Alipawpaw Enterprise v 1. ) Chen Nikki (BA-12ANCvC-3-01/2024)

CHEN NIKKI

GREEN HARMONY PET SUPPLIES [NO. SYARIKAT: 202103353100 (PG0521908-W)] …RESPONDEN-RESPONDEN [Dalam Mahkamah Sesyen Di Petaling Jaya Dalam Negeri Selangor Darul Ehsan, Malaysia Guaman Sivil No.: BB-B52NCVC-87-10/2022 Antara Alipawpaw Enterprise [No. Syarikat: 202003215681 (003151568 -U)] …Plaintif 13/09/2024 12:24:02

Dan Chen Nikki (No. NRIC: 980703-14-5318)

Green Harmony Pet Supplies [No. Syarikat: 202103353100 (PG0521908-W)] …Defendan-Defendan] JUDGMENT Introduction [1] As its playful name suggests, Alipawpaw Enterprise operates within the pet food industry. Registered as a partnership, Alipawpaw found itself entangled in a legal battle with one Chen Nikki and Green Harmony Pet Supplies, the latter's business nature being self-evident. Alipawpaw initiated legal proceedings against Chen Nikki and Green Harmony Pet Supplies, citing multiple causes of action, including breach of fiduciary duty, breach of duty and responsibility, fraud, tortious interference with business, and the tort of conversion. [2] Chen Nikki and Green Harmony Pet Supplies succeeded in having the Alipawpaw’s Writ and Statement of Claim struck out by the Sessions Court. Their applications for striking out were made pursuant to two separate Notices of Application. Hence the present two appeals by Alipawpaw Enterprise before this Court. [3] Appeal No 3 is an appeal by the Appellant/Plaintiff against the decision of the Sessions Court in striking out the Appellant/Plaintiff’s Writ and Statement of Claim pursuant to Order 18 rule 19(1)(b) – (d) of the Rules of Court 2012 (in allowing the Respondents/Defendants’ application in Enclosure 42 in the court below) and Appeal No 75 is an appeal by the Appellant/Plaintiff against the decision of the Sessions Court in dismissing the Appellant/Plaintiff’s Writ and Statement of Claim pursuant to Order 18 rule 19(1)(a) of the Rules of Court 2012 (in allowing the Respondents/Defendants’ application in Enclosure 41 in the court below). These appeals were heard together. The Core Issues [4] The overarching issue in these appeals is whether the Sessions Court had erred in law and/or in fact in striking out the Appellant/Plaintiff’s Writ and Statement of Claim. [5] Arising from the above predominant question are the following issues that are equally vital, namely,

whether the First Respondent/Defendant was a partner in the partnership; and (ii) if the answer is in the affirmative, whether a suit involving a partnership that consists of only two partners and the dispute is between the partners inter se may be commenced by one of the partners against the other in the name of the partnership. The Parties [6] It is the Appellant/Plaintiff’s pleaded case that the Appellant/Plaintiff was registered as a partnership as Alipawpaw Enterprise on 24 August,

The Appellant/Plaintiff averred that Alipawpaw Enterprise as a partnership “mempunyai seorang pemilik bernama Wong Shoo Mei”. Curiously, there is no mention of the other or remaining partners. [7] It is also the Appellant/Plaintiff’s pleaded case that at all material times, the First Respondent/Defendant, Chen Nikki, was an employee of the Appellant/Plaintiff and was paid a monthly salary of RM5,000 and that the First Respondent/Defendant started working for the Appellant/Plaintiff at about the same time the Appellant/Plaintiff was registered. [8] The First Respondent/Defendant submitted that she was at all material times a partner of the Appellant/Plaintiff. [9] The Second Respondent/Defendant is a sole proprietorship registered under the Registration of Business Act 1956. It has been registered under the name of the First Respondent/Defendant as the sole proprietor since 1 December, 2021. Proceedings in and the Decision of the Sessions Court [10] As noted in paragraph [3] above, the Sessions Court allowed the two Notices of Applications filed by the Respondents/Defendants to strike out the Appellant/Plaintiff’s Writ and Statement. [11] On the question of whether the First Respondent/Defendant was at all material times a partner of the Appellant/Plaintiff, the