When Staff Become Competitors and Breach of Confidence is Involved 

​

Centricore (S) Pte Ltd and others v ATT Systems (S’pore) Pte Ltd and another [2025] SGHC(A) 17

​

What happens when your most trusted employees - those with access to your pricing information, client contracts and relationships, operating manuals, technical documents, and other proprietary business information - leave en masse to launch a competing business, and it is discovered that your confidential information was taken and may have been misused? 

​

This was the background to the appeal in Centricore (S) Pte Ltd and others v ATT Systems (S’pore) Pte Ltd and another [2025] SGHC(A) 17 (“Centricore”).  The claimants, ATT Systems (S’pore) Pte Ltd (“ATT Systems”) and its related company, ATT Infosoft Pte Ltd (“ATT Infosoft”), brought legal action against their former employees and the competing companies that they set up and/or joined on several grounds, including breach of confidence. The court of first instance found in the claimants’ favour and the defendants appealed.  

 

In this article, we discuss the decision in Centricore surrounding the breach of confidence claim and its implications for companies. 

 

Summary of Appellate Decision

 

In Centricore, the Appellate Division of the High Court clarified and reaffirmed critical legal principles for breach of confidence under Singapore law, confirming that in a breach of confidence suit:

• a claimant may pursue both a wrongful gain claim and wrongful loss claim; and 

• as long as these claims were made in respect of different sets of confidential documents, this would not constitute double recovery.

 

Further, in a wrongful loss claim, even if a defendant shows that the confidential information was not misused, this does not necessarily mean his conscience was unaffected.

 

The general law on breach of confidence

 

Under Singapore law, two different kinds of breach of confidence claims¹ are available. 

 

The first is the wrongful gain claim, where the defendant has made unauthorised use or disclosure of confidential information and gained a benefit. This claim may be available to a company, where an ex-employee wrongfully benefitted or profited from the exploitation of its confidential documents. Under such a claim, the claimant-company must prove three elements: 

1. That the information in question possessed the necessary quality of confidence i.e., it must not be in the public domain;

2. The information was imparted in circumstances importing an obligation of confidence - this is generally proven through non-disclosure or confidentiality agreements in place, to which employees and ex-employees are bound; and 

3. The ex-employee misused the confidential information causing the claimant to suffer some detriment.

 

What happens, however, if an ex-employee took confidential information without the company’s knowledge, and the company has trouble proving that its ex-employee had misused it in a manner that caused detriment? This was an evidentiary obstacle commonly faced by claimants leading to the formulation of a modified test in I-Admin (Singapore) Pte Ltd v Hong Ying Ting and others [2020] SGCA 32 (“I-Admin”).

​

This brings us to the second kind of breach of confidence claim – the wrongful loss claim, where the claimant seeks protection for the confidentiality of the information per se. The wrongful loss is suffered so long as a defendant’s conscience was impacted in the breach of the obligation of confidentiality. This claim is available where the defendant had improperly acquired or retained the information, without consent or knowledge of the claimant. Under the applicable modified test in I-Admin, a claimant for a wrongful loss claim must still prove: 

(a) that the information possesses the necessary quality of confidence; and 

(b) the information was imparted in circumstances importing an obligation of confidence. 

​

However, the difference is, when the first two elements are established, the burden shifts to the defendant ex-employee to prove that his conscience was unaffected when the confidential information was acquired. 

 

No double recovery

 

Where two types of claims are available, can you rely on both against the same defendant?

 

It is accepted that a claimant cannot simultaneously succeed in both a wrongful gain and wrongful loss claim in respect of the same set of confidential documents, as this may lead to double recovery. One of the main issues in Centricore was whether the Judge below had impermissibly allowed this to happen against one of the ex-employee defendants, Mr Faruk ².  

 

On appeal, the Court affirmed that there was no double recovery against him. The Judge below correctly allowed the wrongful gain claim with respect to one set of confidential documents, which Mr Faruk used to create new documents and proposals, and on the other hand, the wrongful loss claim with respect to the rest of the confidential documents (where there was insufficient evidence of misuse) ³. The Court noted, however, that any confusion could have been avoided with greater clarity and distinction between the classes of information and/or documents subject to each claim.  

 

Accordingly, where a company’s confidential documents are taken by an ex-employee, and the company wishes to bring an action for breach of confidence, it is important to identify those documents which are being relied upon for a wrongful gain claim, and those which are used to support a wrongful loss claim. 

 

All circumstances are relevant in determining if ex-employee’s conscience affected 

 

The Court also made clear that in a wrongful loss claim, even if the defendant ex-employees established that they had not misused the confidential information in question, it does not necessarily follow that their conscience was unaffected ⁴. Having regard to all the circumstances, their conscience were still affected as they had received and accessed the information without the claimant’s knowledge and approval, in breach of their employment agreements, and in furtherance of a conspiracy to cause loss to the claimant. 

​

Ultimately, the claims of breach of confidence succeeded.

 

Comments

 

Centricore emphasised the importance of clearly delineating documents / information which are subject to the wrongful gain claim on one hand, and the wrongful loss claim on the other. This prevents any double recovery and would determine which party the burden of proof falls on. In a wrongful gain claim, the claimant bears the burden of showing that the defendant’s use caused detriment. In a wrongful loss claim, the burden shifts to the defendant to show that his or her conscience was unaffected.

 

The case also serves as a reminder to employers to implement sufficiently robust safeguards to protect and manage their confidential information. This could encompass contractual, physical and technical safeguards, including implementing systems and processes around access control, and tracking and monitoring any unauthorised taking of company confidential information. If an ex-employee deliberately circumvents these measures to acquire the information without the company’s knowledge or consent, such circumstances may point towards the former’s conscience being affected and will be helpful in establishing a claim for breach of confidence.

 

For queries or more information, please contact:

​​​​