1. ) Qlivia Hen Chye Chin v 1. ) Sachaway Sdn Bhd (PA-22NCvC-190-11/2021)

QLIVIA HEN CHYE CHIN

VALERIE CHEW WAN JUN (NO. K/P: 970130-07-5148) … PLAINTIF-PLAINTIF DAN 1. SACHAWAY SDN BHD

ORIENTAL INCHAWAY SDN BHD

LEE YIP SIE

SONG CHEN SOO

LEE KIM PENG (NO. K/P: 690214-04-5265) … DEFENDAN-DEFENDAN JUDGMENT (ALLOWING THE APPLICATION TO TRANSFER THE SUIT) 09/02/2023 09:20:41 PA-22NCvC-190-11/2021 Kand. 58 Page 2 of 21 PRELUSION [1] The 1st Defendant (D1) and the 2nd Defendant (D2) are companies. I will refer to D1 and D2 together as “D1D2”. D1D2 are represented by one set of solicitors. [2] The 3rd Defendant (D3), 4th Defendant (D4) and 5th Defendant (D5) are individuals. I will refer to D3, D4 and D5 together as D3D4D5. D3D4D5 are represented by another set of solicitors. [3] D1D2 filed an Application to transfer this Suit from the High Court In Malaya at Penang to the High Court In Malaya at Johor Bahru. D3D4D5 support this Transfer Application. [4] I use the expression “High Court In Malaya” and not the often-used expression “High Court Of Malaya” because Article 121(1) of the Federal Constitution and section 3 of the Courts Of Judicature Act 1964 refer to the High Court as the “High Court In Malaya”. [5] For the sake of brevity, I will also refer to the High Court In Malaya at Penang as the “Penang High Court”, and the High Court In Malaya at Johor Bahru as the “Johor Bahru High Court”. [6] The Defendants’ grounds for the transfer include—

the Plaintiffs’ causes of action arose in Johor Bahru;

D1D2’s place of business is in Johor Bahru;

the Defendants who are individuals: D3D4D5 reside in Johor Bahru; Page 3 of 21

it will be comparatively more inconvenient for D1D2’s witnesses (and D3D4D5) to go to Penang to testify if this Suit proceeds in Penang;

D1D2 (and D3D4D5) will incur more expenses if the trial is held in Penang. [7] Should the Suit be transferred to the Johor Bahru High Court? THE JURISDICTIONAL ASPECT OF TRANSFERS [8] On the jurisdictional aspect of Transfer Applications, I am guided by the oft-cited authority on transfers—Sova Sdn Bhd v Kasih Sayang Realty Sdn Bhd [1988] 2 MLJ 268 (HC)—which propounded the principles to consider when faced with the issue of which is the most suitable court to try a case. [9] In Sova (supra), Justice Lim Beng Choon of the High Court In Malaya at Alor Setar, propounded (at pages 270-271)— Another point worthy of notice is that a writ of summons issued by this court must bear the title "In the High Court in Malaya at Alor Setar". Likewise a writ issued by the High Court located at Penang must also bear the title "In the High Court in Malaya at Penang". The words "at Alor Setar" and "at Penang" are clearly indicative that the High Court located at Alor Setar and Penang respectively are but branches of the same High Court in Malaya. Support of this proposition can be found in the case of Re Application of Asia Insurance Co Ltd [1968] 2 MLJ 228 229 where it is stated: "… The term 'High Courts' is, however, defined in section 3 of the Courts of Judicature Act to mean the High Court in Malaya, the High Court in Borneo and the High Court in Singapore. Because of this definition I think Page 4 of 21 the plaintiff is entitled to file the action in any branch of the High Court in Malaya. The defendant is, however, not precluded from making an application under rule 2(1) of the Third Schedule to the Courts Ordinance 1948 to have the action transferred to the High Court Penang or Alor Star… It is also implicit from that judgment that a branch of the High Court located in any state has concurrent jurisdiction to entertain any civil proceedings;… . . However, that is not the end of the matter since the defendants have also contended that this court is not the proper or convenient forum to determine the dispute between the parties. To this contention, I agree. It is quite obvious that in creating a branch of the High Court in Malaya in each state, the legislature had two things in mind:

