Chan Ah Kien v 1. Brite-Tech Berhad & 1 Lagi (WA-22CY-1-01/2018)

BRITE-TECH BERHAD (Company No: 550212-U)

BRITE-TECH CORPORATION SDN BHD (Company No: 63980-K) …DEFENDANTS GROUNDS OF JUDGMENT A. BACKGROUND FACTS [1] The underlying issue of the present case is verily simple. Amidst the lengthy factual narratives surrounding the case, the Plaintiff’s main grievance is the seemingly benign dissemination of information (regarding his remuneration as Director) through the grapevine of Page 2 of 26 related holding companies and its subsidiaries which had been stirred by Lembaga Hasil Dalam Negeri’s (“LHDN”) request for supporting documents regarding the same, for tax evaluation purposes. [2] It is the Plaintiff’s case that this dissemination (of his salary as Director) is firstly, an unauthorized dissemination of personal data or sensitive personal data secondly (breach against the Personal Data Protection Act 2010), a negligent dissemination of private and confidential information, a breach of confidence or at the very least, a breach of privacy. [3] To this Court’s mind, the determination of all of the Plaintiff’s allegations above are corollary to the determination of two main issues: i. Whether the Plaintiff’s salary as a Director indeed falls within the definition, quality or domain of privacy and is a confidential information or data; and Page 3 of 26 ii. Whether there was an unauthorized dissemination of the alleged confidential and private information (to a 3rd party not privy to the information) to the detriment of the Plaintiff. [4] The determination of the two main issues above would be sufficient to determine the present action. If indeed the information is of a quality which should remain in the private domain, then the Plaintiff would have a right to protect itself against unauthorized dissemination of such information. On the contrary, the Plaintiff’s cause of action would ultimately fail if the information complained already falls within information within the public domain. Following that, even if the alleged information is proven to be private and confidential, then the Plaintiff must prove that the recipients of such information are not privy to receive such information. [5] The facts are simply this. Chan Ah Kien (“Plaintiff”) held position as a director in Brite Tech Berhad (“BT Bhd / D1”), Brite-tech Corporation Sdn Bhd (“BTC / D2”) as well as Hooker Chemical Sdn Bhd (“HCSB”). BT Bhd is a Holding Company, while BTC and HCSB are all subsidiaries of BT Bhd. Page 4 of 26 [6] The information complained of by the Plaintiff is simply the actual amount of his remuneration or salary he received during his tenure as Director. Succinctly put the Plaintiff vigorously contends that information regarding a Director’s salary is private and confidential information. [7] Now, the recipients who were involved in the grapevine of information involving the Plaintiff’s salary are namely, the LHDN, CAS Tax Service Sdn Bhd (“CAS”) (D1’s tax agent), Ms Lee Lay Eng (“Lee”)(D1’s shareholder and account manager), Ms Yong Ah Moi (“Yong”)(D1’s shareholder and D2’s administrative staff) and one Ms Vasugi Thambiran (“Vasugi”)(D1’s shareholder and HCSB’s sole administrative staff). [8] The factum that all three, Lee, Yong and Vasugi are all shareholders of BT Bhd or D1 was admitted by the Plaintiff himself during his testimony in Court (upon cross-examination). [9] The contentious facts of the dissemination of the alleged confidential information all occur circa June 2017. LHDN on 19.6.2017 issued a Page 5 of 26 letter and emailed the same letter to CAS, requesting for supporting documents detailing the Plaintiff’s salary as Director. This Court takes note that the address indicated in LHDN’s letter refers to BT Bhd (and CAS as its tax agent). CAS then, rightfully so, emailed a request to a common email interchangeably used by Yong and Lee (“CAS’ email”) (it is the contents of CAS’ email that the Plaintiff alleges to be private and confidential as it particularizes the actual amount and breakdown of the Plaintiff’s salary as Director). It is also pertinent to note that CAS’ email does not specifically indicate the source of the payments made to the Plaintiff. Thereafter, considering that the Plaintiff is Director in all three companies, D1, D2, and HCSB, it is reasonable to understand that queries would