Stratech Systems Ltd v Nyam Chiu Shin: Breach of Contract & Confidentiality

Stratech Systems Ltd sued Nyam Chiu Shin and Wong Leh Hung, former employees, for breach of contract and Guthrie Engineering (S) Pte Ltd for inducement of breach of contract in the Court of Appeal of Singapore on 28 March 2005. Stratech alleged that Nyam and Wong breached confidentiality and restraint of trade clauses in their employment contracts by divulging confidential information and working for Guthrie, which Stratech claimed induced the breach. The Court of Appeal dismissed Stratech's appeal and allowed Guthrie's cross-appeal, finding that Stratech failed to prove confidential information was taken and that the restraint of trade clause was unenforceable.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal in CA 78/2004 dismissed. Appeal in CA 98/2004 allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Stratech sued Nyam and Wong for breach of contract and Guthrie for inducement. The court dismissed Stratech's appeal, allowing Guthrie's cross-appeal.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Stratech Systems LtdAppellant, RespondentCorporationAppeal DismissedLost
Nyam Chiu Shin (alias Yan Qiuxin)RespondentIndividualClaim DismissedWon
Wong Leh HungRespondentIndividualClaim DismissedWon
Guthrie Engineering (S) Pte LtdRespondent, AppellantCorporationAppeal AllowedWon

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of AppealNo
Woo Bih LiJudgeYes
Yong Pung HowChief JusticeNo

4. Counsels

Counsel NameOrganization
N SreenivasanStraits Law Practice LLC
Collin ChooStraits Law Practice LLC
S SuresshHarry Elias Partnership
Merissa QuekHarry Elias Partnership
Goh Phai ChengAng and Partners
Melvin LumAng and Partners

4. Facts

  1. Stratech and Guthrie collaborated on a Vehicle Entry Permit/Toll System project for the Land Transport Authority.
  2. LTA awarded the VEPS contract to Guthrie in March 1999.
  3. Guthrie subcontracted part of the hardware and all software to Stratech.
  4. Stratech developed multiple versions of the VEPS software.
  5. Disagreement arose over a post-warranty maintenance sub-contract.
  6. Stratech terminated work on V116 and ceased maintenance services.
  7. Guthrie hired Nyam and Wong, former Stratech employees, through EPI.

5. Formal Citations

  1. Stratech Systems Ltd v Nyam Chiu Shin (alias Yan Qiuxin) and Others, CA 78/2004, 98/2004, [2005] SGCA 17

6. Timeline

DateEvent
Land Transport Authority invited tenders for the Vehicle Entry Permit/Toll System contract.
Land Transport Authority awarded the Vehicle Entry Permit/Toll System contract to Guthrie Engineering (S) Pte Ltd.
Guthrie awarded a sub-contract to Stratech to supply part of the hardware and the entire software for Vehicle Entry Permit/Toll System.
Vehicle Entry Permit/Toll System was commissioned by Land Transport Authority.
Warranty period for the Vehicle Entry Permit/Toll System expired.
Land Transport Authority asked Guthrie to integrate Vehicle Entry Permit/Toll System with Singapore’s Electronic Road Pricing System.
Stratech demanded payment from Guthrie and warned it would stop work on V116.
Stratech terminated its work on V116.
Stratech ceased all post-warranty maintenance services for Vehicle Entry Permit/Toll System.
Nyam terminated her employment with Stratech.
Wong resigned from Stratech.
Armin terminated his employment with Stratech.
Guthrie was put on notice regarding Stratech's employees' contractual obligations.
Anton Piller order was executed at Guthrie’s premises.
Stratech filed Suit No 505 of 2003 in the High Court against Nyam, Wong, and Guthrie.
The judge below issued his decision.
Court of Appeal dismissed Stratech’s appeal and allowed Guthrie’s cross-appeal.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the employees did not breach the confidentiality clause and that the restraint of trade clause was not binding.
    • Category: Substantive
    • Sub-Issues:
      • Breach of confidentiality undertaking
      • Breach of restrictive covenant
  2. Inducement of Breach of Contract
    • Outcome: The court found that Guthrie did not induce a breach of contract because the restraint of trade clause was not binding.
    • Category: Substantive
  3. Confidentiality
    • Outcome: The court found that Stratech failed to prove that confidential information was taken.
    • Category: Substantive

8. Remedies Sought

  1. Damages
  2. Injunction

9. Cause of Actions

  • Breach of Contract
  • Tort of Inducement of Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Employment Litigation

11. Industries

  • Technology

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Tang Siew Choy v Certact Pte LtdCourt of AppealYes[1993] 3 SLR 44SingaporeCited for the principle that an employer must particularize the confidential information which he seeks to protect.
FSS Travel and Leisure Systems Ltd v JohnsonEnglish Court of AppealYes[1999] FSR 505England and WalesCited for the legal propositions affecting restrictive covenants in employment contracts.
Faccenda Chicken Ltd v FowlerCourt of ChanceryYes[1987] Ch 117England and WalesCited regarding the circumstances in which a restrictive covenant would be appropriate and could be successfully invoked.
Buckman Laboratories (Asia) Pte Ltd v Lee Wei HoongHigh CourtYes[1999] 3 SLR 333SingaporeCited for the principle that an employer who wishes to enforce a restraint of trade provision must show that it was intended to protect the employer’s legitimate interests.
De Francesco v BarnumHigh Court of JusticeYes(1890) LR 45 Ch D 430England and WalesCited regarding inducement of breach of contract.
Northern Messenger (Calgary) Limited v FrostSupreme Court of AlbertaYes(1966) 57 DLR (2d) 456CanadaCited regarding inducement of breach of contract.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Vehicle Entry Permit/Toll System
  • VEPS
  • V116
  • Confidential Information
  • Restraint of Trade
  • Cloning
  • Post-Warranty Maintenance

15.2 Keywords

  • employment contract
  • breach of contract
  • confidentiality
  • restraint of trade
  • inducement
  • stratech
  • guthrie
  • VEPS

17. Areas of Law

Area NameRelevance Score
Employment Law95
Inducement of Breach of Contract80
Breach of Contract70
Breach of Confidence60
Contract Law60
Torts50

16. Subjects

  • Employment Law
  • Contract Law
  • Tort Law