Between v and (WA-22IP-22-05/2017)

SIGMA GLOVE INDUSTRIES SDN BHD (Co. No.: 978489-V)

SMART GLOVE HOLDINGS SDN BHD (Co. No.: 430860-X)

SKINPROTECT CORPORATION SDN BHD (Co. No.: 572778-A) … PLAINTIFFS

ONG CHIN KOK (NRIC No.: 771003-14-5535)

HARTALEGA HOLDINGS BHD (Co. No.: 741883-X) … DEFENDANTS JUDGMENT (Court enclosure nos. 4, 15, 21 and 100)

The 3 plaintiff companies (Plaintiffs) have obtained an ex parte Anton Piller order (Ex Parte APO) against the 2 defendants (Defendants).

This judgment concerns the following 4 applications: 2

the Plaintiffs’ application in court enclosure no. 4 (Enc. 4) for the following orders -

an inter partes APO;

an inter partes interlocutory mandatory injunction to compel the first defendant (1st Defendant) to deliver to the Plaintiffs, among others, all confidential information (Confidential Information) which belongs to the Plaintiffs and their group of companies (Plaintiffs’ Group);

an inter partes interlocutory mandatory injunction to compel the 1st Defendant to disclose to the Plaintiffs’ solicitors by way of an affidavit, among others, certain information regarding communication between 1st Defendant and second defendant company (2nd Defendant); and

an inter partes interlocutory injunction to restrain the Defendants from, among others, disclosing, divulging, using, communicating, disseminating and publishing the Confidential Information pending the disposal of this suit;

the 2nd Defendant applied in court enclosure no. 15 (Enc. 15) to set aside the Ex Parte APO;

court enclosure no. 21 (Enc. 21) is the 1st Defendant’s application to set aside the Ex Parte APO; and 3

after the hearing of Enc. 4, 15 and 21 (3 Applications), this court, among others –

allowed Encs. 15 and 21. Hence, the Ex Parte APO was set aside; and

dismissed Enc. 4. The Plaintiffs subsequently applied in court enclosure no. 100 to discontinue this suit against the 2nd Defendant (Enc. 100).

The above 4 applications raise the following issues, among others:

whether the Ex Parte APO should be set aside due to, among others, the Plaintiffs’ failure to specify the Confidential Information;

should the court grant an inter partes APO when, among others, the Plaintiffs did not execute the Ex Parte APO by entering the Defendants’ premises to search for and to seize evidence relevant to this case?;

whether the Plaintiffs were entitled to an interlocutory injunction to restrain the 1st Defendant from, among others, disclosing, divulging, using, communicating, disseminating and publishing the Confidential Information pending the disposal of this action;

whether the court should exercise its discretion under O 59 rr 2(2), 3(1), (2), 8(b) and 21 of the Rules of Court 2012 (RC) to deprive the 1st Defendant of the costs of Enc. 4 and 21 because the 1st Defendant 4 had lied to his employer, the first plaintiff company (1st Plaintiff), regarding his reasons for leaving his employment; and

when a plaintiff applies for leave of the court to discontinue an action under O 21 r 3(1) RC, how should the court exercise its discretion to grant leave and if leave is given, should the court impose certain terms? B. Background

The Statement of Claim in this case (SOC) pleaded as follows, among others:

the second plaintiff company (2nd Plaintiff) is the holding company of the 1st Plaintiff while the third plaintiff company (3rd Plaintiff) is “affiliated” with the 1st Plaintiff. The Plaintiffs and Plaintiffs’ Group produce, among others, medical, high risk, “cleanroom” and sterile gloves;

on or about 1.8.2012, the 1st Defendant joined the 1st Plaintiff as its Technical Manager. The 1st Defendant had executed the following agreements -

letter of employment dated 13.6.2012 with the 1st Plaintiff (Employment Contract); and 5

“Confidentiality and Non-Disclosure Agreement” dated 27.3.2013 (CNDA) with Platinum Glove Industries Sdn. Bhd. (PGISB). PGISB is a wholly owned subsidiary of the 2nd Plaintiff;

the 2nd Defendant is a public listed company which is involved in, among others, the business of manufacture and sale of gloves;

over the past 4 years, the Plaintiffs and Plaintiffs’ Group have invested approximately RM9,878,468.17 to develop 2 new glove products (New Products), namely –

