Tan Kok Yong Steve v Itochu Singapore: Breach of Contract & Restraint of Trade

In Tan Kok Yong Steve v Itochu Singapore Pte Ltd, the High Court of Singapore addressed a claim by Tan Kok Yong Steve against his former employer, Itochu Singapore Pte Ltd, for a severance package of $79,345. Itochu counterclaimed for an injunction and damages, alleging breach of a non-competition undertaking. The court, presided over by Justice Tan Siong Thye, ruled in favor of Tan for $53,419, finding a valid agreement for the severance package, but also granted Itochu's counterclaim, issuing an injunction against Tan from dealing in cement products in Vietnam and the Philippines until June 29, 2018, and awarding nominal damages of $1,000.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff's claim allowed in part; Defendant's counterclaim allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Oral Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Plaintiff's claim for severance package succeeds, but defendant's counterclaim for breach of non-competition undertaking also succeeds. Injunction granted.

1.7 Decision Date

9 April 2018

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Tan Kok Yong Steve	Plaintiff	Individual	Claim Allowed in Part	Partial	Mansurhusain Akbar Hussein of Jacob Mansur & Pillai Remesha Chandran Pillai of Jacob Mansur & Pillai
Itochu Singapore Pte Ltd	Defendant	Corporation	Counterclaim Allowed	Won	Tay Yong Seng of Allen & Gledhill LLP Ang Ann Liang of Allen & Gledhill LLP

3. Judges

Judge Name	Title	Delivered Judgment
Tan Siong Thye	Judge	Yes

4. Counsels

Counsel Name	Organization
Mansurhusain Akbar Hussein	Jacob Mansur & Pillai
Remesha Chandran Pillai	Jacob Mansur & Pillai
Tay Yong Seng	Allen & Gledhill LLP
Ang Ann Liang	Allen & Gledhill LLP

4. Facts

Plaintiff claimed against ex-employer for a severance package of $79,345.
Defendant counterclaimed for breach of a non-competition undertaking.
Plaintiff was employed by Defendant from 1 October 2012 to 30 June 2016.
Plaintiff was assigned to handle Defendant’s cement trade in Vietnam, Philippines and Bangladesh.
Plaintiff resigned after being offered a severance package.
Plaintiff was appointed as exclusive agent of DIC for export of Cement Products from Vietnam to the Philippines one day after resignation.
Defendant protested and DIC terminated Plaintiff’s employment.

5. Formal Citations

Tan Kok Yong Steve v Itochu Singapore Pte Ltd, Suit No 1364 of 2016, [2018] SGHC 85

6. Timeline

Date	Event
2012-10-01	Plaintiff employed by Defendant
2016-02-29	Plaintiff issued with a letter of warning
2016-06-23	Plaintiff informed of termination, offered severance package if he resigns
2016-06-24	Plaintiff asked if Non-Competition Undertaking could be waived
2016-06-27	Plaintiff informed that Defendant intended to continue enforcing the Non-Competition Undertaking
2016-06-30	Plaintiff submitted letter of resignation
2016-06-30	Defendant issued Confirmation Letter accepting Plaintiff’s resignation
2016-07-01	Plaintiff appointed as exclusive agent of DIC
2016-07-26	DIC terminated Plaintiff’s employment
2018-02-27	Trial began
2018-03-02	Trial continued
2018-03-09	Trial concluded
2018-04-10	Judgment reserved

7. Legal Issues

Breach of Contract
- Outcome: The court found that there was a valid and enforceable contract for the severance package, backed by consideration and sufficiently certain.
- Category: Substantive
- Sub-Issues:
  - Lack of consideration
  - Uncertainty of terms
  - Condition precedent
- Related Cases:
  - [2009] 2 SLR(R) 332
Restraint of Trade
- Outcome: The court found the non-competition undertaking to be valid and enforceable, protecting the defendant's legitimate proprietary interest.
- Category: Substantive
- Sub-Issues:
  - Reasonableness of scope
  - Legitimate interest
- Related Cases:
  - [2008] 1 SLR(R) 663