be made to staff or persons in charge in D1, D2, and HCSB regarding the supporting documents regarding the Plaintiff’s salary as Director. [10] Following the natural flow of the query, Yong (allegedly on behalf of Lee) forwarded CAS’s email to Vasugi on 20.6.2017. Again following the grapevine of information back to CAS, Yong (allegedly on behalf of Lee) emailed CAS with the requested attachments. Page 6 of 26 [11] Now, as a matter of accuracy and consistency, the Plaintiff has already limited the scope of alleged private and confidential information to the contents of CAS’ email which particularizes the Plaintiff’s salary, fee, and bonus as Director. It has already been admitted by the Plaintiff in his own email dated 21.6.2017 that the parties privy to CAS’ email and information is “IRB/CAS/BTB”. Thus, from the outset, the Plaintiff admits that at the very least BT Berhad or D1 is privy to CAS’ email. [12] Thereto, the two persons who the Plaintiff contends to be unrelated 3rd parties who are not privy to CAS’ email are Yong (as representative of D2) and Vasugi (as sole administrative staff of HCSB). Thus, the Plaintiff argues that the dissemination of CAS’ email to Yong and Vasugi is wrongful transmission of private and confidential information. The Plaintiff’s cause of action was pegged on numerous tortious conduct as well as a statutory breach against the Personal Data Protection Act 2010 (“PDPA”). Page 7 of 26 [13] On the extreme opposite, the Defendants’ defence can be digested as follows: i. CAS’ letter and its contents therein is not private and confidential information and are information which are already within the public domain: a. Arguably considering the aggregate sum of the Plaintiff’s salary has already been published in D1’s Annual Reports (which in turn were published in both D1’s website as well as Bursa Malaysia’s (“Bursa”) website; b. The Malaysian Listing Requirements requires that such information regarding Director’s remuneration be fully disclosed. ii. All three, Yong, Lee, and Vasugi are shareholders of D1 and are privy to the information in CAS’ email as shareholders of D1. Even if the information is indeed confidential information, there was never any unauthorized transmission of confidential Page 8 of 26 information to unrelated 3rd parties not privy to the confidential information. B. WHETHER THE PLAINTIFF’S SALARY AS DIRECTOR FALLS WITHIN THE DEFINITION, QUALITY OR DOMAIN OF PRIVACY AND IS A CONFIDENTIAL INFORMATION OR DATA [14] At the very essence of this issue, it is already perplexing that a Director of a listed company, see it crucial as a fiduciary, that his remuneration as director be kept a secret from the public. BT Bhd or D1 is a listed company in which the public, shareholders or prospects alike, would have a vested interest to transparency in management and administration. The very essence of listing is transparency and transparency is abundantly stressed in the many listing requirements applicable in Malaysia, and this Court believes even in other nations. Failure to Plead Particulars of Confidentiality [15] And it is opportune at this juncture for this Court to examine what was the Plaintiff’s pleading that contends valid justification that the nature Page 9 of 26 of such information (on Director’s salary) should remain private and confidential. Interestingly, this was an issue contended by the Defendant’s counsel in the preliminary. The Defendant’s counsel in his Submissions has at length raised a preliminary issue that the Plaintiff has failed to plead particulars of confidentiality in which would have been crucial to identify the reasons and justifications that such information would indeed have the quality of confidential or sensitive information. [16] As astutely raised by the learned counsel for the Defendants, Hamid Sultan Abu Backer JCA has held (in the case of Ganesh Raja Nagaiah & Ors v NR Rubber Industries Sdn Bhd [2017] 2 MLJ 396) that it is crucial in a case regarding confidential information, that the claimant must plead facts that: “In Manderson M and F Consulting v Incitec Pivot Ltd (No 2) [2011] VSC 205, the Australian Court dealt with the pleading rules related to confidential information. Croft J’s judgment on this issue as summarized… reads as follows: Page 10 of 26 …the information has the necessary quality of confidentiality (and is not for example, common or public knowledge)” [17] And as highlighted by the learned counsel for the Plaintiff, whether or not an information is confidential or otherwise, is fact-sensitive; as was found in the case of Lionex (M) Sdn Bhd v Allen Lim Lai Wah & Ors [2016] MLJU 967: “What is confidential is a question of fact in each case” [18] And this is exactly the difficulty that this Court is inundated with. By and large, the entire breadth of the Plaintiff’s pleading only pleaded facts of which alleges that confidential information was disseminated out to unrelated 3rd parties not privy to the information. However, there is no real trace of facts pleaded as to how, why, and in what manner was the information was of any confidential quality and value. This Court agrees with the Defendants’ counsel, that the Plaintiff’s pleading at most has only pleaded allegations that the Plaintiff’s salary as Director is confidential but falls short of any explanation as to the justification and reason that such information should be Page 11 of 26 confidential and be kept away from the public’s knowledge. There were no facts pleaded as to whether or not by practice, usage, customs, industry standards or any fact at all to indicate that the salary of a Director should be kept a secret or confidential. [19] In essence, salary is innocently, monies paid for contribution or services rendered by an employee or in this case, a Director. Unless the Plaintiff has reasons (which were not pleaded) that such benign information is detrimental to his being, to be in the public domain, this Court is constrained from looking beyond what was pleaded by the Plaintiff. There is a clear want of pleadings here. The Plaintiff’s Salary is Information already within Public Domain [20] Now, a majority of the Defendant’s contention regarding this issue mainly revolves around D1’s Annual Report and D1’s Corporate Governance Report that departs from the practice of disclosing the full particulars of Directors’ remuneration (as required by Malaysia’s Code on Corporate Governance 2012 (“MCCG”)). However, this Page 12 of 26 Court is very well aware that the Plaintiff’s contention on this reservation or departure is but merely an isolated and skewed reading of a select portion of the Report. This will be discussed further later in this Judgement under a distinct heading. [21] Most pertinently, as highlighted by the Defendants’ counsel the information regarding the Plaintiff’s salary is not only available in aggregate in the Defendants’ Annual Reports, the same information is also already within the knowledge of the public at large, particularly the shareholders approving Directors’ salary in the company. Considering D1 is a public listed company, the subscribers of D1’s shares would be none other than the public itself. [22] As rightfully pointed out by the Defendants’ counsel, Directors as fiduciaries generally should not put themselves in a position where there is a conflict of interest or in the present case, the conflict between the interest of a director to earn money from the company, and the interest of the company itself. This is exactly the underlying reason that Section 230(1) of the Companies Act 2016 stipulates that if indeed directors intend to receive payments in fees or salaries Page 13 of 26 for their services to a public or listed company, such remuneration must be put before the shareholders and be approved at a general meeting. [23] This is further supplemented by the fact that Article 84 of D1’s Article of Association also stipulates that: “The fees of the Directors shall be such fixed sums as shall from time to time be determined by an ordinary resolution of the Company” [24] Similarly, Article 98 of D2’s Articles of Association also states: “The Directors shall be paid by way of remuneration for their services such fixed sum (if any) as shall from time to time be determined by the company in general meeting…” [25] The sheer fact that the Plaintiff’s salary can be tabled and be put to a vote at a general meeting clearly shows that the Plaintiff’s salary is Page 14 of 26 not at all any confidential information and is already an information within public domain. [26] This Court also refers to the recent case of Law Siew Ngoh & Anor v Bursa Malaysia Securities Bhd [2019] 2 CLJ 417 in which the Court has held