Diversey (Far East) Pte Ltd v Chester Chai Chung Ching and Others

• Jurisdiction: Singapore
• Judge: Chua F A J
• Judgment Date: 12 November 1992
• Neutral Citation: [1992] SGCA 78
• Date: 12 November 1992
• Subject Matter: Review by judicial commissioner,Taxation,Taxation of by assistant registrar,Civil Procedure,Review an exercise of discretion,Principles guiding review of assistant registrar's award,Getting-up fee,Costs
• Docket Number: Civil Appeal No 180 of 1991
• Published date: 19 September 2003
• Defendant Counsel: Johnny Cheo (Shook Lin & Bok) with Yeoh Lam Hock
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: K S Lo (Allen & Gledhill)

This was an appeal from the decision of the honourable judicial commissioner Goh Phai Cheng allowing the defendants`/respondents` application for review of the taxation of items 337 and 338 of the plaintiffs`/appellants` bill of costs by the assistant registrar and dismissing the plaintiffs` application for review of the same items. [See [1991] 3 MLJ 444 .]

Item 337 is the `getting-up` fee for the hearing before the then Chief Justice for the plaintiffs` application for injunctions and Anton Piller orders against the first, second, third and sixth defendants (hereinafter referred to as D1, D2, D3 and D6 respectively) on 12 November 1986 and for the hearing for the continuation of the orders before AP Rajah J on 12 January 1987, 17 and 18 February 1987 and 26 and 30 March 1987. It was drawn up by the plaintiffs at $45,000, taxed down by the assistant registrar to $30,000 and further reduced by Goh Phai Cheng JC to $20,000.

Item 338 is the `getting-up` fee for the trial of the action. It was drawn up by the plaintiffs at $185,000, taxed down to $100,000 by the assistant registrar and further reduced to $75,000 by Goh Phai Cheng JC.

The facts giving rise to this appeal are as follows. The plaintiffs/appellants are a chemical company incorporated in Singapore and belong to the Diversey group of companies carrying on business in various parts of the world. D1, D2, D3, the fourth and fifth defendants (hereinafter referred to as D4 and D5 respectively) were high-ranking employees of the plaintiffs at material times. In addition, D1, D2 and D3 were members of the plaintiffs` board of directors and D1 was managing director of the plaintiffs from 1 December 1983 to 13 November 1986. D6 were a partnership formed by, inter alia, the spouses of the other five defendants.

On 12 November 1986, the plaintiffs issued a generally indorsed writ claiming:

(i) damages against all the defendants for having unlawfully conspired together to injure and/or defraud the plaintiffs between July 1981 and October 1986;

(ii) damages against the first five defendants for breach of their duties of fidelity and good faith under their respective contracts of employment with the plaintiffs;

(iii) damages against the first three defendants for breach of their fiduciary duties as directors;

(iv) damages against the first three defendants for unlawfully conspiring together with other unknown persons to induce the plaintiffs` employees to leave the plaintiffs and join a company or group of companies formed by them for the purpose of taking over the plaintiffs` business and interests in the Asian region;

(v) damages against D6 for procuring a breach by the other defendants of their respective duties of fidelity and good faith and for procuring a breach by the first three defendants of their respective fiduciary duties;

(vi) injunctions against the first three defendants restraining them from using or divulging trade secrets and confidential information belonging to the plaintiffs, and from dealing with the plaintiffs` customers in Singapore, Malaysia, Indonesia, Sabah, Brunei, India, Pakistan, Sri Lanka, Hong Kong and Nepal and from dealing with the plaintiffs` trade suppliers, agents, distributors or licensors in any country; and

(vii) injunctions against the first three defendants restraining them from inducing the plaintiffs` employees to terminate their employment with the plaintiffs.

On the same day the writ was issued, the plaintiffs obtained ex parte:

(i) an interim injunction against the first three defendants restraining them from using or divulging trade secrets and confidential information belonging to the plaintiffs, from dealing with the plaintiffs` customers in the countries previously mentioned and from dealing with the plaintiffs` trade suppliers, agents, distributors or licensors in any country;

(ii) an interim injunction against the first three defendants restraining them from inducing the plaintiffs` employees to terminate their employment with the plaintiffs; and

(iii) Anton Piller orders against D1, D2, D3 and D6.

On 30 March 1987, AP Rajah J ordered the interim injunctions to continue until trial with some modifications, including the lifting of the order restraining dealings with the plaintiffs` customers and the limiting of the trade secrets and confidential information which D1, D2 and D3 were restrained from using or divulging to specifically enumerated classes of technical (rather than business) information. Both parties filed notices of appeal but neither appeal proceeded to a hearing.

