Kaufman v Datacraft: Breach of Fiduciary Duty & Agreement Interpretation

1. Case Overview

2. Parties and Outcomes

3. Judges

4. Counsels

4. Facts

1. Plaintiffs Kaufman and Leslie were directors/employees of Datacraft Japan, Inc (DC Japan).
2. Plaintiffs held shares in DC Japan through their respective trust companies.
3. DC Japan is a subsidiary of Datacraft Asia Investments BV, which is owned by Datacraft Asia Ltd (DCA).
4. The dispute centers on the interpretation of a Letter Agreement dated 2002-01-29.
5. The Letter Agreement is governed by the laws of Japan.
6. Plaintiffs claim they are entitled to information and documents under the Letter Agreement.
7. Plaintiffs seek an order for an account of what is due to them under the Letter Agreement.
8. In 1999, the defendants acquired 75% of the share capital of Netwave, Inc.
9. In 1999, the defendants acquired 75% of the share capital of PTS Co Ltd from its then shareholders who included the second and fourth plaintiffs.
10. In 2000, the defendants decided to merge PTS into Netwave.
11. Deloitte Touche Tomatsu, Japan conducted valuations of PTS and Netwave to provide the basis on which the merger could take place.
12. Deloitte’s valuations resulted in a 6:1 ratio in favour of Netwave.
13. Netwave was then renamed and became DC Japan.
14. In October 2001, Mr Leslie overheard some former Netwave employees talking about “commissions” that were still being paid by Otsuka to DC Japan.
15. Mr Leslie uncovered evidence that indicated that Otsuka and Netwave had entered into three sham contracts signed on or about 1999-07-01.
16. Mr Leslie discussed his findings with Mr Kaufman.
17. Mr Leslie met with Mr Ron Cattell in Singapore on 2001-12-07.
18. Prior to the signing of the Letter Agreement, the plaintiffs released the evidence they had uncovered to the defendants in two tranches, on or about 2002-01-17 and on or about 2002-01-30.
19. On 2002-06-12, the plaintiffs discovered that the defendants had reached a settlement with the Potential Defendants.
20. On 2002-08-02, the plaintiffs received a letter from DCA informing the plaintiffs of the amount that they were entitled to pursuant to the terms of the Letter Agreement.

5. Formal Citations

1. Kaufman, Gregory Laurence and Others v Datacraft Asia Ltd and Another, OS 179/2004, [2005] SGHC 174

6. Timeline

7. Legal Issues

1. Breach of Fiduciary Duty
   • Outcome: The court found that no fiduciary duty existed because no entrustment was created by the Letter Agreement.
   • Category: Substantive
2. Interpretation of Contract
   • Outcome: The court interpreted the Letter Agreement and found that it did not create an agreement of entrustment.
   • Category: Substantive
3. Admissibility of Expert Witness Evidence
   • Outcome: The court ruled that the expert witness's evidence was admissible but that the weight to be attributed to his evidence could be dealt with in the closing submissions.
   • Category: Procedural

8. Remedies Sought

1. Disclosure of documents and information
2. Order for an account of what was due to the plaintiffs
3. Payment of sums found due
4. Interest
5. Costs

9. Cause of Actions

• Breach of Fiduciary Duty

10. Practice Areas

• Commercial Litigation

11. Industries

• Technology

12. Cited Cases

13. Applicable Rules

14. Applicable Statutes

15. Key Terms and Keywords

16. Subjects

• Contract Law
• Trust Law
• Commercial Litigation

17. Areas of Law

• Contract Law
• Trust Law
• Evidence