“S Series” gloves made of nitrile, chloroprene and other synthetic materials; and

chloroprene-based “C Series” gloves. The Confidential Information consists of, among others, trade secrets, formulas, processes, inventions, designs, know-how discoveries, technical specifications and information regarding the New Products;

the 1st Defendant was the second highest ranking person in the Research and Development Department of the Plaintiffs and Plaintiffs’ Group (R&D Dept). Mr. Prabha is the Assistant General Manager and head of the R&D Dept (Mr. Prabha). In the course of the 1st Defendant’s employment, among others -

the 1st Defendant was closely involved in developing the New Products; 6

the 1st Defendant helped to provide the formulas of the New

the 1st Defendant was involved in monitoring the manufacturing of the New Products to ensure that the New Products met the necessary standards and complied with technical and regulatory specifications; and

the 1st Defendant had knowledge and direct access to the

on or about 22.3.2017, the 1st Defendant tendered his resignation letter. The 1st Defendant requested for an early release from the four-month period provided in the Employment Contract (Early Release Request). The 1st Defendant informed Mr. Prabha that he resigned due to health reasons (a need to reduce his work stress level) and he was considering the possibility of joining his relative in a wire trunking business (1st Defendant’s Reasons). The 1st Defendant did not indicate that he would be joining a competitor of the Plaintiffs and Plaintiff’s Group;

due to the 1st Defendant’s important role in the R&D Dept., Mr. Foo Khon Pu, the Plaintiffs’ Chief Executive Officer and Managing Director (Mr. Foo), spoke to the 1st Defendant on or about April 2017. The 1st Defendant’s Reasons were also given to Mr. Foo. Mr. Foo suggested for the 1st Defendant to be transferred to the Plaintiffs’ marketing and production department if he wanted a less stressful work environment. 7 The 1st Defendant rejected this suggestion. Upon further query by Mr. Foo, the 1st Defendant stated that he was considering to join a chemical dispersion company; and

on or about the end of April 2017, the Plaintiffs found out that the 1 st Defendant would join the 2nd Defendant, a competitor of the Plaintiffs and Plaintiffs’ Group. The 2nd Defendant does not have any glove product which is similar to the New Products. The Plaintiffs and Plaintiffs’ Group are the only companies which have manufactured the New Products.

The Plaintiffs applied for and obtained the Ex Parte APO which provided for, among others, the Defendants to allow the Plaintiffs and the Supervising Solicitors to enter and search -

three premises of the 1st Defendant (1st Defendant’s Premises); and

the 2nd Defendant’s registered address, business address and manufacturing plants (2nd Defendant’s Premises) - for evidence which is relevant to this case and to seize such evidence.

According to the Supervising Solicitors’ affidavits, among others –

the 1st Defendant handed over to the Supervising Solicitor his mobile phone, “USB Flash Drives”, external hard drives, lap top (owned by the Plaintiffs) and “Tablet”. The Plaintiffs’ representatives and solicitors 8 together with the Supervising Solicitors did not enter and search the 1st Defendant’s Premises; and

the Plaintiffs’ representatives and solicitors together with a Supervising Solicitor went to the 2nd Defendant’s Premises. The 2nd Defendant handed to the Supervising Solicitor, among others, a copy of emails and WhatsApp messages between the 1st and 2nd Defendants. The 2nd Defendant’s Premises were not searched by the Plaintiffs’ representatives and solicitors in the presence of the Supervising Solicitors. C. Ex parte APO

My understanding of the relevant cases and provisions of written law regarding ex parte APO, is as follows:

the original purpose of an ex parte APO is to enable a party to preserve evidence which is relevant to a suit (Relevant Evidence) so that in the interest of justice, the Relevant Evidence may be subsequently adduced in the suit - please see Lord Denning MR’s judgment in the English Court of Appeal in Anton Piller KG v Manufacturing Processes Ltd & Ors [1976] 1 All ER 779, at 783. Anton Piller has been followed by our appellate courts as follows -

the majority judgment of the Supreme Court delivered by Mohd. Azmi SCJ in Aspatra Sdn Bhd & 21 Ors v Bank Bumiputra Malaysia Bhd & Anor [1988] 1 MLJ 97, at 103-104; and 9

Richard Malanjum JCA’s (as he then was) decision in the Court of Appeal case of Arthur Anderson & Co v Interfood Sdn Bhd [2005] 6 MLJ 239, at paragraph 21;

there is a second reason for applying for an ex parte APO. A plaintiff may apply for an ex parte APO to preserve any asset which forms the subject matter of the case (Relevant Asset) so as to prevent the Relevant Asset from being dissipated, destroyed, concealed or removed from the court’s jurisdiction - please see Lai Siu Chiu J’s judgment in the Singapore High Court in BP Singapore Pte Ltd v Quek Chin Thean & Ors [2010] SGHC 358, at paragraph 42. I am aware that a party may apply for a court order to preserve a Relevant Asset under O 29 r 2 RC. However, O 29 r 2 RC does not expressly provide for a party to apply ex parte for an order to preserve a Relevant Asset. Hence, the importance of an ex parte APO to preserve a Relevant Asset from being dissipated, destroyed, concealed or removed from the court’s jurisdiction pending the disposal of the action in question;

the court has a statutory discretion to grant an APO (a form of temporary mandatory injunction) pursuant to the following provisions of written law -

s 51(1) of the Specific Relief Act 1950;

s 25(2) of the Courts of Judicature Act 1964 (CJA) read with paragraph 6 of the Schedule to CJA; and 10

