Skip to content
laws.sgby aturio
Grounds publishedDecided 11 Jan 2013
Contents

High Court

Centre for Creative Leadership (CCL) Pte Ltd v Byrne Roger Peter and others

Feedback & support

[2013] SGHC 4Case no. Suit No 25 of 2011/Q

What happened, in plain English

There is no plain-English summary of this judgment yet.

Ask about this judgment

Laws this judgment relies on

Grounds of decision

Official text from eLitigation

  1. Woo Bih Li J:

  2. Introduction

  3. [1] Suit No 25 of 2011 is an action commenced by the Centre for Creative Leadership (CCL) Pte Ltd (“CCL APAC”) against two of its former employees, Roger Peter Byrne (“Mr Byrne”) and Michael Jenkins (“Mr Jenkins”) for breach of a restraint of trade covenant which, in the present case, is a non-compete covenant (“NCC”) in their respective employment agreements with CCL APAC. CCL APAC is also suing Roffey Park Institute Ltd (“Roffey Park”) for inducement of Mr Byrne’s and Mr Jenkins’ breach of the NCC in their employment agreements. In addition, CCL APAC is suing Mr Jenkins for breach of his fiduciary duties if he did inform Mr Byrne that the NCC in his employment agreement was not enforceable. I should add that CCL APAC initially commenced this action against Mr Byrne and Roffey Park only. It then obtained an order on 4 July 2011 in Summons No 2481 of 2011 to join Mr Jenkins as a defendant in the action.

  4. [2] On 23 February 2012, Lee Seiu Kin J heard Registrar’s Appeal No 8 of 2012, which was an appeal against the learned Assistant Registrar’s decision to order bifurcation of the trial in Summons No 5441 of 2011. Lee J ordered a trial of the following preliminary issues of law under O 33 r 2 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“Rules of Court”):

  5. (a) Whether the NCC in Mr Byrne’s and Mr Jenkins’ employment agreements with CCL APAC is enforceable?

  6. (b) Whether CCL APAC’s case of “loss of chance” as pleaded in its Further and Better Particulars of the Statement of Claim served pursuant to a request by the solicitors for Roffey Park dated 31 March 2011 and filed on 14 April 2011, may be struck off? On 11 July 2012, I granted CCL APAC’s application to amend some of the particulars on the loss and damage suffered, including those in respect of loss of chance. The amended particulars were filed on 11 July 2012 (“FNBP of SOC Amendment No 1”). However, the defendants maintain that even on these amended pleadings, CCL APAC’s case on “loss of chance” should still be struck out.

  7. [3] The trial before me concerns the two preliminary issues of law set out at [2] as well as an issue of estoppel, which relates to issue [2(a)], arising from certain alleged representations that I will elaborate on later.

  8. [4] The following witnesses testified on behalf of CCL APAC during the trial:

  9. (a) Paul Draeger (“Mr Draeger”), the Vice-President and Chief Talent Office of Centre for Creative Leadership (“CCL US”), the parent company of CCL APAC;

  10. (b) John R Ryan (“Mr Ryan”), the President of CCL US;

  11. (c) Sureish Devandra Nathan (“Mr Nathan”), CCL APAC’s present Managing Director; and

  12. (d) Jennifer Ruth Maxson Ford (“Ms Ford”), CCL US’ Global Integration Manager who was seconded to CCL APAC from June 2003 to June 2006 to assist Mr Jenkins as Operations-Manager, Singapore in the start-up of CCL APAC’s operations.

  13. CCL APAC also filed an affidavit by Lily Kelly-Radford, who was the Executive Vice-President of CCL US from 1998 to 2008, but as she was unable to testify during the trial, her affidavit was not admitted into evidence.

  14. [5] The witnesses for the defendants were:

  15. (a) The first defendant, Mr Byrne;

  16. (b) The third defendant, Mr Jenkins; and

  17. (c) Shakander Singh s/o Dharam Singh or Shakander Singh Chahal (“Mr Singh”), CCL APAC’s Financial Controller from 5 March 2005 to 30 June 2010.

  18. Background

  19. The parties

  20. [6] CCL APAC is a company incorporated in Singapore in 2003 and is engaged in the business of, inter alia, conducting research, producing publications and providing leadership development and training programmes. CCL APAC is a wholly-owned subsidiary and the Asia-Pacific headquarters of CCL US, a company established in the United States of America (“US”) since 1971.

  21. [7] The CCL organisation (“CCL”) provides the following programmes and services to organisations around the world:

  22. (a) Leadership assessment and diagnostic tools for the purpose of development;

  23. (b) Open-enrolment programmes (ie, public or off-the-shelf programmes) for multiple clients in a single session (“public programmes”);

  24. (c) Customised programmes (ie, programmes tailored to meet specific needs and leadership development objectives of a client) through single or multi-phased sessions (“customised programmes”); and

  25. (d) Coaching.

  26. [8] Mr Jenkins was employed on 1 August 2003 as CCL APAC’s Managing Director to head its operations in Singapore and build awareness of the CCL brand in Singapore. CCL US had previously seconded one of its employees, Dr Meena Wilson (“Dr Wilson”), to assist in the start-up of CCL APAC in Singapore, including overseeing the training of the first cohort of adjunct faculty. After the start-up process was complete, CCL APAC employed Mr Jenkins as Managing Director. He was subsequently promoted to Vice-President of CCL US’ Asia-Pacific business in 2007. Mr Jenkins tendered his resignation from CCL APAC on 12 November 2008. His last day with CCL APAC was 31 March 2009. Mr Nathan joined CCL APAC as its Managing Director on 25 February 2009.

  27. [9] Mr Byrne was initially employed by CCL APAC on a part-time basis as an adjunct faculty and coach in mid-2005. Mr Byrne was later employed full-time as CCL APAC’s Business Development/Conversion Faculty pursuant to an employment agreement between CCL APAC and Mr Byrne dated 31 August 2006. Although Mr Byrne’s formal commencement date for his full-time position with CCL APAC was 11 September 2006, he had apparently started working for CCL APAC about a week before 11 September 2006. His last day with CCL APAC was on 29 May 2009 (according to Mr Byrne) or 1 June 2009 (according to CCL APAC).

  28. [10] The second defendant, Roffey Park, is a registered charity and limited company incorporated in the United Kingdom (“UK”) in 1946. Roffey Park is an educational institute which develops training and research programmes in the fields of leadership and management, personal and organisational development and human resources. Mr Jenkins joined Roffey Park as its Chief Executive Officer on or around 1 April 2009. Roffey Park incorporated a wholly-owned subsidiary in Singapore, Roffey Park Asia Pte Ltd, on 23 July 2010.

  29. [11] After leaving CCL APAC, Mr Byrne also joined Roffey Park pursuant to an agreement signed on 1 August 2009 (enclosed in a letter under Roffey Park’s letterhead dated 1 September 2009 to Mr Byrne). However, it appeared that as early as 26 June 2009, Mr Byrne held himself out as a prospective representative of Roffey Park (see below, at [79]). At the time CCL APAC commenced this suit, Mr Byrne was a director of Roffey Park, and was Roffey Park’s representative in Singapore and/or Asia Pacific. He left Roffey Park around October 2011.

  30. Mr Jenkins’ and Mr Byrne’s role in CCL APAC

  31. Mr Jenkins

  32. [12] According to Mr Draeger, Mr Jenkins was responsible for creating the business strategy and operational plans to build CCL APAC’s operations and building a team of staff to operate the business. Given the size of CCL APAC when he was employed, Mr Jenkins was also expected to take an active role in business development, by sourcing (whether individually or with a team) for business and client prospects, following up on “leads”, performing needs analysis for clients, collaborating with CCL APAC’s faculty to design programmes to meet those needs, developing a pricing scheme for programmes and developing additional opportunities for ongoing engagement with CCL APAC’s clients.

