Breach Of Confidence By Ex-employee Who Retained Company Documents After Leaving Job

In brief

In Hayate Partners Pte Ltd v Rajan Sunil Kumar [2025] SGHC 41, Singapore's High Court found an ex-employee to be in breach of his contractual obligations of confidentiality and equitable obligations of confidence in downloading thousands of company documents around the time of his resignation and retaining copies of the documents after leaving his employment.

In more detail

Rajan Sunil Kumar (Kumar) was employed by Hayate Partners Pte Ltd (Hayate) as Head of Investor Relations. During his employment, Kumar accessed and downloaded work-related documents on his personal devices (a MacBook and iPhone) but also had the use of a company-issued Dell laptop. Most of the company's confidential information in question was stored on Google Drive, a hosted cloud file storage service.

The confidentiality clause in Kumar's Letter of Appointment required him to keep secret and not disclose the company's confidential information nor use it for his own or another's advantage, even after the termination of employment. The Letter of Appointment also required him to deliver up all computer material and other property and information relating to the company's business upon the termination of employment.

Kumar tendered his resignation on 08 December 2021. In an IT audit conducted as part of its exit protocol, Hayate found that Kumar had downloaded a total of 4,800 files from the Google Drive in 2 weeks prior to his last day. Based on the Google Workspace logs, the downloads were likely to Kumar's personal MacBook. Hayate alleged that Kumar retained these files after the termination of employment. The downloaded files fell into six broad categories of confidential information:

Category 1: Investment strategies, including information about Hayate's past successes and failures
Category 2: Research and studies supporting the investment strategies and profitability forecasts
Category 3: Business development materials, including meeting minutes, call logs and client contracts
Category 4: Client information, including bank account information, personal data and risk appetites
Category 5: Hayate's daily operations, including personal data and documents of Hayate's key personnel
Category 6: Regulatory and legal advice provided to Hayate by regulatory and legal advisors

The court ruled that, for downloading documents into his MacBook and retaining them post-termination, Kumar breached his contractual obligations of confidentiality set out in the Letter of Appointment. Kumar also breached his equitable obligations of confidence by accessing and downloading other documents and retaining them post-termination. However, Kumar's downloads to the Dell laptop did not breach contractual or equitable obligations of confidence because it was a company-issued device.

The court ordered Kumar to pay damages to Hayate at an amount to be assessed.

Key takeaway

The court took the opportunity to summarise the approach to breach of confidence claims:

1. First, determine the claimant's interest:
   1. wrongful gain interest, where the defendant has made unauthorised use or disclosure of confidential information and thereby gained a benefit; and/or
   2. wrongful loss interest, where the claimant asserts that there is loss suffered so long as the defendant's conscience has been impacted in the breach of confidentiality.
2. If the wrongful gain interest is at stake, the claimant must establish the following (known as the Coco approach, after the leading case of Coco v AN Clark (Engineers) Ltd [1969] RPC 41):
   1. The information has the necessary quality of confidence about it.
   2. The information was imparted in circumstances in which an obligation of confidence arose.
   3. There was unauthorised use of the information to the detriment of the party who originally communicated it.
3. If the wrongful loss interest applies, the test is the modified approach set out in I-Admin (Singapore) Pte Ltd v Hong Ying Ting and others [2020] 1 SLR 1130 (known as the I-Admin approach), namely if the claimant proves points (i) and (ii) of the Coco approach, it will be presumed that the defendant's conscience has been impinged. It is for the defendant to prove that his conscience was not affected by the breach of confidence.

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