Bluestone Corp v Phang Cher Choon: Breach of Confidence, Fiduciary Duty & Employment Law
In Suit Nos 793 and 794 of 2018, the High Court of Singapore heard claims by Bluestone Corporation Pte Ltd against Phang Cher Choon, Bluestone Healthcare Sdn Bhd, and Lim Hooi Loo for breaches of fiduciary duties, contract of employment, confidence, and conspiracy. The plaintiff, Bluestone Corporation, alleged that the defendants diverted business opportunities and engaged in a conspiracy to defraud the company. Mavis Chionh Sze Chyi JC dismissed all claims against the defendants. Phang's counterclaim for termination without reasonable notice was partially allowed.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Claims dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Bluestone Corp's claims against Phang, Hooi Loo, and Healthcare for breach of fiduciary duties, confidence, and employment contract were dismissed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Bluestone Corporation Pte Ltd | Plaintiff | Corporation | Claims Dismissed | Lost | |
| Phang Cher Choon | Defendant | Individual | Counterclaim Allowed in Part | Partial | |
| Bluestone Healthcare Sdn Bhd | Defendant | Corporation | Claims Dismissed | Won | |
| Lim Hooi Loo | Defendant | Individual | Claims Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Mavis Chionh Sze Chyi | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- Phang and Henry co-founded Corporation, with Phang overseeing medical consumables and Henry medical equipment.
- Healthcare was incorporated by Phang in Malaysia, dealing in medical products.
- Hooi Loo was employed by Corporation in its Malaysian branch office.
- Corporation alleged Phang breached fiduciary duties by setting up Healthcare and diverting business.
- Henry claimed he was unaware of Healthcare's existence until 2018.
- Phang claimed Henry agreed he could explore the Malaysian market independently.
- Phang set up Prius and Primuz, companies dealing in related products.
5. Formal Citations
- Bluestone Corp Pte Ltd v Phang Cher Choon and others and another suit, Suit Nos 793 and 794 of 2018, [2020] SGHC 268
6. Timeline
| Date | Event |
|---|---|
| Bluestone Corporation Pte Ltd incorporated | |
| Corporation registered a branch office in Malaysia | |
| Lim Hooi Loo employed by Corporation | |
| Bluestone Healthcare Sdn Bhd incorporated | |
| Medisol sold to RadLink | |
| Henry came to know of Healthcare’s incorporation | |
| Writs of summonses and statements of claim filed | |
| Henry visited Kuala Lumpur | |
| Phang and Hooi Loo's employment terminated | |
| Lee Jia Shin joined Corporation | |
| Annual general meeting of Corporation | |
| Trial began | |
| Judgment issued |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court found that the defendant did not breach his fiduciary duties.
- Category: Substantive
- Sub-Issues:
- Conflict of interest
- Making secret profits
- Self-dealing
- Breach of Contract
- Outcome: The court found that the defendant did not breach the terms of her employment contract.
- Category: Substantive
- Sub-Issues:
- Breach of confidentiality
- Solicitation of customers
- Use of trade secrets
- Tort of Passing Off
- Outcome: The court found that the defendant did not commit the tort of passing off.
- Category: Substantive
- Tort of Conspiracy
- Outcome: The court found that the defendant did not engage in a conspiracy to defraud.
- Category: Substantive
- Sub-Issues:
- Unlawful means
- Intention to cause damage
- Termination of Employment Contract
- Outcome: The court found that the defendant was terminated without reasonable notice and awarded damages.
- Category: Substantive
- Sub-Issues:
- Reasonable notice
- Summary dismissal
- Limitation Act
- Outcome: The court found that the claims were time-barred.
- Category: Procedural
- Sub-Issues:
- Time bar
- Fraudulent concealment
- Acquiescence
- Outcome: The court found that the plaintiff had acquiesced to the defendant's actions.
