M3 Technologies (Asia) Berhad v Voon Sze Lin (WA-22IP-41-07/2021)

M3 TECHNOLOGIES (ASIA) BERHAD (Company No. : 199901007872 (482772-D))

M3 ONLINE SDN BHD (Company No. : 200901010097 (853112-M)) … PLAINTIFFS

VOON SZE LIN (NRIC No. : 700528-10-5183)

LIM SENG BOON (NRIC No. : 571211-07-5221)

MAISARAH BINTI SAHRAN (NRIC No. : 760625-10-5358)

ASMA BINTI ARIPIN (NRIC No. : 760708-07-5318)

YAP SIEW DEEN (NRIC No. : 920827-01-6388) S/N bguvq39n0WB2vbu3/xPAA

MUHAMMAD FATAHUL HARUN BIN SUMAP (NRIC No. : 880404-04-5239)

FOO MING CHEONG (NRIC No. : 850103-14-5327)

ZAIFAH BINTI NGAH (NRIC No. : 760724-11-5084)

AMAZ DIGITAL SDN BHD (Company No.: 202101009527 (1409826-W)) … DEFENDANTS GROUNDS OF JUDGMENT

This matter comes before this Court following a protracted litigation that has seen over 500 enclosures, culminating in a trial that took an unexpected turn. The case primarily concerns allegations by a listed technology group, the Plaintiffs, against its former employees and a company they incorporated, the 3rd, 4th and 9th Defendants ("D3, D4, & D9"), of massive breaches of fiduciary duty, copyright infringement, and misappropriation of confidential information. S/N bguvq39n0WB2vbu3/xPAA

However, the central drama at trial did not revolve around the proof of these serious allegations. Instead, it concerned the Plaintiffs' failure to prosecute their own case, leading to a trial solely on D3, D4, & D9's Counterclaim for damages arising from the suit itself. The Court is now tasked with determining the fate of the Plaintiffs' main action and, more consequentially, whether D3, D4 & D9 have proven that they are entitled to compensation for the business and reputational damage they allege was inflicted by the Plaintiffs' legal actions.

After careful consideration of the pleadings, the written submissions, the cited authorities, and the notes of proceedings, the following are the grounds for my decision.

The Plaintiffs, M3 Technologies (Asia) Berhad and M3 Online Sdn Bhd (collectively "the M3 Group"), are entities within a listed technology group.

D3 and D4, Maisarah and Asma, are former senior employees of the M3 Group. During their employment, they incorporated D9 (Amaz Digital Sdn Bhd), a Bumiputera enterprise in the information technology sector. S/N bguvq39n0WB2vbu3/xPAA

On 16 July 2021, the Plaintiffs commenced the main action ("the Main Suit") against nine defendants, including D3, D4 & D9. The Plaintiffs' claims were extensive, alleging:

Breach of fiduciary duty and duty of fidelity;

Infringement of copyright in the M3 Group's software products;

Breach of confidence in confidential information and trade secrets;

Conspiracy; and

Unlawful interference with trade.

The Plaintiffs sought sweeping reliefs, including declarations that D9's software products be deemed transferred to the Plaintiffs, a 5-year injunction restraining D3, D4 & D9 from promoting or using their own software, and delivery up of all alleged confidential information.

On 19 August 2021, the Plaintiffs obtained an ex-parte Anton Piller Order against the Defendants, including D3, D4 & D9.

In defence, D3, D4 & D9 filed a Counterclaim against the Plaintiffs, seeking damages for unlawful restraint of trade and S/N bguvq39n0WB2vbu3/xPAA damage to reputation, as well as exemplary and/or punitive damages.

A critical juncture occurred before trial. D3, D4 & D9 successfully applied for an order that the Plaintiffs provide security for costs in the sum of RM150,000.00.

On the first day of trial, 17 September 2025, the Plaintiffs failed to pay the ordered security for costs. The Plaintiffs then informed the Court of their intention to discontinue the Main Suit. Consequently, the Plaintiffs did not call any witnesses or adduce any evidence to prove their claims against D3, D4 & D9. The Plaintiff’s main suit against D3, D4 & D9 was withdrawn upon formal application with the costs of RM100,000.00 payable to D3,

The trial thus proceeded solely on D3, D4 & D9's Counterclaim. D3 and D4 gave evidence as PW1CC and PW2CC respectively. Their testimony detailed the business opportunities and reputational harm they allegedly suffered due to the Main Suit and the Anton Piller Order. Upon the close of D3, D4 & D9’s case, the Plaintiffs, as defendants to the Counterclaim, elected not to call any evidence in defence.