8. Remedies Sought

Monetary Damages
Injunction

9. Cause of Actions

Breach of Contract
Breach of Non-Competition Undertaking

10. Practice Areas

Commercial Litigation
Employment Litigation

11. Industries

Commodity Trading

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Gay Choon Ing v Loh Sze Ti Terence Peter and another appeal	Court of Appeal	Yes	[2009] 2 SLR(R) 332	Singapore	Cited for the principle that courts will look at the whole course of negotiations between parties to ascertain if an agreement has been reached.
Browne v Dunn	N/A	Yes	[1894] 6 R 67	N/A	Cited for the rule that a party should put to each of his opponent’s witnesses so much of his own case as concerns that particular witness.
Aircharter World Pte Ltd v Kontena Nasional Bhd	N/A	Yes	[1999] 2 SLR(R) 440	Singapore	Cited for the definition of an offer as an expression of willingness to contract made with the intention that it shall become binding on the person making it as soon as it is accepted.
Combe v Combe	N/A	Yes	[1951] 2 KB 215	N/A	Cited for the principle that an act or a promise will only constitute valid consideration if it has been requested by the promisor.
Goh Chan Peng and others v Beyonics Technology Ltd and another and another appeal	Court of Appeal	Yes	[2017] 2 SLR 592	Singapore	Cited to argue that the request for the waiver of the notice period had come from the Plaintiff and not the Defendant, and therefore it was not valid consideration.
Lim Seng Choon David v Global Maritime Holdings Ltd and another and another suit	High Court	Yes	[2018] SGHC 25	Singapore	Cited to argue that there was no oral agreement between the parties.
Brown v Gould and others	N/A	Yes	[1972] 1 Ch 53	N/A	Cited for the principle that a contract will not be rendered uncertain even though there is a term to be determined in the future, provided that the contract itself provides the means for ascertainment of that term.
Harwinder Singh s/o Geja Singh v Wong Lok Yung Michael and another	N/A	Yes	[2015] 4 SLR 69	Singapore	Cited where the Court rejected a claim for a “lump sum” payment due under an alleged oral agreement because it was too uncertain.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited for the three-step process for determining if a term can be implied by fact.
John While Springs (S) Pte Ltd and another v Goh Sai Chuah Justin and others	N/A	Yes	[2004] 3 SLR(R) 596	Singapore	Cited that no reasonable employer would have offered a bonus to a cheating employee.
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	Cited that there cannot be a bare and blatant restriction of the freedom to trade and there must be a legitimate proprietary interest which the court will then seek to protect by way of the doctrine of restraint of trade.
Lek Gwee Noi v Humming Flowers & Gifts Pte Ltd	N/A	Yes	[2014] 3 SLR 27	Singapore	Cited that the defendant has a legitimate interest in protecting its trade connection as against the plaintiff.
Thomas Cowan & Co Ltd v Orme	N/A	Yes	[1961] MLJ 41	N/A	Cited that if the defendant was not allowed to operate, this would have given the plaintiffs a virtual monopoly in Singapore.
PH Hydraulics & Engineering Pte Ltd v Intrepid Offshore Construction Pte Ltd and another	N/A	Yes	[2012] 4 SLR 36	Singapore	Cited that a restrictive covenant preventing the defendant from engaging in the design and manufacture of marine hydraulic and electrical installations was reasonable.
Buckman Laboratories (Asia) Pte Ltd v Lee Wei Hoong	N/A	Yes	[1999] 1 SLR(R) 205	Singapore	Cited that a reasonable restrictive covenant would have limited the restriction to countries in which the employee had actual and significant customer contacts.
Kerchiss v Colora Printing	English High Court	Yes	[1960] RPC 235	England and Wales	Cited that it is sufficient for the ex-employee to have sufficient goodwill in the prohibited countries. The court does not require the employer to prove sales in every part of the prohibited countries.
Heller Factoring (Singapore) Ltd v Ng Tong Yang	N/A	Yes	[1993] 1 SLR(R) 495	Singapore	Cited that the period of restraint should only be long enough for the danger of interference by the ex-employee to wear away.
Merlin Financial Consultants v Cooper	N/A	Yes	[2014] IRLR 610	N/A	Cited for the approach adopted in calculating damages for the breach of a non-compete clause.
Wrotham Park Estate Co Ltd v Parkside Homes Ltd	N/A	Yes	[1974] 1 WLR 798	N/A	Cited for the term Wrotham Park Damages.
Clearlab SG Pte Ltd v Ting Chong Chai and others	High Court	Yes	[2015] 1 SLR 163	Singapore	Cited for the applicability of Wrotham Park Damages in Singapore law.

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

Severance Package
Non-Competition Undertaking
Cement Products
Restricted Area
Restricted Goods
Restricted Services
Ex gratia

15.2 Keywords

contract
severance
non-compete
restraint of trade
employment
cement
injunction

17. Areas of Law

Area Name	Relevance Score
Contract Law	85
Breach of Contract	75
Restraint of Trade	70
Injunctions	60
Employment Contracts	60
Damages	50
Illegality and public policy	40
Commercial Litigation	40
Commercial Law	30
Employment Law	30
Inducement of Breach of Contract	30
Costs	20
Collections	20

16. Subjects

Contract Law
Employment Law
Restraint of Trade