  33. [13] Mr Jenkins, on the other hand, stated that his role as Managing Director did not include having direct contact with “[CCL APAC’s] clients for the purpose of any functional tendering process or any programme-related planning, administration or delivery”. Mr Jenkins also stated that he seldom met clients or potential clients unless it was to support CCL APAC’s marketing efforts, such as meeting and greeting participants at CCL APAC’s public relations events or hosting clients at CCL APAC’s offices. He was primarily responsible for building up the CCL brand and generating awareness of leadership education in the Asia-Pacific region. He made high-level decisions about CCL APAC’s strategy in consultation with CCL US and led the public relations effort for CCL APAC. In relation to business development, he would discuss and develop CCL APAC’s business strategy with the faculty, business development, finance and support administration staff.

  34. Mr Byrne

  35. [14] According to CCL APAC, Mr Byrne was responsible for driving CCL APAC’s business development and training programmes in the Asia-Pacific region, managing client relations for CCL APAC, consulting with CCL APAC’s clients on their leadership development needs and collaborating with CCL APAC’s faculty to design programmes to meet those needs. Mr Byrne was also responsible for determining the pricing of CCL APAC’s programmes, responding to customers, facilitating and/or conducting public leadership development and training programmes, and conducting marketing seminars and workshops where CCL APAC’s research material would be shared with its clients or potential clients.

  36. [15] Mr Byrne, on the other hand, stated that his role as Business Development/Conversion Faculty was to “close new business, rather than to seek it”. He assisted Carolyn Chan (“Ms Chan”), Director of Business Development at CCL APAC, with technical discussions on programme design in relation to customised programmes. Ms Chan, Maria Chow (“Ms Chow”), Dr Luke Novelli (“Dr Novelli”) and Mr Singh handled the business development aspect in relation to customised programmes, as opposed to public programmes. It is also undisputed that Mr Byrne consulted with CCL APAC’s clients on their leadership development needs and collaborated with CCL APAC’s faculty to design programmes to meet these needs.

  37. [16] As faculty, Mr Byrne would also help to design and develop programme content and teach. Mr Byrne stated that he only assisted the then lead faculty, Dr Novelli, twice in facilitating one of CCL APAC’s public programmes and about once or twice on some customised programmes, but was never the lead facilitator.

  38. The NCC

  39. [17] The NCC in Mr Byrne’s and Mr Jenkins’ employment agreement with CCL APAC provided that:

  40. [18] Mr Byrne’s and Mr Jenkins’ employment agreement are governed by the laws of Singapore. According to Mr Draeger, the NCC was drafted with the advice from legal counsel in Singapore on its enforceability.

  41. [19] Generally speaking, employees of CCL in the US do not have employment contracts and are not bound by an NCC. Mr Draeger explained that each state in the US has different employment laws such that an NCC may be unenforceable or more difficult to enforce in some states than in others. Furthermore, employees would move across states. Hence CCL decided to adopt the same position for all such employees, ie not to impose any NCC on them. Mr Ryan is the only employee in the US with an NCC but which is worded differently from the NCC applicable to employees of CCL APAC.

  42. [20] There is also no NCC for employees of CCL in Europe. Mr Draeger explained that compensation has to be given for the enforcement of NCC in Europe and it was not vital for CCL to incur that expense just for this purpose.

  43. Programmes for CSC

  44. [21] One of CCL APAC’s main clients in Singapore was the Civil Service College (“CSC”). CCL APAC claimed that Mr Jenkins and Mr Byrne were involved in generating, designing, delivering and/or providing a number of programmes to CSC when they were with CCL APAC (elaborated upon below at [28]).

  45. [22] After Mr Byrne and Mr Jenkins left CCL APAC, CSC continued to run programmes delivered by CCL APAC, including the Senior Management Programme (“SMP”) in 2009. CSC also awarded two additional runs of the Leadership Development Programme (“LDP”) to CCL APAC sometime in late 2009. CCL APAC also ran the 2009 Ministry of Health Holdings Healthcare Family Leadership and Policy Perspectives Programme.

  46. [23] During a meeting in August 2009, CSC informed Mr Jenkins that it intended to offer a new course for middle management officers in 2010, tentatively known as the Essentials in Leadership Programme (“ELP”). Roffey Park decided to develop and design a programme to tender for the ELP and commenced discussions with CSC to learn more about the leadership development requirements which CSC wanted to address through the ELP.

  47. [24] On 17 February 2010, CSC sought tenders for three programs, the ELP which was now renamed to the Management Development Course (“2010 MDC”), the SMP for 2010 (“2010 SMP”) and the Leaders in Administration Programme for 2010 (“2010 LAP”) through the Singapore government’s internet procurement portal, GeBIZ. Four companies, namely, CCL APAC, Roffey Park, Impact International and Oliver Wyman were invited to submit tenders for the three programmes. CCL APAC and Roffey Park submitted bids for all three programmes. The outcome of the bids for the three programmes was that:

  48. (a) CSC awarded the 2010 MDC to Roffey Park;

  49. (b) CSC awarded the 2010 SMP to Impact International; and

  50. (c) CSC did not award the 2010 LAP to any bidder.

  51. Case for CCL APAC

  52. [25] CCL APAC’s case is that the NCC protects against disclosure of confidential information and also protects trade connections generated by its former employees with “Base Clients” as defined in the NCC.

  53. [26] CCL APAC claimed that Mr Byrne and Mr Jenkins had access to trade secrets, confidential or proprietary information and/or intellectual property belonging to CCL APAC and/or CCL US, including but not limited to:

  54. (a) Lists and particulars of CCL APAC’s and CCL US’ customers or prospective customers and the individual contacts of such customers or prospective customers;

  55. (b) Research material, programme designs, assessment instrument and their application, methods of instruction including methods of training programme facilitators, created by CCL APAC or CCL US, forming part of the databases of CCL APAC or CCL US;

  56. (c) Details of CCL APAC’s pricing scheme which differ for various programmes and categories of customers;

  57. (d) Details of CCL APAC’s agreements with its customers, including the negotiations leading up to the final agreement and the contract price of the agreement;

  58. (e) Confidential information regarding current leadership development requirements, strategies and initiatives of CCL APAC’s clients in the Asia-Pacific region;

  59. (f) Details of the customised design of various leadership training and development programmes specifically created for each of CCL APAC’s clients in the Asia-Pacific region;

  60. (g) Information as to the reasons for the success (or lack thereof) of each of CCL APAC’s programmes;

  61. (h) CCL APAC’s client relationship management data systems, which contain information on, inter alia, the preferences of CCL APAC’s clients and potential clients; and

  62. (i) Information about CCL APAC’s business strategy and growth plans.

  63. [27] CCL APAC pleaded that it had provided the SMP to CSC from 2007 to 2009. CCL APAC also participated in the Leaders in Administration Programme (“LAP”) in 2008 and assisted CSC in 2009 in generating and designing the LAP (following from the findings of the “Lessons of Experience” research project jointly undertaken by CCL APAC and CSC in 2007 and 2008). CCL APAC also pleaded that the Management Development Course (“the MDC”) was similar to or a derivation from a programme (that was eventually named the LDP) in its objectives and participant profile, being high potential officers in their late 20s to mid-30s with middle management or supervisory experience. The MDC was also competitive with the public Leadership Development Programme (“Public LDP”) which CCL APAC provided to other clients within the Singapore government including but not limited to the Ministry of Trade and Industry. The participants in the Public LDP and MDC were similar, being high potential officers presently holding Senior Assistant Director/Deputy Director or equivalent responsibilities in various public sector agencies, and both programmes had similar objectives.