(i)to enable the parties of a civil suit to have easy access to a branch of the High Court in Malaya located in a state where either the plaintiff or the defendant resides. When a person is sued for breach of contract or for that matter a tortious act when the breach or the tort was committed in the state where he resides, it is certainly unreasonable to require him to travel all the way, say, to Kuala Lumpur to defend himself. Apart from the expense incurred, the defendant may have to remain in Kuala Lumpur perhaps one week to participate in the civil proceedings. No doubt he would be compensated in terms of costs should he succeed in defending himself but the inconvenience caused may outweigh the amount of costs awarded to him;

(ii)the obvious reason for the setting up of a branch of the High Court in Malaya in every one of the 11 states is to facilitate the disposal of cases in Malaya and to cut down, even if it is not yet possible to obliterate, the Page 5 of 21 backlog of cases pending in any one or more of the branches of such High Court. For the reasons as stated above, I do not think that the present civil proceedings should be dealt with by this court. I am also of the view that it is for the defendants to apply to this court for a transfer of the civil suit and the application made by the plaintiffs under Order 81(1) to the High Court in Malaya at Penang or Kuala Lumpur since the cause of action arose in Penang but the parties have their places of business in Kuala Lumpur. [emphasis added] THE PLAINTIFFS’ CAUSES OF ACTION, AND THE RELIEFS AND REMEDIES THEY SEEK [10] From reading the Plaintiffs’ Statement Of Claim, the following facts that are pertinent to this Transfer Application are pleaded. [11] The Plaintiffs are mother and daughter. They both reside in Penang. [12] D1 is a direct sales company that sells “Inchaway” health products using a multi-level marketing system. D2 is the company that produces the “Inchaway” health products. [13] The Plaintiffs are members and distributors of D1D2’s direct sales business. They each have Accounts in D1D2’s direct sales business. There was a contract between the Plaintiffs and D1D2 and D3. The Plaintiffs assert that as a result of the Defendants’ breach of contract and tortious conduct, the Plaintiffs suffered loss and damage. Page 6 of 21 [14] The Plaintiffs’ causes of action against the Defendants include—

wrongfully suspending the Plaintiffs’ direct sales Accounts;

wrongfully “transferring” the Plaintiffs’ Accounts to D4. These first two causes constitute the breach-of-contract cause of action;

fraudulent misrepresentation;

conversion;

conspiracy to injure; and

defamation. [15] The Plaintiffs’ pray for reliefs and remedies that include—

a Declaration that D1D2 wrongfully deprived the Plaintiffs of their entitlements, benefits and rewards, as members of D1D2’s direct sales business;

a Declaration that D3 fraudulently misrepresented certain facts to the Plaintiffs;

a Declaration that D4 is not the lawful owner of the Plaintiffs’ Account;

a Declaration that the Defendants conspired and colluded to injure the Plaintiffs; and Page 7 of 21

damages. [16] D1D2, and D4 and D5 mounted Counterclaims against the Plaintiffs. Only D3 did not file a Counterclaim. ORDER 57 RULE 1 GOVERNS APPLICATIONS TO TRANSFER [17] Order 57 Rule 1 of the Rules Of Court 2012 relates to and governs applications to transfer proceedings from one Court to another. [18] Order 57 Rule 1 provides as follows—

Transfer of proceedings to another Court (O. 57 r. 1)

Where the Judge of the High Court… is satisfied that any proceedings in that Court can be more conveniently or fairly tried in some other Court of co-ordinate jurisdiction, he may on application by any party, order the proceedings to be transferred to the other Court. .