O 29 r 1(1) RC - please see Pentamaster Instrumentation Sdn Bhd v QAV

Technologies Sdn Bhd & Ors [2017] 11 MLJ 233, at paragraph In view of the above provisions of written law, there is thus no need to resort to the court’s inherent jurisdiction to grant an APO;

the plaintiff has to apply ex parte for an APO because its purpose may be defeated if notice of such an application is given to the defendant - please see Lord Denning MR’s judgment in Anton Piller, at p. 783. O 29 r 1(2) RC allows an APO application to be made ex parte “where the case is one of urgency”. In Chin Wai Hong & Anor v Lim Guan Hoe & Anor [2014] 5 AMR 427, at paragraphs 39, 40(a) and (b), I have opined as follows –

if there is an urgency to hear an application for an interlocutory order, a plaintiff should apply to court under Order 3 rule 5(1) RC to abridge time for short service of the application on a defendant; and

an ex parte application for an interlocutory order should only be made if the purpose of the interlocutory order may be defeated if an inter partes application is made; 11

the court may exercise its statutory discretion to grant an ex parte APO if a plaintiff is able to satisfy the court of all the 6 following conditions (6 Conditions) -

the plaintiff has an extremely strong prima facie case against a defendant (Extremely Strong Prima Facie Case Requirement) - please see Ormrod LJ’s judgment in Anton Piller, at p. 784. There are certain cases which have seemingly applied a less stringent threshold than the Extremely Strong Prima Facie Case Requirement. For example, in the High Court case of Lian Keow Sdn Bhd v C Paramjothy & Anor [1982] 1 MLJ 217, at 219, Yusof Abdul Rashid J only required the plaintiff to show a “strong prima facie case” against a defendant. Abdul Malik Ishak J (as he then was) in the High Court in Apparatech (M) Sdn Bhd v Ng Hock Chong & Anor [2006] 2 MLJ 61, at paragraph 28, required a “very strong prima facie case”. In Arthur Anderson, at sub-paragraph 31(a), the Court of Appeal has adopted the Extremely Strong Prima Facie Case Requirement. This is understandable in view of the draconian nature of an APO. It is to be noted that Chao Hick Tin JA in Singapore Court of Appeal in Asian Corporate Services (SEA) Pte Ltd v Eastwest Management Ltd (Singapore Branch) [2006] 1 SLR 901, at paragraph 14, has also applied the Extremely Strong Prima Facie Case Requirement for the granting of an ex parte APO in Singapore; 12

if the court does not grant an ex parte APO, the plaintiff may suffer very serious damage, actual or potential - please see Ormrod LJ’s judgment in Anton Piller (at p. 784) and Arthur Anderson [at sub-paragraph 31(b)]. In BP Singapore, at paragraphs 37-45, Lai Siu Chiu J Lai Siu Chiu J has explained that a plaintiff may suffer very serious “procedural damage” (loss of Relevant Evidence) or very serious “substantive damage” (loss of Relevant Asset) if an ex parte APO is not given by the court; and

the Relevant Evidence/Asset must be in the defendant’s possession, custody, control or power - please see Arthur Anderson, at sub-paragraph 31(c);

there is a “real possibility” that the defendant may –

destroy or dissipate Relevant Evidence/Asset;

(ii) conceal Relevant Evidence/Asset; or

(iii) remove Relevant Evidence/Asset out of the jurisdiction of Malaysian courts - please see Ormrod LJ’s judgment in Anton Piller (at p. 784) and Arthur Anderson [at sub-paragraph 31(c)]. 13 “Real possibility” does not include “extravagant fears” as explained by Dillon LJ in the English Court of Appeal case of Booker McConnell plc & Anor v Plascow & Ors [1985] RPC 425, at 441;

whether the effect of the APO would be disproportionate to its legitimate object - Asian Corporate Services (SEA) Pte Ltd, at paragraphs 14 and 35; and

the affidavit in support of an ex parte APO application must comply with all the requirements stated in O 29 r 1(2A)(a) to (g) RC (Procedural Requirements). The court may set aside an ex parte APO solely on the ground that the Procedural Requirements have been breached by a plaintiff - Arthur Anderson, at paragraphs 44-48. In considering the effect of a breach of the Procedural Requirements, I am of the view that the court should also bear in mind O 1A RC (the court shall have regard to the “overriding interest of justice”) and whether any breach of the Procedural Requirements is curable under O 2 r 1(1) and (3) RC; and