  64. [28] CCL APAC claimed that Mr Byrne and Mr Jenkins generated, designed, delivered and/or provided to CSC programmes that were competitive with its own programmes for the 2010 SMP, 2010 LAP and the 2010 MDC. It claimed the following:

  65. (a) In relation to the SMP:

  66. (i) Mr Byrne was involved in the generation, design, delivery and/or provision of the SMP in 2008 and 2009 to CSC. Mr Byrne was CCL APAC’s main contact with CSC, and led discussions with CSC in 2008 on continuing the run of the SMP provided to CSC in 2007 and modifications that should be made to the SMP for 2008. Mr Byrne worked with CSC to put together a team within CCL APAC which would best suit CSC’s objectives;

  67. (ii) Mr Bryne continued to be CCL APAC’s main contact with CSC for the provision of the SMP to CSC in 2009, including explaining the pricing of CCL APAC’s proposal for the SMP in 2009, prior to the termination of his employment with CCL APAC. Mr Byrne also put together a team within CCL APAC which would best suit CSC’s objectives.

  68. (iii) Mr Jenkins built and maintained client relations with CSC and marketed CCL APAC’s programmes, including the SMP to CSC.

  69. (b) In relation to the LAP:

  70. (i) Mr Byrne and Mr Jenkins were involved in CCL APAC’s presentation of the findings of the “Lessons of Experience” research in the LAP conducted in 2008.

  71. (ii) Mr Byrne had also assisted in the research and presentation of the findings of the “Lessons of Experience” research in 2009. He put together a team to meet CSC’s needs in this regard and was part of the team that initiated CCL APAC’s draft design for the LAP in 2009.

  72. (iii) Mr Jenkins also co-presented the findings of the “Lessons of Experience” research with Dr Wilson, CCL APAC’s then Director for Research.

  73. (c) In relation to the MDC:

  74. (i) Mr Byrne had assisted in generating, designing, delivering and/or providing the LDP to CSC for 2008 and 2009. Mr Byrne attended a briefing conducted by CSC on the LDP in April 2008 and assisted in the design of CCL APAC’s proposal for the LDP. Mr Byrne also explained the structure and pricing of CCL APAC’s proposal for the LDP for 2008 to CSC. Mr Byrne was involved in a similar capacity for CCL APAC’s tender for the LDP for 2009.

  75. (ii) Mr Byrne was also involved in generating, designing, delivering and/or providing the LDP in 2008 and 2009.

  76. (iii) Mr Jenkins was involved in generating, designing, delivering and/or providing the LDP from 2008 to 31 March 2009. Mr Jenkins built and maintained client relations with CSC and marketed programmes including the LDP to CSC. Mr Jenkins also attended meetings to discuss the design and CCL APC’s provision of the LDP for 2008 to CSC.

  77. (iv) Mr Jenkins was involved in generating, designing, delivering and/or providing the Public LDP from 2007 to 31 March 2009. Mr Jenkins built and maintained relations with parties to whom CCL APAC provided, was providing and/or intended to provide the Public LDP and marketed programmes including the Public LDP to CSC from 2007 to 31 March 2009.

  78. [29] CCL APAC pleaded that Mr Byrne and Mr Jenkins breached the NCC because during the period of contractual restraint, they solicited, attempted to solicit or assisted in soliciting, on Roffey Park’s behalf, the delivery of programmes or services which were competitive with those which they had respectively generated, designed, delivered or provided on behalf of CCL APAC to Base Clients, including CSC.

  79. [30] CCL APAC claimed that it suffered loss as a result of Mr Byrne’s and Mr Jenkins’ breaches of the NCC. The particulars of CCL APAC’s loss will be set out at Issue 3 (see below, at [173]).

  80. Case for Mr Byrne

  81. [31] Mr Byrne disputed that some of the information set out at [26] was confidential information. In particular, he alleged that:

  82. (a) He had general access similar to all CCL APAC employees to the lists and particulars of CCL APAC’s and CCL US’ customers or prospective customers.

  83. (b) CCL APAC’s research materials were freely accessible by the public. CCL APAC’s assessment instruments and their application and methods of instructions were not unique to CCL APAC.

  84. (c) CCL APAC’s pricing scheme was available to and accessible by all CCL APAC staff.

  85. (d) The details of CCL APAC’s agreements with its customers, negotiations, final agreement and contract price were commonly available to and accessible by all senior managers and business development staff of CCL APAC. Contract pricing was derived using a commonly available and pre-determined pricing structure proportional to publicly published prices.

  86. (e) It was common for clients and potential clients to talk to potential providers about their leadership development requirements.

  87. (f) Mr Byrne only had details of “high level designs as shown in proposals” which were freely available to all employees. The details of customised designs for the various programmes were generated, designed and delivered by the specific programme designers and facilitators.

  88. (g) Information on the success (or lack thereof) of CCL APAC’s programmes was openly shared by CCL APAC staff with each other.

  89. (h) Mr Byrne was not aware of any client relationship management data system of CCL APAC.

  90. (i) Information on CCL APAC’s business strategy and growth plans was openly shared by CCL APAC’s staff with each other.

  91. [32] In relation to the programmes that CCL APAC alleged were competitive with those that Mr Byrne had generated, designed, delivered and/or provided to CSC during his employment with CCL APAC:

  92. (a) Mr Byrne denied his alleged involvement in the SMP for 2008 and 2009. Mr Byrne claimed that the SMP was designed and developed by other staff of CCL APAC.

  93. (b) Mr Byrne denied his alleged involvement in the LAP for 2009 and the “Lessons for Experience” research. Mr Byrne claimed that CCL APAC did not assist CSC in generating, designing or delivering the LAP for 2009. Dr Wilson presented the findings of the “Lessons for Experience” research in October 2008. He was not involved in generating, designing or delivering this presentation.

  94. (c) Mr Byrne denied his alleged involvement in the LDP and the Public LDP but also pleaded that the MDC was not similar or a derivative from the LDP provided to CSC in 2008, 2009 and 2010, or the Public LDP that he delivered in 2008 and 2009.

  95. [33] Mr Byrne pleaded that the NCC was unenforceable as against him as it was too vague in the scope of activities that he was prohibited from engaging in, and its duration was longer and its geographical area of coverage was wider than reasonably necessary for the protection of CCL APAC’s legitimate interests.

  96. [34] Mr Byrne also pleaded that CCL APAC was estopped from enforcing the NCC. Shortly before he signed his employment agreement with CCL APAC in September 2006, Mr Jenkins, who was then CCL APAC’s Vice-President, told him that the NCC:

  97. (a) was not enforceable,

  98. (b) was just there to deter people, and

  99. (c) was not deemed to be enforceable even in the US

  100. (a) (“the Three Representations”).

  101. Mr Jenkins also told him that he was not the only employee of CCL APAC who had raised this concern and received this information. Mr Jenkins also told him that according to Mr Draeger, “the NCC was unenforceable and intended as a deterrent” and that rather than CCL APAC removing the NCC, Mr Jenkins “should simply reassure potential employees not to worry about it”. Mr Byrne acted in reliance on Mr Jenkins’ representation and signed his employment agreement.

  102. Case for Mr Jenkins and Roffey Park

  103. [35] As Roffey Park’s defence in relation to the issues before me is generally similar to Mr Jenkins’ defence, I will focus on Mr Jenkins’ pleadings.

  104. [36] Mr Jenkins admitted that he had access to the information listed at [26(a)], [26(c)]–[26(f)] and [26(i)] but denied that the information was confidential information or constituted trade secrets. Mr Jenkins did not admit that the information in [26(b)] and [26(g)] was confidential. In relation to [26(f)], he claimed that he did not generate, design or deliver the programmes. He denied that he had access to the information at [26(h)] and that this information was confidential or constituted a trade secret.

  105. [37] In relation to the programmes that CCL APAC alleged were competitive with those that he had generated, designed, delivered or provided to CSC during his employment with CCL APAC:

  106. (a) Mr Jenkins denied that he generated, designed, delivered or provided the SMP.

  107. (b) In relation to the LAP, Mr Jenkins denied that CCL APAC generated or designed the LAP. CSC requested that Dr Wilson present the findings of the “Lessons of Experience” research, and Mr Jenkins was involved in the presentation only because Dr Wilson’s intended co-presenter could not attend.

