Introduction

This Writ of summons against the Defendants to claim the loss incurred arising from the misconduct of the Defendants involving diversion of the Plaintiffs’ clientele/business opportunities/profits, competing business, misuse of the Plaintiffs’ confidential documents/ information and destructions of the Plaintiffs’ documents.

Court Case

file_1675760080436

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION)

WRIT OF SUMMONS NO: WA-22NCC-142-03/2021

BETWEEN

PNL CAPITAL SDN BHD

(Company No.: 200801023753 (825076-V))
PNL BUSINESS SERVICES SDN BHD (Company No.: 200201008572 (576235-M))
PNL TRADING SDN BHD

(Company No.: 200401012783 (651286-P))
SUBANG INDUSTRY PARK SDN BHD (Company No.: 200801025334 (826658-W))
TIAN AN TRADING SDN BHD

(Company No.: 200901005798 (848748-P)) …PLAINTIFFS

AND

LOH TECK WAH

(No. K/P: 731106-14-5267)
STEPHEN ONG CHING JEN (No. K/P: 860409-56-6537)
ONG SHIN JOE

(No. K/P: 880907-08-6710)
LAM JING TYNG

(No. K/P: 720405-08-5328)
BEVERLY NG SZE MAY (No. K/P: 880625-56-6038)
MICHELLE MAH SIEW LUAN (No. K/P: 930902-14-7150)
WAWA TRADING SDN BHD

(No. Syarikat: 201601009545 (1180473-D))
W CAPITAL SDN BHD

(No. Syarikat: 200301010343 (612763-P))
PINNACLE VALLEY SDN BHD

(No. Syarikat: 201901040599 (1349929-H)) ...DEFENDANTS

GROUNDS OF JUDGMENT

Introduction

The Plaintiffs filed two (2) applications for discovery pursuant to O. 24 r. 3, 4, 5, 7, 8A, 9, 10, 11, 12 and 16 of the Rules of Court 2012

(“ROC 2012”) :
1. Enclosure 68: Plaintiffs’ application for discovery against the 1st to the 6th Defendants; and
2. Enclosure 69: Plaintiffs’ application for discovery against the 7th to the 9th Defendants.
  
  (hereinafter will be referred as “the Applications”)
This Court allowed both applications in part by dismissing Prayer 1 of the Applications and allowing other Prayers. Dissatisfied, the Plaintiffs and Defendants appealed against the order made.
This Grounds of Decision provides the reasoning as to the decision of this Court.

Background

Brief facts
The Plaintiffs in the current suit claim that the 1st Defendant, Loh Teck Wah (“Loh”), breached his fiduciary duties as a Director of the Plaintiffs when he did not act in the best interest of the Plaintiffs. It was alleged that Loh had breached his fiduciary duties when he :
1. colluded with and instructed one Liew Chia Soon (“Liew”) and/or the 2nd to the 6th Defendants (“the Compromised Employees”) to transfer and/or delete the Plaintiffs' documents without permission of the Plaintiffs. Liew is a senior staff with the Plaintiffs in charge of
  
  accounting and the daily affairs of the business who reports to Loh;
2. poached the Plaintiffs' employees and orchestrate the resignation of Liew and the Compromised Employees;
3. instructed and orchestrated the incorporation of Fintree Capital Sdn. Bhd. to transfer the business of the Plaintiffs;
4. carried out competing business with the Plaintiffs without disclosing to the Plaintiffs;
5. diverted the Plaintiffs' profits, clientele, and/or business opportunities; and
6. disrupted the Plaintiffs' business operation.
It was contended that as a result of the stealing, misuse and destruction of the Plaintiffs’ documents, Loh had deprived the Plaintiffs the use of their own records and obstructed the business operation of the Plaintiffs as well as the compliance with statutory obligations by the Plaintiffs. It had also resulted in the diversion of the Plaintiffs’ clientele and business opportunities, profits and the creation of a competing business.
As a result of the conspiracy and collusion of the Defendants, the Plaintiffs claim to have suffered loss and damage.