whether the 6 Conditions are fulfilled in a particular case, must depend on the evidence adduced in that case. Furthermore, the grant or decline of an APO in any case is an exercise of judicial discretion - Arthur Anderson, at paragraph 32. Accordingly, decided cases on 14 APO cannot constitute binding legal precedents as a matter of stare decisis; and

the court has a discretion to set aside an ex parte APO, upon an application by a defendant on the ground that the plaintiff has –

failed to disclose a material fact in support of an ex parte APO application; or

misrepresented or misled material facts to the court in the ex parte APO application - please see the English Court of Appeal’s judgment in Brink’s-Mat Ltd v Elcombe & Ors [1988] 3 All ER 188 and Pentamaster Instrumentation [at sub-paragraphs 40(2) to (5)]. D. Whether Ex Parte APO should be set aside D(1). Whether Plaintiffs had failed to disclose material facts in obtaining

Whether a material fact should be disclosed by a plaintiff in an ex parte APO application depends on an objective test of whether the court should consider such a fact in deciding whether to give an ex parte APO or not - please see the Singapore Court of Appeal case of The Vasiliy Golovnin [2008] 4 SLR 994 and Pentamaster Instrumentation [at sub-paragraphs 40(3) and (4)]. 15

The 1st Defendant had contended that the Plaintiffs had failed to disclose the following 2 material facts to the court in obtaining the Ex Parte APO (2

the 1st Defendant had sent a Whatsapp message to Mr. Foo at 3.17 pm, 29.3.2017 which stated, among others - “Dear Mr. Foo, as I came out of your office I was inform [sic] of the situation with PT Medisafe progress. Just to clear doubts. That has nothing to do with me or my resignation. I sincerely appreciate what you have told me. I will uphold my R&D integrity. This is what I advocated to all the chemist [sic] I hired.” (emphasis added); and

by way of an email dated 26.4.2017, the 1st Plaintiff had allowed the Early Release Request.

I am of the view that based on an objective assessment, the court should consider the 2 Facts in deciding whether to give the Ex Parte APO or not in this case. Accordingly, the 2 Facts are material in this case and the Plaintiffs should have disclosed the 2 Facts to this court in their application for the Ex Parte APO. D(2). Have Plaintiffs satisfied Extremely Strong Prima Facie Case Requirement?

The SOC has pleaded the following causes of action (Plaintiffs’ Causes of Action): 16

in respect of the Confidential Information, the 1st Defendant had breached his duty of confidence, trust, good faith and fidelity owed by him to the Plaintiffs and Plaintiffs’ Group by reason of the Employment Contract and CDNA (1st Defendant’s Breaches); and

the 2nd Defendant had knowingly assisted in the 1st Defendant’s Breaches and had unlawfully interfered with the business of the Plaintiffs and Plaintiffs’ Group by -

inducing the 1st Defendant to leave the Plaintiffs; and

employing the 1st Defendant.

In the Federal Court case of Dynacast (Melaka) Sdn Bhd & Ors v Vision Cast Sdn Bhd & Anor [2016] 6 CLJ 176, at paragraph 31, Richard Malanjum CJ (Sabah & Sarawak) followed Megarry J’s (as he then was) decision in the English High Court in Coco v AN Clark (Engineers) Ltd [1969] RPC 41, at 46-47, that the tort of breach of confidence has the following 3 elements:

the information in question must have the necessary quality of confidence;

the information must have been imparted in circumstances importing an obligation of confidence; and

there must be an unauthorised use of the confidential information to the detriment of the party communicating it. 17

It is clear from Dynacast (Melaka) Sdn Bhd that for a plaintiff to prove a tort of breach of confidence, the plaintiff has to specify the confidential information in question. In fact, all the Plaintiffs’ Causes of Action against both Defendants depend on the contents of the Confidential Information. The Plaintiffs are also required to specify the Confidential Information so as to enable the Defendants to prepare their defence against this action.

