Salad Stop Pte Ltd v Simply Wrapps Express Pte Ltd and another suit

• Jurisdiction: Singapore
• Judge: Loo Ngan Chor
• Judgment Date: 25 June 2018
• Neutral Citation: [2018] SGDC 174
• Court: District Court (Singapore)
• Docket Number: DC/DC Suit No. 1277 of 2016, District Court Appeal No. HC/DCA 7 of 2018, DC/DC Suit No. 3217 of 2015, District Court Appeal No. HC/DCA 8 of 2018
• Year: 2018
• Published date: 04 December 2018
• Hearing Date: 07 February 2018,03 May 2018,21 December 2017,20 December 2017,06 February 2018,18 December 2017,19 December 2017,09 February 2018
• Plaintiff Counsel: Mr Robert Raj Joseph / Mr Wickeremasuriya-Tan Aaron Christian [M/s Gravitas Law LLC] -
• Defendant Counsel: Mr Twang Kern Zern / Ms Simone Bamapriya Chettiar [M/s Central Chambers Law Corporation] -,Mr Datu Glenn Sarili - 2nd Defendant In-Person in DC/DC Suit No. 3217 of 2015
• Subject Matter: Breach of confidence,trade secrets,conspiracy to injure by unlawful means,solicitation,restraint of trade
• Citation: [2018] SGDC 174

District Judge Loo Ngan Chor: INTRODUCTION:

I set out the full reasons for the purpose of the plaintiff’s appeal against my decision to dismiss its claims in the two suits.

The first suit in the title is DC 1277/2016. It was in fact started on 23rd April 2016 after DC 3217/2015 was started on 26th October 2015. Nonetheless, I will refer to these two suits as the first and second suits by reference to their places in the title.

So as not to distract the reader from subordinate, procedural issues that have no bearing on the appeal, I wish to point out that these two suits were heard together by me as consolidated actions even though I eschewed using the word in the orders that I made in the two suits.¹ I should point out that references in the cover pages of the bundles, affidavits of evidence-in-chief and indices of the document bundles to the first, second and third defendants should be read as references, respectively, to the defendant in the first suit (“Simply Wrapps”), and the first defendant (“Antonio”) and second defendant (“Sarili”) in the second suit.

BACKGROUND:

The plaintiff in both suits sells salads and describes itself as “the undisputed market leader in the salad industry, having over 15 outlets in Singapore.” It started its first outlet in November 2009.

Simply Wrapps had, by the time of the trial, numerous salad shops but the plaintiff describes it as “the new upstart and direct competitor… seeking to carve out its own market share in the salad industry.”

Antonio and Sarili in the second suit were employees of the plaintiff, who have since joined Simply Wrapps.

Antonio was hired by the plaintiff on 22nd August 2011 as a kitchen supervisor and was promoted on 1st March 2013 to operations supervisor. He left the plaintiff on 8th November 2013. He joined Simply Wrapps Pte Ltd (“SW”), a predecessor of Simply Wrapps, which has since been struck off the register of companies, on 21st November 2013 and was deployed to its new outlet at Raffles City. Antonio was employed by Simply Wrapps on 6th May 2014. His last, current position was that of F&B Outlets Chief Chef.

Sarili had first been hired by the plaintiff as a salad artist on 5th March 2013.² He was promoted to an assistant kitchen supervisor on 1st December 2013.³ He served his last day with the plaintiff on 20th February 2015.

The action against the third defendant in the second suit had been resolved before the trial so that he was not before me. Also, a defamation claim against Antonio in the second suit had been settled so that this was not an issue before me.

The plaintiff’s claim against the defendants were for breach of confidence/trade secrets, solicitation of its employees, of whom 14 had joined Simply Wrapps, by Antonio and Sarili, with Simply Wrapps being vicariously liable for their alleged solicitation, and conspiracy by the use of unlawful means.

The plaintiff had six witnesses including Mr Adrien Stephanie Desbaillets (“Adrien”) (who started the plaintiff with his father in 2009, opening the first outlet in November), Mr Tan Teong Eow (“Tony”) who was hired as the plaintiff’s chef in September 2009, Ms Norhaslinda Mansor (“Mansor”) (an employee at the plaintiff’s Suntec City outlet), Mr Philip Tan See Wei (a private investigator) and two others.

Simply Wrapps had three witnesses: Mr Wong Meng Teck (a director of Simply Wrapps and its Head of Human Resources), Mr Koh Yong Thye (a director of Simply Wrapps and its Head of Operations and Finance) and Mr Lim Kian Hock (a director of Profilinea Designs Pte Ltd (“Profilinea”)).

Antonio and Sarili testified for themselves. Antonio was represented by the same counsel as Simply Wrapps. Sarili acted in person at the trial, although he was for a time also represented by the same counsel.

THE PLAINTIFF’S CASE:

The plaintiff’s case was that it had confidential information in the form of a suppliers list, contractors list, price list and pricing formulae, ingredients used for its salads and recipes. This confidential information had been taken by Antonio and Sarili and used by them to benefit Simply Wrapps or was passed on to Simply Wrapps, in breach of the duty of confidence owed to the plaintiff by Antonio and Sarili.

