Prudential Assurance v Peter Tan: Breach of Contract, Fiduciary Duty & Restraint of Trade in Mass Agent Departure

In Prudential Assurance Company Singapore (Pte) Ltd v Peter Tan Shou Yi and PTO Management and Consultancy Pte Ltd, the High Court of Singapore addressed claims by Prudential Assurance Company Singapore (Pte) Ltd (PACS) against Peter Tan Shou Yi (Peter) and PTO Management and Consultancy Pte Ltd (PTOMC) for breach of contract and fiduciary duties related to the mass departure of PACS agents to Aviva Limited. Peter counterclaimed against PACS for wrongful termination and related claims. The court found Peter liable for breach of contract for soliciting PACS agents but dismissed the claims for breach of fiduciary duty and the counterclaims. The court ordered an assessment of damages.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Judgment for Plaintiff in part; Defendant's counterclaims dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Prudential Assurance sues Peter Tan for breach of contract and fiduciary duties after he solicited agents to join Aviva. The court found a breach of contract.

1.7 Decision Date

4 May 2021

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Prudential Assurance Company Singapore (Pte) Ltd	Plaintiff, Defendant in counterclaim	Corporation	Judgment for Plaintiff in part	Partial	Luo Qinghui of Rajah & Tann Singapore LLP Tao Tao of Rajah & Tann Singapore LLP Paul Tan of Rajah & Tann Singapore LLP K. Muralidharan Pillai of Rajah & Tann Singapore LLP Jared Kok of Rajah & Tann Singapore LLP Andrea Tan of Rajah & Tann Singapore LLP Joey Ng of Rajah & Tann Singapore LLP
Peter Tan Shou Yi	Defendant, Plaintiff in counterclaim	Individual	Counterclaim Dismissed	Lost	Thio Shen Yi of TSMP Law Corporation Nguyen Vu Lan of TSMP Law Corporation Niklas Wong of TSMP Law Corporation Nanthini Vijayakumar of TSMP Law Corporation
PTO Management and Consultancy Pte Ltd	Defendant	Corporation	Claim Dismissed	Won	Nicholas Poon of Breakpoint LLC

3. Judges

Judge Name	Title	Delivered Judgment
Chua Lee Ming	Judge	Yes

4. Counsels

Counsel Name	Organization
Luo Qinghui	Rajah & Tann Singapore LLP
Tao Tao	Rajah & Tann Singapore LLP
Paul Tan	Rajah & Tann Singapore LLP
K. Muralidharan Pillai	Rajah & Tann Singapore LLP
Jared Kok	Rajah & Tann Singapore LLP
Andrea Tan	Rajah & Tann Singapore LLP
Joey Ng	Rajah & Tann Singapore LLP
Thio Shen Yi	TSMP Law Corporation
Nguyen Vu Lan	TSMP Law Corporation
Niklas Wong	TSMP Law Corporation
Nanthini Vijayakumar	TSMP Law Corporation
Nicholas Poon	Breakpoint LLC

4. Facts

Peter Tan was a successful Master Group Agency Manager at Prudential Assurance Company Singapore.
Peter Tan held meetings with agency leaders to discuss a move to Aviva.
Peter Tan incorporated PTO Management and Consultancy Pte Ltd.
Peter Tan entered into a Distribution Advisory Agreement with Aviva.
A mass exodus of agents from Prudential Assurance Company Singapore to Aviva occurred.
Prudential Assurance Company Singapore terminated Peter Tan's agency agreement.
Peter Tan received a sign-on bonus from Aviva through PTO Management and Consultancy Pte Ltd.

5. Formal Citations

Prudential Assurance Co Singapore (Pte) Ltd v Tan Shou Yi Peter and another, Suit No 772 of 2016, [2021] SGHC 109

