Tan Pit Mooi v Jaia Sdn Bhd (W-02(IPCv)(W)-1707-10/2023)

TAN PIT MOOI (No. K/P: 740214-10-5208)

SIGNATURE CONCEPTS SDN BHD (No. Syarikat: 200501025218 (707351-U)

NG KOK LEONG (No. K/P: 740529-08-6689)

HYGIENE LIVING SDN BHD (No. Syarikat: 202001038740 (1395061-D)

SEOW HON SEONG (No. K/P: 730325-10-5295)

PROTECTION BRANDS PTY LTD (No. Syarikat Australia: 160 443 498)

HYGIENE HEALTY PTY LTD (No. Syarikat Australia: 640 393 442)

MARK CHRISTOPHER PETTITT ... APPELLANTS AND JAIA SDN BHD (No. Syarikat: 201901041048 (1350378-A) ... RESPONDENT [In The High Court Of Malaya In Kuala Lumpur Civil Suit No: WA-22IP-14-03/2021 Between Jaia Sdn Bhd (No. Syarikat: 201901041048 (1350378-a) ... Plaintiff

Tan Pit Mooi (No. K/P: 740214-10-5208)

Signature Concepts Sdn Bhd (No. Syarikat: 200501025218 (707351-U)

Ng Kok Leong (No. K/P: 740529-08-6689

Hygiene Living Sdn Bhd (No. Syarikat: 202001038740 (1395061-D)

Seow Hon Seong (No. K/P: 730325-10-5295)

Protection Brands Pty Ltd (No. Syarikat Australia: 160 443 498)

Hygiene Healty Pty Ltd (No. Syarikat Australia: 640 393 442)

Christopher David Plastow

Mark Christopher Pettitt ... Defendants] CORAM HASHIM HAMZAH, JCA CHOO KAH SING, JCA LIM HOCK LENG, JCA JUDGMENT Introduction [1] For ease of reference, the parties in this appeal shall be referred to as they were in the High Court below. [2] This is an appeal by the $ 1^{\mathrm{st}} $ $ 2^{\mathrm{nd}} $ and $ 3^{\mathrm{rd}} $ Defendants against the decision of the learned trial judge, in which the Plaintiff's claim for breach of confidence, passing off, conspiracy to injure, unlawful interference with trade, and breach of directors' duties was allowed. The decision was delivered on 27.9.2023, after a full trial. [3] For the sake of clarity, when the $ 1^{\mathrm{st}} $ $ 2^{\mathrm{nd}} $ and $ 3^{\mathrm{rd}} $ Defendants are referred to collectively in this judgment, they shall be referred to as the Defendants. Background Facts [4] The salient facts of the present appeal are as follows. [5] The business engaged in manufacturing, distributing, selling, and marketing health and hygiene products, such as hand liquid, surface liquid, air sanitiser liquid, and automotive liquid under the brand 'Stayzon', was initially owned by two Australian companies, namely, the $ 6^{\mathrm{th}} $ Defendant and its affiliated company, MCS Capital Partners Pty. Ltd. ("MCS"). [6] Prior to 9.12.2019, the $ 2^{nd} $ Defendant was the exclusive authorised distributor of 'Stayzon' products in Malaysia. The $ 1^{st} $ and $ 3^{rd} $ Defendants, both husband and wife, served as the $ 2^{nd} $ Defendant's directors and were also its shareholders at that time. [7] To enable the $ 2^{\mathrm{nd}} $ Defendant to deal with the 'Stayzon' products within Malaysia, particularly those related to health and hygiene products that may contact external parts of the human body, the $ 2^{\mathrm{nd}} $ Defendant was required under the National Pharmaceutical Regulatory Agency ("NPRA") Guidelines 2017 to obtain the Notification Note ("NOT") for these products. [8] In 2018, the $ 2^{\mathrm{nd}} $ Defendant had successfully obtained NOTs for Stayzon Skin Anti-Bacterial Spray and Stayzon Skin Anti-Bacterial Foam ("the Products"), namely NOT180500678K and NOT180603670K, respectively ("the 2018 NOTs"). [9] On 13.11.2019, the Plaintiff company was incorporated by the $ 1^{\mathrm{st}} $ Defendant and Jasmine Jane Mohan ("PW2"), with both becoming its joint directors and shareholders. The primary purpose of establishing the Plaintiff was to acquire the 'Stayzon' business from the $ 6^{\mathrm{th}} $ Defendant and MCS. [10] On 9.12.2019, the Plaintiff entered into a written agreement with the $ ^{6th} $ Defendant and MCS for the acquisition of all the assets, rights, benefits, and interests, including all intellectual property rights and goodwill associated with the 'Stayzon' business, for a nominal consideration of AUD $1.00 ("Acquisition Agreement"). [11] Since then, the Plaintiff has used the 'Stayzon' mark in Malaysia throughout the course of its daily business. [12] The Plaintiff's claim against the Defendants is based on breach of confidence, passing off, conspiracy to injure, unlawful interference with trade, and breach of directors' duties. [13] According to the Plaintiff-The Plaintiff's Case a) after the Plaintiff had acquired the 'Stayzon' business, the 2018 NOTs registered under the $ 2 ^{n d} $ Defendant's name were still valid; b) to ensure the proper continuation of its business, the Plaintiff would need to obtain fresh NOTs from the NPRA for the Products and register them under the Plaintiff's name upon their expiry; c) the $ 1^{\mathrm{st}} $ Defendant was entrusted to register the Products with the NPRA before the expiry of the 2018 NOTs; d) on 26.1.2021, the Plaintiff discovered through the NPRA's official website that the Products had been registered in the name of the 2 $ ^{nd} $ Defendant sometime in July 2020 ("2020 NOTs") , without the Plaintiff's knowledge or consent; e) the $ 1^{\mathrm{st}} $ Defendant had colluded with the $ 4^{\mathrm{th}} $ $ 5^{\mathrm{th}} $ $ 6^{\mathrm{th}} $ $ 8^{\mathrm{th}} $ and $ 9^{\mathrm{th}} $ Defendants, along with Afterworx Pty Ltd ("Afterworx") , to launch sanitiser products under a different brand known as 'Hygiene Labs', which was alleged to be in direct competition with the Plaintiff's business; f) the $ 4^{\mathrm{th}} $ Defendant's 'Hygiene Labs' disinfectant spray and wipes are substantially similar to the Plaintiff's unlaunched 'Stayzon 3-in-1 Anti-Bacterial Wipes' ("the Unlaunched Product") in design, packaging, descriptions, usage, safety guides, and icons, which was alleged to have infringed upon the Plaintiff's copyrighted works of its products; and g) the $ 4^{th} $ Defendant unlawfully copied the Unlaunched Product as a result of the $ 1^{st} $ Defendant unlawfully disclosing confidential information belonging to the Plaintiff to third parties. The Defendants' Defence and Counterclaim [14] The Defendants, on the other hand, contended, among others, that-a) on 18.2.2020, the Plaintiff applied to register the 'Stayzon' mark as a trademark in Malaysia, but the registration was unsuccessful. Therefore, the trademark 'Stayzon' was not proven by the Plaintiff to have been registered in Malaysia under the Plaintiff's name; b) the proprietary rights and ownership of the 'Stayzon' trademark belong to the $ 6^{th} $ Defendant and MSC, who are the common law owners of said trademark in Australia and other countries worldwide, including Malaysia; c) the Plaintiff has failed to establish the specific nature of the purported confidential information allegedly misused by the Defendants; d) the $ 1^{\mathrm{st}} $ Defendant fulfilled her duties as a director of the Plaintiff with good faith, due care, skill, and diligence, consistently acting in the best interests of the Plaintiff; e) the $ 1^{\mathrm{st}} $ Defendant was not aware of the Plaintiff's new products; and f) the Plaintiff's claim for passing off lacks merit, as the Plaintiff has not acquired any goodwill or reputation associated with the 'Stayzon' products. [15] The Defendants also filed a counterclaim against the Plaintiff, alleging that the Plaintiff's claim against them was an abuse of process, filed in bad faith, for a collateral purpose, and with an ulterior motive to damage the Defendants' business and reputation. Findings of the High Court [16] During the trial, two witnesses gave evidence for the Plaintiff, i.e., Muhammad Ariff bin Rosely ("PW1") and PW2. Three witnesses gave evidence for the Defendants, i.e., the 3rd Defendant, Ng Kok Leong ("DW1"), the 1 $ ^{1 \mathrm{st}} $ Defendant, Tan Pit Mooi ("DW2"), and the 5 $ ^{5 \mathrm{th}} $ Defendant, Seow Hon Seong ("DW3"). [17] At the conclusion of the trial, the learned trial judge found, among others, that the Plaintiff had successfully proven its case on the balance of probabilities-a) against the Defendants for breach of confidence, passing off, conspiracy to injure, and unlawful interference with the Plaintiff's trade; and b) against the $ 1^{\mathrm{st}} $ Defendant for breach of directors' duties. [18] The trial judge had also dismissed the Defendants' counterclaim against the Plaintiff. [19] In conjunction with those findings, the learned trial judge ordered as follows against the Defendants, and we quote: "1. ...