The plaintiff had imparted to Antonio the confidential information. Yet within days of Antonio joining SW, SW was able to open its new outlet at Raffles City with a menu and salad bar layout which were identical to that of the plaintiff. Moreover, these “bore no resemblance to [SW]’s” previous outlet at 100AM.

The speed with which Antonio could come up with the new dressings and menu were a practical impossibility in that it had taken the plaintiff “at least 6 months to come up with 16 signature salad dressings.”⁴ It was the plaintiff’s case that Adrien, his father and Tony had laboured at creating its dressings.

The dressing recipes were held in folders which were kept in cabinets or shelves of the individual outlets, sometimes under lock and key. This was the arrangement until the plaintiff set up its central kitchen in mid-2012.

Simply Wrapps, having had other suppliers, started placing orders for dry goods from Yong Wen Food Industries Pte Ltd (“Yong Wen”), which was the plaintiff’s dry goods supplier, after Antonio joined Simply Wrapps.

It also used the same kitchen contractor, Hong Lee Steel Industries Co Pte Ltd (“Hong Lee”), to custom-build a salad bar that was identical to the plaintiff’s. Simply Wrapps even used an identical colour coding to the plaintiff’s for premium ingredients on the salad bar. In getting Profilinea to design its outlets, Simply Wrapps had replicated the plaintiff’s outlet designs.

Simply Wrapps was able to rapidly expand its business, growing the number of its outlets to the teens, through Antonio’s contributions, a fact that saw Antonio’s salary grow to double his starting salary by March 2016.

Antonio had made three separate attempts to solicit Mansor’s leaving the plaintiff for Simply Wrapps, two meetings at Mansor’s outlet on 29th March 2015 and 21st May 2015, which straddled a telephone conversation initiated by Mansor. To further convince Mansor to join Simply Wrapps, Antonio had brought along Sarili during the second meeting when he referred to the latter as not having been sued even though Sarili too had a clause against competition. It was also Mansor’s evidence that Antonio had said that a number of other former employees of the plaintiff had joined Simply Wrapps after Antonio had joined the latter.

The plaintiff maintained that Simply Wrapps and Antonio had “poach(ed) experienced staff from [the plaintiff] so that they could start work immediately without any training or orientation.”

SIMPLY WRAPPS’ CASE:

Simply Wrapps’ position was that if Antonio had done any wrong, which it denied, this was done entirely without the knowledge or consent of Simply Wrapps.

It had no knowledge of the terms of Antonio’s employment agreement with the plaintiff. It had not asked for, or been given, any of the alleged confidential information, the alleged confidential nature of which it also denied.

In regard to Simply Wrapps recipes, Antonio’s joining coincided with the prospective opening of its Raffles City outlet and Simply Wrapps accepted Antonio’s request to contribute to the upgrading of the menu and dressings.⁵ The instruction to Antonio, who had long experience in the food and beverage industry including a stint on a cruise liner, was to devise a menu that was different from that of the competition.⁶ On the face of the plaintiff’s and Simply Wrapps’ displayed menus, the alleged similarities were not discernible.⁷

ANTONIO’S CASE:

Antonio’s case was that no customers list, suppliers list, price formulae or contractors list had ever been made known to him.

In respect of recipes, he had not been privy to the recipes used after the plaintiff started its central kitchen in mid-2012. As for the recipes used at the outlets before the central kitchen started, Antonio said that the recipes were in fact publicly displayed at the outlets to facilitate in-house mixing of the recipes.⁸ Antonio thus maintained that the recipes were not confidential information.

He also assumed that the two sets of recipes were not identical in that the plaintiff was always refining and updating its menus and creating new recipes.⁹

SARILI’S CASE:

Sarili’s case was that, being an assistant kitchen supervisor of the plaintiff, he had absolutely no access to the alleged confidential information. The non-competition clause in his employment agreement was an unlawful restraint of trade in that it would keep him from securing lawful employment and making a living.

RELEVANT LEGAL PRINCIPLES:

I now propose to refer to two authorities that guided me in the substantive decision that I made.

I first set out an extract from a Court of Appeal decision. This is a long extract in that it concerns several aspects related to a breach of confidence and contains citations from English authorities which the court accepted. In Tang Siew Choy and ors v Certact Pte Ltd [1993] SGCA 35, the Court of Appeal said this: 16 The principles of law applicable to the appeal were those set out in the leading authority of Faccenda Chicken Ltd v Fowler [1986] 1 All ER 617. Neill LJ, in a passage worthy of extensive quotation, stated the principles as follows (at 625–627): (1) Where the parties are, or have been, linked by a contract of employment, the obligations of the employee are to be determined by the contract between him and his employer: cf Vokes Ltd v Heather (1945) 62 RPC 135 at 141. (2) In the absence of any express term, the obligations of the employee in respect of the use and disclosure of information are the subject of implied terms. (3) While the employee remains in the employment of the employer the obligations are included in the implied term...