The following cases have required a plaintiff to specify the confidential information in question:

the Federal Court has decided as follows in Dynacast (Melaka) Sdn Bhd, at paragraphs 28 and 29 - “[28] While it is true that the claim of the plaintiffs is only to enforce the contractual clauses related to confidential information entered and agreed upon by the second defendant we do not think it is sufficient in the statement of claim by merely stating that the second defendant had 'misappropriated the private and confidential information of the plaintiffs'. [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 those information. …” (emphasis added); 18

Hamid Sultan Abu Backer JCA held as follows in the Court of Appeal case of China Road & Bridge Corporation & Anor v DCX Technologies Sdn Bhd [2014] 7 CLJ 644, at paragraphs 23 and 32 - “[23] ... Very importantly in the instant case the identification of the ‘confidential information’ or for that matter ‘information’ has not been met. (See John Zink Co Ltd v. Wilkinson [1973] FSR 1). … … [32] To trigger cl. 7 of the ‘memorandum’ it is essential to disclose by way of pleadings what ‘information’ which was disclosed was breached. We have perused the pleadings several times but we were not able to identify the precise ‘information’ which was said to be breached. The word ‘information’ has a specific meaning and jurisprudence. All statements or correspondence made by the plaintiff will not qualify as ‘information’. Neither will a part of the proposal per se will qualify as information. In addition, ‘information’ per se will not be entitled to ‘confidential’ status in relation to the memorandum. The statement of claim should define with some precision the information or communication which is alleged to be confidential. (See Diamond Stylus Co Ltd v. Bauden Precision Diamonds Ltd [1972] FSR 177). ... In essence, the trial court must first identify the ‘information’ which has the characteristic of confidentiality and then proceed to consider whether the exception stated in cl. 7 will apply and then proceed to consider whether there was a breach. We have perused the judgment of the learned trial judge several times but we were not able to identify the finding on the ‘information’, whether it had the characteristic of confidentiality and whether it was breached. Failure to do so will necessarily compromise the integrity of the decision-making process and the 19 judgment will stand as perverse. All subsequent findings resulting from the failure will have no value to the decision-making process itself. …” (emphasis added); and

in Ganesh Raja Nagaiah & Ors v NR Rubber Industries Sdn Bhd [2017] 4 CLJ 420, at paragraphs 7 and 11(a), Hamid Sultan Abu Backer JCA delivered the following judgment of the Court of Appeal - “[7] It is well settled that the courts whether in contractual or equitable claim relating to confidential information places much emphasis on the nature of information as well as its breach. … … 11(a) We have checked the pleadings several times to ascertain the nature of information which the respondent claims was breached. We have also checked the judgment of the learned trial judge to ascertain his finding as to the nature of information which was breached. There was none. Failure to identify the nature of information which can be clothed with the jurisprudence relating to intellectual property to give protection to the plaintiff is a grave omission by the learned trial judge which not only compromises the integrity of the decision-making process but also on the face of record makes the judgment sterile.” (emphasis added).

The SOC and the Plaintiffs’ affidavit in support of the ex parte APO application did not specify the contents of the Confidential Information. At the inter partes hearing of Enc. 4, I asked the Plaintiffs’ learned counsel 20 regarding the Plaintiffs’ failure to particularise the Confidential Information (upon which the Plaintiffs’ Causes of Action are based). In response to my query, the Plaintiffs’ learned counsel undertook to amend the SOC and specify the Confidential Information.

Based on the appellate cases elaborated in the above paragraph 14 (which are binding on me as a matter of stare decisis), there was no evidence before this court regarding the contents of the Confidential Information. Accordingly, the Plaintiffs have failed to satisfy the Extremely Strong Prima Facie Case Requirement - please see Anton Piller and Arthur Anderson. On this ground alone, the Ex Parte APO should be set aside. D(3). Should court exercise discretion to set aside part or entire Ex Parte APO?

I have decided to exercise my discretion to set aside the entire Ex Parte APO because of one or both of the following reasons:

as explained in the above Part D(2), the Plaintiffs have not satisfied the Extremely Strong Prima Facie Case Requirement; and/or

the Plaintiffs have concealed 2 Facts [please see the above Part D(1)]. D(4). Effect of setting aside Ex Parte APO

Upon the setting aside of the Ex Parte APO -

I ordered an assessment of damages to be conducted by the Registrar (Assessment) regarding all loss suffered by Defendants due to the 21 execution of the Ex Parte APO (Assessed Damages) - please see Arthur Anderson (at paragraph 51) and Pentamaster Instrumentation [at sub-paragraph 59(a)];

the Assessment shall only be conducted after the trial of this suit. This is to expedite an early disposal of this case - Pentamaster Instrumentation, at sub-paragraph 59(b);

the Plaintiffs shall pay to the Defendants interest at the rate of 5% per annum on the Assessed Damages from the date of Assessment until the date of the Plaintiffs’ full payment of the Assessed Damages;

costs of the Assessment shall be assessed by the Registrar and shall be paid by the Plaintiffs to the Defendants; and

no exemplary damages were awarded to the Defendants because the Plaintiffs and Supervising Solicitors did not enter the Defendants’ premises in this case. E. Whether court should grant inter partes APO

Even though the entire Ex Parte APO has been set aside [please see the above Part D(3)], the court is duty bound to consider afresh the inter partes APO application without being influenced by the setting aside of the Ex Parte APO - please see Pentamaster Instrumentation, at paragraph 48. 22