Satu deklarasi bahawa Defendan-Defendan Pertama, Kedua dan Ketiga telah mengelirukan atau melakukan percubaan untuk mengelirupa perdagangan, perniagaan dan barangan Defendan Kedua sebagai perdagangan, perniagaan dan barangan Plaintif atau sebagai berkaitan atau berhubungan dengan Plaintif dengan apacarapun;

Satu deklarasi bahawa Defendan-Defendan Pertama, Kedua dan Ketiga telah melakukan tort pelanggaran kewajipan kerahsiaan;

...

...

...

Satu deklarasi bahawa Defendan-Defendan Pertama, Kedua dan Ketiga telah berkonspirasi untuk menjejaskan Plaintiff (conspired to injure the Plaintiff);

Satu deklarasi bahawa Defendan-Defendan Pertama, Kedua dan Ketiga telah melakukan tort campur tangan perdagangan, perniagaan dan/atau kepentingan ekonomi Plaintiff secara menyalahi undang-undang;

...

Tuntutan Plaintif terhadap Defendan Pertama untuk pelanggaran hak cipta adalah ditolak;

Satu injunksi untuk menghalang Defendan-Defendan Pertama, Kedua dan Ketiga sama ada secara diri mereka sendiri, pengarah-pengarah, pegawai-pegawai, pengkhidmat-pengkhidmat atau ejen-ejen mereka atau mana-mana daripada mereka secara bersama atau berasingan dengan apa-apa cara pun daripada melakukan atau membenarkan orang lain untuk melakukan tindakan-tindakan berikut atau mana-mana tindakan berikut, iaitu: a. Mengelirupakan perdagangan dan perniagaan Defendan Kedua sebagai perdagangan dan perniagaan Plaintiff termasuk tetapi tidak terhad kepada penggunaan cap 'Stayzon' Plaintiff atau cap-cap yang lain yang digunakan berkaitan dengan barangan, peristiwa, perniagaan dan barangan dagangan yang dianjurkan di bawah nama perdagangan 'Stayzon' termasuk semua cap rasmi, lambang, logo dan susun atur yang dimiliki oleh Plaintiff, sama ada mereka didaftarkan di Malaysia atau tidak, sebagai milikannya atau menyebabkan dirinya dikaitkan dengan Plaintiff; b. Menggunakan dan/atau mendedahkan dan/atau menyebabkan maklumat hak milik dan/atau maklumat sulit kepunyaan Plaintif; c. Campur tangan perdagangan, perniagaan dan/atau kepentingan ekonomi Plaintif secara menyalahi undang-undang;

Satu perintah terhadap Defendan-Defendan Pertama, Kedua dan Ketiga untuk membayar kepada Plaintif ganti rugi am untuk ditaksirkan bagi pelanggaran kewajipan kerahsiaan, pengelirupaan, konspirasi untuk menjejaskan (conspiracy to injure) dan campur tangan perdagangan, perniagaan dan/atau kepentingan ekonomi Plaintif secara menyalahi undang-undang;

Satu perintah terhadap Defendan Pertama untuk membayar gantirugi teladan sebanyak RM150,000.00 untuk pelanggaran kewajipan kerahsiaan, pengelirupaan, konspirasi untuk menjejaskan (conspiracy to injure), campur tangan perdagangan, perniagaan dan/atau kepentingan ekonomi Plaintiff secara menyalahi undang-undang, dan pelanggaran kewajipan pengarah (breach of director'duty);

Faedah bagi semua gantirugi adalah ditaksirkan dengan kadar 5% setahun dari tarikh Writ sehingga bayaran penuh;

Tuntutan Balas Defendan-Defendan Pertama, Kedua, Ketiga, Keempat dan Kelima terhadap Plaintif adalah ditolak;

Suatu Perintah terhadap Defendan Pertama untuk membayar kos sebanyak RM70,000.00 kepada Plaintif;

Suatu perintah terhadap Defendan-Defendan Kedua dan Ketiga untuk membayar kos sebanyak RM30,000.00 kepada Plaintif; dan

Tiada perintah terhadap kos antara Plaintiff dan Defendan-Defendan Keempat dan Kelima." [20] Aggrieved with the decision of the learned trial judge, the Defendants filed this appeal. The Law on Appellate Intervention [21] It is well-settled law that an appellate court would be slow to disturb a trial court's finding of facts unless the decision is shown to be plainly wrong. In Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1, the Federal Court held as follows: "14 In our view, the Court of Appeal in citing these cases had clearly borne in mind the central feature of appellate intervention, ie to determine whether or not the trial court had arrived at its decision or finding correctly on the basis of the relevant law and/or the established evidence. In so doing, the Court of Appeal was perfectly entitled to examine the process of evaluation of the evidence by the trial court. Clearly, the phrase 'insufficient judicial appreciation of evidence' merely related to such a process. This is reflected in the Court of Appeal's restatement that a judge who was required to adjudicate upon a dispute must arrive at his decision on an issue of fact by assessing, weighing and, for good reasons, either accepting or rejecting the whole or any part of the evidence placed before him. The Court of Appeal further reiterated the principle central to appellate intervention, ie that a decision arrived at by a trial court without judicial appreciation of the evidence might be set aside on appeal. This is consistent with the established plainly wrong test." (Emphasis added) [22] The Federal Court in UEM Group Bhd v Genisys Integrated Engineers Pte Ltd & Anor [2010] 9 CLJ 785, had succinctly laid down the trite principle of law pertaining to appellate intervention in the following manner: [39] ...It is well settled law that an appellate court will not generally speaking, intervene with the decision of a trial court unless the trial court is shown to be plainly wrong in arriving at its decision. A plainly wrong decision happens when the trial court is guilty of no or insufficient judicial appreciation of evidence (see Chow Yee Wah & Anor v Choo Ah Pat [1978] 1 LNS 32; Watt v Thomas [1947] AC 484; and Gan Yook Chin & Anor v Lee Ing Chin & Ors [2004] 4 CLJ 309).” (Emphasis added) [23] We are also mindful that the assessment of the credibility of witnesses is within the purview of the trial judge, and it is not for the appellate court to interfere, unless it can be shown that the learned trial judge had gone plainly wrong. The Federal Court in the case of Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67 held as follows: [153] We had analysed the facts and judgments of both the trial judge and the Court of Appeal and we found that the trial judge had arrived at his findings of fact based on what he heard and saw from the main plaintiffs' witness, Ng, who had direct knowledge of the payments, which he was entitled to. Compared to the evidence of the defendants' witnesses who had no personal knowledge of the payments. We cannot say that the trial judge's findings of fact or conclusion was one where no reasonable judge would make in the circumstances. The assessment of credibility of witnesses is well within the purview of the trial judge and it is not for the appellate court to interfere. The evidence as a whole can reasonably be regarded as justifying the conclusions arrived at the trial and that conclusion was heard and seen by the learned trial judge as compared to the appellate court who has not enjoyed this opportunity. In addition, there has been no findings by the Court of Appeal that the learned trial judge had gone plainly wrong and neither was there on a reconsideration of the whole evidence, the opposite conclusion should be reached." (Emphasis added) [24] With these trite principles of law being at the forefront of our minds, we turn to consider the issues raised by the parties to this appeal. Issues [25] The issues raised by the parties in this appeal and our subsequent findings are set forth below. First Issue: Passing Off [26] In order to be successful in its claim against the Defendants for passing off, the Plaintiff must establish-a) its goodwill or reputation in the goods or services it provides; b) the misrepresentation by the Defendants is likely to lead the public to believe that the goods provided are those of the Defendants and not the Plaintiff; and c) that damage has or will likely be caused as a result of the misrepresentation. [27] See Reckitt and Colman Products Ltd v Borden Inc and others, [1990] 1 All ER 873, Ortus Expert White Sdn Bhd v Nor Yanni bt Adorn & Anor [2022] 2 MLJ 67 (FC), Skyworld Holdings Sdn Bhd & Ors v Skyworld Development Sdn Bhd & Anor [2022] 5 CLJ 74 (FC), and Ho Tack Sien & Ors v Rotta Research Laboratorium S.P.A & Anor [2012] 8 CLJ 645 (CA). First Element: The Plaintiff's Goodwill or Reputation in The Sale of 'Stayzon' Products [28] With regard to the first element, the Plaintiff must prove its goodwill and reputation in the Products. [29] A 'goodwill' is defined by the House of Lords through Lord McNaghten in the case of Inland Revenue Commissioners v. Muller & Co's Margarine Ltd [1901] AC 217 as follows: "What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old established business from a new business at its first start. The goodwill of a business must emanate from a particular centre or source." (Emphasis added) [30] This definition was adopted by our court in Yong Sze Fun & Anor (T/A Perindustrian Makanan & Minuman Layang-Layang) v Syarikat Zamani Hj Tamin Sdn Bhd & Anor [2012] 1 MLJ 585; [2011] CLJU 1307 (CA). [31] Abdul Malik Ishak JCA (as he then was) in Yong Sze Fun (supra) further propounded on the four discerning features of goodwill as follows: "[115] Four discerning features of goodwill may be listed:

