In the case of I-Admin (Singapore) Pte Ltd v Hong Ying Ting and others [2020] SGCA 32 (I-Admin Case), the Singapore Court of Appeal (CA) modified the test for a breach of confidence by finding that an employee could breach their confidentiality obligation where their act caused a wrongful loss in the form of loss of confidentiality of the confidential information, even though the employee did not wrongfully gain from the unauthorised use of the confidential information.
In the case of Priscilla Lim Suk Ling and another v Amber Compounding Pharmacy Pte Ltd and another [2024] SGCA 16 (Lim Case), the CA reiterated the modified approach under the I-Admin Case, but clarified that a plaintiff may not claim for damages for both wrongful loss and wrongful gain for the breach of confidence relating to the same set of documents or information.
In past cases, it has been established that the following 3 elements must be shown for a claim of breach of confidence to succeed:
The question before the CA was whether in a claim of breach of confidence, it was necessary for the plaintiff to show unauthorised use of its materials and resulting detriment.
In answering this question, the CA considered what interests are sought to be protected by an action for breach of confidence, and observed that the owner of the confidential information had 2 interests to protect:
The CA held that existing law does not sufficiently protect the interests of owners of confidential information, as they would be left with no recourse when the confidential information was accessed and/or acquired wrongfully but was unable to show the unauthorised use and disclosure of such information, which led to a disproportionate emphasis on Wrongful Gain Interest over the Wrongful Loss Interest. This lack of protection is highlighted by the ease with which the Wrongful Loss Interest could be breached due to modern technology.
Accordingly, the CA adopted a modified approach whereby once the plaintiff proves that the information was of a confidential nature, and was given with an obligation of confidence or was accessed or acquired without the plaintiff’s knowledge or consent, a rebuttable presumption of breach of confidence arises. The burden of proof then shifts to the defendant, who will have to prove that their conscience was not affected by the loss of confidentiality – for example, because they came across the information by accident, were unaware of its confidential nature or believed that there is a strong public interest in disclosing it. This modified approach will place greater focus on the Wrongful Loss Interest without undermining the protection of the Wrongful Gain Interest.
In the Lim Case, the CA clarified that the Wrongful Loss test in the I-Admin case was intended to address a gap in the law which prevented a plaintiff from obtaining a remedy where a defendant wrongfully acquires or accesses confidential information but does not use or disclose it. Thus, where the defendant is shown to have wrongfully used confidential information to the plaintiff’s detriment, the Wrongful Gain test should be applied instead of the Wrongful Loss test. This is to prevent double recovery and to avoid conflicting burdens of proof on an alleged breach relating to the same set of documents.
That said, it would be possible to apply the Wrongful Gain test in respect of one set of documents or information and to apply the Wrongful Loss test in respect of another set. This is because the determination of whether a breach of confidence occurred is fact-sensitive and specific documents or information would need to be assessed.
The CA also reiterated that the Wrongful Loss test requires that the defendant is an unauthorised taker – that is, the confidential information was acquired without the plaintiff’s knowledge and there is a real and sensible possibility that the defendant will misuse the confidential information.
The CA’s modern approach in the I-Admin Case eases the burden of employers and other owners of confidential information in proving breach of confidence. However, plaintiffs in breach of confidence cases should take care in specifically pleading the basis of their claim – whether they seek to apply the Wrongful Gain test or the Wrongful Interest test– and ensure that both tests are not sought to be applied with respect to the same documents or information.
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Disclaimer: This article is for general information only and does not constitute legal advice.
