1 The sole issue for my determination in Summons No 1589 of 2023 (the “Summons”) is whether a plaintiff, in a claim for breach of confidence, is entitled to plead and claim that both its wrongful gain interest and wrongful loss interest (as established in I-Admin (Singapore) Pte Ltd v Hong Ying Ting and others [2020] 1 SLR 1130 (“I-Admin (CA)”)) have been infringed by the defendant. In this judgment, I answer this question in the affirmative.

2 I will briefly state the relevant facts.

3 On 14 February 2018, the plaintiffs filed HC/S 164/2018 (the “Suit”) against the first to fifth defendants. ¹

4 The first plaintiff is a company incorporated in Singapore on 6 March 2008. It specialises in the compounding of medical and pharmaceutical products. The second plaintiff is also a Singapore-incorporated company and, among other things, provides support services to the business of the first plaintiff. ² The plaintiffs claim to have, over the years, built up confidential information and/or trade secrets such as pharmaceutical formulations, price lists and client lists. ³

5 The first, third and fifth defendants were former employees of the first or second plaintiff. ⁴ The second defendant is a compounding pharmacy incorporated in Singapore on 28 April 2017. It is undisputed that the second defendant provides services and products that are highly similar to that offered by the first plaintiff. ⁵ The first and fourth defendants are the directors of the second defendant. ⁶ The sixth defendant, who is the husband of the first defendant, was later joined to the Suit. ⁷

6 In short, the plaintiffs assert that the defendants had acted in breach of confidence by, among other things: (a) copying confidential documents from the plaintiffs and using the confidential information and/or trade secrets to set up and run the second defendant and sell identical products; (b) attempting to communicate with and solicit business from contacts listed in the first plaintiff’s confidential list of clients; and (c) revealing confidential information of the plaintiffs to a third party. ⁸

7 On 14 September 2020, the plaintiffs obtained a consent judgment against the first, second, third, fourth and sixth defendants (the “Consent Judgment”) for, inter alia, the following orders: ⁹

The first and second defendants unconditionally admitted to the unauthorised copying and breach of confidence in relation to the plaintiffs’ confidential information as listed in paragraph 5 of the Statement of Claim (the “Confidential Information”). The first and second defendants also unconditionally admitted to the unauthorised receipt, access, and use of the Confidential Information. ¹⁰ However, notwithstanding the first and second defendant’s admission in the Consent Judgment, the defendants stress, in their Supplemental Defence filed in relation to the assessment of damages, that the extent of use and dissemination of the confidential information is a matter to be adjudicated on. ¹¹

8 The plaintiffs and the first and second defendants are slated to go on trial for the assessment of damages claimed in the Suit (the “AD Trial”). On 3 May 2023, an agreed list of issues was filed for the AD Trial. ¹² One area of disagreement was Issue 11, which was whether the plaintiffs are entitled to claim for both damages under the principles laid down in Coco v A N Clark (Engineers) Ltd [1969] RPC 41 (“Coco”) and equitable damages for breach of confidence under the principles laid down in I-Admin (CA). ¹³

9 On 5 May 2023, I directed parties to either reach an agreement on Issue 11 or otherwise file an application under O 33 r 2 of the Rules of Court (2014 Rev Ed), for the issue to be preliminarily determined. ¹⁴ Parties have now come before me in the present Summons.

10 The plaintiffs’ case is essentially that they are entitled to claim both damages under the principles laid down in Coco and equitable damages for breach of confidence under the principles laid down in I-Admin (CA). This is because a claim for breach of confidence can protect both the wrongful loss interest and the wrongful gain interest at the same time, and each interest gives rise to its own remedies. ¹⁵ Conversely, the defendants submit that the plaintiffs are not entitled to make such a claim because the interests are very distinct. ¹⁶

11 Traditionally, there were three elements for a successful claim for breach of confidence (Coco at 47; I-Admin (CA) at [20]; Ng-Loy Wee Loon SC, Law of Intellectual Property of Singapore (Sweet & Maxwell, 3rd Ed, 2021) (“Ng-Loy”) at [38.1.1]; Shanghai Afute Food and Beverage Management Co Ltd v Tan Swee Meng and others [2023] SGHC 34 (“Shanghai Afute”) at [100(b)]) (the “Coco approach”):

(a) that the information in question has the necessary quality of confidence about it;

(b) this information must have been imparted in circumstances importing an obligation of confidence; and

(c) there must be an unauthorised use of that information, and in appropriate cases, this use must be to the detriment of the party who originally communicated it.