learned Sessions Court Judge opined as follows: [17] … Isu yang dibangkitkan samada benar terdapat niat untuk perkongsian atau Defendan hanya sebagai pekerja yang menerima gaji bulanan boleh ditentukan semasa perbicaraa (jika ada). [12] What the learned Sessions Court Judge considered as the paramount question was whether the Appellant/Plaintiff had utilised the “correct procedure” in commencing the action. At the same para [17] and after referring to the authority Chu Tuang Lin v Mu Boon Hock & Anor … (“Chu Tuang Lin”) which this Court will deal with in the ensuing paragraphs, the learned Sessions Court Judge said: [17] Mahkamah membuat dapatan bahawa ini adalah prosedur sepatutnya dibuat memandangkan pertikaian adalah antara 2 rakan kongsi dan bukan melibatkan syarikat atau perkongsian itu sendiri…. [13] What is meant by the correct procedure in the phrase “ini adalah prosedur sepatutnya dibuat” refers the commencement on an action in the name of one of the partners, which in this case would be Wong Shoo Mei, and not in the name of the partnership, that is, Alipawpaw Enterprise. [14] Again in her grounds of judgment, the learned Sessions Court Judge alluded to the point relating to the “prosedur yang betul”. [18] Namun begitu, prosedur yang betul perlulah dipatuhi. Perkongsian adalah satu persefahaman antara rakan kongsi dan apa-apa keputusan dan tindakan perlulah melalui persetujuan, kebenaran dan dengan pengetahuan rakan-rakan kongsi yang terlibat. [15] On this occasion, the Sessions Court relied on another authority in support of the above proposition, namely Malaysia Land Investment Co (Pte) Ltd v Sathask Realty Sdn Bhd & Ors [2001] 2 AMR 1575; [2001] 1 MLJ 451; [2000] 7 MLRH 53 (“Sathask Realty”). [16] More importantly, the findings of the Sessions Court re the striking out applications were as follows: [23] Dapatan Mahkamah adalah bahawa fakta dalam kes ini berbeza dengan kes yang dirayu sekarang. Ini adalah kerana; a) Pertama sekali, Plaintif menyaman sebagai sebuah perkongsian; b) Kedua, rakan kongsi adalah WSM dan Defendan Pertama sahaja dan tiada lain; c) WSM tidak secara telus memplidkan perkara ini dalam Penyataan Tuntutan (fakta bahawa WSM dan Defendan Pertama adalah rakan kongsi); d) Dakwaan WSM dalam Penyataan Tuntutan adalah salahlaku Defendan Pertama dan kemungkiran tanggungjawab fidusiari, frod, tort serta penyelewengan. Terdapat perbezaan antara tanggungjawab rakan kongsi atau pekerja yang dibayar gaji bulanan; e) Terdapat gantirugi yang dituntut atau akan ditentukan oileh Mahkamah samada dibayar oleh Defendan Pertama atau sebaliknya jika perlu ditanggung oleh Plaintif sebagai satu perkongsian atau WSM sendiri. f) Ini perlu dibuktikan oleh WSM atas kapasiti beliau sendiri dan bukan atas locus perkongsian yang mana (jika dibuktikan atau secara nyata jika dilihat dari carian SSM), Defendan Pertama juga adalah rakan kongsi perniagaan yang sama. [24] Isu locus ini penting dalam memulakan tindakan kerana pada dapatan Mahkamah, ia akan melibatkan kos dan gantirugi yang perlu ditanggung atau dibayar oleh mana-mana pihak yang mana Mahkamah perlu tentukan kelak. Ini juga yang diputuskan dalam kes Malaysia Land Investment Co (Pte) Ltd v Sathask Realty Sdn Bhd & Ors serta hujahan Defendan-Defendan bahawa kos tindakan ini sepatutnya ditanggung dan dibayar sendiri oleh WSM. [25] Dalam kes ini, Mahkamah menolak untuk membenarkan kos dibayar oleh WSM memandangkan dalam tindakan ini, WSM tidak memfailkan tuntutan ini atas kapasiti peribadi dan isu ini tidak pernah diputuskan atau diperintahkan setakat ini. Berbanding dengan kes yang dirujuk, pihak yang diperintahkan membayar kos telah didapati membuat satu tindakan bagi kepentingan dirinya atau melebihi kepentingan lain atau kepentingan perkongsian. [26] Tambahan pula, adalah menjadi satu perintah yang tidak dapat dilaksanakan apabila Mahkamah memerintahkan satu pihak yang tidak dinamakan dalam tindakan untuk membayar kos. Oleh sebab itu, semasa perintah diberikan, Mahkamah memerintahkan agar kos ditanggung oleh pihak Plaintif dan dibayar kepada Defendan-Defendan memandangkan saman ini difailkan oleh Plaintif dan Penama (WSM) bukan