that goodwill is the benefit added to the business through extensive trading operations which attracts custom;

that trademark or get-up is the badge and indicia that signifies, indicates and identifies the goodwill and the business;

that goodwill is created through and by means of trading activities; and

that the more extensive the trading activities are, which must necessarily include sales and promotion, the more value that would be attached to the goodwill." (Emphasis added) [32] In the present case, the Defendants submitted that-a) the evidence adduced at the High Court would only establish the reputation of the 'Stayzon' brand itself, but not the goodwill of the Plaintiff's business; b) the existence of reputation does not necessarily imply the existence of goodwill; c) the Plaintiff was not the first user of the 'Stayzon' trademark and trade name; d) the goodwill of the 'Stayzon' brand acquired internationally does not contribute to the goodwill of the Plaintiff's business in Malaysia; e) the transfer of the goodwill of the 'Stayzon' brand was not transferred in its entirety; f) the short span of time that the Plaintiff was able to trade with the Products; and g) the unsuccessful attempt of the Plaintiff to register the trademark 'Stayzon'. [33] However, we disagree with the Defendants' submission for the following reasons. [34] Firstly, we agree with the learned trial judge that the Plaintiff had successfully shown that it has maintained the goodwill associated with the sale of 'Stayzon' products in Malaysia since the Plaintiff's acquisition of the business through the Acquisition Agreement on 9.12.2019. [35] Goodwill and reputation of a business are transferable. Again, in Yong Sze Fun (supra), Abdul Malik Ishak JCA (as he then was) speaking for this court, held as follows: [121] This brings to the forefront a germane question of the day: what is the effect of the assignment and the transfer? An assignment allows an assignee to assume the position of the assignor (New-West Management Group Sdn Bhd & Anor v. Ng Ah Kow & Anor [2008] 8 CLJ 18). What this amounts to is this: that the plaintiffs would acquire all the goodwill and reputation generated by the assignor. And upon the transfer, the plaintiffs stand in the shoes of their predecessors. As a consequence thereto, all rights that their predecessors would have would be taken over by the plaintiffs. And since the get-up is the badge of goodwill of the business, the rights to that get-up in Malaysia must surely reside and vest with the plaintiffs." (Emphasis added) [36] Therefore, through the Acquisition Agreement, the goodwill of the 'Stayzon' business was transferred to the Plaintiff by the original owner of the business, namely the $ ^{6} $ th Defendant and MCS. [37] Clauses 1 and 6 of the Acquisition Agreement expressly stated as follows (see ROA Vol. 2E at p. 1582-1588): "1. The Seller shall sell and the Buyer shall purchase, free from all encumbrances and as at the date of this Agreement, all of the assets, rights, benefits, and interests in relation to the Business ("Assets") including but not limited to all of the trademarks, trade names, domain names, websites, registrations, social media accounts and other intellectual property rights as set out in Schedule 2 ("IP Rights") together with all goodwill, rights and benefits attaching thereto, for a nominal purchase price of Australian Dollar (A$) 1.00 ("Purchase Price", and the Seller hereby acknowledge receipt thereof). The Seller shall promptly execute and deliver all and any instrument(s) or document(s) necessary to give effect to the transfer, conveyance, and/or assignment of the Assets including but not limited to the IP Rights, to and in favour of the Buyer, and further, shall do all acts and provide all assistance as may be required by the Buyer to give full effect, complete, perfect or register the transfer, conveyance and/or assignment of the Assets including but not limited to the IP Rights, to and in favour of the Buyer.