Directions were then given for the filing of written submissions, leading to the comprehensive submissions now before the Court. S/N bguvq39n0WB2vbu3/xPAA

The following issues fall for determination:

The Status of the Plaintiffs' Main Action: What is the legal consequence of the Plaintiffs' failure to pay security for costs and their election not to call evidence at trial?

The Validity of D3, D4 & D9's Counterclaim:

Do D3, D4 & D9 have a valid cause of action in their Counterclaim?

Have D3, D4 & D9 proven, on a balance of probabilities, that they suffered loss and damage as a result of the Plaintiffs' actions?

If so, what is the quantum of general damages to be awarded?

Are D3, D4 & D9 entitled to exemplary damages? S/N bguvq39n0WB2vbu3/xPAA CONTENTIONS OF PARTIES D3, D4 & D9’s Contentions (Counterclaiming Parties)

D3, D4 & D9’s position, as outlined in their Written Submissions and Replies, can be summarised as follows:

Main Action Abandoned: The Plaintiffs' failure to pay security for costs constituted an effective abandonment of their Main Action. The Plaintiffs' claims are therefore deemed to have zero basis and must be dismissed with costs.

Counterclaim Unrebutted: The evidence of D3 and D4 on the losses suffered stands unchallenged and unrebutted, as the Plaintiffs called no witnesses. Relying on Public Bank Berhad v National Feedlot Corporation Sdn Bhd & Ors [2025] 9 CLJ 193 (FC), the Court is obliged to act on this unchallenged evidence.

Quantum of Loss: D3 and D4 testified that D9 lost specific business opportunities, including a RM250,000 tender and multiple RM50,000 government upgrade projects. They estimated an annual loss of RM1.2 million for 4 years, totalling RM4.8 million. They argued that in the IT industry, where reputation is key, the mere filing of the suit caused irreparable harm, preventing D9 from securing any business. S/N bguvq39n0WB2vbu3/xPAA

Exemplary Damages: The Plaintiffs' conduct was malicious, vindictive, and oppressive. They used their superior resources to oppress D3, D4 & D9, including by instigating MACC investigations. This warrants an award of exemplary damages of RM300,000.00.

The Plaintiffs, in their various submissions, argue:

Main Action Not Abandoned: The failure to pay security for costs does not automatically amount to an abandonment or striking out of the suit. They rely on BM City Realty & Construction Sdn Bhd v Merger Insight Builders Sdn Bhd & Anor [2024] MLJU 01559 (HC), arguing that an "Unless Order" was required. Their intention was to discontinue, not concede, and they should be granted leave to do so with liberty to file afresh.

No Valid Cause of Action: The Counterclaim, based on malicious prosecution and unlawful restraint of trade via litigation, is not a recognised cause of action in Malaysia for civil proceedings, citing Ng Wai Pin v Ong Yew Teik and other appeals [2025] 3 MLJ 764 (FC).

Loss Not Proven: D3, D4 & D9 failed to provide any documentary proof of their alleged losses. Their claims are speculative, based on tenders they "could have" won, not S/N bguvq39n0WB2vbu3/xPAA contracts they had secured. Citing Solid Gold Publishers Sdn Bhd v Chan Wee Ho & Ors [2002] 3 MLJ 310 (HC) and Tan Sri Khoo Teck Puat & Anor V Plenitude Holdings Sdn Bhd [1994] 3 MLJ 777 (FC), they argue that a claimant must prove both the fact and the amount of damage, which D3, D4 & D9 have not done.

