Jaclyn Chua v Control Automation Pte Ltd

• Jurisdiction: Singapore
• Judge: Kim Bum Soo
• Judgment Date: 23 May 2023
• Neutral Citation: [2023] SGDC 91
• Court: District Court (Singapore)
• Docket Number: District Court Suit No 2570 of 2018, Summons No 3642 of 2022
• Hearing Date: 24 May 2023,02 March 2023,10 January 2023
• Citation: [2023] SGDC 91
• Year: 2023
• Plaintiff Counsel: Joseph Liow (Joseph Liow LLP) (instructed), Rajvant Kaur d/o Jagit Singh (Omnia Law Chambers LLC)
• Defendant Counsel: Pua Lee Siang (Kelvin Chia Partnership)
• Subject Matter: Civil Procedure,Judgments and orders,Judgment in default,Striking out,Terms of judgment,Rules of court,Judgment in default of defence
• Published date: 30 May 2023

Deputy Registrar Kim Bum Soo:

What should be the terms of a default judgment entered upon the striking out of a defence? The short answer is that judgment is entered on the basis of what the plaintiff has claimed in his/her statement of claim. The better answer is that only the allegations of fact in the statement of claim are deemed admitted, and that the type of judgment to be entered depends on the nature of the claim(s) in the statement of claim.

What then, of claims for equitable relief – a class of remedies that have traditionally been at the Court’s discretion? How should the terms of a default judgment reflect them (if at all)? That is the main issue which confronts me in this matter.

The dispute and the pleadings

The broad contours of the dispute have already been canvassed in Jaclyn Chua v Control Automation Pte Ltd [2022] SGDC 97 (“the GD”) at [4] – [7]. In essence, the plaintiff-in-counterclaim (“CAPL”) claimed that the defendants-in-counterclaim (“Chua” and “J&J”) had unlawfully siphoned business from CAPL. Specifically, Chua, who was CAPL’s ex-director, had left CAPL sometime in July 2017 and allegedly set up a competing business (J&J) with her husband (“BCC”).

After the defence to counterclaim was struck out (see the GD), only the counterclaim and the plaintiff’s claim remained. The plaintiff’s claim will be the subject of trial – no one disputes that. The question is what sort of default judgment can be entered on the basis of the (now unanswered) counterclaim. It is therefore crucial to first set out the exact causes of action pleaded in the counterclaim:

S/N	Cause of action	Pleaded facts in support of the cause of action
1	Chua’s breach of her employment contract	Chua’s unauthorised absence from work in the months of April to July 2017;1
Chua’s resignation without giving the requisite one-month notice;2
Chua’s failure to handover confidential information relating to CAPL’s assets and properties, business opportunities, contracts, suppliers, customers and employees (“the Confidential Information”) and the personal employment folders of the Plaintiff and another employee, Peong Kim Fat (“the Employment Folders”) upon her resignation from CAPL;3
Chua’s wrongful removal/deletion of all documents and information belonging to CAPL in a work laptop assigned to her by CAPL;4
Chua causing, procuring and/or inducing CAPL to enter into transactions with J&J for the supply of material and services at undervalue;5
Chua’s knowledge that the materials and services supplied were provided at an undervalue, without CAPL’s knowledge, and that such transactions were for Chua’s direct profit;6
Chua’s failure to account to CAPL for the provision of materials and services to J&J at an undervalue;7
Chua setting up J&J without the knowledge of CAPL’s managing director;8
Chua’s failure to disclose that her husband was the beneficial owner and/or controller of J&J;9
Chua’s wrongful diversion of projects away from CAPL to J&J to make a profit for her husband and herself;10
Chua’s misuse of the Confidential Information by divulging it to J&J, for the purposes of diverting projects away from CAPL, and consolidating and further enhancing J&J’s business;11
Chua inducing one of CAPL’s employee (“Peong”) to work for J&J for purposes otherwise than for CAPL and in breach of his employment contract with CAPL;12
Chua causing Peong to take unauthorised leave resulting in overpayment of salaries to Peong;13
Chua inducing Peong to leave CAPL and continue working for J&J;14
2	Chua’s breach of her director’s duties	Chua’s failure to handover the Confidential Information and the Employment Folders upon her resignation from CAPL;15
Chua’s failure to report and/or account to CAPL’s managing director and/or CAPL in respect of CAPL’s day to day running, control and management of the business, sales, assets, properties and collection of monies.16
Chua’s removal/deletion of all documents and information belonging to CAPL (including the Confidential Information) in a work laptop assigned to her by CAPL.17
Chua causing, procuring and/or inducing CAPL to enter into transactions with J&J for the supply of material and services at undervalue;18
Chua’s knowledge that the materials and services supplied were provided at an undervalue, without CAPL’s knowledge, and that such transactions were for Chua’s direct profit;19
Chua’s failure to account to CAPL for the provision of materials and services to J&J at an undervalue.20
Chua setting up J&J without the knowledge of CAPL’s managing director;21
Chua’s failure to disclose that her husband was the beneficial owner and/or controller of J&J;22
Chua’s failure to disclose her interest in J&J and the various transactions for goods/services supplied at undervalue, to CAPL;23
Chua’s diversion of projects away from CAPL to J&J to make a profit for her husband and herself, and consolidating and further enhancing J&J’s business;24
Chua’s misuse of the Confidential Information by divulging it to J&J for the purposes of diverting projects away from CAPL and consolidating and further enhancing J&J’s business;25
Chua inducing Peong to work for J&J for purposes otherwise than for CAPL and in breach of his employment contract with CAPL;26
Chua causing Peong to take unauthorised leave resulting in overpayment of salaries to Peong;27
Chua inducing Peong to leave CAPL and continue working for J&J;28
3	Chua’s breach of duties as CAPL’s trustee	Chua’s failure to handover the Confidential Information and Employment Folders upon her resignation from CAPL;29
Chua’s failure to report and/or account to CAPL’s managing director and/or CAPL in respect of CAPL’s day to day running, control and management of the business, sales, assets, properties and collection of monies.30
Chua’s removal/deletion of all documents and information belonging to CAPL (including the Confidential Information) in a work laptop assigned to her by CAPL.31
Chua causing, procuring and/or inducing CAPL to enter into transactions with J&J for the supply of material and services at undervalue;32
Chua’s knowledge that the materials and services supplied were provided at an undervalue, without CAPL’s knowledge, and that such transactions were for Chua’s direct profit;33
Chua’s failure to account to CAPL for the provision of materials and services to J&J at an undervalue.34
Chua setting up J&J without the knowledge of CAPL’s managing director;35
Chua’s failure to disclose that her husband was the beneficial owner and/or controller of J&J;36
Chua’s failure to disclose her interest in J&J and the various transactions for goods/services supplied at undervalue, to CAPL;37
Chua’s diversion of projects away from CAPL to J&J to make a profit for her husband and herself;38
Chua’s misuse of the Confidential Information by divulging it to J&J for the purposes of diverting projects away from CAPL, and consolidating and further enhancing J&J’s business;39
Chua inducing Peong to work for J&J for purposes otherwise than for CAPL and in breach of his employment contract with CAPL;40
Chua causing Peong to take unauthorised leave resulting in overpayment of salaries to Peong;41
Chua inducing Peong to leave CAPL and continue working for J&J;42
4	Chua and J&J’s unlawful means conspiracy to defraud CAPL	Chua and J&J jointly setting up a competing business,43 using CAPL’s employees, assets and properties, confidential information, business opportunities, contracts, suppliers and customers;44
Chua and J&J planning CAPL’s destruction or planning a situation in which CAPL was forced to sell/close its business (by setting up J&J);45
Effecting the conspiracy through acts46 such as (a) Chua and BCC setting up J&J without CAPL’s authorisation,47 (b) Chua failing to disclose that her husband was the beneficial owner and/or controller of J&J,48 (c) Chua and/or BCC causing CAPL to enter into transactions with J&J for the supply of material and services at undervalue,49 (d) Chua and/or BCC misusing the Confidential Information,50 (e) Chua inducing Peong to work for J&J for purposes otherwise than for CAPL and in breach of Peong’s employment contract with CAPL,51 (f) Chua causing Peong to take unauthorised leave resulting in overpayment of salaries to Peong,52 (g) Chua inducing Peong to leave CAPL and continue working for J&J,53
5	Chua and J&J’s unlawful interference with CAPL’s business	Chua inducing Peong to work for J&J for purposes otherwise than for CAPL and in breach of Peong’s employment contract with CAPL;54
Chua causing Peong to take unauthorised leave resulting in overpayment of salaries to Peong;55
Chua inducing Peong to leave CAPL and continue working for J&J;56
6	BCC’s knowing receipt	BCC knew or should have known that the materials and services provided by CAPL to J&J Automation were provided at an undervalue;57
BCC knew or should have known that Chua intended to use and indeed used the materials and services (provided at undervalue) to benefit J&J and/or Chua, directly or indirectly, and without accounting to CAPL for the actual value of the materials and services;58

Issues to be determined and the approach to be taken

As can be seen above, one huge difficulty is that CAPL has claimed that nearly every act represented multiple legal wrongs (eg. a breach of director’s duties, a breach of the employment contract or otherwise). This therefore required a somewhat tedious examination of each cause of action to examine whether the factual allegations that undergird them sufficiently establish that cause of action. I approach this matter in two broad steps: Whether...