that listing requirements also binds directors of a company: “The rules of Exchange have their genesis in contract. A participating organization…agrees by the terms of the Bursa Malaysia Securities Rules, referred to colloquially as the “business rules”. Similarly a listed company that is admitted into the official list of the Exchange agrees to comply with the obligations contained in the listing requirements. … Thus, a director who agrees to be appointed to a board of listed issuer effectively undertakes to comply with the terms of the listing requirements. … Page 15 of 26 In Tan Sri Dato’ Hj Lamin HJ Mohd Yunus v Bursa Malaysia Securities Bhd & Other Appeals, the Court of Appeal went so far to hold that the listing requirements have statutory force and hence applied to bind directors notwithstanding the general company law…” [27] Corollary to the above, the Plaintiff as Director is also bound to abide by the Listing Requirements. And the ACE Listing Requirement, Appendix 9C, paragraph 12, clearly requires full disclosure of a listed company’s director’s remuneration specific with particularization of components of the remuneration inclusive of fees, salaries, percentages, and bonuses. This full disclosure is similarly required in the Main Market Listing Requirements, in Appendix 9 C, paragraph 11. [28] Thereto, not only that the Plaintiff’s salary is already within the public knowledge, it was also incumbent upon the companies and the Plaintiff that the Plaintiff’s salary (in full particulars) must be disclosed. Page 16 of 26 [29] For an information to be deemed confidential, or have a quality of confidentiality, it cannot be information which is already within public knowledge. This rule was upheld in the case of Worldwide Rota Dies Sdn Bhd v Ronald Ong Cheow Joon [2010] 8 MLJ 297: “A host of confidential information in the possession of the recalcitrant employees have been protected so long as the confidential information have the necessary quality of confidentiality about them. It must not be something which is said to be trivial (Faccenda Chicken Ltd v Fowler & Ors; Fowler v Faccenda Chicken Ltd [1987] 1 Ch 117 (CA); and Stephens v Avery & Ors [1988] 2 WLR 1280) or within the domain of public property or public knowledge (Lord Advocate v The Scotsman Publications Ltd & Ors [1990] 1 AC 812 (HL); O Mustad & Son v S Allcock & Co, Ltd And Dosen [1963] 3 All ER 416 (HL); Stevenson Jordan and Harrison, Ltd v MacDonald And Evans [1952] 1 TLR 101; Peter Pan Manufacturing Corp v Corsets Silhouette Ltd [1964] 1 WLR 96; Franchi v Franchi [1967] RPC 149; and Lennon v News Group Newspapers Ltd And Twist [1978] FSR 573). … To this broad general principle, there are three limiting principles to which I wish to refer. The first limiting principle (which is rather an expression of the scope of the duty) is highly relevant to this appeal. It is that the principle of confidentiality only applies to information to the extent that it is confidential. In particular, once it has entered what is usually called the public domain (which Page 17 of 26 means no more than that the information in question is so generally accessible that, in all the circumstances, it cannot be regarded as confidential) then, as a general rule, the principle of confidentiality can have no application to it.” [30] Even at this juncture, it is overwhelmingly clear that the Plaintiff’s salary is not at all confidential in nature. The Plaintiff has already failed the first and most crucial hurdle to prove its case. [31] Nonetheless, for the sake of completeness, this Court shall continue to delve into other issues raised by the Plaintiff. Departure from MCCG is Qualified Departure and does not deem Information Private or Confidential [32] Reverting back to the issue of this supposed departure from the MCCG, it is reiterated that the Plaintiff has not candidly disclosed the entire extent of the D1’s departure from MCCG’s code to disclose its directors’ remuneration. In verbatim et literatim, D1’s Corporate Governance Report for the year ended 31.12.2017 reads: Page 18 of 26 “The Board is of the view that the disclosure of the directors’ remuneration by band of remuneration, without disclosing the individual Director’s remuneration, is sufficient and to preserve a degree of privacy. However, the Board will consider disclosing on named basis