The Seller undertakes with the Buyer that the Seller shall not, and shall procure all of its affiliates not to, distribute, sell or market any of the Products or similar products, including without limitation any components or constituents thereof, whether under the "Stayzon" brand or otherwise, in Malaysia, Singapore and all other countries in Asia (including Middle East and South Asia), Europe, North America and South America respectively, and all other countries that the Buyer or the "Stayzon" brand has presence in, except for any supply of similar products in Australia, and England and Wales ("Excluded Jurisdiction") or any supply of similar products to automotive brand-owners pursuant to any global supply or sales arrangement entered into by the Seller provided that in each case, the Seller shall ensure that any such products are not distributed, sold or marketed under the "Stayzon" brand." (Emphasis added) [38] It is therefore clear from the above that the $ 6^{\mathrm{th}} $ Defendant and MCS had agreed to sell to the Plaintiff all assets, rights, benefits and interests in relation to the 'Stayzon' business, including the trademark, together with all goodwill, rights and benefits attaching thereto, particularly in Malaysia. [39] Not only that, since the Acquisition Agreement, the Plaintiff has been conducting its business of selling and promoting the Products in Malaysia. This fact is well within the knowledge of the Defendants. [40] Based on the fact that there was an Acquisition Agreement between the Plaintiff and the 6th Defendant and MCS, and that it was not disputed that the Plaintiff has been conducting its business of selling and promoting the Products in Malaysia ever since, we are of the view that the facts in the case of Meidi (M) Sdn Bhd v Meidi-Ya Co Ltd, Japan & Anor [2008] 6 MLJ 433 (CA) and Hai-O Enterprise Bhd v Nguang Chan [1992] 2 CLJ (Rep) 436 (HC) cited by the Defendants can be distinguished from the facts in the present case. [41] Secondly, we are of the considered view that the short span of time that the Plaintiff was able to trade with the Products is irrelevant since the Plaintiff had acquired the 'Stayzon' business together with its goodwill and reputation of the business from the initial owner of the business through the Acquisition Agreement. [42] Lastly, we are satisfied that the unsuccessful attempt of the Plaintiff to register the trademark 'Stayzon' is not of particular importance since the Plaintiff's claim against the Defendants in the present appeal was specifically for passing off and not trademark infringement. [43] In a nutshell, we agree with the finding of the learned trial judge that the Plaintiff had successfully shown that it has maintained the goodwill associated with the sale of the Products in Malaysia since 9.12.2019. Accordingly, we find that the Plaintiff has successfully proven the first element. Second Element: The Misrepresentation by The Defendants Is Likely to Lead the Public to Believe That the Goods Provided Are Those of The Defendants and Not the Plaintiff [44] With regard to the second element, the Plaintiff must prove that there was a misrepresentation by the Defendant that is likely to lead the public to believe that the goods provided are those of the Defendants and not the Plaintiff. [45] On this issue, the learned trial judge found that the misrepresentation by the Defendants can be seen in these two circumstances, namely-a) through the information in the NPRA Register; and b) through the entry in Google for 'Stayzon.Asia'. [46] Firstly, according to the learned trial judge, the information in the NPRA Register, which is readily accessible to the public, shows that the $ 2^{n d} $ Defendant was the registrant of the 2020 NOTs for the Products. The learned trial judge was of the opinion that the public would be misled into believing that the Products belonged to the $ 2^{n d} $ Defendant instead of the Plaintiff. [47] In our considered opinion, this finding is unsubstantiated. The NPRA Guidelines 2017 clearly define the role of the Cosmetic Notification Holder ("CNH") as a company responsible for placing the cosmetic product on the market, which may or may not be the product owner (see ROA Vol. 2L at p.2873). [48] Furthermore, the NPRA Register is not the authority regarding the ownership of the Products, nor does it establish or imply ownership rights. Accordingly, the public could not have been misled into believing that the owners of the products are the $ 2^{\mathrm{nd}} $ Defendant instead of the Plaintiff based solely on the information in the NPRA Register. [49] Secondly, with regard to the entry in Google for 'Stayzon.Asia', the Plaintiff, through PW2, gave evidence that the Defendants had caused the registration of false details in Google for 'Stayzon.Asia' to associate the $ ^{2} $ $ ^{nd} $ Defendant with the 'Stayzon' brand. The $ ^{2} $ $ ^{nd} $ Defendant's address and the $ ^{1} $ $ ^{st} $ Defendant's mobile phone number were listed in Google for 'Stayzon.Asia' as can be seen in the screenshot (see ROA Vol. 21 at p. 2412). The $ ^{1} $ $ ^{st} $ Defendant admitted to them during cross-examination. [50] However, the $ 1^{\mathrm{st}} $ Defendant had clarified during re-examination that the entry was made by the $ 1^{\mathrm{st}} $ Defendant sometime in 2018, when the $ 2^{\mathrm{nd}} $ Defendant was still the authorised distributor of 'Stayzon' products at the material time, and the entry should have expired after two years. The following can be observed (see ROA Vol. 2C at p. 1478): "SK Again, you were asked why your phone number was on the Google entry for Stayzon Asia. TPM Stayzon.asia was registered, I, not, exactly the month, but I remember it is on 2018, when Defendant 2 was the distributor for Stayzon. That's when we registered this. It was registered for the purpose of promoting Stayzon brand at that meantime. SK Ok. TPM And the validity during that, I mean, we apply for, I think two years, so by now it's already expired." [51] The fact that the Google entry was made in 2018 (before the Acquisition Agreement) was also admitted by PW2 in her evidence as follows (see ROA Vol. 2A at p. 1132): DS Ok. Now, stayzon.asia, the website, you refer to a website. Do you know when it was established and created? JJM I don't know the exact date but I believe somewhere in 2018. [52] In our view, the explanation by the $ 1^{\mathrm{st}} $ Defendant was plausible, and there was no evidence adduced by the Plaintiff to show that the said entry in Google for 'Stayzon.Asia" is still maintained by the Defendants as claimed. [53] In an attempt to address the 1 $ ^{st} $ Defendant's explanation above, the learned trial judge referred to the date 12.4.2021 appearing below the entry of an article '6 Reasons Why You Should Buy Stayzon Automotive Hygiene...' from 'https://www,placeandfoods.com' in the screenshot of the Google search page (see ROA Vol. 2I at p. 2412) to conclude that- "... Another entry on that page adduced as evidence is for placesandfoods.com and is dated 12.4.2021. This means that, as at 12.4.2021, the Stayzon.Asia entry was still on Google. It was for the 1st, 2nd and 3rd Defendants to have ceased making such representations by removing that entry upon the execution of the Acquisition Agreement on 9.12.2019 or soon thereafter. That entry still stood 16 months later, which means 16 more months of representations. If it was just a month or two after the Acquisition Agreement, then that could have been regarded as inadvertent. But 16 months surely cannot be so regarded, and must have been intentional." (Emphasis added) [54] After a careful perusal of the appeal records, it is evident to us that the link or webpage associated with the subject article was neither accessed, tested, analysed, nor verified during the trial to establish its validity and authenticity. Furthermore, the matter concerning the said article and its publication date was never raised by the witnesses for either party. Besides, we fail to see any link or connection between the said article, the date of its publication and 'Stayzon.Asia.' Even if the date mentioned therein is accepted at face value, it merely indicates that the article was posted on that date, without establishing anything further. [55] Hence, we agree with the Defendants that the learned trial judge's reliance on the date specified in the screenshot under the said article as evidence that the 'Stayzon.Asia' entry remained on Google up until 12.4.2021 was misplaced and erroneous. [56] Thirdly, it is apparent from the evidence that post the execution of the Acquisition Agreement, all the products in the $ 2^{\mathrm{nd}} $ Defendant's stock were transferred to the Plaintiff, by placing them in PW2's residence (see ROA Vol. 2G at p. 2253 and Vol. 2E at p. 1781). This clearly shows that the $ 2 ^{n d} $ Defendant has ceased to distribute, market or sell the Products after the Plaintiff had acquired the 'Stayzon' business. [57] Therefore, the Plaintiff was unable to prove that the Defendants had marketed any other product that closely resembles the Plaintiff's products to the extent that it would constitute a misrepresentation by the Defendants. [58] Based on the foregoing reasons, we found that the learned trial judge had committed an appealable error in his finding above and found that the Plaintiff had failed to prove the second element. Third Element: Damage [59] In our view, since the Plaintiff has failed to establish the second element for passing off, there is no need for us to delve into the issue of damage. Conclusion [60] To conclude, based on the foregoing reasons, we hold that the learned trial judge had committed appealable errors above in finding that the Plaintiff had successfully proven its case against the Defendants for passing off. Second Issue: Breach of Confidence [61] At the outset, in order for the Plaintiff to succeed in its action for breach of confidence, the Plaintiff must satisfy the three elements outlined in Coco v AN Clark (Engineers) Ltd [1969] RPC 41, affirmed by our court in Dynacast (Melaka) Sdn Bhd & Ors v. Vision Cast Sdn Bhd & Anor [2016] 6 CLJ 176 (FC), Seven Seas Industries Sdn Bhd v. Philips Electronic Supplies (M) Sdn Bhd & Anor [2008] 4 CLJ 217 (CA), and National Feedlot Corporation Sdn Bhd & Ors v. Public Bank Bhd [2023] 10 CLJ 430 (CA). [62] The three elements area) the information sought to be protected has the necessary quality of confidence; b) the information was communicated in circumstances importing an obligation of confidence; and c) there must be an unauthorised use of that information to the detriment of the party communicating it. [63] The Defendants in this appeal submitted that the learned trial judge had erred in his findings that-a) the Defendants are liable to the Plaintiff for breach of confidence in respect of the Plaintiff's MSDS and formulae or detailed ingredients; and b) the $ 1^{\mathrm{st}} $ Defendant is liable to the Plaintiff for breach of confidence in respect of the Unlaunched Product's original packaging. First Element: The Information Sought to Be Protected Has the Necessary Quality of Confidence [64] With regard to the first element, the Plaintiff must first establish (i) what information the Plaintiff sought to be protected; and (ii) whether that information possesses the necessary quality of confidence. [65] It is also trite that information will only be protected if it can properly be classed as a trade secret or, in all the circumstances, the information is of such a highly confidential nature as to require the same protection as a trade secret. [66] The