share on
The District Court found that the employee breached her employment agreement and duty of fidelity by providing services to a direct competitor while still employed. However, the court dismissed several larger damages claims brought by her former employer.
A Singapore corporate services firm has secured a partial win against a former employee who provided services to a rival company while still employed, with the District Court finding that she breached both her employment agreement and her implied duty of good faith and fidelity.
In a judgment dated 17 August 2026, District Judge Teo Guan Kee ordered Wong Suet Mei, Michelle to pay her former employer, Korporatio Sing Pte Ltd, S$14,683.33, with interest at 5.33% per annum from 2 November 2023.
At the same time, Korporatio Sing was ordered to pay Wong S$3,200 in outstanding salary for the period from 1 to 16 October 2023, also with interest at 5.33% per annum.
Case background: Employee worked for rival while employed
Korporatio Sing provides corporate secretarial services in Singapore. Wong joined the company under a written employment agreement dated 13 December 2021, on a full-time basis to provide corporate secretarial services to its clients.
Her responsibilities included being appointed as a local director or corporate secretary for the company's clients.
The company terminated her employment without notice on 16 October 2023.
The dispute centred on Wong's work for Xion AI Pte Ltd, which she accepted was providing the "same category" of services as Korporatio Sing and was therefore a direct competitor.
Under Clauses 15 and 16 of her employment agreement, Wong was required to obtain approval from Korporatio Sing where her activities could create a conflict of interest. She had also agreed not to enter the employment of, or provide technical, commercial or professional advice as an independent contractor to, a business wholly or partly competing with Korporatio Sing.
There was no evidence that Wong had sought such approval.
At trial, Wong maintained that her work for Xion was limited to Singpass authentication and providing internal operational guidance to Xion staff.
She explained that this involved showing Xion staff how the ACRA system worked and guiding them through filing transactions. During calls, she would ask what they could see on screen and tell them which option was correct before they proceeded with a filing.
The court found that, based on Wong's own description, these activities amounted to at least the provision of technical advice under Clause 16 of her employment agreement.
Wong had argued that her arrangement with Xion was "purely functional, temporary, and did not amount to competing business". Her counsel also suggested that her involvement was no more than administrative assistance or isolated involvement.
The court rejected this characterisation.
86 companies and 811 transactions
The court found that Wong's activities for Xion were neither inconsequential nor merely administrative.
Xion needed a qualified individual such as Wong to provide corporate secretarial services. Wong had also allowed herself to be named as a nominee director or company secretary for Xion's clients.
As at 5 September 2023, she was serving as a director for 86 companies that were not Korporatio Sing clients. Her credentials were also used in 811 transactions from around June 2022 through to at least October 2023.
The court further noted that Wong had been paid for the services.
Evidence included 18 invoices issued by Wong in her personal capacity to Xion between 30 June 2022 and 30 April 2023. The invoices ranged from S$400 to S$3,500 and covered services including the provision of a named qualified individual and nominee directorships.
The court therefore found that the services provided to Xion amounted to the provision of technical, commercial or professional advice as an independent contractor to a competing business.
Wong had consequently breached Clauses 15 and 16 of her employment agreement.
Court also finds breach of duty of fidelity
The court separately found that Wong had breached her implied duty of good faith and fidelity to Korporatio Sing.
In its judgement, the court noted that employees should not engage in other business or employment during working hours without their employer's approval, and should not divert business opportunities they became aware of because of their employment.
Having regard to the same factors surrounding Wong's work for Xion, the court found that her conduct also breached this obligation.
Termination without notice was allowed
The court also considered whether Korporatio Sing was entitled to terminate Wong without notice.
Clause 17 of the employment agreement allowed the company to terminate employment without notice for "any misbehaviour or misconduct", including breaches of Clauses 13 to 16.
As the court had found that Wong breached Clauses 15 and 16, it held that Korporatio Sing had the right to terminate her employment without notice.
Wong's counsel argued that the company nevertheless had to show that she had committed "serious misconduct".
However, the court found that the employment agreement did not contain such a requirement. It also distinguished the case relied on by Wong's counsel, noting that the contract in that case expressly referred to "serious misconduct", unlike Wong's agreement.
The court also declined to consider two further arguments raised by Wong at trial — that Korporatio Sing had consented to her work for Xion and that Clauses 15 and 16 were unenforceable restraints of trade — because these had not been pleaded in her defence.
The court said the failure to plead the restraint-of-trade issue had prejudiced Korporatio Sing by depriving it of the opportunity to plead and present evidence in response.
Employer's larger damages claims largely rejected
While Korporatio Sing succeeded in establishing that Wong had breached her contractual and fidelity obligations, the court did not accept several of the company's larger claims for damages.
One of these was a claim for losses arising from the alleged diversion of Wong's productivity.
The company argued that most of the ACRA transactions Wong carried out for Xion had taken place during her working hours. It sought to estimate the proportion of her time spent on Xion's work and use that to calculate the corresponding portion of her salary as damages.
One model presented by the company estimated that Wong spent about 29 hours a month on Korporatio Sing's work. Based on a 160-hour working month, this meant 18.13% of her working time was attributed to the company, with the remaining 81.87% inferred to have been spent on Xion.
Using total salary payments of S$145,785.04, this model put the alleged loss at S$119,354.21. Other models similarly estimated that between roughly 81% and 83% of Wong's salary represented diverted paid labour.