12 In the seminal case of I-Admin (CA), the Court of Appeal took the opportunity to review and extend the law on breach of confidence in Singapore (at [43]–[66]). The Court of Appeal declared that two distinct interests guide the operation of breach of confidence claims. First, a plaintiff has an interest in preventing wrongful gain or profit from its confidential information (“wrongful gain interest”) (I-Admin (CA) at [50]). Second, the plaintiff also has an interest in avoiding wrongful loss (“wrongful loss interest”), ie, to seek protection for the confidentiality of the information per se. Wrongful loss is suffered so long as a defendant’s conscience has been impacted in the breach of the obligation of confidentiality (I-Admin (CA) at [53]); Shanghai Afute at [100(a)(ii)]).

13 Following the judgment of I-Admin (CA), the Court of Appeal clarified in Lim Oon Kuin and others v Rajah & Tann Singapore LLP and another appeal [2022] 2 SLR 280 (“Lim Oon Kuin”) that different analytical frameworks apply depending on whether the wrongful gain interest or wrongful loss interest is at issue. Where the wrongful gain interest is at stake, the traditional Coco approach applies (Lim Oon Kuin at [39] and [41]). This means that the plaintiff bears the legal burden of proving unauthorised use of the confidential information. However, where the wrongful loss interest is engaged, the modified approach promulgated in I-Admin (CA) is adopted (the “I-Admin approach”). Under the I-Admin approach, the first two requirements of the Coco approach are preserved, ie, the relevant information must have the necessary quality of confidence, and it must be imparted in circumstances importing an obligation of confidence. If these two prerequisites are satisfied, the conscience of the defendant is presumed to have been impinged, and an action for breach of confidence is presumed (I-Admin (CA) at [61]). The legal burden then shifts to the defendant to prove that its conscience was unaffected (I-Admin (CA) at [61] and [62]; Lim Oon Kuin at [40]). Further, the Court of Appeal in Lim Oon Kuin endorsed the observation of Prof Ng‑Loy that the I-Admin approach is to be limited to “cases involving unauthorised acquisition of the confidential information, that is, the ‘taker’ cases” (Ng-Loy at [41.3.10]–[41.3.11]; Lim Oon Kuin at [41] and [42]).

14 Traditionally, where a claim for breach of confidence is satisfied, ie, where the wrongful gain interest has been infringed, the law has produced a “formidable armoury” of remedies, such as monetary remedies, “whether termed equitable compensation or damages” (I-Admin (CA) at [56]). On the other hand, where the defendant is liable for infringing on the wrongful loss interest, equitable compensation would be inappropriate as its restitutionary objective requires that a plaintiff be restored to the same position it would have been in if the breach had not been effected, but this may be highly speculative where there has been no actionable use of the confidential information (I-Admin (CA) at [72]). The Court of Appeal found that an account of profits was also not in consideration where there was no finding of actual use of the plaintiff’s confidential materials (I-Admin (CA) at [72]).

15 Instead, the Court may order the remedy of equitable damages for infringement of the wrongful loss interest (I-Admin (CA) at [73] and [77]). In I-Admin (CA), the Court of Appeal then remitted the question of the precise measure of damages to the High Court judge. However, the Court of Appeal directed that in determining the appropriate award, the High Court judge ought to consider the additional cost the third respondent would have incurred to develop its software without any reference to the confidential materials of the appellant, as well as the reduction in the time taken to set up the third respondent’s business, allowing it to commence profit-making earlier. Taken together, these would provide a quantifiable impression of the value of the appellant’s information to the respondents (I-Admin (CA) at [79]).

16 Having considered the existing jurisprudence on breach of confidence, as well as parties’ submissions, I hold that a plaintiff is entitled to plead that it is proceeding on both the wrongful gain interest and the wrongful loss interest in a claim for breach of confidence. Therefore, within a claim for breach of confidence, the Court may, in fact, award both damages under the Coco approach as well as equitable damages under the I-Admin approach.

17 I now set out the reasons for my decision.

18 Firstly, in my judgment, there is nothing in the authorities by the Court of Appeal that precludes a plaintiff from claiming that both its wrongful loss and wrongful gain interests have been affected by the defendant’s breach of confidence.

19 In I-Admin (CA), the Court of Appeal did not need to address the issue of whether a plaintiff could claim both interests under breach of confidence because the wrongful gain interest had not been engaged at all. The High Court Judge found that there had been no actionable use of the confidential information, ie, the appellant’s case failed at the third limb of the Coco approach (I-Admin (CA) at [20] and [54]). Instead, only the wrongful loss interest was at stake, and the Court of Appeal correspondingly found the respondents liable for impinging on the appellants’ wrongful loss interest.