pihak untuk diberikan perintah melalui tindakan ini. [27] Mahkamah akur bahawa untuk menggunapakai prinsip pembatalan kes di bawah aturan ini, ia harus digunakan dengan berhati-hati. Dalam kes SERUAN GEMILANG MAKMUR SDN BHD V KERAJAAN NEGERI PAHANG DARUL MAKMUR & ANOR [2016] 3 MLJ 1 AT 17 dan kes-kes lain yang dirujuk, prinsip adalah bahawa: “The discretionary power of the court to strike out an action summarily is a drastic power. It may be exercised only in plain and obvious cases and must be exercised with the utmost caution (see: CC Ng & Brothers Sdn Bhd v. Government of the State of Pahang [1985] 1 CLJ 235; [1985] 1 MLJ 347 and Solai Realty Sdn Bhd v United Overseas Bank (Malaysia) Berhad [2013] 1 LNS 384; [2013] 4 MLJ 545).” [27] Mahkamah berpandangan bahawa isu locus adalah satu isu penting dan tidak dapat diperbaiki jika tidak dimulakan dengan cara dan prosedur sepatutnya. Pada pandangan Mahkamah, jika sekalipun tindakan ini wajar dimulakan, ia boleh dimulakan sebagai “WSM” (mendakwa sebagai satu perkongsian XXX)” dan meletakkan Defendan-Defendan untuk membela tindakan (jika sekalipun Defendan Pertama hanyalah Pekerja yang dibayar gaji). Analyses of the Authorities [17] It is evident that the learned Sessions Court Judge had proceeded on the basis that the First Respondent/Defendant is a partner of the Appellant/Plaintiff. Since there are only two partners and the dispute is between the partners inter se, this Suit, according to the Sessions Court, should have been commenced in the name of the disgruntled partner, that is, Wong Shoo Mei (suing in her capacity as one of the partners of Alipawpaw Enterprise) as the Plaintiff and not in the name of the partnership, that is Alipawpaw Enterprise. [18] One of the authorities that the Sessions Court had made reference to was Chu Tuang Lin. The parties were partners in Chu & Mu Enterprise. Chu Tuang Lin had commenced the action by naming himself as the Plaintiff and the other two partners as the defendants. The learned Sessions Court Judge was of the view that the plaintiff had acted correctly in leaving out Chu & Mu Enterprise. [19] The Sessions Court then referred to Sathask Realty where it was held that when a challenge to authority in commencing proceedings has been made, the burden of proving that the suit has been instituted with the authority of the company rests with the plaintiff. This case relates to a company and can be distinguished from the present case, which involves a partnership. [20] Another case which the learned Sessions Court made reference to and cited at length was St Vr Veerappan Juga Dikenali Sebagai Sihambaram Veerappan & Ors v Arunachalam A/l Venkatachalam & Ors [2015] AMEJ 924; [2014] CLJU 1853; [2014] MLJU 1771; [2014] MLRHU 1558 (“St Vr Veerappan”). In that case, Nanda Balan JC (as his Lordship then was) had said that “when an action is made on behalf of a partnership, the action should be in the name of the firm or failing that in the names of all the partners of that partnership. Otherwise, the action is fatally defective and ought to be struck off”. [21] The High Court in St Vr Veerappan further referred to the following cases: [14] In MK Varma v Oli Mohamed (1950) MLJ 80, it was held that the plaintiffs had the alternatives of joining all the partners as plaintiffs or take the advantage of the special procedure by suing in the name of the firm. In that case, they failed to take either alternative and the claim was dismissed. [15] In Sivagami Achi v P RM Ramanathan Chettiar & Anor (1959) MLJ 221, it was held that the action was defective for non-joinder of the representatives of two deceased partners and the defendants are under no duty to remedy the defect. [16] In Public Trustee v Elder (1926) Ch 776, the Court of Appeal laid down the salutary principle that all the entities which constituted the partnership should be before the court, otherwise the action is defective and will be struck out accordingly. [22] On the vital issue of whether the Appellant/Plaintiff’s action ought to be struck out on the ground that she had instituted the action in the name of the partnership instead of in her