SeaCAD Technologies Pte Ltd v Tan Siew Meng Aaron and Another

JudgeKan Ting Chiu J
Judgment Date09 November 2007
Neutral Citation[2007] SGHC 192
Plaintiff CounselGodwin Campos (Godwin Campos & Co)
Published date28 December 2007
CourtHigh Court (Singapore)
Defendant CounselPeter Low (Peter Low Partnership)
Subject MatterTort,Confidence,Misappropriation of confidential information,Whether employee misappropriated employer's confidential information before resignation,Contract,Breach,Whether former employee breached non-competition clause in employment contract,Illegality and public policy,Restraint of trade,Whether non-competition clause is void for being in wrongful restraint of trade

9 November 2007

Judgment reserved.

Kan Ting Chiu J:

1 The plaintiff company, Seacad Technologies Pte Ltd, deals in computer hardware, computer software and accessories. The first defendant, Aaron Tan Siew Meng, was an employee of the plaintiff. The second defendant, Engineering Computer Services (S) Pte Ltd, is the current employer of the first defendant.

2 The first defendant was employed by the plaintiff as an account manager. The letter of appointment dated 23 February 2002 set out the terms of employment. Clause 8 thereof stipulated that:

You shall not, during the continuance of the Contract of Employment, or after its termination disclose, divulge, impart or reveal to any person or company any of the trade secrets or confidential operations, processes, dealings or any information concerning the organization, business, finance, transactions or affairs of the Company or any of its subsidiaries which may come to your knowledge during your employment thereunder and shall not use or attempt to use any such information in any manner which may injure or cause loss either directly or indirectly to the Company or its business or may be likely to do so. This restriction shall continue to apply after the termination of this Contract of Employment without being limited to a point of time but shall cease to apply to information or knowledge which may come into the public domain.

3 There was an Invention, Non-Competition and Confidentiality Agreement attached to the letter of appointment which the first defendant also signed. Clause 6(a) of this agreement states that:

As long as I am employed by the Company and for a period of one year after termination of such employment for any reason, I shall not, on my own behalf or as owner, manager, stockholder, consultant, director, officer, in any business or activity which is in direct or indirect competition with the Company, including competitors such as Autodesk, Parametric Technology, Structural Dynamics Research Corporation, Hewlett Packard, and Intergraph, and their dealers or distributors, which intends to compete directly or indirectly with the Corporation or which otherwise provides any products or services similar to any products or services provided or proposed to be offered by the Company at the time of such termination in the Republic of Singapore or Malaysia.

(This clause shall be referred to as the non-competition clause.)

4 The first defendant’s employment with the plaintiff had started well. His performance was good and he became a significant member of the plaintiff’s management. Over time, he became disillusioned, and tendered his resignation on 11 November 2005, only to ask to retract it three days later, on 14 November 2005. The plaintiff agreed to his request, but the first defendant, having retracted the first letter of resignation, tendered another letter of resignation again on 9 January 2006, wherein he gave one month’s notice of resignation, this time for good. It transpired that he had in the intervening period accepted an offer of employment from the second defendant, Engineering Computer Services (S) Pte Ltd. He joined the second defendant with effect from 13 January 2006 as a Regional Channel Manager, an important position in the development of the second defendant’s business. It is common ground that the plaintiff and the second defendant are business competitors.

5 The plaintiff’s Statement of Claim was not particularly well structured. In para 6, the plaintiff claimed that the first defendant had breached the express and implied terms of the employment because he:

… had in November and/or December 2005 prior to the termination of his employment downloaded and/or made copies of the Plaintiffs’ confidential information including business models, financial proposals from the Plaintiffs’ computerised database and had sometime thereafter without the consent of the Plaintiffs either intended to disclose or had disclosed and/or provided copies of the said information to the 2nd Defendant.

6 In para 7, the plaintiff alleged that the second defendant:

should have known at all material times and in all the circumstances, that the material provided by the 1st Defendant including the customer list was information confidential to and belonging to the Plaintiffs and had been unlawfully procured by the 1st Defendant. The 2nd Defendants are competitors of the Plaintiffs in the same business and they service the same industries.

7 In para 9, the plaintiff claimed that:

The 1st and 2nd Defendants have wrongfully made use of the Plaintiffs’ abovementioned confidential information for the purposes of the 2nd Defendant’s business and have on the basis of the confidential information and said customer list, made approaches to some of the Plaintiffs’ customers and persuaded the said customers to give their business to the 2nd Defendants instead of the Plaintiffs. The Plaintiffs are unable to give further particulars of the Defendants’ breaches until after discovery herein.

The plaintiff subsequently named the customers it had referred to simply as “Vibrapower” and “Metalplas”.