  108. (c) Mr Jenkins denied that he generated, designed, delivered or provided the LDP. The LDP had different objectives and content and different target audiences from the MDC.

  109. (d) Mr Jenkins denied that he generated, designed, delivered or provided the Public LDP. In addition, the MDC was an in-house programme that was not competitive with the Public LDP.

  110. [38] Mr Jenkins pleaded that the NCC was in restraint of trade and void. The NCC was too vague in the scope of activities that he was prohibited from engaging in and the duration and scope of geographical area in the NCC was wider than reasonably necessary for the protection of CCL APAC’s legitimate interest.

  111. [39] Both Roffey Park and Mr Jenkins pleaded that in any case CCL APAC was estopped from enforcing the NCC as against Mr Byrne (but not Mr Jenkins) because Mr Draeger had informed Mr Jenkins of the Three Representations. Mr Jenkins had in turn passed this information to Mr Byrne who relied on the information before signing his employment agreement which contained the NCC. The defendants were relying on promissory estoppel.

  112. [40] Mr Jenkins denied that any loss was caused to CCL APAC as a result of the alleged breach of the NCC. He claimed that CSC must have considered various factors in deciding to award the tender for the MDC programme to Roffey Park, including but not limited to:

  113. (a) CSC’s own impression of Roffey Park, made through their evaluation visit to the UK in August 2009;

  114. (b) The merits of the proposals through CSC’s normal evaluation and tender process;

  115. (c) CCL APAC’s performance in delivering programmes to CSC, including the LAP, the SMP and the LDP in 2008 to 2009; and

  116. (d) CCL APAC’s working relationship with CSC in 2009, especially after Mr Byrne departed.

  117. Issues before this court

  118. [41] There are three issues before me.

  119. [42] The first issue (“Issue 1”) is whether the NCC is enforceable, and in answering this issue, it must be determined whether:

  120. (a) CCL APAC had a legitimate interest to protect by the NCC;

  121. (b) the NCC was reasonable with reference to the parties’ interests; and

  122. (c) the NCC was reasonable with reference to the public interest (Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart [2012] 4 SLR 308 (“Smile CA”) at [19]).

  123. All three questions must be answered in the positive for CCL APAC to succeed on Issue 1 (Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart [2012] 1 SLR 847 (“Smile HC”) at [67]).

  124. [43] The second issue (“Issue 2”) is whether CCL APAC is estopped from relying on the NCC as against Mr Byrne. It must be determined whether:

  125. (a) there was a clear and unequivocal representation to Mr Byrne by CCL APAC’s agent (Mr Jenkins in this case) that the NCC was unenforceable;

  126. (b) Mr Byrne acted in reliance on this representation; and

  127. (c) Mr Byrne suffered detriment, or whether it would be inequitable for CCL APAC to go back on its representation.

  128. [44] Although Mr Jenkins was not relying on estoppel to argue that the NCC in his employment agreement was unenforceable against him, the issue as to whether Mr Jenkins made the Three Representations to Mr Byrne is relevant to the issue of whether Mr Jenkins breached his fiduciary duties to CCL APAC. CCL APAC denied that Mr Draeger made the Three Representations to Mr Jenkins, and pleaded that if Mr Jenkins had made the Three Representations to Mr Byrne, he would have breached his fiduciary duties to CCL APAC.

  129. [45] The third issue (“Issue 3”) is whether CCL APAC’s case on loss of chance as pleaded in the FNBP of SOC Amendment No 1 (and set out below at [173]) should be struck out.

  130. Issue 1: Whether the NCC is enforceable?

  131. [46] The applicable principles on the validity of restraint of trade covenants have been canvassed in the Singapore Court of Appeal case of Man Financial (S) Ptd Ltd (formerly known as E D & F Man International (S) Pte Ltd) v Wong Bark Chuan David [2008] 1 SLR(R) 663 (“Man Financial”), and will be stated briefly in my judgment. All restraint of trade covenants are prima facie void (Man Financial at [69] affirming Thorsten Nordenfelt (pauper) v The Maxim Nordenfelt Guns and Ammunition Company, Limited [1894] AC 535 at 565; Smile HC at [66]). However, they may be upheld if the restriction (on trade) is reasonable, ie, with reference to the interests of the parties concerned and reasonable in reference to the interests of the public. These two aspects of reasonableness are distinct (Man Financial at [77]; CLAAS Medical Centre Pte Ltd v Ng Boon Ching [2010] 2 SLR 386 at [44]).

  132. Whether CCL APAC had any legitimate interest to protect

  133. [47] It is established that there cannot be a bare and blatant restriction of the freedom to trade. There must always be a legitimate proprietary interest, over and above the mere protection of the employer from competition. The restrictive covenant must not go further than what is necessary to protect the interest concerned (Man Financial at [79]).

  134. [48] Mr Andre Maniam, SC (“Mr Maniam”), counsel for CCL APAC, took the point that the defences did not allege that CCL APAC had no legitimate interest to protect by way of the NCC. Instead, the defendants alleged that the NCC was too vague, and its duration and geographical scope were wider than reasonably necessary to protect CCL APAC’s legitimate interests. Accordingly, Mr Maniam submitted that it was not open to the defendants to allege that CCL APAC had no legitimate interest to protect.

  135. [49] I am of the view that this is a valid submission and, for that reason alone, the defendants were not entitled to make that allegation. Nevertheless, in case I am wrong and as some time was spent on this allegation at trial and in submissions, I will deal with it in my judgment.

  136. [50] I would also mention that the defendants sought to rely on the fact that CCL US’ employees in other jurisdictions, generally speaking, were not bound by any NCC. The defendants’ case was that this showed that CCL US did not have a legitimate interest to protect and neither did CCL APAC. It would also be unfair to hold employees of CCL APAC to the NCC especially when there were instances of employees from CCL US coming to work in Singapore on an ad hoc or temporary basis and the latter were not bound by any NCC.

  137. [51] I am of the view that this argument does not carry much weight. Mr Draeger had explained why employees of CCL US in other jurisdictions did not have such a provision. His explanation was not challenged. The absence of an NCC for such employees was not necessarily because of an absence of a legitimate interest to protect which would be protected under Singapore law.

  138. [52] Mr Tan Chau Yee (“Mr Tan”), counsel for Mr Byrne, argued that the NCC was too wide because it was found in the employment agreements of all employees of CCL APAC (except for a few in which the NCC was apparently inadvertently left out). He relied on Hanover Insurance Brokers Ltd v Schapiro (1994) IRLR 82 (“Hanover”) at [15], which was cited with approval in Man Financial at [106].

  139. [53] I agree with Mr Maniam that Mr Tan had misapplied Hanover. The passage which Mr Tan was relying on was in respect of a covenant against soliciting or poaching of any employee of the former employer irrespective of expertise or juniority. It was in that context that Dillon LJ in Hanover suggested that the covenant was too wide. It was in a similar context that Man Financial cited Hanover with approval.

  140. [54] I am of the view that if CCL APAC has a legitimate interest to protect vis-à-vis Mr Jenkins and Mr Byrne, this does not change just because it might not have a legitimate interest to protect vis-a-vis employees who are more junior than those two men.

  141. [55] There are generally two main interests which have been identified by courts as meriting protection in the context of covenants in restraint of trade: trade secrets and trade connection (Man Financial at [81]). The court will construe the contractual wording of the restraint of trade covenant and the surrounding circumstances to ascertain the interest intended to be protected (Buckman Laboratories (Asia) Pte Ltd v Lee Wei Hoong [1999] 1 SLR(R) 205 at [22]).

  142. Trade connection

  143. (1) The law

  144. [56] It is well-established that the employee must have personal knowledge of (and influence over) the customers of the employer for the employer to claim that an NCC is necessary to protect trade connection (see Man Financial at [93] and Smile HC at [75]; Herbert Morris, Limited v Saxelby [1916] 1 AC 688 at 709).