I have exercised my discretion to dismiss the inter partes APO application. This exercise of discretion is premised on any one or more of the following 3 reasons:

the Plaintiffs have not satisfied this court of the Extremely Strong Prima Facie Case Requirement [please see the above Part D(2)];

there was no “real possibility” of destruction and/or concealment of Relevant Evidence by the Defendants. This is because despite obtaining the Ex Parte APO, the Plaintiffs had chosen not to enter the Defendants’ premises to search for and to seize Relevant Evidence. In other words, the Plaintiffs admitted by their own conduct that there was no real possibility of the Defendants destroying and/or concealing Relevant Evidence; and/or

if this court were to grant an inter partes APO, its effect would be wholly disproportionate to its legitimate object. Firstly, an inter partes APO would enable the Plaintiffs to embark on a “fishing expedition” to obtain evidence to bolster this suit when the Plaintiffs had failed to specify the Confidential Information and had chosen not to enter the Defendants’ premises to search for and to seize Relevant Evidence. Secondly, the 2nd Defendant has its own trade secrets and other confidential information. An inter partes APO may be unjust to the 2nd Defendant by compelling the 2nd Defendant to disclose its own confidential information to its competitors, the Plaintiffs. 23 F. Should court grant interlocutory mandatory injunctions against 1st Defendant?

The following decisions of our apex courts have held that a plaintiff who has applied for an interlocutory mandatory injunction, should satisfy the court that the plaintiff has an “unusually strong and clear case” against the defendant (not merely to raise a bona fide and serious question to be tried):

Syed Agil Barakbah SCJ’s judgment in the Supreme Court case of Tinta Press Sdn Bhd v Bank Islam Malaysia Bhd [1987] 2 MLJ 192, at 193-194; and

the decision of Lamin Mohd. Yunus FCJ (as he then was) in the Federal Court in Karuppannan s/o Chellapan v Balakrishnen s/o Subban [1994] 4 CLJ 479, at 487.

Regarding the prayers in Enc. 4 for inter partes interlocutory mandatory injunctions to compel the 1st Defendant to deliver Confidential Information and other certain information to the Plaintiffs, I exercise my discretion to refuse such prayers. This is because the Plaintiffs had failed to specify the Confidential Information in this case (please see the above paragraphs 11- 16). Hence, the Plaintiffs have failed to satisfy the court of an unusually strong and clear case against the 1st Defendant which would entitle the Plaintiffs to the interlocutory mandatory injunctions. 24 G. Should 1st Defendant be restrained in respect of Confidential Information pending disposal of suit?

On the inter partes hearing of Enc. 4, the Plaintiffs’ learned counsel informed the court that the Plaintiffs would not apply for an interlocutory injunction to restrain the 2nd Defendant from disclosing, divulging, using, communicating, disseminating and publishing the Confidential Information pending the disposal of this suit. The Plaintiffs would only seek such an interlocutory prohibitory injunction against the 1st Defendant.

It is trite law that a plaintiff who applies for an interlocutory restraining injunction is only required to satisfy the court that there is at least one bona fide and serious question to be tried in respect of the plaintiff’s cause of action against the defendant - please see the Supreme Court’s judgment delivered by Mohd. Jemuri Serjan CJ (Borneo) in Alor Janggus Soon Seng Trading Sdn Bhd & Ors v Sey Hoe Sdn Bhd & Ors [1995] 1 MLJ 241, at 253.

In this case, the Plaintiffs’ failure to specify the Confidential Information (please see the above paragraphs 11-16) meant that the Plaintiffs had failed to satisfy the court that there is at least one bona fide and serious question to be tried in respect of the Plaintiffs’ Causes of Action. On this ground alone, I exercise my discretion to dismiss the Plaintiffs’ inter partes application for an interlocutory prohibitory injunction against the 1st Defendant. 25

O 59 rr 2(2), 3(1), (2), 8(b) and 21 RC provide as follows: “r 2(2) Subject to the express provisions of any written law and of these Rules, the costs of and incidental to proceedings in the Court, shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid. r 3(1) Subject to the following provisions of this Order, no party shall be entitled to recover any costs of or incidental to any proceedings from any other party to the proceedings except under an order of the Court. r 3(2) If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings, the Court shall, subject to this Order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs. Special matters to be taken into account in exercising discretion r 8. The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account – …

the conduct of all the parties, including conduct before and during the proceedings; … Costs for interlocutory applications (High Court) r 21. The amount of costs payable upon the conclusion of any interlocutory application, other than those falling within the ambit of 26 rule 22 shall be at the discretion of the Court, but in fixing the amount of costs, the Court shall have regard, inter alia, to the factors set out in rule 16.” (emphasis added).