Before making any order to transfer any proceedings from-

the High Court to another High Court of co-ordinate jurisdiction; . the High Court Judge… shall take into consideration whether the High Court… which shall hear the case is located at or nearest to the place where-

(A) the cause of action arose;

(B) the defendant, or one of the several defendants, resides or has his place of business;

(C) the facts on which the proceedings are based exist or are alleged to have occurred;

(D) the land the ownership of which is disputed is situated; [note: this factor is not relevant to this Transfer Application]

(E) for other reasons it is desirable in the interests of justice that the proceedings should be transferred. [emphasis and note added] [19] According to Order 57 Rule 1, there are six factors that I have to consider when I am deciding whether to grant the transfer Order. The first four factors are as set out in Order 57 Rule 1(4), namely—

Factor (A)—where the cause of action arose;

Factor (B)—where D1D2 have their place of business and where D3D4D5 reside;

Factor (C)—where the facts upon which this Suit is based occurred;

Factor (E)—reasons that make it desirable, in the interest of justice, to transfer the Suit to the Johor Bahru High Court. [20] The fourth and fifth relevant factors are as set out in Order 57 Rule 1(1), namely whether—

this Suit is more conveniently tried in the Johor Bahru High Court; Page 9 of 21

this Suit is more fairly tried in the Johor Bahru High Court. [21] At this juncture, I am guided by the case law authority of POSC TI Sdn Bhd v Kerajaan Negeri Terengganu & Anor [2016] 10 MLJ 663 (HC), by the principle that out of the five factors—(A) to (E)—listed in Order 57 Rule 1(4), none of the factors is more important than any of the other factors. None of the factors has more weightage or is more cogent than any of the other factors. I am to give each of the factors equal consideration and decide whether there is any factor that warrants this Suit to be transferred to the Johor Bahru High Court. [22] In POSC TI (supra), Justice Mary Lim J (later FCJ) propounded it like this— [18] First of all, there is power to make such an order under O 57. The exercise of this discretionary power must take into consideration the factors set out in O 57 r 4(A) to (E). These factors are the same factors found in s 23 of the Courts of Judicature Act 1964 (‘Act 91’). [19] It is also evident from a proper reading of O 57 r 4, not any one factor will prevail over the other. The court is to weigh any or all the factors relied on in making a decision on whether the application ought to be acceded to. [emphasis added] FACTOR (A): WHERE THE CAUSE OF ACTION AROSE [23] In opposing this Transfer Application, the Plaintiff submits that the breach-of-contract cause of action arose where the breach was Page 10 of 21 discovered. The Plaintiffs assert that they discovered the breach in Penang, where they reside. [24] The Plaintiffs conduct their direct sales business in Penang. In October 2020, when they logged into their Account, they discovered that D1 has removed the Plaintiffs as the owners of the Account that belonged to them. They found that they were replaced by D4 as the owner of the Account. This event, argues the Plaintiffs, constituted D1D2’s breach of the contract between them, which triggered the cause of action for breach of contract. [25] I am not persuaded by this argument. D1D2 have their registered address (the same address) in Johor Bahru. D1 also has its business address in Johor Bahru. These facts are pleaded by the Plaintiffs themselves in their Statement Of Claim. [26] When D1D2 suspended the Plaintiffs’ Account, and replaced D1D2 with D4 as the owner of the Account—D1D2 did these acts in their place of business in Johor Bahru. If D1D2’s acts constitute a breach of contract, the breach would have occurred at D1D2’s premises in D1’s business address in Johor Bahru. [27] And so I find that the cause of action occurred not in Penang but in Johor Bahru. FACTOR (B): WHERE THE DEFENDANTS HAVE THEIR PLACE OF BUSINESS AND WHERE THEY RESIDE [28] The Plaintiffs submit that they reside and conduct their business in Penang. They should be allowed to file this Suit in Penang. Page 11 of 21 [29] The Plaintiffs indeed could file this Suit in the High Court In Malaya in any of the locations where the High Court is situated. But the issue in this Transfer Application is: which location of the High Court is the most suitable venue to hear and determine this Suit. [30] The Plaintiffs admit, in fact pleaded, that D1D2’s registered and business addresses are in Johor Bahru, and D3D4D5’s residential addresses are also in Johor Bahru. [31] Hence, this factor of the Defendants’ addresses (and not the Plaintiffs’ address) emerge in favour of acceding to the Defendants’ request to transfer this Suit to the Johor Bahru High Court for disposal. FACTOR (C): WHERE THE FACTS OF THIS SUIT OCCURRED [32] The Plaintiffs argue that the facts that gave rise to this Suit occurred in Penang. The Defendants, of course, argue that the facts that gave rise to this Suit happened in Johor Bahru. [33] Based on the pleadings and the affidavit evidence disclosed at this juncture, I find that there is no clear-cut answer to this question. In my view, the facts on which this Suit is based, in all likelihood occurred both in Penang and in Johor Bahru. [34] So this factor does not bear upon my consideration on whether to transfer the Suit to the Johor Bahru High Court. FACTOR (E): WHETHER IT IS DESIRABLE, IN THE INTEREST OF JUSTICE, TO TRANSFER THE SUIT; AND WHETHER THE SUIT IS MORE CONVENIENTLY OR FAIRLY TRIED IN JOHOR BAHRU Page 12 of 21 [35] The next three factors to consider are—(i)whether it is desirable, in the interest of justice, to transfer the Suit to the Johor Bahru High Court;