  145. [57] While the extent of the knowledge of, and influence over the customer is a relevant fact, knowledge is immaterial unless it can and is likely to be leveraged in some way by the employee to gain some degree of influence (see Smile HC at [75]; S W Strange Ltd v Mann [1965] 1 WLR 629 at 641).

  146. [58] Apart from knowledge of the employer’s customers, there are several other factors which are relevant to the issue of influence (see also the endorsement in Smile HC (at [76]) of Arthur Murray Dance Studios of Cleveland, Inc v Witter (1952) 105 NE 2d 685 where Hooper J identified two such factors: (a) “employer’s hold” (or “institutional hold”); and (b) customer inconvenience). J D Heydon in The Restraint of Trade Doctrine (Butterworths, 2nd Ed, 1999) (“Heydon”) at pp 93 and 96 also identified several factors which are relevant to the question of influence: (a) the frequency of contact; (b) the place where contacts are made; (c) the seniority of the employee; (d) the nature of the employee's relationship with the customers; and (e) the nature of the goods and services provided. Heydon also noted at p 92 that:

  147. [59] In some cases, however, the courts have upheld covenants prohibiting the employee from soliciting customers of the employers despite the fact that the employee never had personal knowledge of these customers. In Gilford Motor Company, Limited v Horne [1933] Ch 935 (“Gilford”), the former managing director was connected to the company from its incorporation and found to be of “primary importance in the business that was carried on by the company” (Gilford at 938 and 952). His contract contained a covenant prohibiting him from soliciting persons who were customers of the company or in the habit of dealing with the company during his employment at any time after termination of his employment and engaging in a business similar to that of the company for a period of five years within a 3-mile radius from any premises where the business of the company was carried on. He subsequently set up a business and solicited persons who were customers of the company during his employment with the company. Farwell J was of the opinion that the covenant was too wide to be enforceable because it extended to customers with whom the defendant had no contact at all, including persons who came from time to time to the company to purchase goods. On appeal, the Chancery Division disagreed with Farwell J. Lord Hanworth MR held at 959–960 that:

  148. [60] Gilford was distinguished by the English Court of Appeal in M & S Drapers (a Firm) v Reynolds [1957] 1 WLR 9 (“M & S Drapers”) in relation to a covenant restraining a collector and salesman from soliciting persons inscribed in his employer’s books as customers. The employer in M & S Drapers sought to rely on Gilford but Hodson LJ held in M & S Drapers at 13 that:

  149. Lord Denning LJ agreed with Hodson LJ’s treatment of Gilford (see M & S Drapers at 19).

  150. [61] In Spink (Bournemouth), Limited v Spink [1936] 1 Ch 544 (“Spink”), the court upheld a covenant restraining a former director from carrying on the business of the company for five years within a ten-mile radius. The director was in fact the founding partner of the business who was subsequently appointed as permanent director (together with his brother, another founding partner) and joint-manager with his brother.

  151. [62] In my view, Gilford, M & S Drapers and Spink do not stand for the general proposition that the employee’s seniority in the company or the fact that an employee held a directorship position is determinative of the enforceability of a restraint of trade covenant. This is especially if the employee never had any contact with customers. The courts in Gilford and Spink, in arriving at their decision, could have been influenced by the fact that the former directors in those cases were with the company since incorporation and customers could thus “regard the employees as the business to the exclusion of the employer” (Heydon at p 92).

  152. [63] In relation to sales representatives, it appears that the courts are more willing to recognise that such an employee would be able to exercise a certain measure of influence over the employer’s customers (see G W Plowman v Ash [1964] 1 WLR 568; Mills v Dunham [1891] 1 Ch 576 (“Mills”); Heydon at pp 94–95).

  153. (2) Legitimate interest in relation to Mr Jenkins

  154. [64] Ms Indranee Rajah, SC (“Ms Rajah”), counsel for Roffey Park and Mr Jenkins, submitted that Mr Jenkins’ duties and responsibilities did not “engender the degree of client relationships that would require protection by a restrictive covenant”.

  155. [65] As stated at [13], Mr Jenkins’ evidence was that he did not have frequent and close contact with clients. When CCL APAC first established a relationship with a potential client, he would meet the potential client together with a senior faculty member to introduce the CCL brand and its philosophy of leadership training. An assigned faculty member would then conduct the subsequent design and feedback meetings with clients, and design and deliver the programmes. Mr Jenkins would not be involved in those meetings. Mr Jenkins would also meet and speak with clients at events and functions as CCL APAC’s Managing Director and help to co-host occasional half-day or one-day gatherings (or “taster events”) which were meant to provide potential clients with a snapshot of CCL’s research and methodology.

  156. [66] Mr Jenkins also stated that the CCL APAC’s clients “identify [CCL APAC] with its stable of faculty, programmes and reputation, not with the Managing Director”. According to him, the faculty have the most personal contact with the clients and their employees. Clients want faculty with established reputation or who have published relevant research to design and deliver their programmes. Ms Rajah also submitted that CCL APAC’s clients take into account other factors in awarding tenders including:

  157. (a) the reputation of the organisation;

  158. (b) what the clients have been provided with and the willingness of the vendor to devote its resources towards meeting the client’s needs and customising programmes;

  159. (c) the representative of the organisation; and

  160. (d) the quality of the faculty.

  161. [67] Mr Jenkins also emphasised that CCL APAC had an “institutional relationship” with its clients, and as long as the programmes continued to be relevant and useful to the clients, CCL APAC would not lose its clients even if there were personnel changes in CCL APAC. In addition, CCL APAC’s structure militated against a single employee being able to develop and leverage on a client relationship so as to take the client with him or her post-employment. Mr Jenkins also stated that for institutional clients, such as government entities, tender processes are carefully monitored and have rigorous controls to prevent any influence by specific individuals. The selection panel would consist of senior members of the client’s management who would seldom be the same persons who met CCL APAC’s representatives to discuss their leadership development needs.

  162. [68] While I accept that the content of the programme and quality of the faculty are important to CCL APAC’s clients, I am not inclined to find that there was no trade connection which would constitute a legitimate interest that CCL APAC would want to protect by the NCC vis-à-vis Mr Jenkins.

  163. [69] An important factor in this case was that Mr Jenkins was the founding director of CCL APAC who was responsible for building awareness of the CCL brand in Singapore from its early years. Prior to Mr Byrne being hired on a full-time basis from August/September 2006, CCL APAC’s business development team only had Ms Chan (who was employed in 2004) and Jane Koo (who was employed in 2006) to assist in business development. I accept that Mr Jenkins would have had to handle a significant amount of business development, especially before Ms Chan, Mr Byrne and Jane Koo were employed by CCL APAC, and his role would have involved establishing long-term business relationships with clients.

  164. [70] Mr Draeger stated that when Mr Jenkins was first employed by CCL APAC, given the size of CCL APAC at that time, Mr Jenkins would have had to do a significant amount of “client-facing”. Mr Jenkins also agreed, during cross-examination, that he made a “big contribution” in the business development of CCL APAC in helping to land significant contracts. Given the relationships that Mr Jenkins would have developed, CCL APAC had an interest in ensuring that Mr Jenkins did not take these relationships to a competitor.

  165. [71] While I accept that CCL APAC enjoys an institutional relationship with its clients and that multiple stakeholders were engaged with the clients, I am of the view that these facts do not mean that Mr Jenkins has no trade connection for CCL APAC to protect.

  166. [72] I conclude that Mr Jenkins would be able to and did acquire personal knowledge and did exercise some degree of influence over CCL APAC’s clients that was enough to constitute a legitimate interest for the NCC to protect.

  167. (3) Existence of legitimate interest in relation to Mr Byrne

  168. [73] I also conclude that notwithstanding CCL APAC’s institutional relationship with clients and the use of multiple stakeholders, CCL APAC had a legitimate interest in protecting trade connection by imposing the NCC on Mr Byrne.