8 In para 12, the plaintiff pleaded that the first defendant was in breach of the non-competition clause when it joined the second defendant.

9 In para 16, it claimed that:

In further breach of the Employment Contract, the 1st Defendant has wrongfully endeavoured directly or indirectly to induce a customer or customers of the Plaintiffs to cease from dealing with the Plaintiffs and the 1st Defendant has persuaded or tried to persuade such customer or customers to deal with the 2nd Defendant instead. The Plaintiffs are unable to give further particulars of the 1st Defendant’s breaches until after discovery herein.

10 The presentation of the plaintiff’s case left much to be desired. There was little evidence adduced to support its case of the misappropriation and misuse of its confidential information through the downloading from the plaintiff’s computer database.

11 The whole of the plaintiff’s case rested on the evidence of two witnesses. The principal witness was its managing director, Conrad Alvin Montgomery (“Montgomery”). After the first defendant left the plaintiff, Montgomery sent a hard disk (inferentially from the workstation used by the first defendant, although that was not made clear) to IBAS Singapore Pte Ltd (“IBAS”), a company which undertakes forensic examination of hard disks.

12 The other witness was Kelvin Sim Chor Leng (“Sim”), a technician of IBAS. Sim did not profess to be a computer forensic expert[note: 1] (and the plaintiff did not present him as an expert witness). Sim holds a diploma in computer technology and worked for IBAS for a year as a technician where he received on-the-job training in data recovery and computer forensic operations. Sim used a proprietary software known as Encase to examine the hard disk.

13 By using the Encase software and some key words supplied by Montgomery, Sim identified ten files and folders which had been deleted from the hard disk.[note: 2] However, he did not examine the contents of those files and folders because IBAS’s instructions were to search for the deleted files, but the instructions did not extend to reading or checking the contents of the deleted files.[note: 3]

14 Beside Sim, no one from IBAS or the suppliers of the Encase software came to court to state whether the deleted files and folders had been copied before they were deleted.

15 After Montgomery and Sim had given their evidence, the glossary to the operation manual of the Encase software was produced, but it really did not bring any clarity on the identification of the deleted files and its significance.

Evaluation of the claims

The claims under paras 6 and 7 of the Statement of Claim

16 The plaintiff may truly believe that the first defendant had misappropriated the plaintiff’s confidential information stored in the plaintiff’s computer database, but it had failed to prepare and present its case properly.

17 The evidence presented in court was the unproven conclusions of Montgomery based on IBAS’s report on the examination of the hard disk. The report from IBAS was the findings Sim had obtained from the examination of the hard disk with the Encase software. Sim did not read the deleted files and folders and basically said no more than he carried out the examination, identified the deleted files, and presented those findings to the plaintiff. It is hard to understand that the plaintiff thought that it can prove its case without having someone, whether from IBAS, the plaintiff, or elsewhere, read the files and ascertain whether the contents had been copied before the files were deleted.

18 Montgomery did present some views on this, but as I have stated, he did not read the deleted files, and he neither claimed nor proved that he had the knowledge to attest that any parts of the deleted files were copied. He deposed in paras 25 and 26 of his affidavit of evidence-in-chief:

25. In breach of the above express and implied provisions of his employment Contract, the 1st Defendant had in November and/or December 2005 prior to the termination of his employment downloaded and/or made copies of the Plaintiffs’ confidential information including business models, financial proposals from the Plaintiffs’ computerised database and had sometime thereafter without the consent of the Plaintiffs either intended to disclose or had disclosed and/or provided copies of the said information to the 2nd Defendants.

26. Shortly after the 1st Defendant’s resignation on 9 January 2006, it became apparent to the Plaintiffs that their confidential pricing, positioning, customer lists as well as prospect lists were in the hands of their competitor, namely the 2nd Defendants. This was evident due to a number of reasons including the sudden appearance of the 2nd Defendants and their resellers in the Plaintiffs’ existing customer accounts, last-minute deep price undercutting...

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1 cases
  • America Ii Asia Pte Ltd v Kee Foong Meng, Laurel & Ors
    • Singapore
    • District Court (Singapore)
    • 18 November 2011 identified at AB181 - hardly qualify as “Asia”. The High Court decision of SeaCAD Technologies Pte Ltd v Tan Siew Meng Aaron [2007] SGHC 192 does not explain why Malaysia was excised from an otherwise offending clause and I am therefore clear that it provides no guide to me. The phrase “......
1 books & journal articles
  • Tort Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2007, December 2007
    • 1 December 2007
    ...information 22.1 In SeaCAD Technologies Pte Ltd v Tan Siew Meng Aaron[2007] SGHC 192 the plaintiff alleged that the first defendant, its former employee, had breached the non-competition clause in his contract of employment with the plaintiff when he resigned and joined the second defendant......

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