own name and in parentheses suing as a partner of Alipawpaw Enterprise, the Appellant/Plaintiff submitted before this Court that she “should not be deprived of the rights to be heard solely based of technicality” and “it would not be in the interests of justice to permit Defendants to escape liability when they are unable to credibly deny all wrongdoings alleged”. [23] The Appellant/Plaintiff urged this Court to take cognisance of the English case of The White Country Inn (A Firm) v Shauna Crowley and Ulster Bank Ireland Limited [2020] IEHC, where the plaintiff (which is a firm made up of two partners, that is, one Mrs Eileen Geraghty and the first defendant) had commenced action against the first defendant, seeking an order for accounts; the High Court case of Millenium Medicare Services v Nagadevan a/l Mahalingan [2013] 9 CLJ 766; [2013] 9 MLJ 873; [2012] MLRHU 1630, where the partnership, as the plaintiff, sued its partner for breach of restraint of trade clause in the partnership agreement; and another English case of Deacons (a firm) v Bridge [1984] 2 All ER 19, where the plaintiff firm sued one of its previous partner in its own name to protect itself against the defendant’s appropriation of any part of the firm’s goodwill. [24] In response to the above authorities, the Respondents/Defendants cited the following cases, namely: • Cheng Tei Chor v Cheng Hooi Chor [2015] 1 LNS 1122 where the High Court held that the plaintiff had correctly sued the defendants in his personal capacity as a partner cannot sue another partner in the partnership using the partnership’s name; • TRA Mining (M) Sdn Bhd v Thien Hong Teck & Ors and Anor Appeal [2018] AMEJ 0985; [2018] 10 CLJ 438; [2019] 1 MLJ 212; [2018] 5 MLRA 595 where the Federal Court had commented that a partnership is a contract based on the personal relationship that exist between the partners and that the respondents had locus standi to sue the appellants as they sued individually as partners of the partnership and not “in the name of” or “on behalf of” the partnership. The Federal Court noted that each of the partners was the plaintiff in the writ action and not the partnership; • Tham Kim Fai @ Tham Kim Fay v Ng Kon Seong [2007] 1 AMR 142; [2006] 4 CLJ 634; [2006] 7 MLJ 1; [2006] 2 MLRH 13 where the facts are similar to those in our present case and the partnership was not named in the suit; • Mohd Ghazali Ahmad Nasuruddin v Chok Kai Kuang & Anor [2018] 6 AMR 560; [2018] 1 LNS 1335; [018] MLJU 1237; [2018] MLRHU 1032 where a partner had filed a suit in his personal capacity against the other partner in the firm over differences arising between the parties; • Tai Foong Lam v Hamdi Abdullah & Ors [2013] 2 AMR 50; [2013] 5 CLJ 89; [2013] 3 MLJ 72; [2013] 2 MLRA 567 where the dispute was between the partners and the partnership was not named in the suit; and • Augustin Raj a/l Augustin v Selva Kumar a/l Parmal [2017] 6 AMR 439; [2017] 1 LNS 1336; [2018] 7 MLJ 514; [2017] MLRHU 955 where once again the dispute was between the partners and the partnership was not named in the suit. [25] During the hearing, I had also recalled the case of Hashim bin Majid v Param Cumaraswamy & Ors [1993] CLJU 92; [1993] 2 MLJ 20; [1993] 5 MLRH 240, where one of the partners in the legal firm had filed an action naming the other partners individually. The Decision of this Court [26] It is the Appellant/Plaintiff’s pleaded case that Alipawpaw Enterprise is a partnership. However, the Appellant/Plaintiff denied that the First Respondent/Defendant was at all material times an employee of Alipawpaw Enterprise and not a partner. On this issue of whether the First Respondent/Defendant was at all material times a partner of Alipawpaw Enterprise, this Court agrees with the learned Sessions Court Judge that this issue “boleh ditentukan semasa perbicaraan (jika ada)”. [27] Section 6 of the Partnership Act 1961 provides as follows: Meaning of firm and firm name