6. Timeline

Date	Event
1996-12-27	Peter Tan joined Prudential Assurance Company Singapore as a probationary agent.
1997-02-18	Peter Tan confirmed as a Tier 1 agent.
1997-02-24	Peter Tan signed an Agency Agreement with Prudential Assurance Company Singapore.
2001-01-01	Peter Tan appointed as a Tier 2 agency leader.
2001-02-01	Peter Tan signed a Field Manager Agreement.
2005-01-01	Peter Tan Organisation became a standalone Group Agency Leader unit.
2006-01-01	Peter Tan joined Prudential Assurance Company Singapore's Group Agency Manager scheme.
2011-03-30	Prudential Assurance Company Singapore and Peter Tan entered into a Memorandum of Understanding.
2013-07-23	Prudential Assurance Company Singapore and Peter Tan entered into a Memorandum of Understanding.
2015-07-01	Peter Tan entered into the Pegasus Agreement with Prudential Assurance Company Singapore.
2016-02-02	Prudence expressed disappointment with Philip's leadership and management of Prudential Assurance Company Singapore.
2016-04-01	Peter Tan met with Aviva to explore the idea of being a consultant.
2016-06-01	Peter Tan incorporated PTO Management and Consultancy Pte Ltd.
2016-06-02	Peter Tan updated Aviva on the intended timelines for the move and signed a non-disclosure agreement with Aviva.
2016-06-04	Peter Tan met with Lilian Ng, the Chief Executive of Insurance in Prudential Corporation Asia.
2016-06-15	Agents from Peter Tan Organisation started giving notice of termination of their agreements with Prudential Assurance Company Singapore en masse.
2016-07-04	The Business Times reported that Aviva had received in-principle approval to set up a new financial advisory firm.
2016-07-06	Aviva announced that it had taken '250 top advisors from another company'.
2016-07-08	Peter Tan gave 14-days’ notice of termination of his agreements with Prudential Assurance Company Singapore.
2016-07-12	Prudential Assurance Company Singapore terminated Peter Tan’s Agency Agreement.
2016-07-23	Aviva, Peter Tan, and PTO Management and Consultancy Pte Ltd entered into a Distribution Advisory Agreement.
2021-05-05	Judgment reserved

7. Legal Issues

Breach of Contract
- Outcome: The court found that Peter Tan breached his contractual obligation to conduct his insurance business with integrity and honesty by soliciting agents to join a competitor.
- Category: Substantive
- Sub-Issues:
  - Solicitation of agents
  - Duty of fidelity
Fiduciary Duty
- Outcome: The court found that Peter Tan did not owe a fiduciary duty to Prudential Assurance Company Singapore in his role as Master Group Agency Manager.
- Category: Substantive
- Sub-Issues:
  - Existence of fiduciary relationship
  - Scope of fiduciary duties
Restraint of Trade
- Outcome: The court found that the non-solicitation clause did not become a term of Peter Tan's Field Manager Agreement or Agency Agreement.
- Category: Substantive
- Sub-Issues:
  - Enforceability of non-solicitation clause
  - Reasonableness of restraint
Inducement of Breach of Contract
- Outcome: The court dismissed Peter Tan's counterclaim for inducement of breach of contract, finding that the non-disclosure agreements were unenforceable.
- Category: Substantive
- Sub-Issues:
  - Validity of non-disclosure agreements
  - Justification for inducement
Breach of Confidence
- Outcome: The court dismissed Peter Tan's counterclaim for breach of confidence, finding that the non-disclosure agreements were unenforceable.
- Category: Substantive
- Sub-Issues:
  - Confidentiality of information
  - Obligation of confidence
Conspiracy to Injure
- Outcome: The court dismissed Peter Tan's counterclaim for conspiracy to injure, finding that he failed to prove an agreement to cause damage or unlawful acts.
- Category: Substantive
- Sub-Issues:
  - Agreement to cause damage
  - Unlawful acts

8. Remedies Sought

Damages
Equitable Compensation
Account of Profits

9. Cause of Actions

Breach of Contract
Breach of Fiduciary Duty
Inducement of Breach of Contract
Breach of Confidence
Conspiracy to Injure

