Tree Art International Pte Ltd v Colour Moon Pte Ltd and others

• Jurisdiction: Singapore
• Judge: Kevin Kwek
• Judgment Date: 06 July 2020
• Neutral Citation: [2020] SGDC 150
• Court: District Court (Singapore)
• Docket Number: District Court Suit No 1219 of 2020 (Summons No 1617 of 2020)
• Year: 2020
• Published date: 10 July 2020
• Hearing Date: 23 June 2020
• Plaintiff Counsel: Andy Leck, Natalie Huang and Jonathan Teo (Wong & Leow LLC)
• Defendant Counsel: Marissa Tan (Robert Wang & Woo LLP)
• Subject Matter: Injunctions,Interlocutory injunction,Purposes for grant,Protection of contractual rights,Tort,Confidence
• Citation: [2020] SGDC 150

District Judge Kevin Kwek:

The plaintiff is in the business of providing art education.¹ It presently operates four physical art schools (each a “Campus”) in Singapore serving around 1,200 students. Its students are predominantly children, with some students as young as two years old.²

The second defendant (“Ms Duan”) and the third defendant (“Ms Gou”) were employed by the plaintiff as a Campus head and art teacher respectively until sometime in January 2020. The first defendant was incorporated on 27 May 2019 with Ms Duan as a director and shareholder, and Ms Gou as a shareholder. The first defendant, like the plaintiff, is in the business of providing art education.³

According to Ms Duan and Ms Gou, the first defendant only officially began its operations on 1 March 2020, even though it was incorporated on 27 May 2019. On 22 March 2020, a private investigator (“PI”) engaged by the plaintiff visited the first defendant’s art school. The PI’s investigations revealed that all the students in the first defendant’s class schedule and list of students are present or former students of the plaintiff’s.⁴ It is not in dispute that between 1 March 2020 and 22 March 2020, ten of the plaintiff’s students had attended art classes at the first defendant’s art school.⁵

On 15 May 2020, the plaintiff commenced an action against all three defendants for a breach of confidence in unlawfully using the plaintiff’s confidential customer information; and against Ms Duan and Ms Gou, for breach of their employment contracts with the plaintiff. On the same day, the plaintiff applied for an interim injunction against the defendants to restrain the defendants until the final disposal of the trial of the suit, from using, misusing, disclosing, divulging, disseminating and/or otherwise dealing with the plaintiff’s customer contact information and data collected on behalf of the plaintiff’s students and their parents (the “Confidential Customer Information).

Having considered the evidence and the submissions before me, I grant the plaintiff’s application for an interim injunction. The reasons for my decision are set out below.

Background The parties

The plaintiff was incorporated on 2 June 2015 and began operating various art schools, primarily for children in Singapore in or about March 2019 under the “Tree Art” brand name.

According to the plaintiff, Ms Duan was appointed as a Campus Head from March 2019 to January 2020.⁶ Ms Duan on the other hand contends that she was only appointed Campus Head in October 2019 and was employed as an art teacher by the plaintiff from November 2018 to September 2019.⁷ As a Campus head of the plaintiff, part of Ms Duan’s job scope was to assist the plaintiff’s director to manage the day-to-day operations at the Campus as well as to maintain a programme called the enterprise resource planning system (“ERP System”).⁸ According to the plaintiff, a “master list” of the plaintiff’s Confidential Customer Information is stored on this platform.⁹ Ms Duan resigned from the plaintiff’s employ sometime in January 2020.

Ms Gou was employed by the plaintiff as an art teacher from March 2019 until her resignation sometime in January 2020.

As mentioned above, the first defendant was incorporated by Ms Duan and Ms Gou on 27 May 2019 during their employ with the plaintiff. About two months after resigning from the plaintiff in January 2020, Ms Duan and Ms Gou began conducting art classes for some of the plaintiff’s students at the first defendant’s art school.¹⁰

Summary of the parties’ positions

The plaintiff’s application for an interim injunction is based on its claim for breach of confidence against the defendants. According to the plaintiff, Ms Duan and Ms Gou had access and/or were provided with the plaintiff’s Confidential Customer Information in circumstances importing an obligation of confidence. The plaintiff further asserts that Ms Duan and Ms Gou were aware that the information was confidential in nature and that in breach of their duties of confidence owed to the plaintiff, Ms Duan and Ms Gou wrongfully retained and used the Confidential Customer Information to “poach and entice” the plaintiff’s students to join the first defendant’s art school.¹¹ The plaintiff further submits that the first defendant, through its employees Ms Duan and Ms Gou, is deemed to have knowledge of the Confidential Customer Information and is bound by the same duty of confidence owed by Ms Duan and Ms Gou.