20  In fact, in I-Admin (CA) (at [54]), the Court of Appeal alluded to the possibility that a defendant’s conduct can affect both the wrongful loss interest and the wrongful gain interest, such that there could be a “degree of overlap”. I set out the paragraph in full:

I agree with the plaintiffs’ submission that if “it may not always be the case that a defendant’s conduct will affect both the wrongful gain and wrongful loss interests”, then it follows a fortiori that there are cases where the defendant’s conduct affects both the wrongful gain interest and wrongful loss interest.

21 For completeness, I note that the Court of Appeal in Lim Oon Kuin also did not face the present issue that I have to determine, ie, whether a plaintiff in a claim for breach of confidence may plead and claim that both its wrongful gain interest and wrongful loss interest have been infringed. Therefore, I am not bound by precedent to refuse a plaintiff from claiming for both its wrongful gain interest and wrongful loss interest.

22 The position that a plaintiff may plead and claim the wrongful gain interest and wrongful loss interest is also strengthened by the Court of Appeal’s rationale for declaring the existence of both forms of interest in I-Admin (CA). Recognition of the wrongful loss interest is intended to bolster and enhance protection for confidentiality. In I-Admin (CA), the Court of Appeal began its analysis on breach of confidence by reflecting on the circumstances where “defendants wrongfully access or acquire confidential information but do not use or disclose the same”. Nevertheless, the Court of Appeal stated that “their actions compromise the confidentiality of the information in question” (I-Admin (CA) at [43]). Later on in the judgment, the Court of Appeal suggested that the “policy objectives behind the early law of confidence may have extended beyond safeguarding against wrongful gain” [emphasis added] (I-Admin (CA) at [50]). At [58], the Court of Appeal then decided that the existing legal framework “[did] not adequately safeguard [the wrongful loss interest] or offer recourse where it has been affected”. Subsequently, in Lim Oon Kuin, the Court of Appeal made clear that “[t]he I‑Admin approach was … intended to specifically fill the lacuna in the law in so far as the legitimate objective of protecting the wrongful loss interest was concerned” (Lim Oon Kuin at [39]). Therefore, a plaintiff in a breach of confidence claim should be allowed to seek remedies under both the Coco approach and the I-Admin approach. The traditional approach should be applied for confidential documents involving harm to the plaintiff’s “wrongful gain interest” (see Lim Oon Kuin at [39]). Where there is no basis for such a finding of harm, only the I-Admin approach should be applied.

23 I also take the opportunity to address two High Court decisions on breach of confidence that have discussed the law expounded in I-Admin (CA) and Lim Oon Kuin. The defendants averred that the dicta in these decisions support their position that the plaintiffs are not entitled to simultaneously claim damages under the Coco approach as well as equitable damages under the I-Admin approach. ¹⁷ I disagree with this argument.

24 The first High Court judgment is that of Writers Studio Pte Ltd v Chin Kwok Yung [2022] SGHC 205 (“Writers Studio”). The defendants relied on the following dictum by Lee Seiu Kin J (Writers Studio at [135]):

25 In Writers Studio, the plaintiff, a business providing education support services to primary school students, claimed that the defendant, who had worked for the plaintiff as a tuition teacher, breached his duty of confidentiality by contacting the plaintiff’s clients privately, among other things (Writers Studio at [41]). One of the issues in Writers Studio was that the plaintiff did not plead that the defendant had infringed on its wrongful loss interest. Even though the claim in Writers Studio commenced after the Court of Appeal had handed down its decision in I-Admin (CA), the plaintiff in that case appeared unaware of the development of the I-Admin approach. The plaintiff’s pleadings had been framed based on the requirements set forth in Coco. Therefore, it appeared to have proceeded on the basis that the law was as it stood prior to I-Admin (CA) (Writers Studio at [134]). Given that the plaintiff had not pleaded that its wrongful loss interest was at stake, Lee J held that it was no longer open to it to rely on the I-Admin approach and that it “must now let the chips lie where they have fallen”. Lee J noted that even though there had been some uncertainty about the nature of the burden of proof for the defendant to show that his conscience was unaffected (prior to Lim Oon Kuin), “it was always open to [the plaintiff] to have pleaded the point”. Lee J also stressed that “pleadings are meant to give the other party notice of one’s case” (Writers Studio at [135]).

26 Viewed in this context, it becomes clear that the purpose of Lee J’s dictum was not to convey that a plaintiff may only plead either the wrongful loss interest or wrongful gain interest when claiming for breach of confidence. Rather, Lee J appeared to be imploring counsel to sufficiently plead their clients’ cases for breach of confidence. Given this recent development in the law, where the Court of Appeal had pronounced that not one but two distinct interests guide the operation of breach of confidence claims, it is important for a plaintiff to plead all facts pertaining to either or both of the interests that the plaintiff decides to proceed on. ¹⁸ This is also consistent with the earlier analysis in Singapore Civil Procedure 2021 vol 1 (Cavinder Bull gen ed) (Sweet & Maxwell, 2021) at [18/12/6]:

Therefore, Lee J’s dictum in Writers Studio fails to support the defendants’ case.

