HT SRL v Wee Shuo Woon: Breach of Contract, Illegality, Public Policy, Restraint of Trade, Employee's Duty of Good Faith

In HT SRL v Wee Shuo Woon, HT SRL sued Wee Shuo Woon, a former employee, for breach of contract and duty of good faith and fidelity. Woon denied the allegations and counterclaimed for unpaid salary and expenses. The High Court of Singapore found Woon liable for pre-termination breaches of the employment agreement and his duty of good faith and fidelity, but not for post-termination breaches. The court awarded HT SRL nominal damages of $1,000. The court allowed Woon's counterclaim for unpaid salary and expenses in part.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff in part; Counterclaim allowed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

HT SRL sues Wee Shuo Woon for breach of contract and duty of good faith. Woon counterclaims for unpaid salary and expenses. The court finds Woon liable for pre-termination breaches.

1.7 Decision Date

17 April 2019

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
HT SRL	Plaintiff	Corporation	Judgment for Plaintiff in part	Partial	Ong Pei Ching of TSMP Law Corporation Tan Gim Hai Adrian of TSMP Law Corporation Veluri Hari of TSMP Law Corporation
Wee Shuo Woon	Defendant	Individual	Counterclaim allowed in part	Partial	Choo Zheng Xi of Peter Low & Choo LLC Wong Thai Yong of Peter Low & Choo LLC Priscilla Chia Wen Qi of Peter Low & Choo LLC

3. Judges

Judge Name	Title	Delivered Judgment
Hoo Sheau Peng	Judge	Yes

4. Counsels

Counsel Name	Organization
Ong Pei Ching	TSMP Law Corporation
Tan Gim Hai Adrian	TSMP Law Corporation
Veluri Hari	TSMP Law Corporation
Choo Zheng Xi	Peter Low & Choo LLC
Wong Thai Yong	Peter Low & Choo LLC
Priscilla Chia Wen Qi	Peter Low & Choo LLC

4. Facts

HT SRL provides offensive security technology to law enforcement and intelligence agencies.
Wee Shuo Woon was employed by HT SRL as a Security Specialist.
Woon joined ReaQta Ltd, a company that develops defensive software, as its Business Development Director and Co-Founder.
Woon participated in a demonstration of ReaQta's software as ReaQta's Asia Pacific representative while still employed by HT.
Woon tendered his resignation to HT SRL.
HT SRL claimed Woon breached his employment agreement and duty of good faith by engaging in the business of ReaQta.
Woon counterclaimed for unpaid salary and expenses.

5. Formal Citations

HT SRL v Wee Shuo Woon, Suit No 489 of 2015, [2019] SGHC 96

6. Timeline

Date	Event
2003-01-01	HT SRL incorporated in Italy.
2004-01-01	HT SRL began providing security technology.
2008-01-01	Woon employed by PCS Security Pte Ltd.
2011-01-01	Woon left PCS Security Pte Ltd.
2011-12-01	Woon joined British Telecom Global Services.
2012-03-12	Bettini asked Woon about joining HT.
2012-05-23	Woon met Vincenzetti and Russo to discuss joining HT.
2012-08-14	Letter of Appointment issued to Woon.
2012-10-01	Woon commenced work at HT.
2014-03-01	Pelliccione left HT.
2014-05-01	ReaQta Ltd incorporated in Malta.
2014-08-01	HT hired Kroll Associates, Inc to investigate Velasco.
2014-11-01	Email account with ReaQta.com domain created for Woon.
2015-01-20	Woon tendered his resignation to HT.
2015-02-06	Kroll Demonstration of ReaQta's software.
2015-02-12	Russo and Woon agreed to an early termination.
2015-02-13	Woon's last day of employment with HT.
2015-03-11	Woon requested an update on the Letter of Termination.
2015-04-01	ReaQta extended a consulting agreement to Woon.
2015-04-13	HT sent a letter of demand to Woon.
2015-04-27	Woon responded to HT's demands.
2015-05-20	Suit commenced.
2015-07-01	HT's servers suffered a hacking attack.
2015-10-06	Woon formally agreed to and signed the consulting agreement with ReaQta.
2018-08-07	Statement of Claim (Amendment No 1) dated.
2018-08-08	Defence and Counterclaim (Amendment No 2) dated.
2018-08-27	Plaintiff’s closing submissions dated.
2018-09-27	Defendant’s closing submissions dated.
2018-10-07	Reply and Defence to Counterclaim (Amendment No 2) dated.
2019-03-13	Defendant’s reply closing submissions dated.
2019-04-18	Judgment reserved.

7. Legal Issues

Breach of Contract
- Outcome: The court found that Woon breached the employment agreement by engaging in the business of ReaQta without HT's prior written consent.
- Category: Substantive
- Sub-Issues:
  - Failure to obtain prior written consent
  - Engaging in competing business
Duty of Good Faith and Fidelity
- Outcome: The court found that Woon breached his implied duty of good faith and fidelity by developing and marketing ReaQta-Core while employed by HT.
- Category: Substantive
- Sub-Issues:
  - Outside employment inflicting harm on employer's business
  - Developing and promoting a rival product
Restraint of Trade
- Outcome: The court found the non-competition clause (cl 12(b)) to be void as an unreasonable restraint of trade. The court also found that HT had not proven that Woon had breached the non-solicitation clause (cl 13(b)).
- Category: Substantive
- Sub-Issues:
  - Reasonableness of non-competition clause
  - Protection of legitimate proprietary interest
  - Scope of non-solicitation clause
Unpaid Salary
- Outcome: The court allowed Woon's counterclaim for unpaid salary, finding that HT had agreed to pay his salary until 20 March 2015 and that an employer is generally not entitled to withhold payment of salary just because the employee is in breach of the employment agreement.
- Category: Substantive
- Sub-Issues:
  - Agreement to pay salary until a specific date
  - Employer's right to withhold salary due to employee's breach

