Tuitiongenius Pte Ltd v Toh Yew Keat and another

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
JudgeSundaresh Menon CJ,Tay Yong Kwang JA,Quentin Loh J
Judgment Date19 October 2020
Neutral Citation[2020] SGCA 103
Citation[2020] SGCA 103
Defendant CounselNg Lip Chih and Goh Hui Hua (Foo & Quek LLC)
Plaintiff CounselTan Gim Hai Adrian, Ong Pei Ching, Hari Veluri, Yeoh Jean Ann and Jason Hong (TSMP Law Corporation)
Hearing Date29 June 2020
Docket NumberCivil Appeal No 218 of 2019
Published date24 October 2020
Date19 October 2020

[2020] SGCA 103

Court of Appeal

Sundaresh Menon CJ, Tay Yong Kwang JA and Quentin Loh J

Civil Appeal No 218 of 2019

Tuitiongenius Pte Ltd
and
Toh Yew Keat and another

Tan Gim Hai Adrian, Ong Pei Ching, Hari Veluri, Yeoh Jean AnnandJason Hong (TSMP Law Corporation) for the appellant;

Ng Lip Chih and Goh Hui Hua (Foo & Quek LLC) for the respondents.

Case(s) referred to

Abdul Latif bin Mohammed Tahiar v Saeed Husain s/o Hakim Gulam Mohiudin [2003] 2 SLR(R) 61; [2003] 2 SLR 61 (refd)

AG Spalding & Bros v A W Gamage Ltd (1915) 32 RPC 273 (refd)

Audience Motivation Co Asia Pte Ltd, The v AMC Live Group China (S) Pte Ltd [2016] 3 SLR 517 (refd)

BNA v BNB [2020] 1 SLR 456 (refd)

Bristol and West Building Society v Mothew [1998] Ch 1 (refd)

CDL Hotels International Ltd v Pontiac Marina Pte Ltd [1998] 1 SLR(R) 975; [1998] 2 SLR 550 (refd)

Commissioners of Inland Revenue, The v Muller & Co's Margarine, Ltd [1901] AC 217 (refd)

Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, Singapore Branch v Motorola Electronics Pte Ltd [2011] 2 SLR 63 (refd)

Erven Warnink Besloten Vennootschap v J Townend & Sons (Hull) Ltd [1979] AC 731 (folld)

Hai Tong Co (Pte) Ltd v Ventree Singapore Pte Ltd [2013] 2 SLR 941 (folld)

Latham Scott v Credit Suisse First Boston [2000] 2 SLR(R) 30; [2000] 2 SLR 693 (distd)

Liberty Sky Investments Ltd v Aesthetic Medical Partners Pte Ltd [2020] 1 SLR 606 (folld)

Lifestyle 1.99 Pte Ltd v S$1.99 Pte Ltd [2000] 1 SLR(R) 687; [2000] 2 SLR 766 (refd)

Novelty Pte Ltd v Amanresorts Ltd [2009] 3 SLR(R) 216; [2009] 3 SLR 216 (folld)

Rovio Entertainment Ltd v Kimanis Food Industries Sdn Bhd [2015] 5 SLR 618 (refd)

Sembcorp Marine Ltd v PPL Holdings Pte Ltd [2013] 4 SLR 193 (folld)

SIC College of Business and Technology Pte Ltd v Yeo Poh Siah [2016] 2 SLR 118 (refd)

Simpson Marine (SEA) Pte Ltd v Jiacipto Jiaravanon [2019] 1 SLR 696 (folld)

Singapore Professional Golfers' Association, The v Chen Eng Waye [2013] 2 SLR 495 (refd)

Singsung Pte Ltd v LG 26 Electronics Pte Ltd [2016] 4 SLR 86 (folld)

Staywell Hospitality Group Pty Ltd v Starwood Hotels & Resorts Worldwide, Inc [2014] 1 SLR 911 (refd)

Tan Yok Koon v Tan Choo Suan [2017] 1 SLR 654 (folld)

Tat Seng Machine Movers Pte Ltd v Orix Leasing Singapore Ltd [2009] 4 SLR(R) 1101; [2009] 4 SLR 1101 (refd)

Yap Son On v Ding Pei Zhen [2017] 1 SLR 219 (folld)

Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029; [2008] 3 SLR 1029 (folld)

Legislation referred to

Evidence Act (Cap 97, 1997 Rev Ed) ss 94, 94(b), 94(c), 94(f)

Civil Procedure — Pleadings — Whether appellant had sufficiently pleaded particulars of its claim pertaining to first respondent's breach of fiduciary duties in relation to appellant's tuition centre premises at Bedok

Contract — Breach — Whether first respondent breached relevant terms of his employment agreement with appellant

Contract — Formation — Whether parties had entered into oral agreements

Equity — Fiduciary relationships — Duties — Whether first respondent breached his fiduciary duties as director of appellant

Tort — Passing off — Whether respondents liable for tort of passing off

Facts

The first respondent, Mr Toh Yew Keat (“Mr Toh”), started providing private tuition classes in economics in 2007. He later offered these classes in a room at his parents' Housing and Development Board flat in Choa Chu Kang (“HDB Flat”). The appellant, Tuitiongenius Pte Ltd, was a joint venture incorporated in April 2009 by Mr Toh and one Mr Keng Yew Huat (“Mr Keng”) as directors and equal shareholders. The second respondent, Economics at Tuitiongenius Pte Ltd (“ETGPL”), was a company incorporated by Mr Toh. The appellant and ETGPL were both in the business of providing private tuition services. The facts pertaining to the incorporation of the appellant formed the central dispute in the appeal.