The statement of claim was filed on 7 April 1987 and the defence filed on 30 May 1987. The plaintiffs` claims arose from two sets of events. The first concerned various sale, purchase and rental transactions relating to equipment, spare parts and other miscellaneous products between 1981 and 1986. These were entered into between D6 and the other defendants on behalf of the plaintiffs and resulted in secret profits to the defendants and/or loss to the plaintiffs. It was alleged that the following causes of action resulted from these transactions:

(a) conspiracy between D6 and the other defendants;

(b) breach of their duties of fidelity and good faith by the first five defendants as employees of the plaintiffs; and

(c) breach of their fiduciary duties by the first three defendants as directors of the plaintiffs.

The second set of events concerned the setting up of a company or group of companies (which eventually took the name of `Protek`) by the first three defendants and other persons to do business in the Asia Pacific region. The plaintiffs alleged a scheme that involved:

(a) the gathering by the first three defendants of trade secrets and confidential information belonging to the plaintiffs;

(b) the inducement by the first three defendants of numerous employees of the plaintiffs and other Diversey companies in the region to leave the employment of the plaintiffs or Diversey group of companies; and

(c) interference with the plaintiffs` customers, suppliers distributors and agents.

This allegedly resulted in the following causes of action:

(a) conspiracy between the first three defendants and other persons;

(b) breach of their duties of fidelity and good faith by the first three defendants;

(c) breach of their fiduciary duties by the first three defendants as directors.

On 10 November 1987, the length of the trial was fixed at 12 days with about 30 witnesses. Discovery followed together with subsequent orders for further and better discovery. The plaintiffs also sought and obtained substituted service of writs of subpoena ad testificandum on three witnesses.

On 8 September 1989, three days before the trial, the parties reached a settlement. On 11 September 1989, a consent judgment was obtained before Yong Pung How J (as he then was). Under both the settlement agreement and consent order, the plaintiffs were entitled to taxed costs on a party and party basis. On 25 January 1991, the assistant registrar (`AR`) taxed the bill of costs in part and issued an interim certificate under O 59 r 15 for the amount of $152,819.60 as costs and $42,991.69 as disbursements. The former sum includes the sum of $30,000 allowed for item 337 and the sum of $100,000 allowed for item 338. The bill was taxed in part because the defendants objected to the inclusion of items 639 and 641 in the bill, which related to professional fees paid to Messrs Coopers & Lybrand and Commercial Trademark Services (Far East) Pte Ltd and Lionel Security Services Pte Ltd (hereinafter referred to as `CTS`) respectively. [See [1991] 3 MLJ 444 .] These eventually became the subject matter of Civil Appeal No 52 of 1991. [See [1993] SLR]

Both parties were dissatisfied with the taxation of items 337 and 338 and filed separate notices of objection. On 11 April 1991, after hearing the parties, the AR made no order on either party`s application for review of his taxation of the two items. His reasoning was as follows:

My views can be summarized as follows:

(i) The case is factually complicated. I have no doubt that the solicitors for the plaintiffs must have - and I would add necessarily and properly - spent a lot of time and effort taking instructions for the commencement of the case and thereafter at various stages of the proceedings. I have no doubt that the solicitors for the plaintiffs must have spent a lot of time and effort - again necessarily and properly - getting the case in the sense of gathering, organizing, and summarizing the relevant facts and preparing arguments on the facts.

(ii) The case does not raise novel issues of law. Of course, I did consider that getting-up needed to be done on the law relating to

(a) injunctions and Anton Piller orders;

(b) restraint of trade and non-competition clauses;

(c) trade secrets and confidential information;

(d) conspiracy;

(e) inducing breach of contract;

(f) breach of employee`s duty of fidelity;

(g) breach of directors` fiduciary duties.

However, having regard to the facts of this case, I did not consider the getting-up on the law, generally speaking, to be unusually difficult. I was of the view that if the factual allegations regarding the plaintiffs` transactions involving the sixth defendants were proved, there would be no difficulty in showing the facts constituted, in law, breaches of directors` fiduciary duties/breaches of employees/ duties of fidelity and good faith/ conspiracy among the defendants to defraud or to injure the plaintiffs. As for the allegations regarding the setting up by the first, second and third defendants of a rival company and a group of companies and their scheme to gather and use the plaintiffs` trade secrets and confidential information, I considered the law to be somewhat more difficult in the sense that there would be serious issues of law to be argued even if the allegations of fact...