(ii)whether the Suit is more conveniently tried in the Johor Bahru High Court; and (iii)whether the Suit can be fairly tried in the Johor Bahru High Court. [36] In the context of these factors, the Plaintiffs submit that it is desirable, and that it is more convenient and fair, for this Suit to be tried in Penang. The Plaintiffs’ points include—

It is all right for the Defendants to incur more expenses for the trial to be in Penang because if the Defendants succeed, they will be sufficiently compensated by an appropriate Order for costs.

D1D2 are companies that generate huge profits, compared to the Plaintiffs, who are just individuals with normal means. The prejudice will be greater on the Plaintiffs if they have to go to Johor Bahru for the trial, as opposed to the prejudice on the Defendants if they have to go to Penang for the trial.

The Plaintiffs and their witnesses are from Penang. If the trial is in Johor Bahru, they and their witnesses will be inconvenienced, and they will have to bear heavier expenses. [37] On the contrary, in the context of these factors, the Defendants submit that it is desirable, and that it is more convenient and fair for this Suit to be tried in Johor Bahru for the following reasons— Page 13 of 21

D1D2’s witnesses are from Johor Bahru. And D3D4D5 are also from Johor Bahru. It is inconvenient for all of them to have to go to Penang for the trial.

It is also more costly for them to travel to Penang to testify at the trial. Their expenses would increase compared to if the trial is in Johor Bahru.

The Johor Bahru High Court has the “closest nexus” to this dispute and it will be “oppressive” for them to have to go to Penang for the trial. [38] In support of this last proposition, the Defendants cite the authority of Low Long Yoong & Anor v Low Kok Choon & Anor [2014] 2 MLJ 725 (HC), which also relates to an application to transfer a suit out of the Penang High Court to the Muar High Court, where Justice Nantha Balan JC (later JCA) held— [45] In my view, the most important task in a transfer application is to ascertain which court has the closest nexus to the dispute… . TRANSFER OF SUIT TO MUAR HIGH COURT [47] …Ultimately, I was convinced that the only persons who would benefit if the suit were to remain in Penang are the plaintiffs as they would not have to travel to the Muar High Court. On the other hand if the suit were to remain in Penang, then the witnesses from Kluang, Muar and Johor Bahru would have to travel to Penang. That in itself is oppressive. [39] It is my view that the Defendants’ arguments are more cogent. The Plaintiffs accept that D1D2’s place of business is in Johor Bahru, but Page 14 of 21 argues that D1D2 also have addresses in Penang. D1D2 has a business presence in Penang too. [40] It is agreed that the Defendants’ place of business and residence are in Johor Bahru. D1D2’s place of business is in Johor Bahru. D3D4D5 reside in Johor Bahru. And even if D1D2 have places of business in both Penang as well as Johor Bahru, the fact remains that the individual Defendants: D3D4D5 reside in Johor Bahru. This factor favours the Defendants. [41] The Plaintiffs argue that if the case is transferred to Johor Bahru, they, as individuals, will incur much expense to go to Johor Bahru for the trial. They also allege that their witnesses are in Penang. But as D1D2’s counsel points out, the Plaintiffs did not particularise who their witnesses are, and that apart from the Plaintiffs themselves, it is uncertain that the Plaintiffs are going to call other witnesses to testify and that they are in fact from Penang. [42] I also find that it is the Plaintiffs who have filed this Suit, and engaged the Defendants to come to Court to defend against this Suit. It is the Plaintiffs who have initiated this Suit and hauled the Defendants to Court. The relative inconvenience should not be placed upon the Defendants. The inconvenience should be absorbed by the Plaintiffs, who filed the Suit. [43] Just like the Plaintiffs, D3D4D5 are also individuals. Since the Plaintiffs have sued them, it is D3D4D5’s inconvenience that I should weigh against the Plaintiffs’ inconvenience. In this regard, I consider that Page 15 of 21 D3D4D5’s inconvenience weighs in more heavily. After all, they are the Defendants, defending against the Plaintiffs’ suit. [44] Further, under Order 57 Rule 1(4), it matters not where the Plaintiffs reside. It only matters where the Defendants have their business addresses and their residential addresses. [45] I conclude then that the principle that crystalises from these considerations is that if a plaintiff wishes to sue, the plaintiff should sue in the High Court in the State or Territory where the defendant has its place of business or where the defendant resides. Otherwise, the defendant is at liberty to apply to transfer the suit to the High Court in the State or Territory where the defendant has its place of business, or where the defendant resides. THE JUST, EXPEDITIOUS AND ECONOMICAL PRINCIPLE AND THE USE OF REMOTE COMMUNICATION TECHNOLOGY [46] The Plaintiffs also argue that it is just, expeditious and economical to let this Suit remain in Penang to be disposed of by the Penang High Court. [47] The Plaintiffs cited case law authorities where the presiding High Court did not allow the transfer application. The authorities include—