Federal Court speaking through His Lordship Richard Malanjum CJ (Sabah & Sarawak) (as he then was) in the case of Dynacast (supra) held as follows: "[29] Surely more particulars should have been given on the alleged misappropriated private and confidential information. The second defendant is entitled to know what are the private and confidential information allegedly to have been misappropriated by him. It would then allow him to contest the claim of privacy and confidentiality of that information. After all 'information will only be protected if it can properly be classed as a trade secret or as material which, while not properly to be described as a trade secret, is in all the circumstances of such a highly confidential nature as to require the same protection as a trade secret eo nomine.' (See: Faccenda Chicken Ltd. v. Fowler [1987] Ch 117; Ixora Trading Incorporated v. Jones [1990] FSR 251)." (Emphasis added) [67] In Faccenda Chicken Ltd v Fowler and others; Fowler v Faccenda Chicken Ltd [1986] 1 All ER 617, which was adopted by the Federal Court in Dynacast (supra), the English Court of Appeal outlined the test to determine whether the information is a trade secret or equivalent to a trade secret as follows: a) the nature of the employment, for instance, whether the status of the employee was such that he regularly handled confidential information and recognised it as such or whether the information was only handled by a restricted number of employees; b) the nature of the information itself; c) whether the employer had stressed the confidentiality of the information to the employee; and d) whether the relevant information could easily be isolated from other non-confidential information which was part of the same package of information. [68] In the present case, the learned trial judge found that the information having the necessary quality of confidence isa) the MSDS; b) the formulae or detailed ingredients; and c) the Unlaunched Product's original packaging. [69] The basis of the learned trial judge's findings above is as follows: a) Paragraph 3 of the NPRA Guidelines 2017 stipulates that the MSDS and the formulae or detailed ingredients are required to be disclosed to the NPRA to obtain NOTs for the said products; and b) the MSDS and formulae or detailed ingredients are not ordinarily disclosed to the public. [70] We are of the view that the learned trial judge had erred in his findings above for the following reasons. [71] At the outset, we find it pertinent to highlight that the Plaintiff did not list or particularise the alleged confidential information that the Plaintiff sought to protect. This fact was readily admitted by PW2 during crossexamination (see ROA Vol. 2A at p. 1140). [72] In our considered view, the particularisation of the alleged confidential information is required so as to allow the Defendants to know what confidential information is alleged to have been misappropriated by them and to allow the Defendants to contest the claim of confidentiality of that information (see Dynacast (supra) at para. 29). [73] The Plaintiff did not adduce the MSDS and the formulae or detailed ingredients during the trial. Consequently, the contents and purpose of the MSDS and the formulae or detailed ingredients remain unclear, and it is uncertain to us which specific information within them or even the documents themselves, if any, could be deemed as confidential. [74] Secondly, contrary to the finding of the learned trial judge, we see no express mention under Paragraph 3 of the NPRA Guidelines 2017 for the Plaintiff to submit the MSDS to the NPRA for the purpose of obtaining the NOTs for the products (see ROA Part B Vol. 2L at p.2881). [75] Thirdly, even though the full product ingredient list is required by the NPRA Guidelines 2017 to be submitted for the NOT application, we agree with the Defendants that the full product ingredient list is not confidential and is ordinarily disclosed to the public for transparency, health and safety reasons. In fact, the list of ingredients is usually displayed at the back label of the product. The impugned product itself had disclosed its ingredients at the back label (see Supp. ROA (3) at p. 3686, 3688, 3693). [76] Fourthly, we agree with the Defendants that the Plaintiff has failed to produce any evidence to prove its possession of the formulae for the Products in the first place. Clauses 2, 3, and 4 of the Acquisition Agreement stipulate that the $ 6^{th} $ Defendant and MCS are the manufacturers and suppliers of the Products. These clauses also specify that the $ 6^{th} $ Defendant and MCS shall supply the Products to the Plaintiff, with the Plaintiff paying royalties to the $ 6^{th} $ Defendant and MCS as outlined in the relevant terms of the Agreement. In essence, we found no evidence to suggest that the Plaintiff had any access to or knowledge of the Products' formulae. It was not established that it was the Plaintiff who had communicated the alleged confidential information to the Defendants. [77] Finally, the Plaintiff's claim that the MSDS, formulae or detailed ingredients possess their own commercial value is unfounded for lack of supporting evidence. [78] In light of all of the above, we agree with the Defendants that the Plaintiff failed to prove on the balance of probabilities that the MSDS and the formulae or detailed ingredients constitute information with the necessary quality of confidence. [79] However, with regard to the Unlaunched Product, we agree with the finding of the learned trial judge that since the product was in the process of being launched, any information regarding it, including the product's original packaging, would have the necessary quality of confidence about it. Second And Third Element: The Information Was Communicated in Circumstances Importing an Obligation of Confidence and Unauthorised Use of That Information to The Detriment of the Party Communicating It [80] As regards the MSDS, formulae or detailed ingredients as discussed above, we are of the view that since it is our finding that the Plaintiff has failed to prove the first element, the second and third elements need no further consideration. [81] With regard to the Unlaunched Product, the learned trial judge found that-a) the information on the Unlaunched Product would have been communicated to the $ 1^{\mathrm{st}} $ Defendant as one of the directors and shareholders of the Plaintiff in circumstances importing an obligation of confidence; b) the $ 1^{\mathrm{st}} $ Defendant had made unauthorised use of that information to the Plaintiff's detriment since-i) both the $ 1^{\mathrm{st}} $ Defendant and the $ 5^{\mathrm{th}} $ Defendant (the director and shareholder of the $ 4^{\mathrm{th}} $ Defendant) knew each other for several years, and the $ 5^{\mathrm{th}} $ Defendant would have known of the $ 1^{\mathrm{st}} $ Defendant as the distributor of sanitising products; ii) the $ 1^{\mathrm{st}} $ Defendant had assisted the $ 4^{\mathrm{th}} $ and $ 5^{\mathrm{th}} $ Defendants in negotiating a distribution agreement with a company called Afterworks Ltd ("Afterworks") to distribute the $ 4^{\mathrm{th}} $ Defendant's wipes ("the Distribution Agreement"); iii) an email dated 26.12.2020 showed that the $ 1^{\mathrm{st}} $ Defendant had amended the draft of the Distribution Agreement with Afterworks; and iv) the similarities between the artwork on the Unlaunched Product and the $ 4^{th} $ Defendant's wipes are too uncanny to have been coincidental, and the $ 1^{st} $ Defendant must have been the causal connection in that artwork appearing on the packaging of the $ 4^{th} $ Defendant's wipes. [82] We are of the considered view that the findings of the learned trial judge above were misplaced for the following reasons. [83] There was no evidence to establish that the information was communicated to the $ 1^{\mathrm{st}} $ Defendant. The learned trial judge's finding that the $ 1^{\mathrm{st}} $ Defendant would have been privy to such information, due to his position as a director of the Plaintiff company at that time, was nothing more than a mere conjecture and speculation. [84] In fact, evidence shows otherwise. It can be seen based on the evidence that a breakdown occurred in the relationship between the $ 1^{\mathrm{st}} $ Defendant and PW2 in early 2020, a fact admitted by PW2 during crossexamination. The development work on the Unlaunched Product took place during early 2021, as evidenced by email correspondence between PW2, Wen Jia, and Andrew Lim, in which the $ 1^{\mathrm{st}} $ Defendant was excluded. [85] In our view, the absence of incriminating evidence by the Plaintiff supports the $ 1^{\mathrm{st}} $ Defendant's version during cross-examination that she did not have any knowledge regarding the Plaintiff's Unlaunched Product. [86] Further, it is our view that the Plaintiff failed to demonstrate, based on the evidence, that the information regarding the Unlaunched Product's packaging was communicated to the $ 1^{\mathrm{st}} $ Defendant in circumstances giving rise to an obligation of confidence. [87] As such, we hold that the learned trial judge's findings above were clearly misplaced and warranted appellate intervention. [88] With regard to the findings of the learned trial judge that the $ 1^{\mathrm{st}} $ Defendant had engaged in unauthorised use of the information to the detriment of the Plaintiff, we first agree with the Defendants that a mere friendly relationship between the $ 1^{\mathrm{st}} $ and $ 5^{\mathrm{th}} $ Defendants is inadequate to establish that the $ 1^{\mathrm{st}} $ Defendant had, under any circumstances, disclosed the Plaintiff's Unlaunched Product's original packaging information to the $ 5^{\mathrm{th}} $ Defendant. [89] Neither the $ 1^{\mathrm{st}} $ Defendant nor the $ 5^{\mathrm{th}} $ Defendant has admitted to such disclosure, nor has any evidence been presented to substantiate this allegation. [90] Regarding the $ 1^{\mathrm{st}} $ Defendant assisting the $ 4^{\mathrm{th}} $ and $ 5^{\mathrm{th}} $ Defendants and involving herself with the early draft of the Distribution Agreement between the $ 4^{\mathrm{th}} $ Defendant and Afterworks, we do not see any correlation between the Distribution Agreement, which was still in draft stage and the design of the Plaintiff's Unlaunched Product's packaging. [91] According to the $ 5^{\mathrm{th}} $ Defendant, the Distribution Agreement was still at the draft stage, and the change in the name of the company from the $ 2^{\mathrm{nd}} $ Defendant's name to the $ 4^{\mathrm{th}} $ Defendant's name was made because there was a mistake in the draft. [92] In fact, it was admitted by the $ 5^{\mathrm{th}} $ Defendant during crossexamination that the $ 1^{\mathrm{st}} $ Defendant was no longer involved with the negotiation of the Distribution Agreement for the Hygiene Labs product, after the $ 5^{\mathrm{th}} $ Defendant was introduced to Afterworks (see ROA Vol. 2C at p.1513). [93] In a nutshell, based on the foregoing reasons, we are of the view that the learned trial judge had erred in holding that the Plaintiff had proven their case on the balance of probabilities against the Defendants for breach of confidence. Third Issue: Breach of Director's Duties [94] It is trite that a director of a company shall exercise his powers for a proper purpose and in good faith in the best interest of the company. Section 213 of the Companies Act 2016 provides: "(1) A director of a company shall at all times exercise his powers in accordance with this Act, for a proper purpose and in good faith in the best interest of the company.

