Ioupay Limited v Kuan Choon Hsuing (WA-22NCC-137-03/2023)

IOUPAY LIMITED (Australian Company No.: 091 192 871)

ISENTRIC SDN BHD (Company No.: 198901006004 (183309-

IOU PAY (ASIA) SDN BHD (Company No.: 200501018139 (700252-

DATAMORPH SERVICES SDN BHD (Company No.: 201301043665

KUAN CHOON HSUING (NRIC No.: 770523-14-5323)

YONG YUEN YEEN (NRIC No.: 770425-14-5274)

YONG YUEN NEE (NRIC No.: 710405-01-5304)

ASPIRE PROJECT MANAGEMENT SDN BHD (Company No.: 201101033329 (961464-

EDWARD TAN TEE TONG (NRIC No.: 751005-10-5985)

LIEW JWO (NRIC No.: 771122-14-5319)

WANG ERN WEI (NRIC No.: 710709-10-5317) ... DEFENDANTS JUDGMENT [1] Before the court is an application by the Plaintiffs seeking leave to use documents and information obtained pursuant to an Anton Piller order in one action for various other ongoing and prospective legal proceedings, including criminal proceedings. Background facts [2] On 17.3.2023, IOUPay Limited, Isentric Sdn Bhd, IOU Pay (Asia) Sdn Bhd and Datamorph Services Sdn Bhd (collectively “the Plaintiffs”) commenced legal proceedings against the 1st to 4th Defendants, Kuan Choon Hsuing, Yong Yuen Yeen, Yong Yuen Nee and Aspire Project Management Sdn Bhd (“D1, D2, D3 and D4” respectively). On 29.2.2024, Edward Tan Tee Tong, Liew Jwo and Wang Ern Wei were added as the 5th, 6th and 7th Defendants respectively (“D5, D6 and D7” respectively). [3] On 21.3.2023, the High Court granted an Anton Piller Order against D1 to D4 pursuant to the Plaintiffs' ex-parte application dated 17.3.2023. Following an inter partes hearing, the Anton Piller Order was confirmed on 7.9.2023. D1 to D4 have filed an appeal against this decision in the Court of Appeal (Civil Appeal No.: W-02(IM)(NCC)-1646- 10/2023). [4] The Anton Piller Order was executed at multiple locations between 24.3.2023 and 27.3.2023: at Unit 11-05 of Sunway Mont Residences, Jalan Kiara 5, Mont Kiara, Kuala Lumpur (against D1 and D2); at 23A-08 Mont Kiara Bayu, Jalan Kiara 2, Mont Kiara, 50480 Kuala Lumpur (against the D3); and at the registered address of D4. [5] During the execution, various electronic devices and email databases were obtained from D1 to D4, including: multiple mobile phones (Samsung and Apple models), laptops (Dell, MSI and HP models), tablets (Apple iPad and Samsung models), and email databases from Google and Yahoo accounts. These devices and databases were subsequently forensically imaged into extractable and readily accessible soft-copy documents. [6] There are currently seven ongoing civil actions involving the IOUPay group, either through its component parties or subsidiaries. These proceedings include: a) Kuala Lumpur High Court, Suit No.: WA-23NCvC-73- 11/2023 b) Kuala Lumpur High Court, Suit No.: WA-22NCvC- 489-09/2023 c) Kuala Lumpur High Court, Suit No.: WA-22NCC-125- 03/2023 d) Kuala Lumpur High Court, Suit No.: WA-22NCC-228- 05/2022 e) Kuala Lumpur High Court, Suit No.: WA-22NCC-292- 05/2024 f) Court of Appeal, Appeal No.: W-02(IM)(NCC)-1646- 10/2023 g) Court of Appeal, Appeal No.: W-02(IM)(NCC)-1647- 10/2023 [7] Additionally, there are ongoing criminal proceedings against D1 to D4, including foreclosure proceedings and unlawful seizure orders against D1 to D4. On 7.6.2023, seizure orders were issued by the Deputy Public Prosecutor pursuant to Section 50(1) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. [8] On 19.6.2024, the Plaintiffs filed an application (Enclosure 196) seeking leave to use the documents obtained through the Anton Piller Order in these various legal proceedings. The application was served on all Defendants on 19.6.2024 (unsealed) and 21.6.2024 (sealed). The matter came up for case management on 27.6.2024, where directions were given for filing of affidavits and submissions. [9] The application was made pursuant to Prayer 10 of the Anton Piller Order dated 7.9.2023, which provides that a Plaintiff shall be at liberty to use any information, document or item obtained from the execution of the Order for the present proceedings and, with leave of court, any other proceedings against the Defendants or third parties found to be acting in concert with them to the detriment of the Plaintiffs. The application in Enclosure 196 [10] The Plaintiffs’ application seeks three main orders. First, they sought a consequential order and/or leave to use any information, document or item obtained from the execution of the Anton Piller Order in any cause papers, affidavits, witness statements and other relevant documents in seven specified ongoing legal proceedings (five High Court suits and two Court of Appeal matters). Second, they sought leave to use such materials in any prospective actions against the Defendants or third parties in matters arising from or related to the claims in the ongoing proceedings. Third, they sought leave to use the materials in any criminal proceedings, including lodging police reports and assisting in pending criminal investigations against the Defendants and third parties in matters arising from the ongoing and prospective proceedings. [11] The application was premised on four main grounds. First, the documents contained crucial evidence that could materially affect the outcome of the pending legal proceedings, prospective legal proceedings and ongoing/future criminal proceedings. Second, allowing the use of the documents would significantly reduce costs and time associated with further internal investigations and evidence procurement, as the documents were already available to the Plaintiffs. Third, the documents would provide a fuller and more comprehensive understanding of the factual circumstances at issue in the pending legal proceedings, enabling the matters to be fully and finally determined. Fourth, the documents were relevant to ongoing criminal proceedings/investigations and would facilitate the eventual outcome of criminal proceedings including potential prosecution and conviction/punishment of perpetrators of the wider fraudulent scheme. Procedural history [12] The application in Enclosure 196 commenced on 19.6.2024 when the Plaintiffs filed their Notice of Application supported by an affidavit affirmed by Mohammad Azizuddin Bin Shahruddin. The unsealed application and affidavit were served on all Defendants that same day, followed by service of the sealed Notice of Application on 21.6.2024. [13] The matter first came up for case management by e-review on 27.6.2024 before Senior Assistant Registrar Nabila Syaida binti Mohamad. During this session, counsel for D5, D6 and D7 indicated they had no objections to the application, while counsel for D1 to D4 requested time to obtain instructions regarding any potential objections. The court then set out a timeline for the filing of documents: Affidavit in Reply by 5.7.2024, Affidavit in Reply by 19.7.2024, Written Submissions by 2.8.2024, and Written Submissions in Reply by 16.8.2024. The hearing was fixed for 3.9.2024. [14] The matter came me on 23.7.2024. The hearing was originally fixed for case management of the main suit and to hear D1 to D4’s solicitors' discharge application in Enclosure 193. However, the Plaintiffs had written to the court via letter dated 16.7.2024 (Enclosure 200) requesting that Enclosure 196 also be addressed at this hearing. [15] With the court's permission, the Plaintiffs' counsel addressed Enclosure 196 first, before dealing with the case management and discharge application. The Plaintiffs highlighted that no Affidavit in Reply had been filed by the deadline of 5.7.2024. When asked by the court, counsel for D1 to D4 confirmed they had received no instructions from their clients regarding Enclosure 196. Counsel for D5 maintained their position of no objection, while D6 and D7 were absent but had previously indicated they had no objection to the application. [16] After hearing submissions on Enclosure 196, the court noted that while no affidavit in opposition had been filed and most defendants had no objection, it would still need to review the merits of the application. The court therefore reserved its decision to 25.7.2024, noting that it would need at least two days to consider the materials. [17] The court then proceeded to deal with D1 to D4’s solicitors' discharge application in Enclosure 193, which was allowed in terms as the solicitors had still received no instructions from their clients. The court also gave directions for the main action. [18] On 25.7.2024, the matter came up for decision