Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart

JudgeWoo Bih Li J
Judgment Date16 December 2011
Neutral Citation[2011] SGHC 266
CourtHigh Court (Singapore)
Docket NumberSuit No 847 of 2009
Published date09 April 2013
Hearing Date24 October 2011,26 September 2011,23 September 2011,16 November 2011,20 September 2011,18 October 2011,19 September 2011,29 September 2011,21 September 2011,22 September 2011
Plaintiff CounselAqbal Singh s/o Kuldip Singh (Pinnacle Law LLC)
Defendant CounselWong Siew Hong and Teh Ee-Von (Infinitus Law Corporation)
Subject MatterEmployment Law
Citation[2011] SGHC 266
Woo Bih Li J: Introduction

This is an action by Smile Inc Dental Surgeons Pte Ltd (“Smile”) against its former employee, Dr Andrew Stewart Lui (“Dr Lui”), for breaches of express and implied terms of Dr Lui’s employment contract.

As a result of an agreement between the parties on a reduced list of issues, only two persons gave evidence for Smile: Dr Ernest Rex Tan Sek Ho (“Dr Tan”) and his wife Chong Mo-Ai Grace (“Ms Chong”). Dr Lui elected to make a submission of no case to answer after the close of the case for Smile and not to adduce any evidence for his case.

After considering submissions, I dismissed the action by Smile with costs to be paid to Dr Lui. Smile has filed an appeal to the Court of Appeal.

The facts or allegations I set out below come mainly from Dr Tan.


Smile was incorporated in Singapore in March 1997 by Dr Tan and Ms Chong. Since inception, Dr Tan and Ms Chong have been equal shareholders in, and the only directors of, Smile. Dr Tan is a practising dentist and is also a specialist prosthodontist certified by the Singapore Dental Council. Prosthodontics is a dental specialisation in reconstructive and cosmetic dentistry. Ms Chong is not a practising dentist. She is the Managing Director of Smile.

Smile opened its first dental clinic in a shopping mall known as “Suntec City” (“the Suntec Clinic”) in October 1997. It was the first dental clinic in Singapore to provide a procedure known as “Britesmile Laser Teeth Whitening”. Dr Tan explained that this procedure was the first technology (back in 1997) which enabled patients to whiten their teeth in one sitting in one hour on the dentist’s chair1. Dr Tan bought the rights of distributorship for this procedure for the whole of Asia and brought the first machine for this procedure in Asia back to Singapore in 1997.

Smile opened its second dental clinic at “Forum the Shopping Mall” (“the Forum Clinic”) in September 1998 after securing a covenant from the landlord, Hermill Investments Pte Ltd (“Hermill”), that the Forum Clinic would be the only dental clinic in the shopping mall. The Forum Clinic was the “first and only full-fledged children and family-themed dental practice in Singapore” (see para 26 of Dr Tan’s Affidavit of Evidence-in-Chief (“AEIC”)). This was in line with Hermill’s positioning of the Forum shopping mall as a children-themed mall.

The Suntec Clinic was located within the central business district while the Forum Clinic was located along Orchard Road, which is the main shopping belt in Singapore. Dr Tan stated (at para 41 of his AEIC) that Smile’s “Forum Clinic clientele comprises mainly locals/expatriates/tourists who are of the upper middle to high income families that reside around or frequent the Orchard and Tanglin vicinity”.

Dr Lui is an Australian citizen. In 2003, he approached Smile to explore the possibility of employment with the latter. He informed Dr Tan and Ms Chong that he was dissatisfied with his then employment as an associate dentist at a dental practice in Great World City due to its lack of “profile and visibility”. His remuneration with that practice was contingent on the number of patients he treated. He complained that that practice did not attract sufficient patients to make it worth his while to remain employed there.

Dr Tan and Ms Chong were impressed with Dr Lui. They felt that “he had the personality, skills and aptitude to relate to patients”, and he struck them as a dentist with “good chair-side manners” (see para 35 of Dr Tan’s AEIC).

Dr Lui had several discussions with Smile about his employment prospects. During this time, Dr Lui held an Employment Pass and was living in a rented apartment. Dr Lui informed Dr Tan and Ms Chong that his mother was living in Melbourne, Australia, and that he eventually planned to return to Melbourne to look after her (see para 36 of Dr Tan’s AEIC). He claimed that he had no plans to apply for Permanent Resident status as he did not intend to settle down in Singapore for the long run.

In one of the discussions, Dr Lui asked whether Smile was looking for a partner or an associate dentist. Dr Tan and Ms Chong replied that they were only looking for an associate dentist, and Dr Lui indicated his agreement to this.

Initially, the draft employment contract stipulated that Dr Lui’s minimum term of employment was five years. Dr Lui managed to get this reduced to three years. According to Dr Tan and Ms Chong, Dr Lui gave them the impression that he would only stay and practise in Singapore for a short term. As such, it was “completely inconceivable” to them when the contract was entered into that Dr Lui “would seek to practice elsewhere in Singapore” after his employment with Smile ended (see para 39 of Dr Tan’s AEIC). They believed that he would return to Australia to practise.

