Baldor Electric (Asia) Pte Ltd v Liew Chin Choy and others

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang J
• Judgment Date: 28 January 2010
• Neutral Citation: [2010] SGHC 32
• Court: High Court (Singapore)
• Docket Number: Suit No 439 of 2006
• Published date: 11 February 2010
• Year: 2010
• Hearing Date: 03 November 2009,02 November 2009,29 October 2009,26 October 2009,06 November 2009,10 November 2009,04 November 2009,05 November 2009
• Plaintiff Counsel: Suresh Nair (Allen & Gledhill LLP), Ng Lip Chih (NLC Asia Law LLP) and Eunice Chew (Allen & Gledhill LLP)
• Defendant Counsel: David Liew (DSH Law Corporation),Joseph Tan and Corinne Taylor (Legal Solutions LLC)
• Subject Matter: Employment law,Employees' duties
• Citation: [2010] SGHC 32

Tay Yong Kwang J: Introduction

The plaintiff, Baldor Electric (Asia) Pte Ltd (“Baldor”) is suing the first defendant, Liew Chin Choy (“Liew”) for alleged breaches of his fiduciary duties and/or duties of fidelity and good faith and duties of confidentiality owed to it as its Sales Manager. Baldor also claims against the second defendant, Neo Bee Hong (“Neo”), Liew’s wife, as constructive trustee for moneys she received on behalf of Liew acting in breach of his duties. Baldor claims against the third defendant, WEG Export Adora S.A. (“WEG”) for inducing Liew to breach his duties to Baldor and/or for unlawful interference in and as constructive trustee in respect of corporate opportunities diverted to WEG by Liew. Baldor has a further claim against Liew and WEG for conspiracy to defraud Baldor. Finally Liew counterclaims against Baldor for his loss of employment as a result of the commencement of this action.

The trial was on the question of liability only. At the conclusion of the evidence, parties requested time for written submissions to be exchanged. The final set of written submissions (the plaintiff’s reply) was filed on 17 December 2009.

Background facts

Baldor’s parent company Baldor Electric Company (“Baldor US”) specialises in the marketing, designing and manufacturing of electric motors, drives and generators. Baldor is in charge of the sale of Baldor US’s products to distributors, original equipment manufacturers and direct customers in Asia.

Liew was employed by Baldor as its Assistant Sales Manager on 1 October 1999. With effect from 1 January 2002, Liew was promoted to Sales Manager of Baldor. As Sales Manager, Liew was responsible for the sales and marketing of Baldor US’s motors in Singapore, Malaysia, Indonesia, Brunei, Thailand and Vietnam, in various industries, in particular the oil and gas industry. He reported directly to Tan Peng Yong (“Tan”), the Managing Director of Baldor.

PT Kenvin Elektrika Makmur (“PT Kenvin”) was incorporated on 7 August 2002 in Indonesia. Liew became the second bank signatory for PT Kenvin’s bank account before it was incorporated. Liew issued two letters under Baldor’s letterhead dated 1 May 2003 and 4 May 2004 certifying that PT Kenvin was Baldor’s authorised distributor/agent in Indonesia. Neo opened a DBS Bank US Dollar Account No 0023-XXXXXX-XX-X-XXX (“USD account”) on 17 May 2003 and received into her USD account USD15,000 from PT Kenvin (“First Secret Payment”) on 23 May 2003 and a further sum of USD5,000 into her USD account from PT Kenvin (“Second Secret Payment”) on 25 May 2004. Around July 2005, Liew received USD9,000 (“Third Secret Payment”) from PT Sarana Teknik Industri (“PT Sarana”), a customer of PT Kenvin and around August 2005, Liew received S$2,450 (“Fourth Secret Payment”) from CV Surya Cipta Pratama (“CV Surya”), another customer of PT Kenvin. Collectively, I shall refer to the four payments as Secret Payments.

Liew resigned and left Baldor’s employment on 30 September 2005. He commenced employment with WEG on 1 October 2005 as Managing Director of WEG Singapore Pte Ltd (“WEG Singapore”) which was registered in Singapore on 17 October 2005. WEG was founded on 25 September 2001 with its headquarters in Brazil. WEG is in the business of providing solutions with electric machines, including the designing and manufacturing of electric motors and automation for industry and energy systems.

Liew’s relationship with WEG begun after Liew initiated contact via email with WEG sometime in or around February 2005. There was no contact between WEG and Liew until Djalma Luis Wolf (“Wolf”), the Export Manager for Asian Markets for WEG (as he then was), spoke to Liew on 22 April 2005 over the telephone regarding Liew’s proposal to assist WEG in opening a branch office in Singapore. Further communication between Liew and WEG representatives took place via email as well as via face-to-face meetings before Liew was employed by WEG. On or around 16 May 2005, Liew met Sergio Luiz Silva Schwartz (“Schwartz”), a director of WEG, in Nantong City, China. From 1 to 4 August 2005, Liew met several of the directors and managers of WEG in Brazil. Sometime in late August 2005, Wolf and Schwartz met Liew in Singapore before the three of them proceeded to Indonesia and Taiwan.