before me. D5 reconfirmed their position of no objection to the application. The court proceeded to allow the application with order in terms, and consequently, the previously fixed hearing date of 3.9.2024 was vacated. Analysis and findings of the court Non-filing of affidavit in reply [19] At the hearing on 23.7.2024, D1 to D4 were represented by Mr. Na Wee Jern of Messrs Wee Jern and Partners. However, when specifically asked by the court about his position, Mr. Na informed that: “I do not have any instructions from him. Yes, my lord.” This was despite the D1 to D4 having been served with the unsealed application and supporting affidavit on 19.6.2024, and the sealed notice of application on 21.6.2024, as recorded in the case management on 27.6.2024. [20] During case management on 27.6.2024, the court had directed that any Affidavit in Reply be filed by 5.7.2024. D1 to D4 failed to comply with this direction despite having ample time to do so. In Ng Hee Thoong & Anor v Public Bank Berhad [1995] 1 CLJ 609, Gopal Sri Ram JCA (as he then was) held at p.614: “Now, it is a well settled principle governing the evaluation of affidavit evidence that where one party makes a positive assertion upon a material issue, the failure of his opponent to contradict is usually treated as an admission by him of the fact so asserted.” [21] This principle was earlier established in Alloy Automotive Sdn Bhd v Perusahaan Ironfield Sdn Bhd [1985] 1 MLRA 309, where Lee Hun Hoe CJ (Borneo) stated: “There is force in the appellant's contention that an affidavit must reply specifically to allegations, and if it does not, then those allegations not replied to must be taken to have been accepted.” [22] The importance of affidavit evidence in applications of this nature cannot be understated. As emphasised by Abdul Malik J (as he then was) in Abdul Razak Ahmad v Majlis Bandaraya Johor Bahru [1995] 4 CLJ 339 at p.342: “...affidavits play a crucial role in originating summonses as submissions and decisions are primarily hinged on affidavit evidence. I am sure the plaintiff being a lawyer should know the value of affidavit evidence in an application of this nature. He should know and cannot be said not to know that affidavits should contain facts known to him and not legal arguments and submissions of law...” [23] The failure of D1 to D4 to file any affidavit in reply to the serious allegations made in the Plaintiffs' affidavit must therefore be taken as an admission of those allegations. [24] As recorded in the case management before the learned Senior Assistant Registrar on 27.6.2024, D5 through Ms. Jeane Lee Yi Jin expressly stated “Puan, pihak Defendan Kelima tiada bantahan terhadap permohonan pihak Plaintif-Plaintif ini.” Similarly, D6’s counsel Mr. Stefan Aaron Maman stated “Dengan izin, pihak kami tiada bantahan terhadap permohonan plaintif di Lampiran 196 Puan”, while D7’s counsel Puan Gurmit Singh confirmed “Dengan izin Puan pihak Defendan Ke-7 tiada bantahan terhadap permohonan Plaintif di Lamp. 196.” The non-opposition of these defendants further strengthens the court's view that the application should be allowed. Merits of the Application [25] On the merits, I am satisfied that the application should be allowed based on the following grounds. [26] The starting point is the principle established in Riddick v Thames Board Mills Ltd [1977] QB 881 that documents obtained on discovery in an action are subject to an implied undertaking that they will not be used for any collateral or ulterior purpose. However, as stated by Lord Oliver in Crest Homes Plc v Marks [1987] AC 829 at p.854: “it is clear and is not disputed...that it [the implied undertaking] can, in appropriate circumstances, be released or modified by the court.” [27] This is an appropriate case for release of the undertaking for the following reasons based on the evidence before me. From the affidavit of Mohammad Azizuddin Bin Shahruddin affirmed on 19.6.2024, he deposes at paragraph 15 that: “upon internal investigations having been conducted by the 1st to 4th Plaintiffs (which is presently ongoing) in which, among others, the Anton Piller Order Documents were reviewed and analysed, it has become reasonably apparent that