10. Practice Areas

Commercial Litigation
Insurance
Breach of Contract

11. Industries

Insurance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Man Financial (S) Pte Ltd v Wong Bark Chuan David	High Court	Yes	[2008] 1 SLR 663	Singapore	Cited for the principle that a non-solicitation clause is a restraint of trade and is unenforceable unless it protects a legitimate proprietary interest and is reasonable.
Cactus Imaging Pty Limited v Glenn Peters	New South Wales Supreme Court	Yes	[2006] NSWSC 717	Australia	Cited regarding the proprietary interest in maintaining a stable workforce.
Powerdrive Pte Ltd v Loh Kin Yong Philip and others	High Court	Yes	[2019] 3 SLR 399	Singapore	Cited regarding the reasonableness of a restraint of trade clause in the interest of the public.
Austin Knight (UK) Ltd v Hinds	UK High Court	Yes	[1994] FSR 52	United Kingdom	Cited regarding the interpretation of the phrase 'endeavour to entice away' in a non-solicitation clause.
Lek Gwee Noi v Humming Flowers & Gifts Pte Ltd	High Court	Yes	[2014] 3 SLR 27	Singapore	Cited regarding the reasonableness of a non-solicitation covenant.
TSC Europe (UK) Ltd v Massey	Employment Appeal Tribunal	Yes	[1999] IRLR 22	United Kingdom	Cited regarding the reasonableness of a non-solicitation clause.
Kearney v Crepaldi & Ors	New South Wales Supreme Court	Yes	[2006] NSWSC 23	Australia	Cited regarding the reasonableness of a non-solicitation clause.
Aussie Home Loans Ltd v X Inc Services Pty Ltd	New South Wales Supreme Court	Yes	[2005] NSWSC 285	Australia	Cited regarding the reasonableness of a non-solicitation clause.
Salomon Alliance Management Pte Ltd v Pang Chee Kuan	High Court	Yes	[2019] 4 SLR 577	Singapore	Cited regarding the relevance of the reasonableness of a restraint of trade clause after termination of employment.
AXA China Region Insurance Co Ltd & Anor v Pacific Century Insurance Co Ltd & Ors	Hong Kong Court	Yes	[2003] 3 HKC 1	Hong Kong	Cited regarding the duty of fidelity in respect of an agency agreement.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited regarding the test for the implication of terms in fact.
Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal	Court of Appeal	Yes	[2018] 2 SLR 655	Singapore	Cited regarding the principles for determining the existence of a fiduciary relationship.
Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd	Court of Appeal	Yes	[2018] 1 SLR 317	Singapore	Cited regarding the circumstances in which silence may amount to an unequivocal representation for waiver.
QBE Management Services (UK) Ltd v Dymoke	High Court	Yes	[2012] EWHC 80	United Kingdom	Cited regarding the approach to causation when considering multiple breaches.
Alvin Nicholas Nathan v Raffles Assets (Singapore) Pte Ltd	High Court	Yes	[2016] 2 SLR 1056	Singapore	Cited regarding the assessment of damages for breach of contract in terms of expectation loss.
George Raymond Zage III and another v Ho Chi Kwong and another	High Court	Yes	[2010] 2 SLR 589	Singapore	Cited regarding the requirements for establishing dishonest assistance.
Innovative Corp Pte Ltd v Ow Chun Ming and another	High Court	Yes	[2020] 3 SLR 943	Singapore	Cited regarding the diversion of a maturing business opportunity and dishonest assistance.
Tan Wee Fong v Denieru Tatsu F&B Holdings (S) Pte Ltd	High Court	Yes	[2010] 2 SLR 298	Singapore	Cited regarding the definition of 'solicitation'.
Ochroid Trading Ltd and another v Chua Siok Lui (trading as VIE Import & Export) and another	Court of Appeal	Yes	[2018] 1 SLR 363	Singapore	Cited regarding the categories of illegal contracts and the principle of proportionality.
Ting Siew May v Boon Lay Choo	High Court	Yes	[2014] 3 SLR 609	Singapore	Cited regarding the categories of illegal contracts and the principle of proportionality.
Tribune Investment Trust Inc v Soosan Trading Co Ltd	High Court	Yes	[2000] 2 SLR(R) 407	Singapore	Cited regarding the requirements for establishing inducement of breach of contract.
Edwin Hill & Partners v First National Finance Corp plc	Court of Appeal	Yes	[1998] 3 All ER 801	United Kingdom	Cited regarding the defence of justification in a claim for inducement of breach of contract.
I-Admin (Singapore) Pte Ltd v Hong Ying Ting	Court of Appeal	Yes	[2020] 1 SLR 1130	Singapore	Cited regarding the approach to be taken in relation to breach of confidence claims.
EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and another	High Court	Yes	[2014] 1 SLR 860	Singapore	Cited regarding the requirements for establishing a claim for conspiracy to injure.
Singapore Shooting Association and others v Singapore Rifle Association	Court of Appeal	Yes	[2020] 1 SLR 395	Singapore	Cited regarding the types of losses that can be claimed in the tort of unlawful means conspiracy.

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

Agency Agreement
Non-Solicitation Clause
Fiduciary Duty
Distribution Advisory Agreement
Master Group Agency Manager
PTO
Aviva
Solicitation
Pegasus Agreement
Orphan Agents
New Business Profit
Risk Discount Rate

15.2 Keywords

breach of contract
fiduciary duty
insurance agents
non-solicitation
restraint of trade
mass departure
agency agreement

17. Areas of Law

Area Name	Relevance Score
Breach of Contract	90
Contract Law	90
Illegality and public policy	80
Restraint of Trade	75
Damages	70
Fiduciary Duties	70
Confidence	60
Torts	60
Conspiracy	50
Remedies	50
Costs	30
Civil Procedure	30
Accounting	30
Evidence	20

16. Subjects

Contract Law
Insurance Law
Fiduciary Duty
Restraint of Trade