Liziz Plantation v Liew Ah Yong [2020] 10 MLJ 360 (HC); [2020] 10 CLJ 94; and

Pacific & Orient Insurance Co Bhd v Mohammad Hafizi Bahari & Anor [2021] 1 LNS 647 (HC). Page 16 of 21 [48] Although I am guided by the reasoning of the presiding High Court in these two cases, I find, however, that there are facts and factors in Liziz Plantation (supra) and Pacific & Orient (supra) that distinguish them from this Suit. The Liziz Plantation case [49] Liziz Plantation (supra) is an Originating Summons case, where the “critical issue” is a question of law about the removal of private caveats, which do not require the testimony of witnesses: paragraphs [31] to [37] of the Judgment. [50] Also, the Originating Summons had reached “an advanced stage of being ready for hearing”, and to transfer it to another Court “would not secure the just, expeditious and economical disposal” of the Summons: paragraph [37] of the Judgment. [51] In contrast, this Suit is a Writ action, which necessitates a trial, which calls for the testimony of witnesses. It is also not at the stage where the trial is ready to proceed. [52] On the balance, I find that it is just, expeditious and economical to determine this Suit in the Johor Bahru High Court. The Pacific & Orient case [53] Pacific & Orient (supra) is a Writ action. The transfer application there was not allowed for reasons that included these reasons (see paragraph [61] of the Judgment)—

the trial dates were already fixed by the Kuala Lumpur High Court; and Page 17 of 21