Analysis/reasoning of this Court

The law in brief
When wanting to obtain an order for discovery, an applicant needs to fulfil certain principles. The guidelines in successfully applying for a disclosure can be seen in the case of Yekambaran Marimuthu v Malayawata Steel Berhad [1994] 2 CLJ 581 where Edgar Joseph Jr outlined the position in law on discovery. The following requirements must be fulfilled:
1. there must be a ‘document’;
2. the document must be ‘relevant; and
3. the document must be or have been in the ‘possession, custody or power’ of the person against whom the order for discovery is sought.
In the case of Nguang Chan Liquor Trader & Ors v HAI-O Enterprise Bhd & Ors [2009] 5 MLJ 40, the Court of Appeal ruled that the document sought must be by way of direct allusion to a document or class of documents sought for discovery and not of the inference arise merely by inference. This shows how the specified class of documents must be relevant to the issue raised by the plea of justification and the particulars relied upon discovery or disclosure should be conducted on relevant documents only and with the intention to determine certain issues.
Ultimately, it is the exercise of the court’s discretion. As such, the considerations must be based on the facts and circumstances of each application. (See Kanandara A/L Krishnasamy v Dato’ Dr Vijayasingam & Anor [2005] 7 MLJ 120; Dr Pritam Singh v Yap Hong Choon [2007] 1 MLJ 31).

Considerations by this Court

In allowing all Prayers but Prayer 1
This Court is of the view that granting all the other Prayers apart from Prayer 1 will not result in any injustice to the Defendants as the Defendants are still able to depose in their respective affidavits whether or not they have the documents sought by the Plaintiffs. If they do not have the documents sought as itemised in Appendix A of the Applications (as annexed to this Grounds of Judgment), the Defendants are entitled to depose that they are unable to produce simply because they do not have access or possession to the documents as outlined in Yekambaran.
In considering the Application by the Plaintiffs, this Court took into consideration the background of how this Suit arose. It arose as a result of the allegation that Loh, the Managing Director of PNL Capital Sdn. Bhd. (“PNLC”) and PNL Business Services Sdn. Bhd. (“PNLBS”) from the year 2016, was managing the day to day operations of the business. It is the case of the Plaintiffs that the Compromised Employees conspired with Loh to injure the Plaintiffs.
The very fact that the Compromised Employees were part of Loh’s team and were involved in the carrying out of the fund raising and investment business under Loh or his senior staff such as Liew or one Venessa Kang, makes it necessary for the Defendants to own up what they have or what they do not have.
Again, this Court stresses the point that this is a unique case where this Court is privy to other suits involving the parties. In particular Suit WA-22NCC-623-12/2020 (“Suit 623”) where as a result of an Anton Piller Order issued by the Court, it was revealed among others, company information and property had been taken out by Loh and several of his staff members.
The Statement of Claim in the current Suit gave a background of Suit 623. For contextual purposes, the relevant paragraphs i.e. paragraphs 38 to 41 of the Statement of Claim are reproduced as follows:
1. The suspicion begun when the Plaintiffs discovered that the relevant documents of their clients have gone missing. Hence, the Plaintiffs carried out a forensic investigation with the engagement of Le-Global Services Sdn Bhd ("LGMS") on the 2 working laptops used by Liew ("Working Laptops") and the office server of the Plaintiffs. The outcome of the forensic investigation revealed that the Working Laptops were wiped clean with professional software and there were evidences of transfer of information and/or documents from the office server to the Working Laptops which were then synced to Liew's personal cloud storage, i.e. dropbox.
2. Having discovered the wrongful transfer and/or destruction of the Plaintiffs' documents/information by Liew, an action was filed in the Kuala Lumpur High Court (Civil Suit No. WA-22NCC-623-12/2020) ("Suit 623") by the Plaintiffs against Liew and Fintree. An ex-parte Anton Piller order was also granted by the court to raid Fintree to recover stolen documents.
3. The documents raided at Fintree were categorised and marked by the supervising solicitors for the Anton Piller search as follows:
  1. Exhibit 1: Jovis's Huawei handphone;
  2. Exhibit 2: Liew's ThinkPad laptop;
  3. Exhibit 3: Beverly's Samsung handphone and Kingston Pendrive;
  4. Exhibit 4: Liew's Huawei's handphone;
  5. Exhibit 5: Computer claimed to be used by Beverly (Central Processing Unit (CPU) Lenovo Serial no. YLOORW2X);
  6. Exhibit 6: Computer claimed to be used by Jovis (CPU Lenovo Serial No. YLOORZH6);
  7. Exhibit 7: Computer claimed to be used by Michelle (CPU Lenovo Serial No. YLOORVZ2);
  8. Exhibit 8: Computer claimed to be used by Stephen (CPU Lenovo Serial No. YLOORVYF);
  9. Exhibit 9: Hewlett Packard laptop Serial No. 5CD621BOKZ seized from an office room occupied by Loh;
  10. Exhibit 10: Liew's SanDisk pendrive;
  11. Exhibit 11: Liew's SeaGate external hard drive Serial No. NABEFORW together with the cable;
  12. Exhibit 12: All documents seized from an office room occupied by Loh;
  13. Exhibit 13: All documents seized from an office room occupied by the Account Department (Liew and Jovis);
  14. Exhibit 14: All documents seized from Stephen's work station 40.15. Exhibit 15: QNAP Network Attached Storage (NAS) 40.16. Exhibit 16: Computer claimed to be used by Liew (CPU Hewlett Packard Serial No. SGH541RJ2R).
It would be grossly wrong for this Court to ignore the on goings between the parties and adopt a myopic approach when considering the current Applications. It is in this respect that this Court exercised its discretion when making the relevant ruling in the two Applications.
While this Court is cognisant of the requirement of law in terms of possession of documents being a critical consideration when determining discovery applications (as per the requirements of Yekambaran), given the background of this case where there is an allegation of collusion between the Defendants, the Plaintiffs are entitled to ascertain with the Defendants what they have or what they do not have in their possession.
This is not a fishing expedition as it is not a situation where the Plaintiffs do not know anything about the documents that are being sought. A fishing expedition in discovery proceedings is one where the applicant has no inkling of what document there are in the possession of the party discovery is being sought against.
This Court is also of the view that this is not the case where the Plaintiffs are seeking to strengthen their claim via these Discovery Applications. This, to the mind of this Court, is a genuine case of the Plaintiffs having no recourse to obtain the relevant documents but by resorting to the Defendants.
A perusal of Appendix A of the Notice of Applications would show that the documents requested are all documents pertaining to the business which the Plaintiffs have been involved in. They are not documents that are unconnected with the Plaintiffs’ businesses and clients.
As such it is the view of this Court that the documents will allow a fair and expedient disposal of the Suit if the Plaintiffs are allowed to be provided with the documents requested.