for the remuneration of individual directors as and when it is deemed appropriate” [33] It is pertinent to note that the full effect of the above departure would entail the following: i. The preservation of privacy is not absolute. It is only up to a certain ‘degree’. In fact, it does not specifically specify to who’s privacy it is preserving, whether it be the company’s or the directors’ privacy; ii. The departure and preservation is a qualified departure and preservation subject to the ultimate and unfettered discretion of the Board of Directors, and not the Directors. The Directors were never clothed with any authority to withhold this information to begin with. Page 19 of 26 [34] Thus, the sheer fact that the qualified preservation of this information is at the total mercy and discretion of the Board of Directors is sufficiently telling that the company has never intended to clothe the Plaintiff with any say or authority regarding the disclosure of such information. Thus, when the dissemination of such information is at the discretion of other people besides the Plaintiff, it is patently obvious that such information is already within the public sphere and domain and clearly was never intended to be kept within the private domain. Report of Aggregate Sum in D1’s Annual Report Immaterial [35] Again for the sake of completeness, this Court finds that the Plaintiff’s contention that there should be a distinction that should be drawn between reporting the aggregate sum of his salary (in the company’s Annual Report) and reporting the actual sum of his salary, is without any merit or basis. [36] The fact either the actual or the aggregate amount of the Plaintiff’s salary was reported does not at all detract away from the fact that the Plaintiff’s salary is readily available and accessible to the public Page 20 of 26 knowledge vide the company’s own Annual Report which are published in the company’s own website and Bursa Malaysia’s website. [37] The breakdown and particulars of the Plaintiff’s remuneration is merely a matter of documents and record. The breakdown of the remuneration does not elevate the aggregate amount from the realm of public domain up to the domain of privacy and confidentiality. There are no precedents furnished to this Court to supplement such a contention. C. WHETHER THERE WAS AN UNAUTHORIZED DISSEMINATION OF THE ALLEGED CONFIDENTIAL AND PRIVATE INFORMATION (TO A 3RD PARTY NOT PRIVY TO THE INFORMATION) TO THE DETRIMENT OF THE PLAINTIFF [38] Adding further detriment to the Plaintiff’s case is the fact that the persons who the Plaintiff complained of are in fact, interested persons who are very well privy and entitled to know (and in fact should have already know of) the Plaintiff’s salary. Page 21 of 26 [39] This Court has already at length deliberated above regarding the rights of a shareholder to be informed of and approve the Plaintiff’s salary and remuneration. It is infinitely pertinent now, to note that all three, Lee, Yong and Vasugi are shareholders of BT Bhd, D1. [40] Much has been said by the Plaintiff in its attempt to draw Yong and Vasugi as outsiders or 3rd parties who are unrelated and not privy to know his salary. The Plaintiff attempted a long narrative on Yong and Vasugi as employees of D2 and HCSB has no business at all to meddle with matters involving D1 or his salary paid as director of D1. [41] But there is no reason at all for this Court to be inundated by this lengthy narrative by the Plaintiff simply because the parties’ positions cannot be skewed or isolated from the entire breadth of their personas and involvement in the matter. The Plaintiff cannot isolate and ignore the fact that Yong, Vasugi and Lee are shareholders of D1. They are not mere 3rd party strangers separated and limited by the rules of incorporation between holding companies and its subsidiaries. Thus, when the information flowed through the grapevine, the receipt of such information is not merely Yong, Lee, Page 22 of 26 and Vasugi receiving the information as employees, but also as shareholders of D1. [42] Being shareholders of D1, Yong, Vasugi, and Lee are perfectly privy to know the full extent of the Plaintiff’s salary. As a matter of fact, it is already admitted by the Plaintiff in his own email dated 21.6.2017 that D1 is privy to CAS’ email. As shareholders, Yong, Vasugi, and