Wong Bark Chuan David v Man Financial: Restraint of Trade & Termination Agreement Dispute
In Wong Bark Chuan David v Man Financial (S) Pte Ltd, the High Court of Singapore heard a case involving a claim by Wong Bark Chuan David, the former managing director and CEO of Man Financial (S) Pte Ltd (MF), for compensation under a termination agreement (TA). MF declined to pay the compensation, alleging that Mr. Wong had breached non-solicitation and non-competition clauses in the TA by soliciting MF's employees and providing advice to a competitor, Refco (S) Pte Ltd. The court, presided over by Justice Woo Bih Li, ruled in favor of Mr. Wong, finding that while Mr. Wong had solicited employees, the non-solicitation and non-competition clauses were invalid restraints of trade.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Former CEO Wong Bark Chuan David sues Man Financial for compensation under a termination agreement. The court examines restraint of trade clauses.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Wong Bark Chuan David | Plaintiff | Individual | Judgment for Plaintiff | Won | Chia Ho Choon, Spring Tan |
| Man Financial (S) Pte Ltd | Defendant | Corporation | Claim Dismissed | Lost | Andre Maniam, Ameera Ashraf, Jaclyn Neo, Wong Baochen |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Woo Bih Li | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Chia Ho Choon | KhattarWong |
| Spring Tan | KhattarWong |
| Andre Maniam | Wong Partnership |
| Ameera Ashraf | Wong Partnership |
| Jaclyn Neo | Wong Partnership |
| Wong Baochen | Wong Partnership |
4. Facts
- Mr. Wong was the managing director and CEO of Man Financial (S) Pte Ltd.
- Mr. Wong was asked to resign and placed on garden leave.
- Mr. Wong and MF entered into a termination agreement (TA) with non-solicitation and non-competition provisions.
- MF alleged Mr. Wong breached the TA by soliciting employees and advising a competitor.
- MF declined to pay Mr. Wong the compensation stipulated in the TA.
- The TA contained provisions on non-solicitation and non-competition for a period of 7 months.
- Mr Wong sent emails relating to purchases or sales of securities and emails on administrative matters to various parties at Refco.
5. Formal Citations
- Wong Bark Chuan David v Man Financial (S) Pte Ltd, Suit 706/2005, [2007] SGHC 5
6. Timeline
| Date | Event |
|---|---|
| Mr Wong asked to resign and placed on garden leave. | |
| Termination agreement (TA) dated. | |
| Mr Wong accepted the TA. | |
| Start of 3-month notice period. | |
| Start of 7-month non-solicitation and non-competition period. | |
| Dickson Woon resigned from MF. | |
| Joey Sim resigned from MF. | |
| Diana Sim resigned from MF. | |
| David Tan resigned from MF. | |
| Malcolm Yeo resigned from MF. | |
| June Lim resigned from MF. | |
| Voo Tung Heng resigned from MF. | |
| Dennis Seet resigned from MF. | |
| Dennis Seet tendered his resignation from MF. | |
| Dennis, Dickson, Mr Wong, Diana, Joey, Malcolm and Voo met for coffee at Corduroy & Finch. | |
| Jacob Djaja resigned from MF. | |
| Vincent Quah resigned from MF. | |
| Mr Wong's account with Refco opened. | |
| Wong Partnership sent a letter to Mr Wong alleging breach of TA. | |
| Mr Wong replied to Wong Partnership disputing breach of TA. | |
| End of 3-month notice period. | |
| Wong Partnership wrote again to Mr Wong. | |
| Mr Wong replied to Wong Partnership denying solicitation of Tricia. | |
| End of 7-month non-solicitation and non-competition period. | |
| Judgment reserved. |
7. Legal Issues
- Restraint of Trade
- Outcome: The court held that the non-solicitation and non-competition clauses were invalid restraints of trade.
- Category: Substantive
- Sub-Issues:
- Reasonableness of restrictive covenants
- Scope of restrictive covenants
- Legitimate interest of employer
- Related Cases:
- [1999] 1 RLR 22
- [1999] 3 SLR 333
- [2000] 2 SLR 24
- [2000] 1 RLR 114
- [1894] AC 535
- [1990] SLR 407
- [1998] 3 SLR 299
- Breach of Contract
- Outcome: The court found that the plaintiff was entitled to compensation under the termination agreement.
- Category: Substantive
- Consideration
- Outcome: The court found that the restrictive covenants did not constitute all, or substantially all, of the consideration for the compensation.