No Basis for Exemplary Damages: There was no evidence of egregious or exceptional conduct by the Plaintiffs. Bringing a suit to protect proprietary rights, supported by an Anton Piller Order granted by the Court, cannot be construed as "unusually injurious" conduct. COURT’S FINDINGS

The Plaintiffs' position on this issue is untenable. While the case of BM City Realty & Construction Sdn Bhd v Merger Insight Builders Sdn Bhd & Anor (supra) discusses the procedure for an "Unless Order," the factual reality of this case is starkly different. The Court had made a final order for security for costs. The trial date was fixed. The Plaintiffs, faced with the choice of paying the security to proceed or not paying and being unable to proceed, made a conscious election for the latter. S/N bguvq39n0WB2vbu3/xPAA

On the day of trial, they formally declined to proceed with their case. In a civil adversarial system, a plaintiff who fails to adduce evidence in support of their claim at trial is, for all practical purposes, abandoning their claim. The Plaintiffs' subsequent application for discontinuance with liberty to file afresh is a tactical manoeuvre that does not alter the reality that their case collapsed at the threshold of trial.

It is therefore the finding of this Court that the Plaintiffs’ Main Action against D3, D4 & D9 is dismissed. Their claims for breach of fiduciary duty, copyright infringement, and all other reliefs sought against D3, D4 & D9 have not been proven and are accordingly dismissed. The Plaintiffs shall pay costs to D3, D4 & D9 in respect of the Main Action. Issue 2: The Validity and Merits of D3, D4 & D9’s Counterclaim

Cause of Action

The Plaintiffs' technical argument that Malaysian law does not recognise a tort of malicious prosecution in civil proceedings, while potentially valid, misses the point D3, D4 & D9’s Counterclaim is not solely, or even primarily, framed as malicious prosecution. It is a claim for damages for unlawful restraint of trade and injury to business reputation caused by the filing of a suit that was ultimately not prosecuted. S/N bguvq39n0WB2vbu3/xPAA

A cause of action exists where a party suffers loss due to another's unjustified invocation of legal process. While parties have a right of access to the court, this right is not absolute. Where a suit is filed without reasonable cause and it inflicts actual damage on the defendant, the law provides a remedy. The failure of the Plaintiffs to adduce even a shred of evidence in support of their serious allegations, after having obtained a draconian remedy in the nature of an Anton Piller Order, lends strong credence to D3, D4 and D9’s assertion that the suit was an unlawful restraint on their legitimate trade.

Therefore, the Court finds that D3, D4 & D9 have a valid cause of action in the context of this case, grounded in the economic tort of unlawful interference with trade, which encompasses the initiation of legal proceedings without reasonable cause that causes foreseeable loss.

Proof of Loss and Quantum

This is the most contentious issue. The Plaintiffs are correct that the burden of proof lies with D3, D4 & D9 and that damages cannot be merely speculative. D3, D4 & D9’s inability to produce signed contracts or tender award letters is a weakness in their case.

However, the Court must assess the evidence in its full context. The Plaintiffs' own actions created the circumstances that made precise proof difficult. By seeking a 5-year injunction and claiming S/N bguvq39n0WB2vbu3/xPAA ownership of all of D9's products, the Plaintiffs effectively painted a target on D9's back, making it commercially unviable for D9 to enter into any contracts. What client would engage a software company whose very right to its core products is being challenged in court by a listed entity? The evidence of D3 and D4 that they were constrained from trading is logical and compelling.

The Plaintiffs called no evidence to suggest that D9 was actively trading, that the IT tenders mentioned did not exist, or that D3, D4 & D9’s estimates of the value of such opportunities were unreasonable. In line with Public Bank Berhad v National Feedlot Corporation Sdn Bhd & Ors (supra), where evidence is unchallenged, the Court is entitled to act on it. The testimony of D3 and D4, both experienced IT professionals, on the value of lost opportunities is the best evidence available in the unique and oppressive circumstances created by the Plaintiffs.

While the claim of RM4.8 million is a projection, the Court is satisfied that D3, D4 & D9 have proven, on a balance of probabilities, that they suffered significant, real financial loss due to their inability to pursue business opportunities. The specific opportunities mentioned (e.g., the RM250,000 KPI system tender) lend credibility to their overall estimate.

Finding on Quantum.

On the issue of quantum, the Plaintiff claims RM4.8 million as damages for an alleged four-year loss of business opportunity S/N bguvq39n0WB2vbu3/xPAA arising from the inability to operate following the execution of the Anton Piller Order. In this case D9 did not commence any substantive commercial operations. There were no completed contracts, no delivery of services, and no established revenue stream.