Mr Keng claimed that Mr Toh had insufficient space to hold group tuition classes in the room at the HDB Flat. As such, the parties entered into an agreement, called the “CCK Joint Venture”, pursuant to which Mr Keng allegedly invested a sum of between $20,000 and $30,000 to renovate that room in return for half of the monthly tuition revenue after Mr Toh was paid a fixed monthly salary. However, Mr Keng alleged that Mr Toh never paid him his share of the revenue. Despite the absence of payment, Mr Keng agreed to enter into a “fresh joint venture” with Mr Toh, as a result of which the appellant was incorporated. Mr Keng claimed that the parties agreed that Mr Toh would continue to teach and retain the fees from the group of students that he was tutoring at that time until they had graduated from junior college (“JC”). Mr Keng's understanding of the “fresh joint venture” was that the entirety of Mr Toh's tuition business would be transferred to and be carried out through the appellant.

Mr Toh's account was almost entirely different. Mr Toh claimed that between 2007 and 2009, he had established himself as a popular economics tuition teacher for JC students and had marketed his services under the name “TuitionGenius”. Mr Toh denied Mr Keng's account of the CCK Joint Venture entirely. Instead, he claimed that Mr Keng had approached him and had suggested that they take advantage of the reputation of “TuitionGenius” by establishing the appellant to operate their joint venture. Mr Toh was hesitant because he lacked the means to invest any capital in a joint venture, had no experience in running one and wanted financial security as he hoped in time to start a family. To allay these concerns, the parties concluded an oral agreement to enter into a joint venture, on terms that: (a) Mr Toh would be free to continue to run his private tuition business and retain the revenue that it generated; and (b) Mr Toh would apply the expertise that he had acquired in building up a successful private tuition business to grow the appellant's business and would participate in joint marketing activities with the appellant (“the Joint Venture Agreement”).

In August 2009, Mr Toh entered into a written employment agreement with the appellant (“the Employment Agreement”) by which he agreed to serve as a director of the appellant for a period of five years. In September 2009, the appellant registered a business under the name REAL Education Centre (“REC”) which operated from premises at Clementi (the “Clementi Centre”), and in June 2011, it opened a second branch at Bedok (the “Bedok Centre”). Mr Toh taught economics classes at the Clementi and Bedok Centres, but continued to conduct classes at other locations as well, including at the HDB Flat.

The appellant ceased its operations at the Bedok Centre sometime in or around May 2014 as it was not profitable. In September 2012, Thinktank Learning Centre Pte Ltd (“ThinkTank”) was incorporated with Mr Toh, Mr Keng, and Mr Xavier Tong (“Mr Tong”) as its directors, and Mr Toh and Mr Tong as its shareholders. Sometime in April 2014, ThinkTank took over the Bedok Centre premises and the Bedok Centre's students from the appellant.

In November 2010, Mr Toh registered a sole proprietorship, Economics at Tuitiongenius (“ETG”). Subsequently, Mr Toh incorporated ETGPL in April 2014 to replace ETG and corporatise his private tuition business. ETG and ETGPL were referred to as the “ETG Entities”. Mr Toh claimed that he had informed Mr Keng of this move and had even been encouraged by Mr Keng to develop and grow his own business and, in that context, establish the ETG Entities. In line with this, the appellant and the ETG Entities conducted joint marketing activities.

In contrast, Mr Keng denied that he had agreed that Mr Toh could set up the ETG Entities. He claimed that in 2013, he began to suspect that Mr Toh was misappropriating money from the appellant. He procured the appellant's employment of his son, Jun Hao, in 2014, a move which was partly motivated by his wish to gather information about how the appellant's business was in fact doing. Mr Toh gave a different account of that which led to the split between the parties. In any case, in October 2015, Mr Toh resigned as a director of the appellant and transferred his shareholding to Mr Keng, who in turn transferred his entire shareholding to Jun Hao in November 2015.

In the High Court, the appellant alleged that by conducting his private tuition business under the ETG Entities, Mr Toh had breached the best efforts and exclusive employment clauses of the Employment Agreement as well as his fiduciary duties as a director of the appellant. Further, the appellant alleged that Mr Toh's acts of training the appellant's staff specifically to promote his economics classes and using ThinkTank to take over the Bedok Centre premises and the appellant's Bedok Centre students constituted further breaches of his fiduciary duties. Lastly, the appellant claimed that the respondents, by marketing their services under “Economics @ TuitionGenius” (“ETG Mark”), were passing off their business as the appellant's, which was marketed under “TuitionGenius” (“TG Mark”).

The appellant's claims in breach of contract and fiduciary duties were largely dismissed by the High Court judge (“the Judge”) on the basis of the foundational finding that there were two oral agreements between Mr Toh and Mr Keng (the “Oral Agreements”) as follows: (a) the Joint Venture Agreement; and (b) a subsequent oral agreement, under which Mr Toh was allowed to set up ETG in 2010, incorporate ETGPL in 2014, and carry on teaching economics under his private tuition business through the ETG Entities as well as retain the revenue generated thereby (“the Second Oral Agreement”). The Judge dismissed the appellant's claim under the tort of passing off on the basis that that there was no evidence that the appellant had any goodwill in the TG Mark. The appellant appealed against the Judge's dismissal of its claims.

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