A director of a company shall exercise reasonable care, skill and diligence with-

the knowledge, skill and experience which may reasonably be expected of a director having the same responsibilities; and

any additional knowledge, skill and experience which the director in fact has." (Emphasis added) [95] In Avel Consultants Sdn Bhd & Anor v Mohamed Zain Yusof & Ors [1985] 2 MLJ 209, Salleh Abas LP said: "The law is clear that a director of a company is in fiduciary relationship with his company and as such he is precluded from acting in a manner which will bring his personal interest into conflict with that of his company." (Emphasis added) [96] In Acumen Scientific Sdn Bhd v Yeow Liang Ming [2020] 3 MLJ 82 (CA), Hasnah Hashim JCA (as she then was) held as follows: "The defendant in the instant appeal before us owed the plaintiff a fiduciary duty not only as the general manager but as a working director of the plaintiff. He was reposed with trust and confidence to discharge his duties, responsibilities and functions honestly, in good faith and in the best interest of the plaintiff. Firstly, a director must act in what he honestly considers to be the company's interests and not in the interests of some other person or body. This is a director's main and overriding duty at common law; Secondly, a director must employ the powers and assets that he is entrusted with for proper purposes and not for any collateral purpose; Thirdly, a director must not place himself in a position whereby his duty to the company and his personal interests may conflict. A company director holds a fiduciary relationship with his company and the duty to avoid conflicts of interest and must at all times exercise his powers bona fide and in the best interests of the company as a whole. The essence of the fiduciary duty is a duty to act bona fide at all times in the interests of the company and not for a collateral purpose. This the defendant failed to exercise and his failure to do so is a blatant breach of his fiduciary duties. The law requires the defendant as a director of the plaintiff to do, act and behave as follows:

exercise the powers vested as a director in the interests of the company;

must not exercise those powers as a director against the interests of the company; and

