Powerdrive Pte Ltd v Loh Kin Yong Philip: Restraint of Trade & Striking Out Claim
In Powerdrive Pte Ltd v Loh Kin Yong Philip and others, the Singapore High Court heard applications to strike out Powerdrive's claim against its former employees and Singapore Technologies Kinetics Ltd (ST Kinetics) for breach of a restraint of trade (ROT) provision. The court, presided over by Justice Woo Bih Li, granted the applications, finding the ROT provision too wide and unenforceable. The court also dismissed Powerdrive's application to amend its Statement of Claim. The claim was a breach of contract claim.
1. Case Overview
1.1 Court
High Court of Singapore1.2 Outcome
Application to strike out Powerdrive’s claim granted.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court strikes out Powerdrive's claim against former employees and ST Kinetics for breach of restraint of trade, finding the clause too wide.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Powerdrive Pte Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Loh Kin Yong Philip | Defendant | Individual | Claim Dismissed | Won | |
| Law Kok Keong | Defendant | Individual | Claim Dismissed | Won | |
| Ramiesh s/o Kalaichelvem | Defendant | Individual | Claim Dismissed | Won | |
| Suntharam s/o Satapha | Defendant | Individual | Claim Dismissed | Won | |
| Tan Weilin | Defendant | Individual | Claim Dismissed | Won | |
| Singapore Technologies Kinetics Ltd | Defendant | Corporation | Claim Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Woo Bih Li | Judge | Yes |
4. Counsels
4. Facts
- Powerdrive is in the business of training military armour vehicle drivers.
- Powerdrive brought an action against five former employees for breach of a restraint of trade provision.
- The former employees were employed by ST Kinetics, a competitor of Powerdrive.
- The restraint of trade clause prohibited employees from working for a rival company for two years after termination.
- Powerdrive applied to amend its Statement of Claim to include particulars of confidential information.
- The email dated 6 April 2010 was sent to all employees of Powerdrive.
- The first to fourth defendants had entered into a two-year fixed term contract of employment with Powerdrive.
5. Formal Citations
- Powerdrive Pte Ltd v Loh Kin Yong Philip and others, Suit No 1015 of 2017, [2018] SGHC 224
6. Timeline
| Date | Event |
|---|---|
| Suit filed by Powerdrive Pte Ltd | |
| ST Kinetics filed Summons No 605 of 2018 to strike out Powerdrive’s claim | |
| Powerdrive filed Summons 628 of 2018 to amend its Statement of Claim | |
| The first five defendants filed Summons 698 of 2018 to strike out certain paragraphs of the SOC | |
| First hearing of all three applications | |
| Further hearing | |
| Judgment delivered |
7. Legal Issues
- Enforceability of Restraint of Trade Clause
- Outcome: The court held that the restraint of trade clause was too wide and therefore unenforceable.
- Category: Substantive
- Sub-Issues:
- Reasonableness of scope
- Reasonableness of duration
- Protection of confidential information
- Related Cases:
- [1999] 1 SLR(R) 205
- [2005] 2 SLR(R) 579
- [2013] 2 SLR 193
- [2014] 3 SLR 27
- [1894] AC 535
- [2008] 1 SLR(R) 663
- [2000] IRLR 114
- Striking Out of Claim
- Outcome: The court granted the application to strike out Powerdrive's claim against all defendants.
- Category: Procedural
8. Remedies Sought
- Injunction
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Tort of Inducement of Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Military
- Training
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Buckman Laboratories (Asia) Pte Ltd v Lee Wei Hoong | High Court | Yes | [1999] 1 SLR(R) 205 | Singapore | Cited for the principle that a restraint of trade provision is justifiable only if it protects the employer’s legitimate interests and it is reasonable in the circumstances and that an indiscriminate application would suggest that the true purpose of the provision was to restrain competition rather than to protect a legitimate interest of an employer. |
| Stratech Systems Ltd v Nyam Chiu Shin (alias Yan Qiuxin) and others | Court of Appeal | Yes | [2005] 2 SLR(R) 579 | Singapore | Cited for the principle that if an employer has the benefit of a clause protecting against the disclosure of confidential information, then it could not use that same interest to justify the imposition of an ROT provision against its employee. |
| Centre for Creative Leadership (CCL) Pte Ltd v Byrne Roger Peter and others | High Court | Yes | [2013] 2 SLR 193 | Singapore | Suggested that the Court of Appeal may wish to review the decision in Stratech in the light of some English cases which recognised that an ROT provision can also protect trade secrets and confidential information even though there is already a confidentiality clause elsewhere in the contract of employment. |
| Lek Gwee Noi v Humming Flowers & Gifts Pte Ltd | High Court | Yes | [2014] 3 SLR 27 | Singapore | Vinodh Coomaraswamy J was apparently of a similar view as Centre for Creative Leadership (CCL) Pte Ltd v Byrne Roger Peter and others, at [71]. |
| Thorsten Nordenfelt v The Maxim Nordenfelt Guns and Ammunition Company, Limited | House of Lords | Yes | [1894] AC 535 | United Kingdom | Cited for the twin tests of reasonableness stated by Lord Macnaghten in Thorsten Nordenfelt v The Maxim Nordenfelt Guns and Ammunition Company, Limited [1894] AC 535 and applied by the Court of Appeal in Man Financial (S) Pte Ltd (formerly known as E D & F Man International (S) Pte Ltd) v Wong Bark Chuan David [2008] 1 SLR(R) 663 (“Man Financial”) at [70]. The twin tests are that each ROT provision must be reasonable in reference to the interests of the parties concerned and also in reference to the interests of the public. |
| Man Financial (S) Pte Ltd (formerly known as E D & F Man International (S) Pte Ltd) v Wong Bark Chuan David | Court of Appeal | Yes | [2008] 1 SLR(R) 663 | Singapore | Applied the twin tests of reasonableness stated by Lord Macnaghten in Thorsten Nordenfelt v The Maxim Nordenfelt Guns and Ammunition Company, Limited [1894] AC 535 and applied by the Court of Appeal in Man Financial (S) Pte Ltd (formerly known as E D & F Man International (S) Pte Ltd) v Wong Bark Chuan David [2008] 1 SLR(R) 663 (“Man Financial”) at [70]. The twin tests are that each ROT provision must be reasonable in reference to the interests of the parties concerned and also in reference to the interests of the public. |
| Turner v Commonwealth and British Minerals Ltd | England and Wales Court of Appeal (Civil Division) | Yes | [2000] IRLR 114 | United Kingdom | Cited for the proposition that, “[i]f a particular construction was to lead to the view that the clause was unenforceable, then an alternative view, which did not lead to the same result if legitimate, ought to be preferred”. |
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
- Restraint of Trade
- Confidential Information
- Legitimate Interest
- Reasonableness
- Statement of Claim
- Armour Vehicle Driver Trainer
15.2 Keywords
- restraint of trade
- employment
- contract
- singapore
- high court
- striking out
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Restraint of Trade | 90 |
| Contract Law | 80 |
| Civil Practice | 75 |
| Illegality and public policy | 70 |
16. Subjects
- Contract Law
- Civil Procedure
- Restraint of Trade
- Employment Law