- Category: Procedural
8. Remedies Sought
- Monetary Damages
- Injunction
- Account of Profits
- Claw-back of bonuses and salaries
9. Cause of Actions
- Breach of Fiduciary Duty
- Breach of Contract
- Tort of Passing Off
- Tort of Conspiracy
10. Practice Areas
- Commercial Litigation
- Employment Disputes
- Breach of Contract
- Corporate Law
11. Industries
- Healthcare
- Medical Equipment
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ng Chee Chuan v Ng Ai Tee (administratrix of the estate of Yap Yoon Moi, deceased) | Court of Appeal | Yes | [2009] 2 SLR(R) 918 | Singapore | Cited to emphasize the importance of relying on objective evidence over witness credibility when available. |
| Chin Siew Seng v Quah Hun Kok Francis and another appeal | Court of Appeal | Yes | [2010] SGCA 44 | Singapore | Cited for the principle that a court should be slow to place too much reliance on the perceived credibility of witnesses where there are undisputed facts and/or objective evidence from which the court can draw the appropriate inferences. |
| Nordic International Ltd v Morten Innhaug | High Court | Yes | [2017] 3 SLR 957 | Singapore | Cited for the scope of directors’ duties, including the duty to act bona fide, the duty not to place himself in a position of conflict, the duty not to make a profit out of his position without Corporation’s consent, and the duty not to enter into any self-dealing transaction. |
| Novelty Pte Ltd v Amanresorts Ltd and another | Court of Appeal | Yes | [2009] 3 SLR(R) 216 | Singapore | Cited for the elements of a claim of passing off: goodwill, misrepresentation, and damage to goodwill. |
| Tuitiongenius Pte Ltd v Toh Yew Keat and another | Court of Appeal | Yes | [2020] SGCA 103 | Singapore | Cited for the principle that a fiduciary cannot act for his own benefit without the informed consent of his principal. |
| Ho Kang Peng v Scintronix Corp Ltd (formerly known as TTL Holdings Ltd) | Court of Appeal | Yes | [2014] 3 SLR 329 | Singapore | Cited for the principle that either the informal assent of all the directors of a company or the unanimous, or at the very least majority agreement of the shareholders would suffice to release a director from his obligations to the company. |
| Innovative Corp Pte Ltd v Ow Chun Ming and another | High Court | Yes | [2020] 3 SLR 943 | Singapore | Cited for the principle that an informal assent of all the shareholders may be sufficient to effectively ratify a director’s breach of his fiduciary duties. |
| Smile Inc Dental Surgeons Pte Ltd v OP3 International Pte Ltd | High Court | Yes | [2020] 3 SLR 1234 | Singapore | Cited for the principle that the plaintiff bears the burden of proving each head of claim on the balance of probabilities. |
| Griffin Travel Pte Ltd v Nagender Rao Chilkuri and others | High Court | Yes | [2014] SGHC 205 | Singapore | Cited for the principle that a director of a company is not entitled to treat the company’s employees as if they were his own, and make use of them for his private benefit. |
| Dynasty Line Ltd (in liquidation) v Sukamto Sia and another and another appeal | Court of Appeal | Yes | [2014] 3 SLR 277 | Singapore | Cited for the principle that the six-year time bar in s 6 of the Limitation Act applies to equitable claims for breach of fiduciary duties. |
| Yong Kheng Leong and another v Panweld Trading Pte Ltd and another | Court of Appeal | Yes | [2013] 1 SLR 173 | Singapore | Cited for the principle that only Class 1 constructive trusts would fall within the ambit of s 22 of the Limitation Act. |
| EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and another | Court of Appeal | Yes | [2014] 1 SLR 860 | Singapore | Cited for the elements of a claim of unlawful means conspiracy. |
| Seagate Technology Pte Ltd and another v Goh Han Kim | Court of Appeal | Yes | [1994] 3 SLR(R) 836 | Singapore | Cited for the principle that a high degree of proof is required to make out a claim of unlawful means conspiracy. |
| Tan Yong San v Neo Kok Eng and others | High Court | Yes | [2011] SGHC 30 | Singapore | Cited for the scope of the defence of acquiescence and the requirements for it to operate. |
| Goh Chan Peng and others v Beyonics Technology Ltd and another and another appeal | Court of Appeal | Yes | [2017] 2 SLR 592 | Singapore | Cited for the principle that an employer may not use an employee’s breach of fiduciary duties to justify withholding payment of salary that that employee is entitled to. |
| Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart | Court of Appeal | Yes | [2012] 4 SLR 308 | Singapore | Cited for the distinction between the duties of good faith and fiduciary duties. |
| 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 for the principle that an employee owes an employer an implied duty of good faith and fidelity. |
| George Raymond Zage III and another v Ho Chi Kwong and another | Court of Appeal | Yes | [2010] 2 SLR 589 | Singapore | Cited for the elements of a claim in dishonest assistance and knowing receipt. |
| Richardson and another v Koefod | English Court of Appeal | Yes | [1969] 1 WLR 1812 | England | Cited for the principle that every contract of service is determinable by reasonable notice in the absence of express contractual stipulation. |
| Teh Guek Ngor Engelin née Tan and others v Chia Ee Lin Evelyn and another | Court of Appeal | Yes | [2005] 3 SLR(R) 22 | Singapore | Cited for the principle that the reasonable length of the period of notice of termination depends on the individual facts of the case. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act Cap 50 | Singapore |
| Limitation Act (Cap 163, 1996 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Fiduciary Duty
- Breach of Contract
- Passing Off
- Conspiracy
- Employment Contract
- Reasonable Notice
- Acquiescence
- Time Bar
- Confidential Information
- Director's Duties
15.2 Keywords
- fiduciary duty
- breach of contract
- passing off
- conspiracy
- employment law
- director
- shareholder
- medical equipment
- healthcare
- singapore
- high court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Breach of Confidence | 85 |
| Fiduciary Duties | 80 |
| Employment Law | 75 |
| Torts | 60 |
| Chancery and Equity | 50 |
| Contract Law | 40 |
16. Subjects
- Breach of Fiduciary Duty
- Employment Law
- Contract Law
- Tort Law
- Company Law