It is not in dispute that Ms Duan and Ms Gou had access to the Confidential Customer Information. The defendants however contend that the information was not confidential in nature and that there was no duty of confidence imposed on them.¹² The defendants submit that even if there was such a duty imposed, the defendants “did not disclose and/or provide access of and/or make copies of, duplicate or reproduce in any form”¹³ the Confidential Customer Information. Further, the defendants deny approaching any of the plaintiff’s students and/or parents and assert that the parents had approached the defendants as they were of the opinion that the first defendant’s teaching methods were “more preferable”¹⁴ to the plaintiff.

Issues to be determined

It is trite that the law applicable on whether an interim injunction should be granted is set out in American Cyanamid Co v Ethicon Ltd [1975] AC 396, namely, whether there is a serious question to be tried followed by whether the balance of convenience lies in favour of granting or refusing the interim injunction sought.

Having considered the evidence and submissions, I find that there is a serious question to be tried and that the balance of convenience lies in favour of granting the interim injunction. I set out my reasons below.

Issue 1: Serious question to be tried

The bar for this enquiry is a low one. The plaintiff need only show that its case is not frivolous and vexatious, such that there is no prospect of succeeding and is bound to fail: Law and Practice of Injunctions, Interim Measures and Search Orders in Singapore, Daniel Koh et al, Sweet & Maxwell, 2017 at para 1.062.

It should also be stated at the outset that as part of the enquiry on whether there is a serious question to be tried, this court is not making a determination, at this interlocutory stage, on the plaintiff’s rights or whether there has been a violation of it. This must be so since at this juncture, all the court has before it are affidavits of the parties’ witnesses and the evidence has not been tested by way of cross-examination. These are issues that are to be dealt with at trial.

As stated by the High Court in Jardine Lloyd Thompson Pte Ltd v Howden Insurance Brokers (S) Pte Ltd and others [2015] 5 SLR 258 (“Jardine”) at [6]:

An interim injunction is a temporary measure to restrain a defendant from doing acts alleged to be in violation of the plaintiff’s legal right. Decisions on whether to grant an interim injunction are made at a time when the plaintiff’s right or the violation of it, or both, is yet to be determined. It is not the court’s duty at this stage of the proceedings to resolve the conflicts of evidence on affidavit pertaining to facts on which the claims of the parties ultimately depend on. Neither is it the court’s duty to decide difficult questions of law which call for detailed argument and mature considerations at this point. They are issues to be dealt with at trial.

With the above in mind, I proceed to consider the parties’ positions on the alleged breach of confidence by the defendants.

The Court of Appeal recently set out the approach to be taken in breach of confidence claims in I-Admin (Singapore) Pte Ltd v Hong Ying Ting and others [2020] SGCA 32 (“I-Admin”) at [61]: The information must have the necessary quality of confidence about it. The information must have been imparted in circumstances importing an obligation of confidence. Upon the fulfilment of the prerequisites in (a) and (b) above, an action for breach of confidence is presumed, and the burden then shifts to the defendant to displace such a presumption.

The three elements are considered below.

Necessary quality of confidence

A plaintiff must particularise the confidential information that it seeks to protect as it is oppressive for it to rely on a general statement that the information is confidential or to delay the giving of particulars until after discovery: Tang Siew Choy and others v Certact Pte Ltd [1993] 1 SLR(R) 835 (“Tang Siew Choy”) at [23]. In my view, the plaintiff has in this case sufficiently identified the Confidential Customer Information that it seeks to protect i.e. the customer contact information and data collected on behalf of the plaintiff’s students and their parents. The plaintiff essentially seeks to protect its customer list as it considers this one of its most valuable assets.¹⁵

In this regard, it has been held that customer lists constitute confidential information: Tang Siew Choy at [30] to [32]; Mech-Power Generator Pte Ltd v Kang Beng Chiang and others [1996] SGHC 99 at [32]; Clearlab SG Pte Ltd v Ting Chong Chai and others [2015] 1 SLR 163 (“Clearlab SG”) at [129(i)] read with [131].

The evidence of the plaintiff was that its employees frequently use the WeChat application to communicate or exchange work materials with one another, rather than by of electronic mail. According to the plaintiff, this is because “most of the plaintiff’s teachers, students and parents are Chinese nationals and are accustomed to using WeChat as their primary mode of communication”.¹⁶ However, to protect the confidentiality of the Customer Confidential Information, the plaintiff’s employees are informed that they are not allowed to communicate with the students’ parents directly using the employees’ personal WeChat application accounts unless there are special or urgent circumstances warranting the same.¹⁷ It was the...