The Court also takes judicial notice of the commercial realities of the IT industry. Early-stage IT companies typically incur heavy research and development expenditure in their first five years. Such businesses are characteristically cash-intensive and commonly operate at a loss during their initial years as they invest in product development, testing, system infrastructure and market entry. In this context, any assumption of consistent profitability during the first four years is inherently doubtful without strong documentary proof.

There was further no credible evidence of capital outlay, no cashflow analysis, and no reliable financial or accounting data placed before the Court. No independent expert evidence was adduced to support the valuation of the alleged loss. From the SSM search conducted D9 had only RM2,000 capital. The claim is therefore founded on speculative projections rather than proven commercial loss.

However, the Court recognises that the Plaintiff was restrained from carrying on its intended business by reason of the Anton Piller Order. In law, where a legal right is infringed but substantial S/N bguvq39n0WB2vbu3/xPAA loss is not proven, the Court may award nominal damages to mark the infringement of that right.

In the circumstances, the Court awards the sum of RM10,000.00 as nominal damages, not as compensation for proven financial loss, but to vindicate the Plaintiff’s legal right.

Exemplary damages.

On the issue of exemplary damages, such damages are not awarded as compensation but to punish and deter conduct that the Court considers to be oppressive, arbitrary, or calculated to secure an improper advantage. The applicable principles are well established and restrict such awards to narrowly defined categories. Lord Devlin in the case of Rookes v Barnard [1964] 1 All ER 367 (HL) propounded two categories of circumstances where exemplary damages could be awarded:

Oppressive, arbitrary or unconstitutional action by the servants of the government; and

Cases where defendant’s conduct had been calculated by him to make a profit for himself which may well exceed the compensation payable to the plaintiff.

The claim for exemplary damages by the plaintiff in our case falls in the second category. Lord Devlin in Rookes v Barnard (supra) S/N bguvq39n0WB2vbu3/xPAA held as follows with regards to the need to show a conduct which has been calculated to make a profit: “(ii)(a) English law recognized the awarding of exemplary damages, that is, damages whose object was to punish or deter and which were distinct from aggravated damages (whereby the motives and conduct of the defendant aggravating the injury to the plaintiff would be taken into account in assessing compensatory damages); and there were two categories of cases in which an award of exemplary damages could serve a useful purpose, viz., in the case of oppressive, arbitrary or unconstitutional action by the servants of the government, and in the case where the defendant’s conduct had been calculated by him to make a profit for himself, which might well exceed the compensation payable to the plaintiff. (Emphasis added) (Page 369, letters B & C)

In this context, it is evident that D9 is not required to establish that the Plaintiffs have definitively gained from the tort. The use of the phrases "had been calculated" and "might well exceed" indicates that the D9's obligation is only to demonstrate the likelihood that the Plaintiffs could benefit from the committed tort.

Further, the following passage of Lord Devlin’s judgment in Rookes v Barnard (supra) is instructive as to the scope of the second category of cases under exemplary damages: “Where a defendant with a cynical disregard for a plaintiff’s rights has calculated that the money to be made out of his wrongdoing will probably exceed the damages at risk, it is necessary for the law to show that it cannot be broken with impunity. This category is not confined to moneymaking in the strict sense. It extends to cases in which the defendant is seeking to gain at the expense of the plaintiff some object, -- perhaps some property which he covets, -- which S/N bguvq39n0WB2vbu3/xPAA either he could not obtain at all or not obtain except at a price greater than he wants to put down. Exemplary damages can properly be awarded whenever it is necessary to teach a wrongdoer that tort does not pay. (Emphasis added) (page 410, letter I & page 411, letter A).

First, the use of the phrases "has calculated" and "will probably exceed" emphasizes that D9’s burden is to establish the likelihood of profit rather than proving its actual realization. Secondly, the second category of cases is not limited to strict monetary gains. As per Lord Devlin's perspective, it encompasses situations where one party is actively attempting to benefit at the expense of the other.

This interpretation is applicable to our case. The Anton Piller Order was pursued and executed in a manner that went beyond what was reasonably necessary for the preservation of evidence. The manner of execution caused the D9’s business to be brought to a complete standstill without sufficient regard to proportionality or safeguards.