27 The second judgment cited by the respondents is my earlier decision of Shanghai Afute. In Shanghai Afute, the plaintiff mounted its breach of confidence claim on two alternative bases – the defendants’ breach of cl 6(5) of its master franchise agreement and breach of a general obligation of confidentiality in common law or equity. As I found that the defendants were in breach of cl 6(5), the plaintiff was not entitled to more damages under the alternative cause of action due to the rule against double recovery. Nonetheless, I considered the merits of the plaintiff’s breach of confidence claim. This was because the plaintiff had sought an injunction on the use of the alleged confidential information and an order to deliver up any material containing the alleged confidential information only as part of the remedies for its breach of confidence claim (Shanghai Afute at [99]). The plaintiff’s case was essentially that two of the defendants had misused the alleged confidential information or allowed the alleged confidential information to be misused to unlawfully gain a head start in establishing and operating the alleged competing business (Shanghai Afute at [23] and [24]). I found that there was a breach of confidence by the sale and disclosure of certain confidential information to a company owned by the third defendant and granted an injunction against the first defendant to restrain him from using that certain confidential information for any purpose (Shanghai Afute at [151] and [154]).

28 In that case, I summarised the law on breach of confidence and set out the relevant approach to analysing whether there was, in fact, a breach of confidence (Shanghai Afute at [100]):

29 Subsequently, at [103], I similarly noted that:

The defendants have interpreted these dicta to mean that a plaintiff cannot pursue claims based on both the wrongful gain interest and the wrongful loss interest in the assessment of its damages. ¹⁹

30 I accept that Shanghai Afute would have provided clearer guidance if it had stated that the first step in the inquiry is to determine whether the defendant’s actions were an incursion to the wrongful gain interest and/or the wrongful loss interest. That said, the issue that I am faced with here did not arise in Shanghai Afute. In Shanghai Afute, the plaintiff simply relied on the I-Admin modified approach in its closing submissions with no explanation proffered for its preference for this approach. Its pleadings were silent on the nature of the interest relied on in its claim for breach of confidence (Shanghai Afute at [103]). However, on the facts, the I-Admin approach did not apply. This was because Shanghai Afute was not a “taker” case. The plaintiff had itself pleaded that the alleged confidential information was provided by the plaintiff to further the arrangement pursuant to parties’ master franchise agreement. Therefore, the relevant interest in Shanghai Afute was the wrongful gain interest (Shanghai Afute at [104]). Given that the plaintiff had (wrongly) made an election between the I-Admin approach and the Coco approach, albeit, without any explanation, I sought to draw out the required steps to make such an election and applied the relevant approach. Therefore, the approach set out at [100] and [103] in Shanghai Afute was not intended to be exhaustive. The approach is to be applied where parties choose to elect between the I-Admin approach and Coco approach, but it does not mean that a plaintiff cannot simultaneously claim for its wrongful gain and wrongful loss interests in the same suit.

31 In principle, it also makes sense for a plaintiff to be entitled to plead and claim both forms of interests. To illustrate, in a “taker” situation, Party A has unauthorisedly acquired ten confidential documents belonging to Party B. Over the course of the proceedings, it is found that only three of the ten documents were, in fact, used by Party A (so as to satisfy the third limb of the Coco approach). As for the remaining seven documents, there is no evidence that there was actionable use by Party A (ie, these documents did not fulfil the third requirement of the Coco approach), but nonetheless, they were wrongfully “taken”. In such circumstances, Party B may claim for its wrongful gain interest and its wrongful loss interest. As held in I-Admin (CA), the wrongful loss interest is “distinct” from the wrongful gain interest (I-Admin (CA) at [53]). The Coco approach and the I-Admin approach each seek to protect different wrongs that have been committed by the defendant against the plaintiff, and the plaintiff should be entitled to protect both interests. For completeness, I note that the parties have not argued before me that for the same document, the plaintiffs are entitled to claim for both the wrongful gain interest and the wrongful loss interest. Therefore, this judgment does not decide this issue.

32 In conclusion, a plaintiff is entitled to plead that it is proceeding on both the wrongful gain interest and the wrongful loss interest in a claim for breach of confidence and therefore claim for both damages under the Coco approach and equitable damages under the I-Admin approach.