Between 8 August and 30 August 2005, Liew sent four sales enquiries he received in his capacity as employee of Baldor to Wolf. Wolf provided WEG quotations for the four sales enquiries to Liew.

On 6 September 2005, WEG sent the finalised employment contract to Liew, paving the way for his move to WEG Singapore on 1 October 2005.

Following a letter dated 17 October 2005 from one Mdm Hajjah Widyantari Darwin (“Mdm Widya”) to Baldor, Baldor commenced investigations into Liew’s conduct during the period he was working at Baldor. On 4 November 2005, Baldor’s solicitors sent a letter of demand to Liew demanding, amongst other things, the repayment of USD29,000 (see [5] above) which Liew received from PT Kenvin for the sale of Baldor motors by PT Kenvin. Liew replied on 15 November 2005 agreeing to pay the USD29,000 in three instalments. On 23 November 2005, Liew confirmed “I did not receive any monies from any other organisation/companies in the territories nor monies from PT. Kenvin”. On 3 December 2005, Baldor’s solicitors wrote to Liew stating that in reliance on his express representation that apart from USD29,000, he did not receive any other sums from PT Kenvin, its customers or any other organisation in breach of his duties to Baldor, Baldor accepted his instalment plan and that upon receipt of full payment, Baldor stated that it shall cease to have further claims against Liew in relation to the matters set out in their earlier letter dated 4 November 2005. Liew paid Baldor a total of USD29,000 in three instalments on 5 December 2005, 23 December 2005 and 4 January 2006 using his personal savings as well as a loan of S$10,000 from Thiang Shiang Hiang (“Thiang”), his friend.

In or around late December 2005, Tan discovered that Liew had joined WEG. Further, in or around February 2006, Tan discovered that Liew had received a payment of S$2,450 from another of PT Kenvin’s customers CV Surya in or around August 2005, contrary to Liew’s confirmation on 23 November 2005 that he had not received money from any other company.

On 3 February 2006, TecBiz FRisMan Pte Ltd (“TechBiz”) was engaged by Baldor to retrieve email messages from a Fujitsu laptop computer (“Fujitsu Laptop”) which had been assigned to Liew during his employment with Baldor.

With effect from 1 November 2006, WEG terminated Liew’s employment contract. Liew then started a new company, Motor Technology Asia and was appointed as WEG’s agent in Singapore in December 2006. This appointment has since been terminated.

Baldor’s case

I shall deal briefly with the interlocutory applications before going into the substance of the case. In SUM 5573 of 2009, Baldor sought leave for the first Affidavit of Evidence-in-Chief (“AEIC”) of Mdm Widya dated 14 December 2007 (“First AEIC”) on behalf of Baldor to be received in evidence notwithstanding her non-attendance at the trial for cross-examination. Subsequent to her First AEIC, Mdm Widya signed a supplementary AEIC on 5 February 2008 (“Supplementary AEIC”) stating that she signed her First AEIC without properly understanding the contents therein. Mdm Widya then signed a second supplementary AEIC dated 4 September 2009 (“Second Supplementary AEIC”) to reply to various allegations made by Baldor’s witnesses against her in their AEICs, but leave for Liew to file Mdm Widya’s Second Supplementary AEIC was refused by an Assistant Registrar (in SUM 4983 of 2009). Given that Mdm Widya was not giving evidence in court and she had substantially changed her evidence on affidavit, I disallowed the application in SUM 5573 of 2009 and ordered that all the AEICs of Mdm Widya not be admitted into evidence as I would not be in a position to assess the reliability of Mdm Widya’s evidence since she was not going to testify in court.

In the light of my decision in relation to SUM 5573 of 2009, I disallowed Baldor’s application in SUM 5420 of 2009 to call Chew Siang Tong to give evidence as to how Mdm Widya’s Supplementary AEIC came about. I also refused leave to Baldor to call Maya Augustin, a translator who translated one Mr Indra Tjia’s AEIC (see [26] below) to him, because the translation of Indra Tjia’s AEIC was not in issue.

Moving to the substantive claims in this suit, Baldor claims against Liew for breaches of fiduciary duties and/or duties of fidelity and good faith and duties of confidentiality owed to it as its Sales Manager. Baldor alleges that Liew breached his duties by (see paragraphs 10 and 11 of the Statement of Claim (Amendment No 2)): i) placing himself in a position where his interests conflicted with Baldor’s interest and made secret profits and/or received secret payments; ii) diverting corporate opportunities to PT Kenvin and WEG; and iii) using or disclosing confidential information belonging to Baldor (or will use or disclose it).

The confidential information which Baldor alleges in its pleadings that Liew has used or disclosed or will use or disclose is the information obtained by Liew in: i) the course materials for the one-on-one generator training in Oshkosh & Mukwonago from 8 March to 12 March 2005; and ii) all the information set out in the course materials for the H2 Drive course from 14 March to 16 March 2005. I shall refer to the alleged confidential information collectively as the Baldor Information (“Baldor Information”). Baldor also claims S$15,052.27 from Liew for the cost of the two Baldor courses which Liew attended in the US.

Baldor claims against Neo as constructive trustee for monies received by her on behalf of Liew, which Baldor alleges Liew received in breach of his duties to Baldor. Baldor...