O 59 r 22 RC does not apply to the 3 Applications.

The general rule is that “costs to follow the event” [O 59 r 3(2) RC], namely the court should generally exercise its discretion to award costs of an action or application to the winning party. The court however has a discretion to deprive the winning party of costs of the suit or application, wholly or partly - please see La Kaffa International Co Ltd v Loob Holdings Sdn Bhd [2017] 6 MLRH 33, at paragraphs 48 and 49.

Although the 1st Defendant has succeeded in respect of Enc. 4 and 21, I have decided to exercise my discretion under O 59 rr 2(2), 3(1), (2), 8(b) and 21 RC to deprive him of the costs of Enc. 4 and 21. This exercise of discretion is due to the 1st Defendant’s conduct in lying, not once but twice, to Mr. Prabha and Mr. Foo regarding his reasons for leaving the 1st Plaintiff. The 1st Defendant had the right not to give any reason for his resignation but if he chose to give reasons for leaving the 1st Plaintiff, he should not have given untrue reasons.

In accordance with O 59 rr 16 and 21 RC, I exercise my discretion to order the Plaintiffs to pay RM50,000.00 to the 2nd Defendant as costs for Enc. and 15. Such an exercise of discretion is based on the following reasons:

the complex nature of Enc. 4 and 15 which concerns APO and confidential information [please see O 59 r 16(1)(a) RC];

the skill, specialized knowledge and responsibility required of the 2 nd Defendant’s learned counsel, a senior member of the Malaysian Bar [please see O 59 r 16(1)(b) RC]; and

the importance of this case to the 2nd Defendant [please see O 59 r 16(1)(e) RC]. I. Enc. 100

O 21 r 3(1) RC provides as follows: “r 3(1) Except as provided by rule 2, a party may not discontinue an action (whether begun by writ or otherwise) or counterclaim, or withdraw any particular claim made by him therein, without the leave of the Court, and the Court hearing an application for the grant of such leave may order the action or counterclaim to be discontinued, or any particular claim made therein to be struck out, as against any or all of the parties against whom it is brought or made on such terms as to costs, the bringing of a subsequent action or otherwise as it thinks just.” (emphasis added).

When a plaintiff applies under O 21 r 3(1) RC for the court’s leave to discontinue an action (Discontinuance Application), the court has the following discretion:

whether to grant leave for the Discontinuance Application (Leave To Discontinue) or otherwise. In the following cases, the Discontinuance Applications have been dismissed -

in Majlis Peguam Malaysia & Ors v Raja Segaran S Krishnan [2002] 3 CLJ 370, at 378, Gopal Sri Ram JCA (as he then was) in the Court of Appeal reversed the High Court’s Leave To Discontinue on the ground that the defendants were exercising their constitutional right of freedom of speech and had resisted that suit “tooth and nail”; and

in the High Court case of Overseas Union Finance Ltd v Lim Joo Chong [1971] 2 MLJ 124, the finance company was a National Land Code (NLC) chargee of land belonging to the defendant. The finance company applied to court for an order for sale of the charged land under the NLC. The defendant had raised, among others, a defence that the NLC charge was illegal and void. Raja Azlan Shah J (as His Majesty then was), at p. 125- 126, disallowed the Discontinuance Application because if that suit was discontinued, the defendant would be deprived of certain “advantages” in that suit regarding the validity of the NLC charge; and

if Leave To Discontinue is given, the court has a discretion to impose the following terms (Discontinuance Terms) - 29

whether the plaintiff should be granted liberty or not to file a subsequent action against the defendant based on the same cause of action as in the discontinued action. The following cases have explained that when the court grants Leave To Discontinue, a party may generally be given the liberty to the plaintiff to file a subsequent action against the defendant based on the same cause of action as the discontinued action (Liberty To File Afresh) -

the Court of Appeal’s judgment delivered by Zabariah Mohd. Yusof JCA in Newlake Development Sdn Bhd v Zenith

(ii) VC George J’s (as he then was) decision in the High Court case of United Asian Bank Bhd v Balakrishnan Thanakodi & Ors [1992] 3 CLJ (Rep) 742, at 744-745. There are exceptional cases which have allowed Discontinuance Applications subject to the term that the plaintiff cannot institute a fresh action against the defendant based on the same cause of action as the discontinued action (No Liberty To File Afresh) - please see Ahmad Fairuz JCA’s (as he then was) judgment in the Court of Appeal in Ng Hee Thoong & Anor v Public Bank Bhd [2000] 1 CLJ 503 and Lim Beng Choon J’s decision in the High Court case of Hanhyo Sdn Bhd v Marplan Sdn Bhd & Ors [1991] 2 CLJ (Rep) 684. The party who applies for No Liberty To 30 File Afresh has the burden to satisfy the court that there is an exceptional ground for the court to impose such a Discontinuance Term; and

the court may order costs of the action to be paid by the plaintiff to the defendant. The court may even exercise its discretion to order each party to bear its own costs - please see the judgment of Chong Siew Fai J (as he then was) in the High Court in Hongkong & Shanghai Banking Corp v Timor Electric Cable & Wine Sdn Bhd & Ors [1991] 2 CLJ (Rep) 728.

