar nature of a “springboard” injunction, the court considering whether an interim “springboard” injunction ought to be granted must look beyond the usual American Cyanamid principles and assess the relative strength of the parties’ rival arguments at the interlocutory stage (see Jardine Lloyd Thompson Pte Ltd v Howden Insurance Brokers (S) Pte Ltd and others [2015] 5 SLR 258 (“Jardine”) at [21]).

In my view, one must consider the historical origin and the evolution of “springboard” relief in order to understand the nature of the mischief that it is intended to address. As I previously noted in Jardine, “springboard” relief was first granted in Terrapin Ltd v Builders Supply...