In disallowing Prayer 1
It must be noted that this Court did not allow the Applications in their entirety. Prayer 1 of both Applications was dismissed and disallowed. Prayer 1 reads as follows:

Enclosure 68:

“1. That the 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants, shall within 14 days from the date of th e order or such other time directed by this Honourable Court, make and serve on the Plaintiffs’ solicitors and file into Court, a list of the documents which are or have been in his possession, custody or power and make and file an affidavit verifying

such a list by person having actual conduct of the affair of the 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants, any documents which are :
1. Documents on which 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants relies in this action or adversely affect the Plaintiffs’ case;
2. Documents which could adversely affect the 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants’ case or support the Plaintiffs’ case.”
Enclosure 69:

“1. That the 7th, 8th and/or 9th Defendants, shall within 14 days from the date of the order or such other time directed by this Honourable Court, make and serve on the Plaintiffs’ solicitors and file into Court, a list of the documents which are or have been in his possession, custody or power and make and file an affidavit verifying such a list by person having actual conduct of the affair of the 7th, 8th and 9th Defendants, any documents which are :
1. Documents on which 7th, 8th and/or 9th Defendants relies in this action or adversely affect the Plaintiffs’ case;
2. Documents which could adversely affect the 7th, 8th and/or 9th Defendants’ case or support the Plaintiffs’ case.”
This Court denied Prayer 1 as it would entail the Plaintiffs to have too wide an access to documents that they are seeking. It would also be an abuse of process if it is allowed as it means that the Plaintiffs will have a general sweep of all held by the Defendants.
The fact that this Court had granted other Prayers apart from Prayer 1 is more than sufficient for the Plaintiffs to be given with documents they require, without allowing a carte balance approach as sought in Prayer 1.
Based on the above considerations, it is the view of this Court that the Applications in Enclosure 68 and 69 be allowed in part. This Court allows the following for discovery:

Enclosure 68:
1. The 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants, shall within 14 days from the date of the order or such other time directed by this Honourable Court, make and serve on the Plaintiffs’ solicitors and file into Court, an affidavit stating the following:
  1. Whether any of the documents or class of documents described in Annexure A (“Documents”) are or had at any time been in the possession, custody or power of the 1st, 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants;
  2. In the event that any of the Documents are not under the possession, custody or power of the 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants, the 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants shall specify the following:
    1. When had the 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants parted with such Documents;
    2. Who are the person(s) or party(ies) currently having possession, custody or power of such Documents;
    3. The whereabouts of the such Documents so parted from the 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants.
2. The 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants, shall within 14 days from the date of the order or such other time directed by this Honourable Court, serve on the Plaintiffs’ solicitors a copy of the documents as set out in Annexure A herein, together with a list of these documents and file and serve an affidavit verifying such list by person having actual conduct of the affair of the 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants.
3. The 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants shall continue to give discovery of all of the Documents or such documents that may be order by this Honourable Court until the conclusion of this action;
4. Parties are at liberty to apply for an order (s) to bring into effect the order of this Honourable Court; and
5. No order as to costs.”
(For ease of reference Annexure A of the Notice of Application in enclosure 68 is attached to this Grounds of Judgment as Appendix 1)

Enclosure 69:
1. The 7th, 8th and/or 9th Defendants, shall within 14 days from the date of the order or such other time directed by this Honourable Court, make and serve on the Plaintiffs’ solicitors and file into Court, an affidavit stating the following:
  1. Whether any of the documents or class of documents described in Annexure A (“Documents”) are or had at any
    
    time been in the possession, custody or power of the 7th, 8th and/or 9th Defendants;
  2. In the event that any of the Documents are not under the possession, custody or power of the 7th, 8th and/or 9th Defendants, the 7th, 8th and/or 9th Defendants shall specify the following:
    1. When had the 7th, 8th and/or 9th Defendants parted with such Documents;
    2. Who are the person(s) or party(ies) currently having possession, custody or power of such Documents;
    3. The whereabouts of the such Documents so parted from the 7th, 8th and/or 9th Defendants.
2. The 7th, 8th and/or 9th Defendants, shall within 14 days from the date of the order or such other time directed by this Honourable Court, serve on the Plaintiffs’ solicitors a copy of the documents as set out in Annexure A herein, together with a list of these documents and file and serve an affidavit verifying such list by person having actual conduct of the affair of the 7th, 8th and/or 9th Defendants.
3. The 7th, 8th and/or 9th Defendants shall continue to give discovery of all of the Documents or such documents that may be order by this Honourable Court until the conclusion of this action;
4. Parties are at liberty to apply for an order (s) to bring into effect the order of this Honourable Court; and
5. No order as to costs.”
6. (For ease of reference Annexure A of the Notice of Application in enclosure 69 is attached to this Grounds of Judgment as Appendix 2)
(Note: A perusal of the documents filed in the Case Management System would show that the Learned Registrar had directed the abovementioned orders to be reflected as the fair order. The approved Sealed Order however did not reflect the draft as amended by the Learned Registrar i.e. only Prayer 2 was allowed.)

Conclusion/Summary of this Court’s rationale for allowing/disallowing the Applications

Appeal by the Defendants
This Court granted Enclosures 68 and 69 in part. It is the view of this Court that the Defendants ought to provide the information required by the Plaintiffs given the complex and closely connected relationship between the Plaintiffs and their former employees who were subsequently identified to have been compromised.
To the mind of this Court, all is not lost for the Defendants as they are still able to depose their position in the affidavits.

Appeal by the Plaintiffs for only allowing Prayer 2
This Court refused Prayer 1 of the Plaintiffs’ Applications as it is of the view that the Plaintiffs should not be entitled to have a carte blanche approach in seeking discovery.