with the use of remote communication technology, there should be no issue about travelling out of the respective cities to attend the trial. In other words, there was no need to transfer the case to the Johor Bahru High Court. The plaintiff there assert that the defendants and their witnesses can testify through remote communication technology, through what is colloquially called a “Zoom trial”. [54] In contrast to Pacific & Orient (supra), however, this Suit is not at the stage where pre-trial directions were given and the case is already fixed for trial. [55] Also, in Pacific & Orient (supra), there was no issue with the residential addresses of the Defendants, which, according to Order 57 Rule 1(4), is one of the factors that I have to expressly take into account when I consider whether to grant the Transfer Application. [56] As for the argument mounted by the Plaintiffs that the geographical location of the parties is no longer important because of the use of remote communication technology—I note that the Pacific & Orient (supra) judgment was written in April 2020. The year 2020 was the year of the Movement Control Order and the different versions of it. There was a need to have trials to be conducted by remote communication technology then. [57] There would have been much delay if the Pacific & Orient action was transferred to the Johor Bahru High Court and a physical trial in open court had to be conducted. It would have been uncertain as to when the physical trial would be permitted to be held. Page 18 of 21 [58] And since the factor of the Defendants’ business and residential addresses is expressly provided for in Order 57 Rule 1(4) to be considered when deciding on this Transfer Application, and it is the Plaintiffs who have instituted this Suit against the Defendants—I hold that this factor (of the business and residential addresses) cannot and should not be disregarded just because there is now an option to use remote communication technology. [59] I am of the view that the Courts should be circumspect not to permit the floodgates to be opened by this argument—that since trials can be conducted by remote communication technology, the factors set out in Order 57 Rule 1 have become redundant. [60] This argument will open the door for any plaintiff to file a suit anywhere in Malaysia without any regard to the factors set out in Order 57 Rule 1, and without the avenue of applying for a transfer to a more appropriate location of the High Court for disposal. These plaintiffs will submit that since trials can be conducted by remote communication technology, they are at liberty to file their suits anywhere in the country, at their own convenience, without regard to factors such as—where the cause of action arose; where the defendants reside or have their place of business; where the facts that gave rise to the dispute arose; whether there are other reasons that make it desirable and in the interest of justice to have the suit tried by a Court at another location; and whether it is convenient or fair to try the case in the Court where it was filed or at another location. [61] I hold that a Transfer Application must be considered in the context of the factors set out in Order 57 Rule 1, as well as in the context of the facts and circumstances of each case. Page 19 of 21 [62] As for the element of inconvenience, I am mindful that it is the relative convenience or inconvenience to the parties that I should consider. Order 57 Rule 1(1)’s expression is “more conveniently or fairly tried”. I find that this Suit is more conveniently and equally fairly tried in the Johor Bahru High Court. CONCLUSION [63] On the facts and circumstances discussed above—namely (1)that the cause of action arose in Johor Bahru; (2)that the Defendants’ business and residential addresses are in Johor Bahru; (3)that it is more costly for the five Defendants and their witnesses to go to the Penang High Court for the trial, as opposed to the two Plaintiffs and their witnesses to go to Johor Bahru for the trial—I find that not only will it be just, expeditious and economical to transfer this Suit to the Johor Bahru High Court for trial, but this Suit will be more conveniently and fairly tried in the Johor Bahru High Court. I also find that it is desirable and it is in the interest of justice to have the trial in the Johor Bahru High Court. [64] I therefore allow D1D2’s Transfer Application to transfer this Suit to the Johor Bahru High Court for determination, with costs to be in the cause between the Plaintiffs and D1D2 i.e. the side that ultimately succeeds in this Suit will also get the costs of this transfer proceedings, which is fixed Page 20 of 21 at RM3K. Costs are of course subject to the allocatur. I also grant the parties (the Plaintiffs and D1D2) liberty to apply. Dated: 9 February 2023 Signed KENNETH ST JAMES Judicial Commissioner High Court of Penang Counsel/Solicitors For the Plaintiffs: Chan Shao Hang, Cheng Theng Keat and Lim Tao Sheng [Messrs. Chan Eng & Co., (Pulau Pinang)] For the 1st and 2nd Defendants: Chok Chin You and Chai Juan Qi [Messrs. The Chambers of Teo Say Eng, (Johor)] For the 3rd, 4th and Sebastian Cha Tean An 5th Defendants: [Messrs. Sebastian Cha & Co., (Johor)] Page 21 of 21 Statutes referred to:

Article 121(1) of the Federal Constitution.

Section 3 of the Courts Of Judicature Act 1964.

Order 57 Rule 1(1) and Order 57 Rule 1(4) of the Rules Of Court 2012. Cases referred to:

Sova Sdn Bhd v Kasih Sayang Realty Sdn Bhd [1988] 2 MLJ

268.

POSC TI Sdn Bhd v Kerajaan Negeri Terengganu & Anor [2016]

Low Long Yoong & Anor v Low Kok Choon & Anor [2014] 2 MLJ

725.

Liziz Plantation v Liew Ah Yong [2020] 10 MLJ 360 (HC); [2020]

Pacific & Orient Insurance Co Bhd v Mohammad Hafizi Bahari & Anor [2021] 1 LNS 647.