I am of the view that decisions on Leave To Discontinue and Discontinuance Terms depend on the exercise of judicial discretion based on the particular facts and circumstances of each case. Accordingly, cases on Discontinuance Applications cannot be binding precedents from the view point of the stare decisis doctrine.

Regarding Enc. 100, I exercise my discretion under O 21 r 3(1) RC to grant Leave To Discontinue because –

Enc. 100 had been made in good faith. There is no evidence adduced by the 2nd Defendant to show that Enc. 100 has been filed with an ulterior motive or an improper purpose to obtain a collateral advantage vis-a-vis the 2nd Defendant;

the 2nd Defendant will not suffer any injustice if Leave To Discontinue is granted. There is no evidence that the 2nd Defendant will be deprived of any advantage or defence if the court allows Enc. 100; 31

this action against the 2nd Defendant is not at an advanced stage; and

the 2nd Defendant did not object to the granting of Leave To Discontinue. The 2nd Defendant only contended that No Liberty To File Afresh should be imposed on the Plaintiffs.

Leave To Discontinue is granted to the Plaintiffs subject to the following

this court exercises its discretion to grant Liberty To File Afresh based on the following reasons -

if the court orders No Liberty To File Afresh, this will cause an injustice to the Plaintiffs if the Plaintiffs subsequently discover evidence that the 2nd Defendant is liable to the Plaintiffs for the same causes of action as pleaded in this case. It is to be noted that the 1st Defendant is still employed by the 2nd Defendant; and

there is no injustice to the 2nd Defendant if Liberty To File Afresh is given to the Plaintiffs. This is because the 2nd Defendant is not barred from raising any defence to resist a subsequent suit by the Plaintiffs based on the same causes of action raised in this case. In any event, the 2nd Defendant has failed to show any prejudice which may be suffered by the 2nd Defendant as a result, directly or otherwise, of the granting of Liberty To File Afresh. In the circumstances, the 2nd Defendant has failed to discharge the onus 32 to persuade the court that there is an exceptional ground in this case for the court to order No Liberty To File Afresh;

costs of RM5,000.00 shall be paid by the Plaintiffs to the 2 nd Defendant; and

to ensure that the trial of this action against the 1st Defendant (Trial) is not delayed, I order the Assessment to be conducted after the Trial. J.

In summary -

Enc. 15 and 21 are allowed - the Ex Parte APO is set aside in its entirety;

Enc. 4 is dismissed;

as between the Plaintiffs and the 1st Defendant, there will be no order as to costs regarding Enc. 4 and 21;

as between the Plaintiffs and the 2nd Defendant, Plaintiffs shall pay RM50,000.00 to 2nd Defendant as costs for Enc. 4 and 15. An allocatur fee is imposed on this sum pursuant to O 59 r 7(2) RC; and

Enc. 100 is allowed on the following terms -

the Plaintiffs are given Liberty To File Afresh; 33

costs of RM5,000.00 shall be paid by the Plaintiffs to the 2nd

the Assessment shall be conducted after the Trial.

In closing, an employee has the right to resign from his or her employment. An employee also has the right to give reasons or may even opt to remain silent on why he or she has resigned. If an employee however gives an untrue excuse for leaving his or her employment, such a conduct may have severe and adverse legal consequences (as in this case). Hence, the 1st Defendant in this case should be admonished (in terms of deprivation of costs) for giving less than honest answers for his resignation. WONG KIAN KHEONG Judicial Commissioner High Court (Commercial Division) Kuala Lumpur DATE: 7 DECEMBER 2017 Counsel for Plaintiffs: Mr. Gideon Tan, Mr. Brian Ernest Cumming, Ms. Teo Qing Qing & Ms. Khong Jo Ee (Messrs Gideon Tan Razali Zaini) Counsel for 1st Defendant: Ms. Wendy Lam Mei Kwan, Ms. Himahlini Ramalingam, Ms. Wong Jia Ee & Mr. Ong Yan Hao (Messrs Himahlini & Loh) 34 Counsel for 2nd Defendant: Dato’ Ambiga Sreenevasan, Mr. S. Sivaneindiren, Ms. Janini Rajeswaran, Mr. Jeff Ong Sze Ren & Mr. Lim Wei Jiet (Messrs Cheah Teh & Su)