8. Remedies Sought

Damages
Injunction

9. Cause of Actions

Breach of Contract
Breach of Duty of Good Faith and Fidelity

10. Practice Areas

Commercial Litigation

11. Industries

Security
Technology

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Towa Corp v ASM Technology Singapore Pte Ltd	Singapore Court of Appeal	Yes	[2017] 3 SLR 771	Singapore	Cited for the defence of acquiescence.
Tan Kok Yong Steve v Itochu Singapore Pte Ltd	Singapore High Court	Yes	[2018] SGHC 85	Singapore	Cited regarding customer connection.
Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart	Singapore Court of Appeal	Yes	[2012] 4 SLR 308	Singapore	Cited for the principle that a restraint of trade clause can go no further than is necessary to protect a legitimate proprietary interest.
Man Financial (S) Pte Ltd (formerly known as E D & F Man International (S) Pte Ltd) v Wong Bark Chuan David	Singapore Court of Appeal	Yes	[2008] 1 SLR(R) 663	Singapore	Cited for the implied term that an employee will serve the employer with good faith and fidelity and for principles regarding restraint of trade.
ABB Holdings Pte Ltd and others v Sher Hock Guan Charles	Singapore Court of Appeal	Yes	[2009] 4 SLR(R) 111	Singapore	Cited for the duty not to engage in outside employment which would inflict great harm on the employer’s business.
Hivac Limited v Park Royal Scientific Instruments Limited	High Court of Justice	Yes	[1946] Ch 169	England and Wales	Cited for the duty not to engage in outside employment which would inflict great harm on the employer’s business.
Stratech Systems Ltd v Nyam Chiu Shin (alias Yan Qiuxin) and others	Singapore Court of Appeal	Yes	[2005] 2 SLR(R) 579	Singapore	Cited for the proposition that where the protection of confidential information or trade secrets is already covered by another clause in the contract, the covenantee will have to demonstrate that the restraint of trade clause in question covers a legitimate proprietary interest over and above the protection of confidential information or trade secrets.
Lek Gwee Noi v Humming Flowers & Gifts Pte Ltd	Singapore Court of Appeal	Yes	[2014] 3 SLR 27	Singapore	Cited for the principle that the time for ascertaining the reasonableness of a restrictive covenant is at the time it is entered into.
Sakthivel Punithavathi v Public Prosecutor	Singapore Court of Appeal	Yes	[2007] 2 SLR(R) 983	Singapore	Cited for the principle that a court must carefully sift, weigh and evaluate expert evidence in the context of the objective facts.
Foaminol Laboratories v British Artid Plastics	King's Bench Division	Yes	[1941] 2 All ER 393	England and Wales	Cited for the principle that a claim for mere loss of reputation is the proper subject of an action for defamation, and cannot ordinarily be sustained by means of any other form of action.
Arul Chandran v Gartshore and others	Singapore High Court	Yes	[2000] 1 SLR(R) 436	Singapore	Cited for the principle that general damages for loss of reputation are not recoverable in claims for contractual breach.
Malik and Mahmud v Bank of Credit and Commerce International SA (In Compulsory Liquidation)	House of Lords	Yes	[1998] 1 AC 20	United Kingdom	Cited for the principle that financial loss can be recovered where a breach of contract damages one’s reputation which in turn causes foreseeable financial loss to the claimant.
Wong Leong Wei Edward and another v Acclaim Insurance Brokers Pte Ltd and another suit	Singapore High Court	Yes	[2010] SGHC 352	Singapore	Cited for the principle that general damages for loss of reputation are not recoverable in claims for contractual breach.
Wrotham Park Estate Co Ltd v Parkside Homes Ltd	High Court of Justice	Yes	[1974] 1 WLR 798	England and Wales	Cited for the nature and applicability of Wrotham Park damages.
Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal	Singapore Court of Appeal	Yes	[2018] 2 SLR 655	Singapore	Cited for the nature and applicability of Wrotham Park damages and the test for when an award of Wrotham Park damages would be appropriate.
The Owners of the Steamship “Mediana” v The Owners, Master and Crew of the Lightship “Comet”	House of Lords	Yes	[1990] AC 113	United Kingdom	Cited for the principle that nominal damages are appropriate to affirm that there is an “infraction of a legal right”.
Schonk Antonius Martinus Mattheus and another v Enholco Pte Ltd and another appeal	Singapore Court of Appeal	Yes	[2016] 2 SLR 881	Singapore	Cited for the principle that an employer is generally not entitled to withhold payment of salary just because the employee is in breach of the employment agreement.
Sagar v H Ridehalgh and Son, Limited	Court of Appeal	Yes	[1931] 1 Ch 310	England and Wales	Cited for the principle that an employer may claim damages for any breach of duty by its employee but such a breach will not by itself disentitle the employee to his or her salary.

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

Offensive security technology
Defensive software
Remote Control System (RCS)
ReaQta-Core
Non-competition clause
Non-solicitation clause
Restraint of trade
Good faith and fidelity
Pre-termination breaches
Post-termination breaches

15.2 Keywords

breach of contract
restraint of trade
employment law
security technology
good faith
fidelity

17. Areas of Law

Area Name	Relevance Score
Breach of Contract	90
Contract Law	90
Good Faith and Fidelity	70
Employment Law	70
Damages	70
Remedies	60
Illegality and public policy	50
Inducement of Breach of Contract	30

16. Subjects

Contract Dispute
Employment Dispute
Restraint of Trade