  169. [74] As Mr Nathan explained, a Business Development Director (“BDD”) such as Mr Byrne is the “main contact point” for the client and manages the client’s relationship with CCL APAC. He explained that the BDD would first understand the client’s needs for a leadership development initiative through open tender briefing or phone call or meeting with the client. The BDD would then consult a faculty member on how the client’s needs could be addressed. The faculty would then prepare a proposal which the BDD would integrate into his proposal for the client detailing the client’s needs and objectives, proposed solutions and terms and conditions. There would be follow-up sessions with the client in relation to the proposal, attended by the BDD with or without faculty members to clarify the client’s needs. If the client accepts the proposal, the BDD would then finalise the design of the programme with an assigned faculty. These activities would involve close contact and interaction with clients that would enable trade connection to be generated on CCL APAC’s behalf.

  170. [75] Mr Tan argued that although Mr Byrne interacted with CCL APAC’s clients, these interactions did not involve “extensive and highly personal information”. Mr Tan also argued that CCL APAC’s clients chose their service provider based on the quality of products offered and not their relationship with CCL APAC’s employees. In addition, the choice of service provider is made by members of the client’s senior management and not the client’s representative who would have interacted with CCL APAC’s employees.

  171. [76] Mr Byrne also emphasised that the faculty member designated to work on CCL APAC’s proposals for the specific client is involved in the follow-up meetings and conference calls with the client. Clients frequently requested to communicate with the faculty member at an early stage to ensure that they were comfortable with the choice of faculty. However, this does not mean that Mr Byrne did not play an important role in developing relationships with CCL APAC’s clients. Mr Draeger stated that while the assigned faculty member would be able to provide analysis and insight on programmes, the BDD is responsible for all other aspects of the relationship including addressing clients’ queries.

  172. [77] I conclude that Mr Byrne did acquire personal knowledge and influence over CCL APAC’s clients given the nature of his role in CCL APAC.

  173. [78] In an email dated 22 July 2008 to Mr Jenkins and Ms Sabine van Craen, another CCL APAC staff, Mr Byrne himself described his business development role as “highly consultative” and “one of long term engagement for which personal and product credibility are paramount”.

  174. [79] The evidence also reveals that Mr Byrne had established a close and positive relationship with CSC. Mr Byrne sent an email dated 1 June 2009 to Paul Lim, a representative of CSC who worked with Mr Byrne to develop CCL APAC’s programmes for CSC, copied to other personnel from CSC. Mr Byrne informed them in this email that he was leaving CCL APAC, and that this was “all the more regretful given the sheer breadth and depth of my engagements with you all and the huge opportunities for the future”. In another email from Mr Byrne to Mr Jenkins dated 26 June 2009, with the subject “Re Paul and CSC”, Mr Byrne recounted his conversation with Paul Lim and stated that Paul Lim was “genuinely pleased that I will represent Roffey Park”. He also stated:

  175. [80] Mr Byrne was also in a position to acquire personal knowledge of CSC’s preferences in terms of programme requirements. In an email dated 18 February 2010 from Mr Byrne to Laura McLellan-Crew (who was in Roffey Park’s administration) and Sharon Brockway (a consultant or facilitator at Roffey Park), Mr Byrne stated:

  176. Trade secrets and confidential information

  177. [81] CCL APAC claimed that the NCC also prevents disclosure of its confidential information. It did not suggest that the NCC was intended to protect its trade secrets.

  178. [82] The law recognises that employers have a legitimate interest in protecting trade secrets through restraint of trade covenants. Cross J in Printers & Finishers Ltd v Holloway and Others [1965] 1 WLR 1 at 5 defined trade secrets as information which “can fairly be regarded as a separate part of the employee’s stock of knowledge which a man of ordinary honesty and intelligence would recognise to be the property of his old employer and not his own to do as he likes with”. Trade secrets are not the same as confidential information. The learned authors of Illegality and Public Policy (Thomson Reuters (Legal) Limited, 2nd Ed, 2009) at para 12.05 explained that confidential information may include, for example, documentation on proposed commercial developments while trade secrets are confined to “more technical matters”.

  179. [83] In determining whether information constitutes a trade secret or its equivalent, the Court of Appeal in Man Financial at [83] affirmed the guidelines set out in Faccenda Chicken Ltd v Fowler [1987] Ch 117 (“Faccenda Chicken”) at 137–138.

  180. [84] It is crucial that the trade secret or confidential information sought to be protected is separable from publicly available information, the employee’s skills and experience and general practice of the trade (see Heydon at p 76; Man Financial at [84]). It has been said that business methods and practices may not constitute trade secrets, but may be considered confidential information. Information can be recognised as confidential or amount to a trade secret even if it is a result of the employer’s effort on materials available to the public “[by] the fact that the maker... has used his brains and thus produced a result which can only be produced by somebody who goes through the process” (see Heydon at p 72 citing Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1963] 3 All ER 413).

  181. [85] Some controversy has arisen as to whether confidential information which does not constitute a trade secret can be protected by a restraint of trade covenant post-employment. The English Court of Appeal in Faccenda Chicken held (at 136–137) that “sales information” including customer lists, requirements of customers, prices charged to them and dates of delivery constituted confidential information (not amounting to a trade secret) which could not be disclosed or used by the employee during his employment, but could be disclosed or used after the contract of employment was terminated. The Singapore Court of Appeal in Man Financial at [86] noted that the courts in subsequent cases have cast doubt on these views in Faccenda Chicken and observed (at [86]) that:

  182. [86] For present purposes, I will assume that the NCC may be used to protect an employer’s confidential information. However, there is another clause in Mr Jenkins’ and Mr Byrne’s employment agreements that protects CCL APAC’s confidential information (“Confidentiality Clause”). I set out the clause in Mr Byrne’s employment agreement from which Mr Jenkins’ does not materially differ:

  183. [87] The Court of Appeal has affirmed in Man Financial at [92] and Stratech Systems Ltd v Nyam Chiu Shin (alias Yan Qiuxin) and others [2005] 2 SLR(R) 579 (“Stratech”) at [48]–[49] that where there is another clause in the employment agreement that pertains to the protection of confidential information or trade secrets, the employer has to show that an NCC protects a legitimate proprietary interest “over and above the protection of confidential information or trade secrets” [emphasis in original] (Man Financial at [92]).

  184. [88] Mr Maniam sought to dispute this proposition by relying on the case of The Littlewoods Organisation Ltd v Harris [1978] 1 All ER 1026 (“Littlewoods”) which he argued was not considered by the Court of Appeal in Stratech. In Littlewoods, the defendant was a former executive director of the plaintiff company, a giant in the mail order business. The defendant played an important part in the compilation of the mail order catalogues and had access to the pricing policies of the company. He had a provision in his employment contract stating that he could not be directly or indirectly engaged in the business of Great Universal Stores, a competitor of the plaintiff, for twelve months after the termination of his contract. There was apparently also a confidentiality clause in his contract (Littlewoods at 1043). The defendant resigned from the plaintiff and joined Great Universal Stores. Lord Denning MR, who was in the majority, held that this clause protected a legitimate interest of the plaintiff, being confidential information (Littlewoods at 1033):

  185. [89] Littlewoods has been followed in Turner v Commonwealth & British Minerals Ltd [2000] IRLR 114 (“Turner”) and Thomas v Farr plc [2007] ICR 932 (“Thomas”). In both Turner and Thomas, the employee was subject to non-solicitation clauses or non-compete clauses in addition to confidentiality clauses. The courts recognised that covenants restraining competition could protect trade secrets notwithstanding that there was also a confidentiality clause in these contracts. The reasoning in these cases appears to be premised on the argument that confidentiality clauses are difficult to police.

