Tort Law

Date01 December 2017
Publication year2017
Citation(2017) 18 SAL Ann Rev 698
Published date01 December 2017
AuthorKumaralingam AMIRTHALINGAM LLB (Hons), PhD (Australian National University); Professor, Faculty of Law; Chair, NUS Teaching Academy, National University of Singapore. Gary CHAN Kok Yew LLB (Hons), MA (National University of Singapore), MA (Birmingham), LLM, BA (University of London); Professor, School of Law; Associate Dean (Faculty and Research), Singapore Management University.
Causing loss by unlawful means

26.1 Prior to the High Court decision in Wolero Pte Ltd v Lim Arvin Sylvester,1 causing loss by unlawful means, though clearly recognised in England,2 had not been extensively examined in Singapore. The plaintiff company, which provided limousine services to corporate clients and private individuals, rented a limousine to the defendant pursuant to hire and service agreements with a guaranteed number of job assignments. The tortious claim was that the defendant caused the plaintiff loss by unlawful means and unlawfully interfered with its contracts. The defendant had written to and obtained from the Land Transport Authority (“LTA”) a written response that the limousines were required to be covered by insurance, which extended to employees. The plaintiff alleged that the defendant had published the LTA response to a WhatsApp group and called on the recipients to return their cars to the plaintiff, with some drivers terminating their contracts. In any event, based on the facts, there were no unlawful means used by the defendant in sending the LTA response to the drivers and calling upon them to return their cars. Further, there was no evidence that the freedom of the drivers to perform their contracts had been interfered with via unlawful means.

26.2 On the state of the law, Tan Lee Meng SJ explained, consistently with Lord Hoffmann's opinion in OBG Ltd v Allan,3 that the tort of causing loss by unlawful means is a tort of primary liability that does not require a wrongful act by anyone else. In response to the plaintiff's

counsel, the learned judge also clarified that the tort exists and is part of Singapore law, citing Paragon Shipping Pte Ltd v Freight Connect (S) Pte Ltd,4 per Judith Prakash J (as her Honour then was), in which a claim for causing loss by unlawful means was dismissed on the facts, and obiter dicta from Tribune Investment Trust, Inc v Soosan Trading Co Ltd 5 and EFT Holdings, Inc v Marinteknik Shipbuilders (S) Pte Ltd6 (“EFT Holdings”) to support the judicial stance. Nonetheless, Tan SJ recognised the “divergent views” on the scope of “unlawful means” in OBG Ltd v Allan, namely, whether the unlawful act has to be independently actionable by the third party and exclude criminal and statutory offences or if “unlawful means” should embrace all acts not permitted under civil or criminal law. A definitive judicial response on this issue will have to wait another day. However, it would seem that the former approach of defining the scope of unlawful means as requiring independent actionability by the third party under civil law would be more consistent with Tan SJ's classification above of this tort as one of primary (as opposed to accessory) liability.
Conspiracy

26.3 This section discusses seven cases on conspiracy involving the alleged use of unlawful means (including fraud, which is the most common, breach of confidence, conversion, inducing breach of a consent order, breach of director's duties and criminal breach of trust).

26.4 The interpretation of contractual clauses can at times have a direct and significant influence on the viability of related tortious claims (in this case, under the tort of unlawful conspiracy). This is illustrated by the following High Court decision in Centre for Laser and Aesthetic Medicine Pte Ltd v Goh Pui Kiat7 and the Court of Appeal decision in Centre for Laser and Aesthetic Medicine Pte Ltd v GPK Clinic (Orchard) Pte Ltd8 respectively. Two doctors, Dr Goh PK and Dr Kelvin Goh, who specialised in aesthetic treatment, co-owned and operated two clinics, one of which was the appellant company. A dispute arose between the two doctors which eventually led to them entering into a settlement agreement.

26.5 Under the settlement agreement, the two doctors were to procure the sale of the two clinics at a certain minimum price. Pending the sale of the clinics, the two doctors were obliged to work at the

Orchard Clinic on different days, such that one of them would be on duty at the Orchard Clinic on any given day of the week. The Orchard Clinic was owned by the appellant company, which in turn was owned in equal shares by the doctors' wives. The wives are registered directors of the appellant company, while Dr Kelvin Goh and Dr Goh PK are the appellant's de facto directors.