in exercising those powers by virtue of his position as a director he must always do so for the general interests of the company and nothing else." (Emphasis added) [97] As for the test for breach of a director's duty, in Tengku Dato' Ibrahim Petra bin Tengku Indra Petra v Petra Perdana Bhd and another appeal [2018] 2 MLJ 177, Azahar Mohamed FCJ (as he then was) speaking for the Federal Court held as follows: "[165] What then is the true test for breach of duty as a director to act in good faith and in the 'best interest of the company'? The question is whether it is a subjective or objective test to judge whether directors acted in the best interest of the company. It is to this we now turn. [166] In our judgment, the correct test combines both subjective and objective tests. The test is subjective in the sense that the breach of the duty is determined on an assessment of the state of mind of the director; the issue is whether the director (not the court) considers that the exercise of discretion is in the best interest of the company. In this regard, in Corporate Law by Hans Tjio, Pearlie Koh and Lee Pey Woan at p 361, the learned authors said that the director's conduct is tested by reference to an essentially subjective barometer. The classic formulation of the subjective element in the test is found, as we have discussed earlier at para 157, in In re Smith & Fawcett, Limited in which Lord Greene MR said that 'directors must exercise their discretion bona fide in what they consider not what a court may consider is in the interest of the company'. The duty is to act in what the director believes, not what the court believes, to be the best interest of the company. The subjective nature of the test can be seen in Regentcrest Plc (in liq) v Cohen [2001] BCC 494 where Jonathan Parker J said: ... the question whether the director honestly believed that his act or omission was in the interests of the company. The issue is as to the director's state of mind. No doubt, where it is clear that the act or omission under challenge resulted in substantial detriment to the company, the director will have a harder task persuading the court that he honestly believed it to be in the company's interest; but that does not detract from the subjective nature of the test. [167] The test is objective in the sense that the director's assessment of the company's best interest is subject to an objective review or examination by the courts. In an article entitled Directors' Duty to Act in the Interests of the Company: Subjective or Objective? [2015] JBL Issue 2, the writers said that courts have introduced objective elements into the duty to act in good faith and in the best interest of the company to address the problem identified by Browen LJ in Hutton v West Cork Railway Company (1883) 23 Ch D 654 at p 671 where the learned judge said: Bona fides cannot be the sole test, otherwise you might have a lunatic conducting the affairs of the company, and paying away its money with both hands in a manner perfectly bona fide yet perfectly irrational. The test must be what is reasonably incidental to, and within the reasonable scope of carrying on, the business of the company. (Emphasis added) [98] On this issue, the learned trial judge found that the $ 1^{\mathrm{st}} $ Defendant had breached her duties as a director of the Plaintiff company on three instances, namely-a) in dishonestly failing to apply for the NPRA registration for the Plaintiff's products in the Plaintiff's name and instead intentionally obtaining the 2020 NOT for the $ 2^{n d} $ Defendant; b) in dishonestly maintaining the 'Stayzon.Asia' website even after the Plaintiff had acquired the 'Stayzon' business; and c) in dishonestly colluding with the $ 4^{\mathrm{th}} $ and $ 5^{\mathrm{th}} $ Defendants pertaining to the Plaintiff's Unlaunched Product. First Instance: Application for the 2020 NOTs [99] Specifically on this issue, the learned trial judge found that-a) due to the Acquisition Agreement, the Plaintiff had acquired the 'Stayzon' business from the $ 6^{th} $ Defendant and MCS (see para. 8 of the learned trial judge's grounds of judgment); b) the Plaintiff needed fresh NOTs from NPRA in its own name to trade in the 'Stayzon' products and run the 'Stayzon' business in Malaysia (see para. 9 of the learned trial judge's grounds of judgment) c) the $ 1^{\mathrm{st}} $ Defendant was left with the task of applying and registering NOTs for the Products for the Plaintiff (see para. 9 of the learned trial judge's grounds of judgment); d) the email correspondence between PW2 and the $ 1^{\mathrm{st}} $ Defendant shows that the new NOTs for the Products should be applied in the Plaintiff's name (see paragraph 18(ii) of the learned trial judge's grounds of judgment); e) the NOTs for the Products were found to be registered in the $ 2^{\mathrm{nd}} $ Defendant's name (see ROA Vol. 2E at p. 1658-1660). [100] We agree with the findings of the learned trial judge above. [101] Before us, the Defendants submitted that the Plaintiff knew and was allegedly complicit with the concurrent application for NOTs pertaining to the Products, as can be seen from the email correspondences between the parties (see ROA Vol. 2E at p. 1640-1649). [102] For the avoidance of doubt, when we say concurrent application, it refers to the application for renewal of the existing NOTs under the $ 2^{\mathrm{nd}} $ Defendant's name and a fresh application for NOTs under the Plaintiff's name. [103] In the present case, we are of the considered view that even though PW2 knew of the concurrent application for NOTs with regard to the Products, PW2 was not complicit with it since PW2 did mention that the NOTs should be registered in the Plaintiff's name, even if they have to pause trading with the Products pending its approval (see ROA Vol. 2E at p.1647). [104] The $ 1^{\mathrm{st}} $ Defendant, on the other hand, had provided her explanation pertaining to the concurrent application during re-examination as follows (see ROA Vol. 2C at p. 1493): "SK Ok. Earlier it was put to you that the renewal of the NOT was a joint effort between D1 and D3 and you disagreed. Could you-JUDGE The question was D1, D2 and D3- TPM And D3. JUDGE All three, yes. TPM The reason why the renewal is actually because there are stocks in the market, and Plaintiff at the time, I couldn't really apply for the new one under JAIA. So, the plan was to actually renew the D2 and to apply the new one for Plaintiff. So, it was not a joint effort because I, sorry, because I was, I'm also the director of the Plaintiff, so I'm actually working on both at the same time. Renew and apply new one. So, whichever come first for, to facilitate JAIA for the sale of the hand sanitiser. That was the plan, yes." (Emphasis added) [105] According to the $ 3^{\mathrm{rd}} $ Defendant, at the time, the parties faced a significant setback during the NOT application, namely that the NPRA did not approve any product claiming germicidal efficacy without the use of alcohol, in accordance with the World Health Organisation's requirements. This directly conflicts with the distinctive characteristic of the Products, which are formulated to be alcohol-free (see ROA Vol. 2B at p. 1307 and ROA Vol. 2E at p. 1640-1641, 1643-1644 and 1648-1650). [106] Regardless of the above, we are of the considered view that the most proper course of action for the directors of the Plaintiff company is to apply for new NOTs in the name of the Plaintiff. Such a step is in the best interest of the company, despite the likelihood that the Plaintiff may need to suspend sales of the Products pending approval of the new NOTs, which could be delayed or denied due to the setbacks encountered during the application process. [107] We note that the $ ^{1st} $ Defendant sought to avoid such risks through the concurrent application. While her intention may be noble, the law is clear that "bona fides cannot be the sole test; otherwise, you might have a lunatic conducting the affairs of the company, and paying away its money with both hands in a manner perfectly bona fide yet perfectly irrational", as per Brown LJ in Hutton v West Cork Railway Company (1883) 23 Ch D 654 affirmed and adopted by the Federal Court in Tengku Dato' Ibrahim Petra bin Tengku Indra Petra (supra). [108] We are also of the view that the $ 1^{\mathrm{st}} $ Defendant's further contention that she had not breached her director's duty towards the Plaintiff by registering the 2020 NOTs in the $ 2^{\mathrm{nd}} $ Defendant's name does not hold water. Even though the NPRA Guidelines 2017 stated that the CNH is the company responsible for placing the cosmetic product on the market, which may or may not be the product owner, the 2 $ ^{nd} $ Defendant no longer has any business placing the Products on the market since the Acquisition Agreement. [109] It is for these reasons that we find that the Plaintiff had successfully proven its case against the 1 $ ^{st} $ Defendant for breach of directors' duties, pertaining to the application of the 2020 NOTs. Second Instance: Maintenance of the 'Stayzon.Asia' Website [110] On the issue pertaining to the alleged maintenance of the 'Stayzon.Asia" website, we have addressed this issue in an earlier part of this judgment, and we do not wish to repeat it here. [111] It is sufficient to state at this juncture that we have found that the learned trial judge had committed an appealable error in his finding regarding the maintenance of the website. Therefore, this does not constitute an instance of the 1st Defendant's breach of directors' duties. Third Instance: Collusion with the $ 4^{\mathrm{th}} $ and $ 5^{\mathrm{th}} $ Defendants Pertaining to the Unlaunched Product [112] On this issue, the learned trial judge based his finding that the $ 1^{\mathrm{st}} $ Defendant had colluded with the $ 4^{\mathrm{th}} $ and $ 5^{\mathrm{th}} $ Defendants pertaining to the Unlaunched Product based on the same reason that the learned trial judge found the $ 1^{\mathrm{st}} $ Defendant to have committed a breach of confidence pertaining to the Unlaunched Product. [113] On this issue, we have found that the learned trial judge had committed an appealable error in his finding and provided reasons for our decision above. Again, since this issue has been addressed in an earlier part of this judgment, we do not wish to repeat it here. Therefore, this