  186. [90] In Turner, Waller LJ held at [18] that:

  187. [91] In Thomas, Toulson LJ (whom Scott Baker LJ and Chadwick LJ agreed with) stated at [41] and [42] of his judgment, that:

  188. [92] The observations in these cases merit consideration by our Court of Appeal. Indeed, one may add that it seems illogical that an employer who does not have the benefit of a confidentiality provision in his employee’s contract of employment has a better chance of establishing confidential information as a legitimate interest to protect under an NCC than an employer who has sought to protect his confidential information by the use of dual provisions (ie, one specifically to preclude disclosure of such information post-employment and the other to restrict the employee from engaging in a competitive business for a certain duration and within a certain geographical scope).

  189. [93] In the meantime, I am bound by the views of our Court of Appeal which would mean that because of the existence of the Confidentiality Clause, CCL APAC would have had to establish some legitimate interest, other than confidential information, to protect by way of the NCC. I have concluded that it has succeeded in establishing this in view of the trade connection interest.

  190. [94] In the circumstances, it is unnecessary for me to elaborate on the various categories of confidential information which CCL APAC had raised to justify the validity of the NCC.

  191. Reasonableness

  192. The law

  193. [95] In ascertaining the reasonableness of a restraint of trade covenant, the court in Mills held at 590 that “where a clause is ambiguous a construction which will make it valid is to be preferred to one which will make it void”.

  194. [96] However, this canon of construction has sometimes been used by courts to arrive at controversial outcomes. In Littlewoods, the covenant which stated, inter alia, that the former executive director shall not, for twelve months after termination of his employment with the plaintiff, “[e]nter into a Contract of Service or other Agreement of a like nature with Great Universal Stores Limited or any company subsidiary thereto...” [emphasis added in italics]. Great Universal Stores Ltd (“Great Universal Stores”) had many companies, of which many had businesses outside the United Kingdom and were not involved in the mail order trade. In considering whether the words “any companies subsidiary thereto” rendered the covenant unenforceable, Megaw LJ held (at 1043) that:

  195. Denning LJ agreed, holding (at 1037) that limiting words should be read into the clause to limit it to the part of the business that the plaintiff was reasonably entitled to protection. Thus the clause was, in Denning LJ’s view, limited to “such part of the business of the [Great Universal Stores] group as operates within the United Kingdom” (Littlewoods at 1037). Browne LJ dissented, holding that the clause clearly prevented the defendant from entering into the service of any subsidiary of Great Universal Stores in any of their manifold activities in any part of the world. Despite Megaw LJ’s view that the interpretation he adopted did not amount to a rewriting of the contract, this view is, with respect, doubtful.

  196. [97] In contrast to the majority in Littlewoods, the High Court of Australia in Butt v Long (1953) 88 CLR 476 (“Butt v Long”) took a more cautious approach in considering whether the contractual wording was indeed ambiguous and deserving of a restrictive interpretation. Dixon CJ in Butt v Long held at 487 that:

  197. Fullagar J also expressed at 490–491 that:

  198. [98] I agree with the approach taken in Butt v Long. As Evershed LJ in Electric Transmission Ltd v Dannenberg (1949) RPC 183 held at 188:

  199. Application

  200. [99] Mr Tan helpfully broke up the NCC in Annex A of his closing submissions which made it easier to read and understand the NCC. Using his Annex A as a guide, I set out the NCC as follows:

  201. [100] In submitting that the NCC was too wide, Ms Rajah compared the NCC with one found in Mr Jenkins’ employment agreement with Roffey Park, specifically, clause 13. Clause 13 had various restrictive covenants but the relevant one was clause 13(2) which stated:

  202. [101] Ms Rajah suggested that clause 13(2) was not as wide as the NCC in the CCL APAC agreement. On the other hand, Mr Maniam argued that the relevant Roffey Park restrictive covenant was wider than the CCL APAC one in some ways. For example, there was no geographical restriction in the former which also restricted any dealing with the relevant client and not just the generation, design, delivery or provision of competitive programmes.

  203. [102] I need only say that a comparison of the two was helpful but was not determinative.

  204. [103] As mentioned at [48] above, the defences alleged only that the NCC was too vague and its duration and geographical scope were too wide. Yet in submissions, Mr Tan and Ms Rajah sought to attack the scope of the NCC in other aspects, for example, the scope of the restricted activity, as well. I am of the view that they were not entitled to raise other aspects of attack but, again, in case I am wrong on this point, I will address the other aspects as well.

  205. [104] After considering the parties’ submissions, I am of the view that the NCC was wider than reasonably necessary to protect CCL APAC’s legitimate interests.

  206. (1) Restricted Duration

  207. [105] Ms Rajah and Mr Tan argued that the duration of the prohibition in the NCC was longer than necessary because CCL APAC had failed to provide any rational or reasonable basis why the duration of the NCC was for one year. However, Ms Rajah and Mr Tan did not actually say what a reasonable duration would have been. Naturally, Mr Jenkins, as Chief Executive Officer of Roffey Park, had to accept, for the time being, that the relevant provision of his employment agreement with Roffey Park (ie, clause 13) was reasonable, thereby suggesting that in his view, six months was a reasonable duration. On the other hand, Mr Jenkins did also accept the NCC in its entirety when he signed his employment agreement with CCL APAC, although that in itself does not preclude him from now asserting that the NCC in his CCL APAC agreement was an unreasonable restraint of trade.

  208. [106] Mr Draeger said that CCL APAC picked a duration between three months and 18 months, the latter duration being considered to be too long to be enforceable.

  209. [107] Mr Ryan said that the one year duration was adopted because the client contracts are usually yearly contracts.

  210. [108] Mr Maniam also relied on Mr Jenkins’ evidence that the amount of time for a tender is between one to four weeks and the award of the contract could be done within six weeks, but in some cases, up to a year. Mr Maniam submitted that since the price in a competitive tender should not be disclosed to competitors, and since a tender process may not be concluded till a year later, such information should remain confidential for more than a year.

  211. [109] Yet, no such reason was given by the witnesses for CCL APAC. Indeed, its price in a competitive tender could be captured by the Confidentiality Clause already and there would be no difficulty establishing that that would be confidential information. Furthermore, from the scanty evidence from CCL APAC, it did not seem that the fear of disclosure of confidential information was the reason for the duration of one year for the NCC.

  212. [110] In so far as Mr Maniam cited cases in which a one-year restraint was upheld, this did not assist CCL APAC much as such cases were fact specific.

  213. [111] From one perspective, a one year restraint might not appear to be too long a restraint. However, the burden was on CCL APAC to persuade the court that this duration was not unreasonable. CCL APAC seemed to have just plucked a figure from the air and that will not do.

  214. [112] In the circumstances, I am of the view that it has not discharged its burden on this point and the duration was unreasonable with reference to the parties’ interests.

  215. (2) Restricted geographical scope

  216. [113] Ms Rajah and Mr Tan also criticised the geographical scope of the NCC as too wide. Mr Draeger confirmed under cross-examination that the NCC prevented a former employee from soliciting business from a client in any city even where CCL APAC or CCL US had no office of its own in that city. For example, if an employee generated a programme for a client in Frankfurt and the client also had an office in Munich, the employee would be prohibited from soliciting the delivery of competitive programmes to the client’s office in Munich even if the employee had never dealt with the client’s Munich office before.

  217. [114] Prima facie, the geographical scope of the NCC seemed too wide. However, Mr Maniam sought to justify its apparent width by the following arguments. In the above example, he suggested that the client contact might move from the client’s Frankfurt office to the client’s Munich office, hence the need to prevent solicitation from any office in any city where the client might be situated. He also submitted that referrals could be made from one office of a client to another office even if the client contact remained in Frankfurt and CCL APAC was entitled to prevent solicitation of that referral in so far as it involves the delivery of competitive programmes.

  218. [115] Significantly, the above arguments were not offered in evidence by any of CCL APAC’s witnesses.