Lee have real vested interest to see to the transparent and proper management of the company which inevitably would include being informed of the remunerations paid to the Plaintiff as D1’s director. [43] Thus, even if assuming indeed, the Plaintiff’s salary was confidential information (which it is indeed not), the information has never been disseminated to unrelated 3rd parties not privy to the information. [44] Thus, the entire narrative of Vasugi’s scope of duty in HCSB or Yong’s involvement via D2 is a non-issue. To unnecessarily ventilate these issues would only add unnecessary complexity to an inevitable conclusion. Page 23 of 26 [45] This Court finds that there was no unauthorized dissemination of alleged confidential and private information (to a 3rd party not privy to the information) to the detriment of the Plaintiff. D. WHETHER THERE IS A CASE FOR NEGLIGENCE, BREACH OF CONFIDENCE OR BREACH OF PRIVACY [46] As found above, the determination of the first two issues would be sufficient to defeat the entirety of the Plaintiff’s case. It would naturally and logically entail that, when the information itself is not confidential, and there was never any unauthorized dissemination of any information, then there can never arise, a breach of duty of care, a breach of confidence or breach of privacy. [47] In fact, the Plaintiff’s case here would fail all counts of elements of breach of confidence as laid down in the case of Coco v AN Clark (Engineers) Limited [1969] RPC 41. The Plaintiff’s salary does not at all have the quality of confidence. Since the information is not even confidential, then it cannot be said to be imparted in circumstances importing an obligation of confidence. Considering the Page 24 of 26 entire dissemination of the information occurred to comply with LHDN’s request and the Income Tax Act 1967, there has never been any unauthorised use of the information. And finally, this Court cannot see, and the Plaintiff has failed to prove the manner and reason in which dissemination such information has put him to detriment. [48] Regarding the Plaintiff’s contention on breach of privacy, this Court is inclined to follow the brilliant decision and digest by Vazeer Alam J (now JCA) in the case of Mohamad Izaham bin Mohamed Yatim v Norina bt Zainol Abidi & Ors [2017] 7 MLJ 772, in which Vazeer Alam J (as His Lordship then was) has reconciled the many precedents which have dealt with contentions involving the tort of breach of privacy. His Lordship found that although the Courts have allowed cases of breach of privacy in the past, it has always remained constant that such allowance is limited to matters of private morality and modesty: “In M Mohandas Gandhi & Anor v Ambank (M) Berhad & Anor [2014] 1 LNS 1025 the Lau Bee Lan J was minded to follow the decision of Chew Soo Ho J in Lee Ewe Poh v Dr Lim Teik Man & Anor [2011] 1 MLJ 835; [2011] 4 CLJ 397 and held that in her judgment: Page 25 of 26 … the law in Malaysia on the issue of invasion of privacy, as it stands presently, has developed in the sense that there is recognition of a cause of action in invasion of privacy as held by the Court of Appeal in Maslinda Ishak and followed by Lee Ewe Poh but it is limited to matters of private morality and modesty. (Emphasis added.) … Now, even if I were to accept and follow the decisions of the High Court in M Mohandas Gandhi & Anor v Ambank (M) Berhad & Anor [2014] 1 LNS 1025 and Lee Ewe Poh v Dr Lim Teik Man & Anor [2011] 1 MLJ 835; [2011] 4 CLJ 397, where the tort of invasion of privacy it is limited to matters of private morality and modesty, I find that such a cause of action is not disclosed on the pleaded facts. [49] Similarly, the present case does not disclose any pleading of matters regarding private morality and modesty. Thus, the Plaintiff’s case for breach of privacy shall ultimately fail. Page 26 of 26 E. CONCLUSION [50] Upon all of the aforementioned findings and deliberations, it is overwhelmingly obvious that the Plaintiff has failed to prove his case against the Defendants. [51] The Plaintiff’s claim is thereby dismissed with costs of RM20,000.00 each to be paid by the Plaintiff to each of the two Defendants. ………………………………… (AZIMAH BINTI OMAR) Judge High Court of Kuala Lumpur 14th Oct 2019 For the Plaintiff - Messrs. Dee, Netto, Fatimah & Ng Ng Yih Miin For the Defendants -