does not constitute an instance of the 1 $ ^{st} $ Defendant's breach of directors' duties. Exemplary Damages [114] In the present case, the learned trial judge had awarded a total sum of RM150,000.00 as exemplary damages for breach of confidence, passing off, conspiracy to injure, unlawful interference in the Plaintiff's trade, and breach of directors' duties. [115] Exemplary damages are additional damages awarded with reference to the conduct of the defendant, to signify disapproval, condemnation or denunciation of the defendant's tortious act, and to punish the defendant. These are the exact words of Zawawi Salleh JCA (as he then was) speaking for this court in Sambaga Valli a/p KR Ponnusamy v Datuk Bandar Kuala Lumpur & Ors and another appeal [2018] 1 MLJ 784 as can be seen below: [33] The exemplary damages or punitive damages the two terms now regarded as interchangeable are additional damages awarded with reference to the conduct of the defendant, to signify disapproval, condemnation or denunciation of the defendant's tortious act, and to punish the defendant. Exemplary damages may be awarded where the defendant has acted with vindictiveness or malice, or where he has acted with a 'contumelious disregard' for the right to the plaintiff. The primary purpose of an award of exemplary damages may be deterrent, or punitive and retributory, and the award may also have an important function in vindicating the rights of the plaintiff (see Rookes v Barnard [1964] 1 All ER 367; AB and others v South West Water Services Ltd [1993] 1 All ER 609; Broome v Cassell & Co Ltd [1971] 2 QB 354, Laksmana Realty Sdn Bhd v Goh Eng Hwa and another appeal [2006] 1 MLJ 675)... [36] The remaining issue to be determined is the amount of damages. In Rookies v Barnard, Lord Devlin set out three basic principles of the assessment of quantum in exemplary damages cases. His Lordship held that in order to recover damages, the plaintiff must have been the victim of the punishable behaviour involved. This stipulation was necessary since 'the anomaly inherent in exemplary damages would become an absurdity if a plaintiff totally unaffected by some oppressive conduct which the jury wish to punish obtained a windfall in consequence'. Secondly, Lord Devlin specified that exemplary damages should be assessed with restraint and, thirdly, that the means of the parties should be taken into consideration. In addition to these rules, Lord Devlin also stipulated that exemplary damages should be awarded 'if but only if' the sum of compensatory (including aggravated) damages to be awarded had an insufficient punitive or deterrent effect." (Emphasis added) [116] There is no hard and fast rule regarding the computation of exemplary damages. Most recently, the Federal Court in Big Man Management Sdn Bhd v. Tenaga Nasional Bhd [2025] 7 CLJ 519 held as follows: [116] On our perusal of those cases, we find that it is inaccurate to say that there is any hard and fast rule that exemplary damages ought to be calculated as 25% of special damages. Rather than utilising a formula to calculate exemplary damages, we are of the view that exemplary damages are to be assessed based on the peculiar facts of each particular case. [117] We quote from the Court of Appeal judgment in Sambaga Valli KR Ponnusamy v. Datuk Bandar Kuala Lumpur & Ors And Another Appeal [2017] CLJU 500; [2017] 1 LNS 500 ('Sambaga ') which the High Court Judge had relied on: ... exemplary damages are not intended to compensate the plaintiff and are not recoverable as a matter of right. The amount of the exemplary damages award is left to the judge's discretion and is determined by considering the character of the defendant's misconduct, the nature and extension of the plaintiff's injury and the means of the defendant. The quantum of exemplary damages to be awarded must be appropriate to the wrongdoing inflicted to the parties involved. Exemplary damages must not be uncontrolled or arbitrary; they must be of an amount that is the minimum necessary to achieve their purpose in the context of the particular case. (emphasis added) [118] The Court of Appeal in Sambaga (above) also referred to the approach in other jurisdictions. Other commonwealth countries do not use a formula to calculate exemplary damages. For example, Lord Woolf in the English case of Thompson v. Commissioner Of Police Of Metropolis [1997] 2 All ER 782 stated that it was not "possible to indicate a precise arithmetical relationship between basic damages and aggravated damages...". Meanwhile, O'Flaherty J in the Irish case of McIntyre v. Lewis [1991] 1 IR 121 disapproved calculating exemplary damages at 12 times compensatory damages. [119] We are of the view that a sum of RM100,000 is appropriate to show this court's disapproval of TNB's conduct. In arriving at this figure, we took into consideration TNB's conduct in disconnecting the electricity supply to an ice-making factory deliberately. This too was done not once but twice. And these disconnections were undertaken with the purpose of placing extreme pressure on Big Man to make payment of outstanding dues. In other words, it was done with knowledge of the effect of such disconnection on the factory's business. In these circumstances the sum of RM100,000 is the minimum amount required to signify the court's disapproval of its actions." (Emphasis added) [117] In the present case, we have considered the 1 $ ^{st} $ Defendant's breach of her director's duty by applying the NOTs for the Products in the name of the 2 $ ^{nd} $ Defendant, despite the 1 $ ^{st} $ Defendant being fully aware that the Plaintiff had acquired the 'Stayzon' business from the 6 $ ^{th} $ Defendant and MCS. We have also noted that the 1 $ ^{st} $ Defendant concurrently made a new application for NOTs, and the reason for this concurrent application is already discussed above. Be that as it may, we cannot condone such action because the 1 $ ^{st} $ Defendant no longer has any business to register the Products in the name of the 2 $ ^{nd} $ Defendant after the execution of the Acquisition Agreement, and the 1 $ ^{st} $ Defendant is obliged to act in the best interest of the Plaintiff at all times as one of its directors. However, there is no evidence to suggest that the Plaintiff had suffered any actual loss due to the actions of the 1 $ ^{st} $ Defendant. Furthermore, the RM150,000.00 awarded by the learned trial judge as exemplary damages was related to five tortious acts: breach of confidence, passing off, conspiracy to injure, unlawful interference in the Plaintiff's trade, and breach of directors' duties. Since we find that the learned trial judge erred in his findings on the breach of confidence, passing off, conspiracy to injure, and unlawful interference in the Plaintiff's trade, and that these torts were not established against the Defendants, we consider the sum of RM30,000.00 as exemplary damages against the $ ^{1st} $ Defendant to be just and reasonable, serving the purpose of punishing the $ ^{1st} $ Defendant's misconduct. Conclusion [118] Based on all of the above, we found that the Plaintiff had failed to establish that the $ 1^{\mathrm{st}} $ Defendant had breached its director's duties as against the Plaintiff except with regard to the application of the 2020 NOTs. Conspiracy to Injure and Unlawful Interference with The Plaintiff's Trade [119] The learned trial judge based his findings on these claims based on his earlier finding that the Appellants are liable for breach of confidence and passing off above. Since we have found that the Plaintiff has failed to establish its claim above, these claims for conspiracy to injure and unlawful interference with the Plaintiff's trade should subsequently fail. The Defendants' Counterclaim [120] With regard to the Defendants' counterclaim, we believe it suffices to say that we agree with the learned trial judge that- "To be clear and to avoid any misunderstanding, it is not only in the finding of liability that renders an action deemed for genuine redress. Even if an action was dismissed, as long as it was for genuine redress, it will not be an abuse of process." [121] In our view, the Defendants have failed to establish that the Plaintiff's action was a deliberate abuse of the court's process. The claim seeks legitimate redress, and it is the role of the courts to thoroughly examine and analyse all evidence presented by the parties to determine whether any party has met its respective burden of proving its claims. Conclusion [122] In summary, based on all the foregoing reasons, we find that-a) there is merit in the Defendants' appeal against the decision of the learned trial judge regarding breach of confidence, passing off, conspiracy to injure, and unlawful interference with trade; b) there is no merit in the Defendant's appeal against the decision of the learned trial judge regarding the $ 1^{\mathrm{st}} $ Defendant's breach of directors' duties; and c) there is no merit in the Defendant's appeal against the decision of the learned trial judge regarding the Defendant's counterclaim. [123] It is for the above reasons that the Defendant's appeal in this case is allowed in part. [124] We hereby set aside the judgment of the High Court at paragraphs 2,3,7,8,and 11. [125] Paragraph 14 is varied as per the following: "that the 1 $ ^{st} $ Defendant do pay to the Plaintiff general damages for breach of director's duty, to be assessed" and Paragraph 16 is varied as per the following: "that the 1 $ ^{st} $ Defendant do pay to the Plaintiff exemplary damages of RM30,000.00 for breach of director's duty". [126] All cost awarded by the High Court is set aside and to be substituted with the following order. The Plaintiff to pay the $ 2 ^{nd} $ and $ 3 ^{rd} $ Defendants a sum of RM30,000.00 each. The $ 1 ^{st} $ Defendant to pay the Plaintiff a sum of RM40,000.00. The cost are for here and below and subject to allocator fee. Dated: 3 February 2026 Solicitors For The $ 1^{\mathrm{st}} $ , $ 2^{\mathrm{nd}} $ & $ 3^{\mathrm{rd}} $ Appellant: Gideon Tan, Teo Qing Qing & Muhammad Alif Ashraf bin Hamzah Messrs. Gideon Tan Razali Zaini Kelana Square 812, $ 8^{\mathrm{th}} $ Floor, Block A 17 Jalan SS 7/26 47301 Petaling Jaya Selangor Solicitors For Respondent: Joel Lim, Bryan Teo & Fitria Tri Parwoko Messrs. Joel & Mei Menara UOA Bangsar A-27-15, 27th Floor 5 Jalan Bangsar Utama 1 59000 Kuala Lumpur