  219. [116] As regards the argument that a client contact might move from one office to another, it is obvious that the contact may also not move within the one year duration after termination of the employee’s service. Secondly, the prohibition was not aimed only at preventing a former employee from contacting the client contact but was much wider than that. It precluded the former employee from attempting to deliver a competitive programme to any other office of the client even if the employee did not seek assistance from his contact. This point also applies to Mr Maniam’s argument that referrals could easily be made by the client contact.

  220. [117] It is also clear that if a former employee had delivered a programme to a client’s Singapore office, he would be precluded within one year post-employment from attempting to deliver a competitive programme to the client’s office in, say, Vladivostok even if there was no intention by CCL APAC or CCL US to deliver a leadership programme to that office at the relevant time. Mr Maniam argued that if CCL APAC and CCL US had no interest in delivering programmes to the client’s office in Vladivostok, a former employee would not be regarded as having offered programmes competitive with CCL APAC’s or CCL US’ business if he did so. I do not find this argument persuasive. As the NCC stood, it precluded a former employee from delivering competitive programmes to the client’s Vladivostok office for the duration of the prohibition, whether or not CCL APAC or CCL US intended to deliver a similar programme there.

  221. [118] In so far as Mr Maniam argued that the geographical scope was not too wide because a client contact in one office may move to another office of the same client or make referrals to another office of the same client, I note that unlike the NCC in Mr Jenkins’ employment agreement with Roffey Park, the NCC in the CCL APAC agreement was not restricted to a client whom the former employee dealt with within a period of one year prior to the termination of his employment. Thus, if the former employee had delivered a programme to a client, say, six years before his termination, the former employee was still precluded from delivering a competitive programme to that client or to any other office which that client had in the world for the relevant duration post employment. This in turn also indirectly suggested that the geographical scope was too wide.

  222. [119] Although Mr Maniam pointed out that (a) the restraint was in respect of competitive programmes only, ie, leadership development programmes, and that this still left an employee with a large range of other endeavours and that (b) the restraint was in respect of Base Clients only, these arguments still did not adequately address the issue about the width of the geographical scope.

  223. [120] Mr Maniam relied on Koops Martin v Dean Reeves [2006] NSWSC 449 (“Koops Martin”) in which the Supreme Court of New South Wales held at [86] that “[w]here a restraint prohibits solicitation of specific customers or classes of customers, no area limitation is generally required”. In my view, this statement by the court in Koops Martin cannot be a matter of general proposition and does not advance the case of CCL APAC much.

  224. [121] In my view, the geographical scope of the NCC was too wide to be reasonable with reference to the parties’ interests.

  225. (3) Restricted activity

  226. [122] CCL APAC’s position, as explained by Mr Draeger during cross-examination, was that the reference to competitive programmes in the NCC meant any “programme targeted at leaders”.

  227. [123] Ms Rajah and Mr Tan criticised the use of the word “competitive” in the NCC. Mr Tan argued that this was in contrast to the FNBP of SOC Amendment No 1 at para 4(b) in which CCL APAC provided particulars to the effect that a programme is competitive where the target participant group and the objectives of the programmes were similar. Both Ms Rajah and Mr Tan argued that CCL APAC’s definition of “competitive” was unreasonably wide as it prevented a former employee who had generated, designed, delivered or provided, say, programme X to a client from generating, designing, delivering or providing another programme, say, programme Y to that client even if CCL APAC did not have a programme Y of their own.

  228. [124] Mr Maniam, on the other hand, submitted that the NCC left open “a large range of endeavour” including “selling any leadership programs/ services which does not compete with those programs / services which Mr Jenkins and Mr Byrne had dealt with whilst in CCL APAC”. Mr Maniam claimed that “leadership development merely forms part of the available talent management / human-resource type work generally” [emphasis in original].

  229. [125] I do not agree with Ms Rajah and Mr Tan that the term “competitive” programmes per se rendered the NCC unreasonably wide with reference to the parties’ interests. The term has to be read in the context of the NCC as a whole, which restricted a former employee from generating, designing, delivering or providing a leadership development programme to Base Clients, and if the persons that former employees were restricted from approaching were not unreasonably wide, the restricted activity per se was not too wide.

  230. (4) Restricted persons

  231. [126] Ms Rajah submitted that the restriction in relation to Base Clients in the NCC was too wide. According to Ms Rajah, the words “generated, designed, delivered or provided programs or other services” were too broad; these words could extend to a situation where an employee had helped to design a programme but did not meet with the client. CCL APAC’s position on the definition of the terms, as explained by Mr Draeger during cross-examination, was that:

  232. (a) “generated” relates to steps taken in the sales and development process, and would include situations where the employee generates interest in CCL APAC’s programmes;

  233. (b) “designed” relates to the process of engaging the client to understand their organisational needs, analysing their needs, assembling a solution and evaluating the implementation of the programme, in the context of customised programmes;

  234. (c) “delivered” relates to the facilitation of learning and development goals; and

  235. (d) “provided” is an encompassing term which includes the process of creating and delivering the programme to the client.

  236. [127] It seems to me that the words “generated” and “designed” were not limited in the way that Mr Draeger described. These words did extend to employees who had no interaction with the client and had been simply instructed on what to include in a proposal for a leadership development programme for a client. Thus, I find that “generated, designed, delivered or provided programs or other services” was wider than necessary to protect CCL APAC’s interests.

  237. [128] Ms Rajah also submitted that the NCC extended not just to CCL APAC’s clients but to CCL US’ clients, and this was unreasonably wide because CCL has clients all over the US and elsewhere in the world. I do not think this criticism is persuasive, given that the prohibition on solicitation of CCL US’ clients was limited to those that Mr Jenkins and Mr Byrne had generated, designed, delivered or provided programmes to.

  238. [129] Ms Rajah also criticised the inclusion of “potential clients” of both CCL APAC and CCL US in the NCC. Ms Rajah argued that a potential client would be someone who was not yet CCL APAC’s client and to whom programmes have not been provided to, and this was wider than necessary to protect CCL APAC’s interests. Mr Maniam, on the other hand, argued that the NCC only extended to clients of CCL APAC and CCL US (whether actual or potential) who Mr Byrne and Mr Jenkins had “‘generated, designed or delivered’ a CCL / CCL APAC program / service to” [emphasis in original].

  239. [130] Although Mr Maniam has a point, I have found that the definition of “Base Client”, and in particular, its extension to clients to whom the employee had generated, designed, delivered or provided programmes or other services, but have no actual interaction with, was unreasonably wide. In addition, as I have alluded to at [118], the NCC prohibited a former employee who delivered a programme to CCL APAC’s or CCL US’ client say, six years before termination, from delivering competitive programmes to that client even if he no longer has (due to, for example, the effluxion of time) personal knowledge and influence over that client. I am thus of the view that the scope of the NCC in relation to restricted persons was too wide to be reasonable with reference to the parties’ interest.

  240. Doctrine of severance

  241. [131] The Court of Appeal in Man Financial at [127] held that the court, in applying the doctrine of severance to a restraint of trade clause, must be able to run a “blue pencil” through the offending words “without altering the meaning of the provision and, of course, without rendering it senseless (whether in a grammatical sense or otherwise)” [emphasis in original]. The court will not rewrite the contract for the parties (Man Financial at [127]).

  242. [132] Mr Maniam submitted that in the context of the NCC, the court may adopt the blue-pencil test to sever reference to CCL US if its inclusion was to give the NCC too wide a scope.

  243. [133] As intimated above, the problem for CCL APAC is much more than that and the blue pencil test would not save the NCC. The NCC is too wide with reference to the parties’ interests for reasons I have stated. It is not necessary for me to consider the public interest. To sever the NCC such as to make it valid would require a rewriting of the contract between the parties.

  244. Issue 2: Is CCL APAC estopped from enforcing the NCC against Mr Byrne?

The judgment continues past this page. Read the rest at eLitigation.