Confidential Information and Data Protection
| Author | Benjamin WONG LLM (London School of Economics), LLB (Hons) National University of Singapore; Advocate and Solicitor (Singapore); Sheridan Fellow, Faculty of Law, National University of Singapore. |
| Publication year | 2021 |
| Date | 01 December 2021 |
11.1 Angliss Singapore Pte Ltd v Yee Heng Khay1 (“Angliss”) was a High Court case involving an ex-employee whose breach of confidence caused his ex-employer to lose a customer to a competitor. While this case is a fairly typical case involving breach of confidence in the employment context, it usefully elucidates some features of the current law on breach of confidence after I-Admin (Singapore) Pte Ltd v Hong Ying Ting2 (“I-Admin”).
11.2 The plaintiff (“Angliss”) was a food distributor. For several decades, Angliss had acted as an exclusive distributor for a dairy producer (“Arla”). The defendant (“Yee”) was a former employee of Angliss. In 2017, Yee copied a large number of files from Angliss's system, including documents relating to Angliss's work for Arla. On 30 December 2017, Arla terminated its distributorship arrangement with Angliss and engaged the services of a competitor (“Indoguna”). Shortly after Arla's termination, Yee resigned from Angliss to work at Indoguna as “Arla Brand Manager”.
11.3 Angliss commenced proceedings in the High Court against Yee, alleging breach of confidence, breach of contract and breach of fiduciary duties.3 Angliss alleged that Yee had shared Angliss's confidential information with Indoguna, thereby helping Indoguna to displace Angliss as Arla's distributor.
11.4 The High Court found that Angliss had made out its claims for breach of confidence and breach of contract. The claim for breach of fiduciary duties was rejected because Yee was not a fiduciary of Angliss.4
11.5 To determine if Yee had committed an equitable breach of confidence, the High Court applied the three-step test in I-Admin.5 First, the High Court found that the information obtained by Yee had the necessary quality of confidence as the information was not readily accessible to the public and was valuable information.6 Second, the High Court found that the information was obtained by Yee in circumstances importing an obligation of confidence because he had only been given access to the information for the purposes of his employment, and because he had used surreptitious means to make copies of the information.7 Third, as the first two elements of the I-Admin test had been satisfied, this raised a presumption of breach, placing the burden on Yee to prove that his conscience was unaffected. Yee failed to rebut the presumption of breach because the High Court did not believe that his subjective motivations were innocent, and because he had not adduced evidence to show that he had not misused the confidential information.8 Therefore, the High Court concluded that Yee had breached his duty of confidence to Angliss.9
11.6 Separately, the High Court also found that Yee had breached his employment contract with Angliss: the employment contract contained a confidentiality clause,10 which Yee had contravened by disclosing Angliss's information to Indoguna.11
11.7 As for damages, the High Court found that Angliss would have, in all probability, secured its distributorship with Arla for the next six years but for Yee's breach.12 Accordingly, the High Court awarded damages of $729,423 to Angliss for profits lost due to its loss of the Arla distributorship.13 The High Court rejected Angliss' alternative heads of damage (namely damages for loss of chance, Wrotham Park damages and I-Admin damages). In relation to I-Admin damages, it is interesting to note that the High Court rejected this claim for the reason that it “would
11.8 Angliss provides some useful insights on the continuing relevance of misuse after I-Admin.16
11.9 First, although misuse is no longer an element of the test for breach of confidence, Angliss demonstrates that misuse may still be a relevant consideration. In particular, misuse will be relevant where, as in Angliss, the plaintiff is seeking substantial damages for profits lost as a result of the defendant's alleged misuse of confidential information — in such a case, the plaintiff will still have to prove that the defendant had in fact misused his confidential information, and will also have to prove the causal connection between the misuse and the loss.
11.10 Second, Angliss demonstrates that, if the defendant wishes to point to the absence of misuse to rebut the presumption of breach, the onus is on the defendant to adduce positive evidence that he did not misuse the confidential information. In Angliss, Yee claimed that Angliss had not produced sufficient evidence of misuse, and argued that this should “constitute probative evidence that his conscience has not been affected, and should be enough to displace the presumption of an actionable breach of confidence”.17 The High Court appeared to accept that the presumption of breach could be rebutted by an absence of misuse, but held that it was not enough for Yee to simply make the bare allegation that that Angliss had not adduced sufficient evidence of misuse; rather, it was incumbent on Yee to “produce evidence which supports a positive case that there was no misuse or abuse of the confidential information” [emphasis in original].18
11.11 In iVenture Card Ltd v Big Bus Singapore City Sightseeing Pte Ltd19 (“iVenture”), the Court of Appeal dismissed a claim for breach of confidence because the respondents had successfully proved that they had not misused the appellants' confidential information. Such proof was sufficient to discharge the respondents' burden of proving that their conscience was unaffected.
11.12 iVenture involved Tourist Attractions Aggregator Passes (“TAAPs”), which allow pass-holders to access multiple tourist attractions. The appellants were part of the iVenture Group, which was in the business of developing and marketing tourist packages worldwide. The respondents were part of the Duck and HiPPO Group, a Singapore tourism business. Since 2006, the Duck and HiPPO Group had been operating a local TAAP. In 2014, the iVenture Group and the Duck and HiPPO Group agreed on a collaboration, in which the iVenture Group's TAAP transaction management system (“the Smartvisit System”) would be used to operate a new co-branded TAAP (“the Singapore iVenture Pass”). After the launch of the Singapore iVenture Pass, however, the relationship between the two sides deteriorated, culminating in the suspension of the Singapore iVenture Pass. Subsequently, one of the respondents launched another TAAP (“the HiPPO Singapore Pass”) — this new TAAP covered similar attractions to the Singapore iVenture Pass but did not rely on the Smartvisit System.
11.13 In proceedings before the High Court, the parties made various claims and counterclaims against each other. Among these was the claim by two of the appellants (namely “iVenture Card” and “iVenture International”) that the respondents had acted in breach of confidence. Specifically, the two appellants alleged that the respondents had misused confidential information relating to, inter alia, “product development, pricing, operating processes and marketing” (“the Alleged Confidential Information”) when developing the HiPPO Singapore Pass.20
11.14 Preliminarily, it should be noted that, in bringing their claim before the High Court, iVenture Card and iVenture International relied on the traditional test for breach of confidence instead of the modified
11.15 The High Court dismissed the claim for breach of confidence as it found that the respondents had not “misused the Alleged Confidential Information” or “acted unconscionably in any other way”.24 The main evidence of misuse given by iVenture Card and iVenture International was that the attractions featured on the HiPPO Singapore Pass were the same as those on the Singapore iVenture Pass, but this was not probative of misuse as the attractions were merely typical tourist attractions in Singapore. On the other hand, the respondents had given a persuasive explanation that their HiPPO Singapore Pass was part of a system that they had been independently developing for at least a year before the parties' dispute, which went to show that the HiPPO Singapore Pass had not been developed using the Alleged Confidential Information.
11.16 The appellants appealed against the High Court's decision. They argued, inter alia, that the High Court had erroneously placed the burden of proving the third element of the traditional test (that is, the element of misuse) on them, and that the High Court had therefore erred in dismissing their claim for breach of confidence.25
11.17 The Court of Appeal affirmed the High Court's decision to dismiss the appellants' claim for breach of confidence. The Court of Appeal found that the High Court had not placed the burden of proof on the appellants.26 In any case, the respondents had successfully “discharged their burden of proof to show that they did not misuse the Alleged Confidential Information”.27 The evidence showed that the respondents were already familiar with TAAP operations before the conception of
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