The court found several problems with this calculation.
These included assumptions about how much time Wong spent on specific tasks, how many hours constituted a standard full-time working month and the assumption that any time not spent on Korporatio Sing's work must have been spent on Xion's work. There was also no objective basis provided for several of these estimates.
The court also noted that the company had used salary figures from July 2021, even though Wong's employment agreement was only entered into in December 2021 and her first day of work was 15 January 2022.
Further, the evidence showed that Wong was only approached by Xion to carry out filings from June 2022, meaning there was no basis to attribute her earlier working time or salary to Xion.
Importantly, the court found that Korporatio Sing had not actually adduced evidence showing that Wong had failed to perform her duties for the company during the relevant period.
This did not excuse her breaches, the judge said, but it affected the question of the loss suffered by Korporatio Sing. The claim was therefore reduced to S$100 in nominal damages.
S$112,750 partnership claim also dismissed
Korporatio Sing had also sought S$112,750 for what it described as the loss of an opportunity to take on companies for which Wong had provided services through Xion.
The sum included potential fees for local director appointments for 86 companies, renewals for 19 companies, and appointments as Qualified Individual, corporate secretary and nominee shareholder.
The court found that the company had not shown there was a real or substantial chance that Xion would have entered into a partnership with Korporatio Sing.
A message from Wong suggesting that Xion was desperate to engage a qualified individual was deemed to be not enough. The court said this reflected Wong's subjective perception and did not establish that Xion would have considered entering into a strategic partnership with Korporatio Sing, which was itself a competitor.
The court also found no evidence showing how likely such a partnership would have been to materialise. The claim was therefore dismissed as speculative. A separate S$22,700.25 claim for reputational loss was also dismissed.
The court found that the company's method of calculating this loss was unclear and inconsistent. Although the claim was characterised as reputational loss, evidence from Korporatio Sing's witness described the amount as lost profits from incorporation services.
The court also questioned why reputational loss should be quantified using fees for incorporating companies and said the identity of the assets allegedly used, and how their use caused reputational loss, were unclear.
The company's alternative request for Wong to account for profits she derived from her work for Xion was also rejected. The court found that Korporatio Sing had not explained why an account of profits was an appropriate remedy for the contractual claim.
Employee had 41 outstanding appointments when dismissed
The claim that ultimately formed the bulk of the damages award related to appointments Wong had held for Korporatio Sing's clients.
As part of her employment, Wong was required to be available for appointment as a director or company secretary of the company's clients. She was paid S$200 per year for each company secretary appointment and S$500 per year for each director appointment, with the fees paid in advance for each year.
When her employment ended, Wong accepted that she still held 41 appointments on behalf of Korporatio Sing. She also accepted that she had not completed the one-year appointments because her employment had been terminated.
Korporatio Sing therefore sought the pro-rated fees paid to Wong for the uncompleted portions of these appointments. The court accepted this claim and ordered Wong to pay S$14,583.33.
The company had also claimed S$181.82 for an additional half-day of annual leave allegedly taken by Wong. However, the claim was not supported by evidence from Korporatio Sing's only trial witness and was dismissed.
Wong's counterclaims
Wong had filed several counterclaims, some of which were based on her argument that her termination without notice was wrongful.
Those claims fell away after the court found that Korporatio Sing was entitled to terminate her employment without notice.
The court nevertheless considered three other counterclaims: her salary for the first 16 days of October 2023, repayment of ACRA penalties, and repayment of her August 2023 salary.
On her October salary, the court found that Wong was entitled to S$3,200 for the period from 1 to 16 October 2023. The amount was supported by her October payslip, which had been produced by Korporatio Sing and whose authenticity was agreed by Wong.
Her claim for repayment of ACRA penalties was dismissed. Wong had said the penalties arose from an accountant's delays in preparing financial statements, but the court found that she had not provided evidence supporting this assertion or the amount she sought to recover. Her claim for repayment of her August 2023 salary was also dismissed.
Wong had been on maternity leave between May and August 2023 and had signed a declaration stating that she would take 16 weeks of Government-Paid Maternity Leave. She subsequently shared four weeks of the leave with her husband.
The court noted that this reduced Korporatio Sing's reimbursement entitlement from two months to one month under the rules then prevailing. Evidence showed that Wong had acknowledged the consequence and that the parties had agreed to treat August as unpaid leave.
Although Wong later said she had been pressured into returning her August salary and had worked during that month, the court found that neither assertion was supported by objective independent evidence. The counterclaim was dismissed.
Court awards S$14,683.33 to employer
In its final judgment, the court allowed Korporatio Sing's claims in part and ordered Wong to pay S$14,683.33, comprising:
- S$100 in nominal damages for loss arising from the alleged diversion of productivity; and
- S$14,583.33 for losses stemming from her failure to complete the appointments she held for Korporatio Sing's clients when her employment ended.
The sum carries interest at 5.33% per annum from 2 November 2023.
Korporatio Sing, meanwhile, must pay Wong S$3,200 for her outstanding salary from 1 to 16 October 2023, with interest at the same rate from 15 November 2023.
The court said costs and disbursements would be fixed if the parties could not agree on them.
Overall, while the court found that Wong had breached her employment obligations by working for a competitor, Korporatio Sing was awarded only the losses it could substantiate with evidence.
ALSO READ: Woman awarded $20,000 in wrongful dismissal claim following WFH dispute during cancer recovery
share on
