Chong Hon Kuan Ivan v Levy Maurice: Conspiracy to Induce Breach of Contract & Director Liability
In Chong Hon Kuan Ivan v Levy Maurice, the Singapore High Court addressed the issue of whether directors can be held liable for conspiracy to induce and inducing a company (Publicis Singapore) to breach an employment agreement with Chong Hon Kuan Ivan. Chong sued Levy Maurice, Salomon Salto, Jean-Paul Morin, Publicis Worldwide B.V., Publicis Groupe SA, and Publicis Eureka Pte Ltd after his employment was terminated. The court allowed Levy's appeal, refusing to allow an amendment to the Statement of Claim and striking out the part of the claim against Levy, holding that directors acting within the scope of their authority are not liable for inducing breach of contract by the company.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal allowed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court examined director liability for inducing a company's breach of contract, dismissing claims against directors acting within their authority.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Chong Hon Kuan Ivan | Plaintiff | Individual | Claim Dismissed | Lost | |
| Levy Maurice | Defendant | Individual | Judgment for Defendant | Won | |
| Salomon Salto | Defendant | Individual | Neutral | Neutral | |
| Jean-Paul Morin | Defendant | Individual | Neutral | Neutral | |
| Publicis Worldwide B.V. | Defendant | Corporation | Neutral | Neutral | |
| Publicis Groupe SA | Defendant | Corporation | Neutral | Neutral | |
| Publicis Eureka Pte Ltd | Defendant | Corporation | Neutral | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Woo Bih Li | Judge | Yes |
4. Counsels
4. Facts
- Chong was employed as managing director and CEO of Publicis Singapore.
- Publicis France acquired 60% of Publicis Singapore's shares.
- Levy was the chairman and CEO of Publicis France and a director of Publicis Singapore.
- A board meeting was held on 9 February 2002 to terminate Chong’s employment.
- Morin proposed the resolution to terminate Chong’s employment and voted in favor of it.
- Chong commenced an action against the defendants for conspiracy to induce breach of contract.
5. Formal Citations
- Chong Hon Kuan Ivan v Levy Maurice and Others (No 2), Suit 766/2002, RA 163/2004, [2004] SGHC 217
6. Timeline
| Date | Event |
|---|---|
| Publicis France acquired 60% of Publicis Singapore's shares. | |
| Chong Hon Kuan Ivan's employment as managing director and chief executive officer of Publicis Singapore commenced. | |
| Maurice Levy became a director of Publicis Singapore. | |
| Board meeting of Publicis Singapore was held; resolution to terminate Chong’s employment was passed. | |
| Decision Date | |
| Assistant registrar allowed Levy’s application to strike out. |
7. Legal Issues
- Conspiracy to Induce Breach of Contract
- Outcome: The court held that directors acting within the scope of their authority are not liable for conspiracy to induce breach of contract by the company.
- Category: Substantive
- Related Cases:
- [1920] 3 KB 497
- (1942) 66 CLR 18
- Director's Liability
- Outcome: The court held that directors acting within the scope of their authority are not liable in tort for inducing breach of contract by the company.
- Category: Substantive
- Related Cases:
- [1920] 3 KB 497
- (1942) 66 CLR 18
- Amendment of Pleadings
- Outcome: The court refused to allow the plaintiff to amend the Statement of Claim.
- Category: Procedural
- Striking Out Pleadings
- Outcome: The court struck out part of the Statement of Claim.
- Category: Procedural
8. Remedies Sought
- Damages
9. Cause of Actions
- Breach of Contract
- Conspiracy to Induce Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Advertising
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Said v Butt | King's Bench Division | Yes | [1920] 3 KB 497 | England and Wales | Cited for the principle that a servant acting bona fide within the scope of their authority does not become liable for procuring breach of contract between their employer and a third person. |
| De Jetley Marks v Greenwood (Lord) | King's Bench Division | Yes | [1936] 1 All ER 863 | England and Wales | Discussed regarding the argument that servants or agents of a company could never be guilty of conspiracy to dismiss one of the company’s servants. |
| O’Brien v Dawson | High Court of Australia | Yes | (1942) 66 CLR 18 | Australia | Endorsed the principle that a director is not liable in tort for a company’s breach of contract if the director was acting within the scope of his authority. |
| Katz v Tannenbaum | Ontario High Court of Justice | Yes | (1982) 13 ACWS (2d) 103 | Canada | Followed the principle that no action lies against a corporate officer or director for inducing the breach of a contract if that person were acting within the scope of his authority. |
| Desimone v Herrmann Group Limited | N/A | Yes | (1991) 27 ACWS (3d) 192 | Canada | Followed Katz v Tannenbaum. |
| Kuhn v American Credit Indemnity Co | N/A | Yes | (1992) 33 ACWS (3d) 37 | Canada | Followed Desimone v Herrmann Group Limited. |
| Welsh Development Agency v Export Finance Co Ltd | Court of Appeal | Yes | [1992] BCLC 148 | England and Wales | Expressed some doubt over the reasoning in Said v Butt but accepted that Said v Butt had stood the test of time. |
| Idoport Pty Ltd v National Australia Bank Ltd | Supreme Court of New South Wales | Yes | [2001] NSWSC 328 | Australia | Endorsed the principle that a director is not liable in tort for a company’s breach of contract if the director was acting within the scope of his authority. |
| Schmeichel v Lane, Thatcher and Bernston | Saskatchewan Court of Queen’s Bench | Yes | (1982) 28 Sask R 311 | Canada | Discussed regarding the argument that directors may be liable for conspiracy or inducement for steps taken before the board meeting. |
| Pacific Internet Ltd v Catcha.com Pte Ltd | N/A | Yes | [2000] 3 SLR 26 | Singapore | Cited for the principle that the fact that a pleading revealed an “arguable, difficult or important point of law” could not justify striking out part of the statement of claim. |
| Einhorn v Westmount Investments Ltd | N/A | Yes | (1970) 11 DLR (3rd) 509 | Canada | Discussed in relation to the pleadings mentioning mala fides and fraud. |
| Johannes Budisutrisno Kotjo v Ng Wei Teck Michael | N/A | Yes | [2001] 4 SLR 232 | Singapore | Cited regarding whether the court should defer its decision on a question of law. |
| Imperial Oil Ltd v C&G Ltd | Newfoundland Court of Appeal | Yes | (1989) 62 DLR (4th) 261 | Canada | Cited regarding a director's immunity from liability for procuring breach of contract when acting bona fide within the scope of authority. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Director's Liability
- Breach of Employment Agreement
- Scope of Authority
- Conspiracy
- Inducement
- Alter Ego
- Bona Fide
- Board Meeting
- Statement of Claim
- Striking Out
15.2 Keywords
- director liability
- breach of contract
- conspiracy
- employment agreement
- Singapore
- Publicis
- statement of claim
- striking out
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Inducement of Breach of Contract | 80 |
| Civil Practice | 75 |
| Conspiracy by Unlawful Means | 70 |
| Director's Duties | 65 |
| Corporate Law | 60 |
| Contract Law | 50 |
16. Subjects
- Contract Law
- Company Law
- Civil Procedure
- Tort Law