(a) the Anton Piller Order Documents and information procured thereto are relevant and pertinent to the Pending Legal Proceedings which relate to issues derived from the wider fraudulent scheme perpetrated by amongst others the Defendants and their fellow cohorts.” [28] The circumstances here are analogous to those in Crest Homes where Lord Oliver observed at p.860: “The proper policing and enforcement of observance of orders made and undertakings given to the court in an action are, in my judgment, as much an integral part of the action as any other step taken by a plaintiff in the proper prosecution of his claim...There is, in my judgment, nothing 'collateral' or 'alien' about enforcement of the court's order in the action in which discovery is obtained.” [29] The deponent's affidavit at paragraphs 17(a) to (d) sets out compelling grounds that align with the principles in Crest Homes for allowing use of the documents: “(a) first, it is in the interest of justice for this Honourable Court to grant leave to the Plaintiffs to use the Anton Piller Order Documents and information procured thereto as they contain crucial evidence that could materially affect the outcome of the Pending Legal Proceedings, Prospective Legal Proceedings and the ongoing and/or any related future criminal proceedings;

(b) second, by allowing the use of the Anton Piller Order Documents and information procured thereto for the purposes of the Pending Legal Proceedings, there would be a significant reduction of cost and time associated with further internal investigations and evidence procurement conducted by the Plaintiffs;

(c) third, the Anton Piller Order Documents and information procured thereto provide a fuller and more comprehensive understanding of the factual circumstances at issue in the Pending Legal Proceedings; and

(d) fourth, the use of the Anton Piller Order Documents and information procured thereto are relevant in the ongoing criminal proceedings and/or investigations as well as for purposes of lodging police report(s) involving the perpetrators of the wider fraudulent scheme.” [30] As emphasised in Crest Homes at p.861, “to accede to [the] application will, in these circumstances, cause no injustice to the [defendants] nor will it detract from the solemnity and importance of the implied undertaking.” The documents are already available to the Plaintiffs and contain pertinent information insofar as the Pending Legal Proceedings are concerned. Allowing their use would enable the matters to be fully and finally determined while maintaining the integrity of the court's processes. [31] Moreover, as noted in Riddick at p.896, the public interest in discovering truth so that justice may be done between parties must be weighed against preserving privacy and protecting confidential information. Here, the balance clearly favors allowing use of the documents given their centrality to the related proceedings and the absence of any demonstrated prejudice to the Defendants. Notice to D1 to D4 [32] I must emphasise that D1 to D4 had clear and proper notice of this application through their solicitor Mr. Na. The procedural history shows: a) In the case management before me on 27.6.2024, the Plaintiffs informed that they had served the unsealed Notice of Application in Enclosurre 196 dated 19.6.2024 and supporting Affidavit affirmed on 19.6.2024 on all Defendants on 19.6.2024; b) The Plaintiffs then served the sealed Notice of Application dated 19.6.2024 on all Defendants on 21.6.2024; c) At the case management on 27.6.2024, Mr. Na representing D1 to D4 specifically informed the court that “kami perlu dapatkan arahan lanjut daripada anak guam kami sama ada mempunyai sebarang bantahan terhadap Kandungan 196 tersebut”; d) The court then fixed strict timelines, directing that any Affidavit Jawapan be filed by 5.7.2024; e) When the matter came up for hearing on 23.7.2024, Mr. Na informed the court “I do not have any instructions from him. Yes, My Lord”; and f) This ultimately led to Mr. Na having to apply through Enclosure 193 to discharge himself as solicitor for D1 to D4. [33] D1 to D4’s conduct in: a) failing to give any instructions to their counsel despite having been served with the application since 19.6.2024; b) failing to file any Affidavit in Reply by the court's deadline of 5.7.2024; and c) failing to give instructions even by the case management date of 23.7.2024, leading their counsel to seek discharge, clearly demonstrates their lack of opposition to this application. This is particularly significant given that they had over a month to consider their position and respond appropriately. Their complete silence and inaction, despite having proper notice through their solicitor on record, can only be interpreted as acquiescence to the application. [34] In contrast, the other Defendants who wished to take a position on the application did so expressly through their counsel - with D5's counsel Ms Jeane Lee Yi Jin, D6's counsel Mr Stefan Aaron Maman and D7's counsel Puan Gurmit Singh all stating their non-objection for the record during case management. D1 to D4’s failure to similarly state their position, despite having every opportunity to do so, reinforces the court's view that they do not oppose this application. Conclusion [35] In all the circumstances, I am satisfied that this is an appropriate case to allow the Plaintiffs' application for release of the implied undertaking to permit use of the documents obtained through the Anton Piller order in the specified proceedings. Not only have the Defendants failed to raise any opposition despite having ample notice and opportunity to do so, but more fundamentally, allowing such use would serve the interests of justice by enabling a full and proper determination of the related proceedings while causing no unfair prejudice to the defendants. The application is therefore allowed with costs, and I make the orders as prayed for in Enclosure 196. 2 January 2025 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiffs: Polwin Sua Shiang-Nian and Mohd Irwan bin Ismail (Messrs Cecil Abraham) For the 1st to 4th Defendants: Na Wee Jern (Messrs Wee Jern and Partners) For the 5th Defendant: Ung Zhee Laine and Jeane Lee Yi Jin (Messrs Lim Kian Leong)