26.6 Dr Goh PK set up his new clinic, GPK Clinic, close to the clinic operated by the appellant company. He copied the patient and inventory database of the appellant without the permission of Dr Kelvin Goh. With the information in the database, Dr Goh PK actively diverted patients from the appellant to GPK Clinic. The High Court held that Dr Goh PK and GPK Clinic were liable for breach of confidentiality and for conspiracy to injure the appellant through Dr Goh PK's breach of confidentiality but dismissed the other claims by the appellant (based on breach of fiduciary duties and inducement of breach of employment contracts). Chua Lee Ming J applied the elements of breach of confidence: (a) the information must possess the necessary quality of confidentiality; (b) the information must have been imparted (or received) in circumstances importing an obligation of confidence; and (c) there must be an unauthorised use of that information to the detriment of the party from whom the information originated.9 There was, however, a distinction in the state of mind of Goh PK, his wife, Mdm Wong and GPK Clinic. As Goh PK was a director of GPK Clinic, Goh PK's state of mind and knowledge were attributed to the latter.10 GPK Clinic was therefore liable for breach of duty of confidence in using the confidential information. Mdm Wong, on the other hand, had no knowledge of the business plans or operations of GPK Clinic and had not participated in Goh PK's breach of confidentiality.

26.7 The elements of unlawful means conspiracy require (a) a combination of two or more persons to do certain acts, (b) that the alleged conspirators must have the intention to cause damage or injury to the plaintiff by those acts, (c) the acts must be unlawful, (d) the acts must be performed in furtherance of the agreement, and (e) the plaintiff must have suffered loss as a result of the conspiracy.11 Based on the proposition that a company may conspire with its director, Chua J held that Goh PK and GPK Clinic (but not Mdm Wong) had conspired to injure the appellant by means of the breach of confidentiality.

26.8 Chua J dismissed the claim in respect of the diversion of patients on the basis that the settlement agreement expressly permitted such diversion. Clause 10 of the settlement agreement stated:

[The parties] shall be entirely at liberty to set up any other business or clinics in any location in Singapore. For the avoidance of doubt, none of the Parties shall make any allegations or make any claim in respect of diversion of patients/customers from [the companies].

26.9 On appeal, the Court of Appeal took a contrary view of the interpretation of the agreement. It found that cl 10 did not permit Dr Goh PK to actively divert patients from Orchard Clinic to GPK Clinic and allowed the diversion claims against Dr Goh PK. In addition, the Court of Appeal held that GPK Clinic was liable for conspiracy to injure the appellant by unlawful means in relation to Dr Goh PK's acts in diverting the patients from the appellant to GPK Clinic.

26.10 Automatic Controls and Instrumentation Pte Ltd v Tan Thiam Soon12 involved conspiracy and conversion. The plaintiff company alleged that two of its former employees, a field service manager (the first defendant) and a senior supervisor (the second defendant) had wrongfully and with intent to injure the plaintiff conspired to commit fraud against the plaintiff. In particular, the plaintiff company alleged that the defendants sent the company's workers to job sites where the plaintiff company did not have any projects. The plaintiff further claimed that both the defendants had wrongfully interfered with the plaintiff's goods by committing acts of conversion.

26.11 The plaintiff had earlier obtained judgment against the second defendant in default of appearance. In the present trial focusing on liability, Woo Bih Li J granted the plaintiff interlocutory judgment against the first defendant for conspiracy with the second defendant to injure the plaintiff as well as against both defendants in the tort of conversion. The learned judge found that the second defendant had directed manpower paid by the plaintiff to certain projects and had used materials and tools of the plaintiff for such projects, thereby injuring the plaintiff. The first defendant was a party to such wrongful conduct so as to constitute the tort of conspiracy by unlawful means and the tort of conversion.

26.12 There was no direct application of the legal elements in both the torts of conspiracy and conversion to the facts of the case. Nonetheless, the following evidence adduced at trial would appear to be relevant to the judicial findings. One director of a company, who was given a project at one of the sites, testified that he had approached the first

defendant to help him with manpower shortage and the first defendant had referred him to the second defendant who then put him in touch with a supplier for the required manpower. The second defendant – who was convicted of criminal charges for deceiving the plaintiff into paying a worker at a worksite managed by the plaintiff – had testified that the first defendant was his supervisor and that the first defendant had told him to sign the time cards to verify the hours worked by the workers. The managing director of the plaintiff company testified that the first defendant was the mastermind in defrauding the plaintiff through the use of fake invoices for workers who were sent to work in the projects. Finally, the first defendant had signed the payment vouchers with knowledge of the amounts claimed for the supply of labour.

26.13...

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