- Category: Substantive
8. Remedies Sought
- Monetary Compensation
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Financial Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| TSC Europe (UK) Ltd v Massey | N/A | Yes | [1999] 1 RLR 22 | United Kingdom | Cited regarding the unreasonableness of restraint of trade clauses, even when the employee agreed to their reasonableness. |
| Buckman Laboratories (Asia) Pte Ltd v Lee Wei Hoong | N/A | Yes | [1999] 3 SLR 333 | Singapore | Cited regarding the court's tentative view that a restrictive covenant was too wide, despite the employee's acknowledgement of its necessity. |
| National Aerated Water Co Pte Ltd v Monarch Co Inc | Court of Appeal | Yes | [2000] 2 SLR 24 | Singapore | Cited for the principle that the rule against unreasonable restraint of trade is based on public policy and cannot be excluded by mutual consent. |
| Turner v Commonwealth & British Minerals Ltd | N/A | Yes | [2000] 1 RLR 114 | United Kingdom | Cited regarding the employer's obligation to justify a restraint of trade, even when employees were advised by lawyers and there was no inequality of bargaining position. |
| Nordenfelt v Maxim Nordenfelt & Co | N/A | Yes | [1894] AC 535 | N/A | Cited for the general principle against stifling an individual's liberty to trade or be employed, unless restraints are reasonable. |
| Asia Polyurethane Mfg Pte Ltd v Woon Sow Ling | N/A | Yes | [1990] SLR 407 | Singapore | Cited for the general principle against stifling an individual's liberty to trade or be employed, unless restraints are reasonable. |
| Heller Factoring (Singapore) Pte Ltd v Ng Tong Yang | N/A | Yes | [1998] 3 SLR 299 | Singapore | Cited for propositions on the validity and enforceability of agreements restricting an employee from serving an employer's competitors. |
| Home Counties Dairies Ltd v Skilton | N/A | Yes | [1970] 1 WLR 526 | N/A | Cited regarding reading an agreement in the context of the business and the relationship between the parties. |
| Marion White Ltd v Francis | N/A | Yes | [1972] 1 WLR 1423 | N/A | Cited regarding reading an agreement in the context of the business and the relationship between the parties. |
| Chappell v Griffith | N/A | Yes | (1885) 53 LT 459 | N/A | Cited as an established item of proprietary goodwill. |
| Inland Revenue Commissioner v Muller & Co Magarine Ltd | N/A | Yes | [1901] AC 217 | N/A | Cited as an established item of proprietary goodwill. |
| Bollinger v Costa Brava Wine Co Ltd (No 3) | N/A | Yes | [1960] Ch 262 | N/A | Cited as an established item of proprietary goodwill. |
| Bridge v Deacons | N/A | Yes | [1984] AC 705 | N/A | Cited as an established item of proprietary goodwill. |
| Herbert Morris Ltd v Saxelby | N/A | Yes | [1916] 1 A.C. 688 | N/A | Cited regarding a proprietary right. |
| Attwood v Lamont | N/A | Yes | [1920] 3 K.B. 571 | N/A | Cited regarding a proprietary right. |
| Alliance Paper Group plc v Prestwick | N/A | Yes | [1996] I.R.L.R. 25 | N/A | Cited regarding a proprietary right. |
| Dawnay, Day & Co Ltd v De Braconier D’Alphen | N/A | Yes | [1997] I.R.L.R. 442 | N/A | Cited regarding a proprietary right. |
| Kores Manufacturing Co Ltd v Kolok Manufacturing Co Ltd | Court of Appeal | Yes | [1957] 1 WLR 1012 | N/A | Cited regarding a proprietary right. |
| Hanover Insurance Brokers Ltd v Shapiro | Court of Appeal | Yes | [1994] I.R.L.R. 82 | N/A | Cited regarding a proprietary right. |
| SBJ Stephenson Ltd v Mandy | N/A | Yes | [2000] I.R.L.R. 233 | N/A | Cited regarding a proprietary right. |
| Kores Manufacturing Co Ltd v Kolok Manufacturing Co Ltd | N/A | Yes | [1959] 1 Ch 108 | N/A | Cited regarding the onus of showing that a contract in restraint of trade is injurious to the public interest. |
| Stratech Systems Ltd v Nyam Chiu Shin (alias Yan Qiuxin) and others | Court of Appeal | Yes | [2005] 2 SLR 579 | Singapore | Cited for stressing the importance of properly establishing some legitimate interest to be protected by a covenant in restraint of trade. |
| Banner Investments Pte Ltd v Hoe Seng Metal Fabrication & Engineers (S) Pte Ltd | N/A | Yes | [1997] 1 SLR 461 | Singapore | Cited regarding points of law that need not be pleaded. |
| Development Bank of Singapore Ltd v Bok Chee Seng Construction Pte Ltd | N/A | Yes | [2002] 3 SLR 547 | Singapore | Cited regarding points of law that need not be pleaded. |
| New Civilbuild Pte Ltd v Guobena Sdn Bhd & anor | N/A | Yes | [2000] 2 SLR 378 | Singapore | Cited regarding issues that raise questions of fact and law that must be pleaded. |
| Alec Lobb Garages Ltd v Total Oil (Great Britain) Ltd | N/A | Yes | [1985] 1 All E.R. 303 | N/A | Cited regarding severance. |
| Stenhouse Australia Ltd v Phillips | N/A | Yes | [1974] A.C. 391 | N/A | Cited regarding severance. |
| Vancouver Malt & Sake Brewing Co Ltd v Vancouver Breweries Ltd | N/A | Yes | [1934] A.C. 181 | N/A | Cited regarding severance. |
| Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd | N/A | Yes | [1975] A.C. 561 | N/A | Cited regarding severance. |
13. Applicable Rules
| Rule Name |
|---|
| Order 18 Rule 14(2)(a) of the Rules of Court |
| Order 18 Rule 4 of the Rules of Court |
| Order 18 Rules 7 of the Rules of Court |
| Order 18 Rules 11 of the Rules of Court |
| Order 18 Rule 8 (1) of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Termination Agreement
- Restraint of Trade
- Non-Solicitation
- Non-Competition
- Garden Leave
- Compensation
- Solicitation of Employees
- Confidential Information
15.2 Keywords
- contract
- restraint of trade
- termination
- employment
- financial services
- solicitation
- compensation
16. Subjects
- Contract Law
- Employment Law
- Restraint of Trade
17. Areas of Law
- Contract Law
- Restraint of Trade
- Illegality and Public Policy