Persons who have entered into partnership with one another are, for the purposes of this Act, called collectively a firm, and the name under which their business is carried on is called the firm name. Hence, if indeed Wong Shoo Mei and Chen Nikki had entered into a partnership with one another, they may collectively be referred to as a firm and Alipawpaw Enterprise as the firm name. [28] While a partnership and the partners may be collectively recognised as a firm under the Partnership Act 1961, unlike a company, a partnership is not a separate legal entity. [29] Be that as it may, a partnership may sue or be sued in its firm’s name. When a partnership sues or is being sued in its firm’s name, to all intents and purposes, it is the partners that are the parties in the proceedings. [30] The provision in Order 77 rule 1 of the Rules of Court 2012 confirms this and it provides as follows: Action by and against firms within jurisdiction (O. 77, r. 1)

Subject to the provisions of any written law, any two or more persons claiming to be entitled, or alleged to be liable, as partners in respect of a cause of action and carrying on business within the jurisdiction may sue or be sued, in the name of the firm, if any, of which they were partners at the time when the cause of action accrued. [31] The purpose of this provision is to ensure procedural efficacy when “any two or more persons claiming to be entitled, or alleged to be liable, as partners in respect of a cause of action” are allowed to sue or be sued in the name of the firm. Order 77, rule 1 of the Rules of Court 2012 is an enabling provision. It permits partners in a partnership to sue in the name of the firm or to be sued in the firm’s name. Partners may choose to commence an action in the name of each partner individually. Similarly, an outsider suing a partnership may choose to name each partner individually in the lawsuit. Which of these options is preferable is a topic for discussion in another forum. [32] The pivotal concern in these appeals is whether the present action should or could be instituted in the name of the firm or partnership, that is, Alipawpaw Enterprise. As the dispute is one that is between the parties inter se, is the Appellant/Plaintiff entitled to invoke the option as provided in Order 77 rule 1 of the Rules of Court? This Court is of the view that the answer is in the negative. [33] Section 6 of the Partnership Act 1961 and Order 77 rule 1 of the Rules of Court 2012 operate in a scenario where the firm or partnership is suing a third party/outsider or is being sued by a third party/outsider. They will not apply in a situation such as in the present appeals, where the dispute is between the partners. [34] On this ground alone, this Court agrees with the decision of the Sessions Court that the applications by the Respondents/Defendants to strike out the Appellant/Plaintiff’s Writ and Statement of Claim ought to be allowed. [35] The decision of the Sessions Court (re Enclosures 41 and 42 that were before it) is affirmed. [36] The decision of this Court in the instant appeals is not one that has deprived the rights of the Appellant/Plaintiff to be heard “solely based of technicality”. It pertains to the issue of locus and that is not a mere case of technical non-compliance as envisaged in Order 1A, Order 2 rule 1(3) or Order 2 rule 3 of the Rules of Court 2012. [37] Is this a decision that “would not be in the interests of justice” as it would “permit the Defendants to escape liability when they are unable to credibly deny all wrongdoings alleged,” as argued by the Appellant/Plaintiff? [38] This Court’s response is twofold: first, the Appellant/Plaintiff has no one to blame but herself and/or her solicitors; second, it is entirely up to the Appellant/Plaintiff to pursue the next course of action to ensure that the Respondents/Defendants do not escape liability, if the latter are indeed liable. [39] Appeals Nos 3 and 75 are dismissed with costs. As this action was initiated by Wong Shoo Mei, she is to pay costs of RM6,000 to the Respondents/Defendants, subject to allocatur. Dated: 13 September, 2024 sgd [CHOONG YEOW CHOY] Judicial Commissioner High Court of Malaya Shah Alam Counsel: Alvin Tan for the Appellant (Messrs. Daljit Singh Partnership) Kwan Yi Xuan for the Respondents (Messrs. K H Wong, Chin & Cheah)