In more detail

Background

In Amber, the sole issue for determination before the court was whether a claimant, in a claim for breach of confidence, is entitled to plead and claim that both its wrongful gain interest and wrongful loss interest (defined below) have been infringed by the defendant.

The two claimants, Amber Compounding Pharmacy Pte Ltd and Amber Laboratories Pte Ltd (companies specialising in the compounding of medical and pharmaceutical products), brought a claim of breach of confidence against the defendants, Urban Rx Compounding Pharmacy Pte Ltd (a company that provides services and products highly similar to that offered by the claimants) and its related directors, employees and individuals.

The claimants asserted that the defendants: (i) copied and used confidential information and/or trade secrets from the claimants to set up another company selling identical products; (ii) attempted to communicate with and solicit business from the claimants’ confidential list of client contacts; and (iii) revealed the claimants’ confidential information to a third party. In the course of proceedings, the claimants obtained a consent judgment against the first and second defendants, under which the first and second defendants unconditionally admitted to the unauthorised breach of confidence, receipt, access and use of the claimant’s confidential information.

Before going on trial for the assessment of damages claimed in the proceedings, the claimants filed an application under O 33 r 2 of the Rules of Court 2014 to preliminarily determine whether the claimants are entitled to claim from the first and second defendants for both damages under the principles in Coco and equitable damages under the principles in I-Admin.

The claimants asserted that a claim for breach of confidence can protect both the wrongful loss interest and wrongful gain interest at the same time, with each interest giving rise to its own remedies. On the other hand, the defendants submitted that the claimants were not entitled to make such a claim because the interests are distinct.

Claiming damages for wrongful gain interest and wrongful loss interest in claim for breach of confidence

In Amber, the court confirmed that the claimants are entitled to plead and claim damages for both its wrongful gain interest and wrongful loss interest under its claim for breach of confidence. The wrongful gain interest refers to the claimant's interest in preventing the wrongful gain or profit from its confidential information. The wrongful loss interest refers to the claimant's interest in preventing the wrongful loss which is suffered, so long as the defendant's conscience has been impacted in the breach of the obligation of confidentiality. The application of wrongful loss is limited to “taker” cases, which involve the unauthorised acquisition of confidential information, as compared to cases where the confidential information was provided by the claimant to the defendant.

I-Admin, the leading Court of Appeal decision on damages for breach of confidence, did not previously 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 court in Amber therefore held that there was no conflicting binding precedent that precluded the plaintiff from claiming that both its wrongful loss and wrongful gain interests have been affected by the defendant’s breach of confidence.

Further, the court held that the position that the plaintiff may plead and claim the wrongful gain interest and wrongful loss interest was strengthened by the Court of Appeal's rationale for declaring the existence of both forms of interest in I-Admin. This recognised that the policy objectives behind the law of confidence extends beyond safeguarding against wrongful gain, and the previous framework before I-Admin did not adequately safeguard the wrongful loss interest or offer recourse where it had been affected. It followed that a plaintiff in a breach of confidence claim should be allowed to seek damages for its wrongful gain interest and wrongful loss interest.

Lastly, the court found that there were no conflicting High Court decisions preventing a claimant from seeking damages for its wrongful gain interest and wrongful loss interest.

Key takeaways

The Amber decision is significant in clarifying that the law of damages protects both a claimant's wrongful gain interest and wrongful loss interest. The law's recognition of each interest protects different wrongs that may be committed by a defendant who has taken or wrongfully benefitted from the use of confidential information. The decision also reiterates the importance of carefully strategising and drafting pleadings for initiating breach of confidence claims.

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