The Court finds that the Plaintiff’s conduct against D9 was not a mere procedural misstep. It displayed a conscious and calculated disregard for the D9’s commercial position, and the dominant purpose was to gain a strategic advantage in the dispute rather than solely to preserve evidence. S/N bguvq39n0WB2vbu3/xPAA

The award of exemplary damages in this case reflects a broader public interest concern. When litigants use court process not to vindicate genuine rights but to destroy competitors, they:

Abuse the court's process;

Bring the administration of justice into disrepute;

Harm legitimate businesses; and

Deter innovation and competition. Exemplary damages serve to protect this public interest by making it costly to abuse legal process.

The Anton Piller Order is one of the law's most powerful weapons. It is granted ex parte, without notice to the affected party, and permits search and seizure of materials. With such power comes immense responsibility. When a litigant obtains such an order not for its legitimate purpose—the preservation of evidence—but as a tactical weapon to destroy a competitor's business before trial, the very foundation of justice is undermined.

The Plaintiffs in this case obtained the Anton Piller Order based on allegations they subsequently abandoned. They failed to pay security for costs. They elected not to call evidence at trial. They withdrew their claim. Yet the damage to D9 was already done— S/N bguvq39n0WB2vbu3/xPAA its business was destroyed in its infancy, its reputation tarnished, its ability to compete eliminated.

The Court must send a clear message that such conduct will not be tolerated. The administration of justice depends on litigants using court processes in good faith. When that good faith is absent, and when court orders are used as instruments of commercial warfare, the Court must respond with sanctions that reflect the gravity of the misconduct.

In these circumstances, the Court is satisfied that an award of exemplary damages is justified to mark the Court’s disapproval and to deter similar conduct in the future.

Taking into account the gravity of the conduct, the need for proportionality, and the absence of proven substantial compensatory loss, the Court awards RM300,000.00 as exemplary damages.

The Court notes that D9 is a separate legal entity. Any damages for business interruption or loss of profits are properly recoverable by the company. There is no evidence before the Court that the directors, D3 and D4, suffered any personal loss independent of the company. Accordingly, the award is made solely in favour of D9. S/N bguvq39n0WB2vbu3/xPAA

The Court therefore orders:

That the counterclaim by D3, D4 & D9 is allowed.

Plaintiff is to pay D9 nominal damages in the sum of RM10,000.00.

Plaintiff is to pay D9 exemplary damages in the sum of RM300,000.00.

Plaintiff is to pay costs of the counterclaim to D3, D4 & D9 in the sum of RM30,000.00.

Damages and costs are to be paid within 30 days from the date of the judgment. Dated: 2nd March 2026 Yusrin Faidz Bin Yusoff Judicial Commissioner High Court of Malaya Kuala Lumpur S/N bguvq39n0WB2vbu3/xPAA Counsel for the Plaintiffs: Weera Premananda (Together with Jeslyn Ling) Messrs Ahmad Deniel, Rueben & Co C3-2-10, C3-2-11 & C3-2-12, Solaris Dutamas, Jalan Dutamas 1, 50480 Kuala Lumpur. Counsel for the Third, Fourth and Ninth Defendants: Mohd Ivan Hussein (Together with Queenie Hoh Li Chian) The Chambers of Queenie Hoh Li Chian P-2-16, Plaza Damas, No. 60, Jalan Hartamas 1, Sri Hartamas, 50480 Kuala Lumpur. CASE REFERENCE:

Public Bank Berhad v National Feedlot Corporation Sdn Bhd & Ors [2025] 9 CLJ 193 (FC).

BM City Realty & Construction Sdn Bhd v Merger Insight Builders Sdn Bhd & Anor [2024] MLJU 01559 (HC).

Ng Wai Pin v Ong Yew Teik and other appeals [2025] 3 MLJ

Solid Gold Publishers Sdn Bhd v Chan Wee Ho & Ors [2002]

Tan Sri Khoo Teck Puat & Anor v Plenitude Holdings Sdn Bhd [1994] 3 MLJ 777 (FC).

Rookes v Barnard [1964] 1 All ER 367 (HL) S/N bguvq39n0WB2vbu3/xPAA