Ng Thiam Kiat and Others v Universal Westech (S) Pte Ltd and another appeal

• Jurisdiction: Singapore
• Judgment Date: 30 June 1997
• Date: 30 June 1997
• Docket Number: Civil Appeals Nos 184 and
• Court: Court of Appeal (Singapore)

Ng Thiam Kiat and others

Plaintiff

and

Universal Westech (S) Pte Ltd and another appeal

Defendant

[1997] SGCA 26

Yong Pung How CJ

,

M Karthigesu JA

and

L P Thean JA

Civil Appeals Nos 184 and 185 of 1996

Court of Appeal

Civil Procedure–Costs–Principles–Costs within discretion of trial judge–Costs generally to follow event–Civil Procedure–Injunctions–Discharging interim injunction–Undertaking as to damages–Enforcement–Whether inquiry should be ordered–Loss suffered by third defendant passed on to first and second defendants–Contract–Remedies–Damages–Employee becoming director of competitor while employed–Breach of duty of fidelity–Lack of participation in management or operation–Minimal harm or damage caused

The plaintiff, a company, sued the first and second defendants, their former employees, for breach of their contracts of employment and breach of their duties as employees and ex-employees. The third defendant, a company owned by the first and second defendants who were also its directors, was subsequently added to the proceedings. The plaintiff obtained an ex parte injunction against the first and second defendant, but this was subsequently set aside with the questions of inquiry as to damages and costs reserved to the trial judge. At trial, the trial judge dismissed the plaintiff's claim against the first defendant, but awarded him only half of his costs on the basis that he was not completely blameless. The trial judge held that the second defendant breached his duty of fidelity to the plaintiff, but only awarded the plaintiff damages in the amount of $1,000 with costs of $3,000. The trial judge further held that the first and second defendant had not suffered any loss from the grant of the ex parte injunction as any loss was suffered by the third defendant who was not a party to the injunction. The plaintiff appealed against the trial judge's dismissal of their claim against the first defendant and his award against the second defendant. The defendants appealed against the award of half the costs to the first defendant, the award against the second defendant and the trial judge's refusal to make an order for damages in favour of the first and second defendant.

Held, dismissing the plaintiff's appeal and allowing the defendants' appeal in part:

(1) In the instant appeal, the plaintiff's allegations against the first defendant were largely unsubstantiated and the evidence was largely hearsay or without any evidential basis or support. The trial judge was justified in dismissing the plaintiff's claim against the first defendant: at [16] and [17].

(2) The issue of costs was one within the sole discretion of the trial judge and generally costs followed the event, except when it appeared to the trial judge that in the circumstances of the case some other order should be made. In this case, the trial judge was justified in awarding half the costs against the first defendant, even though the plaintiff's claim against him did not succeed: at [24].

(3) The second defendant became a director of the third defendant whilst he was in the service of the plaintiff. However, while he had committed a breach of his duty of fidelity to the plaintiff, he did not take part in the management or operation of the third defendant's business. Hence, the harm or damage caused to the plaintiff was minimal and there was no basis to interfere with the trial judge's findings: at [21] and [23].

(4) Although the party that nominally suffered the loss was the third defendant, such loss would be passed on the first and second defendant as shareholders and directors. Hence, an inquiry ought to be held to determine whether any damage or loss had been occasioned to the first and second defendants as a result of the interim injunction and the appeal was allowed on this point alone: at [28].

Cheltenham & Gloucester Building Society v Ricketts [1993] 1 WLR 1545; [1993] 4 All ER 276 (refd)

Tullio Planeta v Maoro Andrea G [1994] 2 SLR (R) 501; [1994] 2 SLR 489 (folld)

Vieweger Construction Co Ltd v Rush & Tompkins Construction Ltd [1965] SCR 195 (refd)

Thio Ying Ying (Chor Pee & Co) for the appellants in CA 184/96 and for the respondents in CA 185/96

Liew Teck Huat (Niru & Co) for the respondent in CA 184/96 and for the appellant in CA 185/96.

L P Thean JA

1 These two appeals arose from the decision of Kan Ting Chiu J. In the proceedings before him, the company, Universal Westech (S) Pte Ltd, (“the plaintiffs”) claimed against Ng Thiam Kiat (“the first defendant”) and Ng Kim Leng (“the second defendant”), both of whom were their former employees, damages for breach of their contracts of employment and breach of duty as their employees. The third defendant, Optim Application (S) Pte Ltd (“the third defendant”) is a company in which the first and second defendants have substantial interests and which they wholly control. It was joined as a party in the proceedings at the instance of the first and second defendants, but it played only a nominal role. The learned judge dismissed the plaintiffs' claim against the first defendant, awarding him, however, only half the costs. He allowed the plaintiffs' claim against the second defendant and awarded them damages in the sum of $1,000 with costs which he fixed at $3,000. There was also before the learned judge for determination the question of assessment of damages of the first and second defendants arising from the ex parte injunction against them which was discharged at the interlocutory stage. The learned judge, however, did not make an order for damages in their favour. [See Universal Westech (S) Pte Ltd v Ng Thiam Kiat [1996] 3 SLR (R) 429.]

2 Against the decision of the learned judge the plaintiffs appealed. Their appeal, namely, CA 185/96, was essentially against that part of the learned judge's decision dismissing the plaintiffs' claim against the first defendant and awarding damages against the second defendant in the sum of $1,000 with costs fixed at $3,000. The defendants also appealed against the learned judge's decision. In their appeal, namely, CA 184/96, they appealed against that part of the decision awarding half the costs to the first defendant, allowing the plaintiffs' claim...