The employment contract was signed by the parties on 31 July 2003 (“the Contract”). Clause 7 of the Contract provided that Dr Lui’s remuneration as an “associate dental surgeon” was to be 40% of the net professional fees collected each month. Dr Lui commenced work with Smile on 1 September 2003. In his first two years of working for Smile, Dr Lui practiced both in the Suntec Clinic and the Forum Clinic. However, with effect from July 2005 Dr Lui was assigned by Smile to work full-time at the Forum Clinic.

Smile set up a third clinic at One Raffles Quay (“the ORQ Clinic”) in 2005.

Dr Tan stated (at para 47 of his AEIC) that, at the end of 2004, the Ministry of Health (“the MOH”) relaxed the advertising guidelines for the medical and dental professions. Smile subsequently embarked on a substantial advertising and marketing effort to increase the awareness and profile of its brand name as well as the profile of the Forum Clinic.

A “large light box signage” was erected on the external facade of the Forum shopping mall facing Cuscaden Road from 9 February 2007 to 8 September 2010 in order to raise awareness of the Forum Clinic in the area.

From October 2007 to August 2008, Smile ran a series of advertisements in “Motherhood Magazine” that specifically promoted the Forum Clinic and the dentists practicing there, including Dr Lui. Smile also ran a series of “Question and Answer” articles in “Motherhood Magazine” and “Ma Ma Bao Bei” (a Mandarin-language child and family magazine) to increase the profile of its individual dentists, including Dr Lui. For instance, Dr Lui was featured in the October 2007 and February 2008 issues of “Motherhood Magazine”, and the December 2008 issue of “Ma Ma Bao Bei”.

On 7 January 2009, Dr Lui incorporated Dental Essence Pte Ltd (“Dental Essence”) and was the sole director and shareholder thereof while he was still employed by Smile. On or about 25 February 2009, Dr Lui entered into a one-year tenancy agreement for premises at 127 Tanglin Road, Tudor Court, Singapore 247922 (“Tudor Court”) on behalf of Dental Essence. This location was within five minutes’ walk from the Forum Clinic. On the same day (ie, 25 February 2009), Dr Lui also gave written notice of his resignation to Smile. Despite the three months’ notice period which Dr Lui was obliged to give to Smile pursuant to Clause 20 of the Contract, Smile agreed on 31 March 2009 that Dr Lui’s last day of work with Smile would be 18 April 2009. On 14 May 2009, Dental Essence obtained a licence from the MOH to operate a dental clinic, and it began operations the next day, ie, 15 May 2009.

According to Dr Tan, sometime in March 2009 Dr Lui committed to renovation works of Dental Essence’s premises amounting to about $60,0002. On 19 March 2009, Dr Gareth Pearson (“Dr Pearson”), a former employee of Smile, joined Dental Essence as a shareholder and a dentist. About one year earlier, in March 2008, Dr Pearson had given Smile six months’ notice that he intended to stop working in September 2008 for an indefinite period because he was leaving Singapore. Dr Pearson was a part-time dentist employed by Smile and was based primarily at the Forum Clinic. Dr Lui and Dr Pearson together accounted for 80% of the Forum Clinic’s patient pool3.

After Dr Lui’s departure from the Forum Clinic, the Forum Clinic experienced a decrease in monthly revenue. Although the clinic’s monthly revenue was about $116,000 in April 2009 (which was the month in which Dr Lui left Smile’s employment), this dropped to about $52,000 by September 2009. This was a drop of about 55%. On 8 October 2009, Smile commenced this action against Dr Lui. By this time, Smile had received requests from numerous patients for their dental records. It later found out that many of these patients became patients of Dental Essence.

The monthly revenue of the Forum Clinic continued to dwindle, and Smile eventually closed the Forum Clinic on 15 September 2010, which was the same day when the Forum Clinic’s licence expired.

In January 2011, this action was bifurcated upon application by Dr Lui.

The case for Smile

Smile relied on two broad categories of causes of action. First, Smile alleged that Dr Lui had breached various express provisions in the Contract which restricted Dr Lui from undertaking certain activities.

Secondly, Smile also alleged that Dr Lui had breached implied terms of the Contract which provided that Dr Lui owed certain implied duties.

As regards the express provisions, Smile’s first allegation (at paras 21 and 22 of its Statement of Claim (Amendment No 2) (“the SOC (No 2)”)) was that Dr Lui had breached Clause 24 of the Contract because the latter was practising as a dentist at Dental Essence’s clinic at Tudor Court, which was within three kilometres of Smile’s Forum Clinic. Clause 24 of the Contract was as follows:

24. In the event that Dr. Lui leaves (whether resignation or dismissal) The Practice, Dr. Lui shall not practice within a 3 kilometre radius distance from the Smile Inc. Dental Surgeons practices at Suntec City Mall and from Forum The Shopping Mall,...

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