Jardine Lloyd Thompson Pte Ltd v Howden Insurance Brokers (S) Pte Ltd and others

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 03 August 2015
• Neutral Citation: [2015] SGHC 202
• Plaintiff Counsel: Ang Cheng Hock SC, Vincent Leow, Tan Kai Liang and Xu JiaXiong, Daryl (Allen & Gledhill LLP)
• Docket Number: Suit No 595 of 2015 (Summons No 2937 of 2015)
• Date: 03 August 2015
• Hearing Date: 24 July 2015,03 August 2015
• Subject Matter: Injunction,springboard injunction,interlocutory injunction
• Year: 2015
• Citation: [2015] SGHC 202
• Defendant Counsel: Gan Kam Yuin and Ho Shiao Hong (Bih Li & Lee LLP),and Adrian Aw Hon Wei (Incisive Law LLC),Choo Zheng Xi (Peter Low LLC),Chew Kei Jin, Andre Teo and Lee Ping (Tan Rajah & Cheah)
• Court: High Court (Singapore)
• Published date: 06 August 2015

Choo Han Teck J:

The plaintiff is part of the Jardine Lloyd Thomson Group. It claims to be the second largest international broker network in the world. The Group has business in 39 countries and has more than 10,000 employees. The plaintiff is suing the defendants in this action because 17 of their employees resigned in April and May this year. Four of them are named as the second, third, fourth and fifth defendants (“the Employee Defendants”) respectively. They are alleged to be joining the first defendant, a competitor of the plaintiff. The sixth defendant is the employment agency that purportedly helped the first defendant engage the Employee Defendants.

The plaintiff’s cause of action is for injunctive relief and damages arising from the tort of conspiracy to injure, breach of contract, and breach of fiduciary duty. The plaintiff alleges that as early as April 2014, the second defendant commenced discussions with Gerard Pennefather (“GP”), the managing partner of the sixth defendant. The plaintiff claims that a year later, the mass resignations began and were completed in two movements. The first took place on 27 and 28 April 2015, and the second a few days commencing 11 May 2015. According to the plaintiff, some of the employees who had resigned told the plaintiff that they had been approached by the sixth defendant.

The plaintiff relies on cases such as British Midland Tool Ltd v Midland International Tooling Ltd [2003] 2 BCLC 523 and UBS Wealth Management (UK) Ltd v Vestra Wealth LLP [2008] IRLR 965 (“UBS Wealth”) for its case that the Employee Defendants owe a fiduciary duty to the plaintiff to act in the interests of the plaintiff. It claims that the fiduciary obligations include a duty to warn the plaintiff of an impending raid on the plaintiff’s employees. Apart from fiduciary duties, the plaintiff asserts that the Employee Defendants also owe contractual duties as employees under their employment contract. These include the general duty of good faith; the duty to devote working time only to the plaintiff’s affairs; the duty to not solicit staff from the plaintiff or induce a breach of contract; and the duty of keeping the plaintiff’s proprietary information confidential. Some of the specific duties are also covered in the plaintiff’s Employee Handbook. None of the employment contracts of the Employee Defendants contain a restraint of trade clause.

The plaintiff alleges that the mass defections were the result of a calculated and coordinated conspiracy that was hatched by all six defendants. It claims that as part of the conspiracy, the Employee Defendants committed the following unlawful acts: First, a breach of their fiduciary and contractual duties of non-solicitation by encouraging staff to leave the plaintiff and to join either the first defendant or other competitors. The plaintiff further alleges that the second defendant misused his authority, as managing director, by not extending the notice periods for the third and fifth defendants from three to six months to be in line with the rest of the staff. Second, a breach of their fiduciary and contractual duties of keeping the plaintiff’s proprietary information confidential by misusing confidential information such as the internal arrangements of the plaintiff’s business and clients and by removing confidential information from the plaintiff. The plaintiff claims that there is a real risk that there will be further breaches of confidentiality.

The plaintiff claims that by the wrongful acts of the defendants, it has, or will, suffer irreparable damage. It also claims their conduct enabled the first defendant and the Employee Defendants to gain “an unfair competitive advantage” against it. Mr Ang Cheng Hock, SC submitted on behalf of the plaintiff that unless the Employee Defendants are enjoined, they “will be allowed to use such unfair competitive advantage to “springboard” ahead, causing further irreparable loss to the plaintiff”. The plaintiff thus seeks interim injunctions to “neutralise the unfair advantage and restore the competitive positions of the parties”.

An interim injunction is a temporary measure to restrain a defendant from doing acts alleged to be in violation of the plaintiff’s legal right. Decisions on whether to grant an interim injunction are made at a time when the plaintiff’s right or the violation of it, or both, is yet to be determined. It is not the court’s duty at this stage of the proceedings to resolve the conflicts of evidence on affidavit pertaining to facts on which the claims of the parties ultimately depend on. Neither is it the court’s duty to decide difficult questions of law which call for detailed argument and mature considerations at this point. They are issues to be dealt with at trial. These are the principles in American Cyanamid Co v Ethicon Ltd [1975] AC 396.

Looking at the present case, it is clear that there are serious and important issues that will arise at trial. These include the almost intractable conflicts between the rights of a contracting party to a contract, the right of a professional to work, and the rights of a company to prevent competition. Importantly, what constitutes a conspiracy? Such issues involve law and policy.

Professional insurance agents and brokers whose careers lay in the service of the insurance industry do not have many options should they wish to leave their employers. Employment agencies such as the sixth defendant serve to connect job seekers and employers. All employees are entitled to leave their employer subject to terms of notice in their employment contract. Naturally, when a large group of employees at a high level leaves, the employer will suffer some detriment and disadvantage but that is part of commercial reality. The employer will have to employ new people and re-build its business. Sometimes they have little difficulty getting new and experienced replacements for those who are leaving or have left; sometimes not.

In such circumstances, the employer often has to recruit its new staff from competitors. Nothing exemplifies my views above more than the recent story concerning the plaintiff’s parent company in the United Kingdom (“the UK”). In the written grounds of the court in Willis Ltd and another v Jardine Lloyd Thompson Group Plc and others [2015] EWCA Civ 450, the English Court of Appeal allowed a short injunction in an action by the plaintiff in that case against the principal defendant, who is the parent company of the plaintiff in the case before me. The defendant parent in the UK purportedly did exactly what the Singapore plaintiff is accusing the defendants of doing – enticing the employees of a rival insurance company to resign en mass.

The action of the plaintiff’s parent company has no bearing on the plaintiff’s case here whatsoever but it serves to illustrate the context in which employees leave one company and join another. Employment agencies like the sixth defendant serve a useful commercial purpose. When they have clients in search of a person with a specified qualification and experience, the agencies may seek him out and even encourage him to leave his employer to join the new one. Does it make any difference whether the employment agency sought one or ten such employees from a single source? That may be an issue at trial – not at the interlocutory stage of proceedings.

An interim injunction may be necessary only if damages will not be adequate. On this point, parties sometimes...