Global Advanced Broadband Solutions (M) Sdn Bhd v Gabs Network Solutions Sdn Bhd (BA-22NCvC-595-11/2018)

GABS NETWORK SOLUTIONS SDN BHD (No. Syarikat : 1193656-U)

AFANDI BIN HUSSAIN (No. K/P : 730705-11-5399)

MOHAMED NAHU BIN ABDULLAH (No. K/P : 750519-08-6449)

NURUL SYUHADA BINTI NOOH (No. K/P : 930412-01-5278) …DEFENDAN-DEFENDAN (MELALUI TUNTUTAN ASAL) DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM DALAM NEGERI SELANGOR DARUL EHSAN, MALAYSIA WRIT SAMAN NO: BA-22NCVC-595-11/2018 ANTARA AFANDI BIN HUSSAIN …PLAINTIF (No. K/P : 730705-11-5399)

GLOBAL ADVANCED BROADBAND SOLUTIONS (M) SDN BHD (No. Syarikat : 713237-M)

RABIH DAHER (PASSPORT NO : HH583092) …DEFENDAN-DEFENDAN (MELALUI TUNTUTAN BALAS) 23/05/2024 16:13:09 BA-22NCvC-595-11/2018 Kand. 191 GROUNDS OF JUDGMENT Introduction [1] The Plaintiff sues the Defendants for damages arising from various causes of action, principally arising from the actions of the 2nd Defendant in establishing the 1st Defendant company, whose business was in competition with that of the Plaintiff. The 1st Defendant then continued with a project known as the Huawei-P1 project which was initially awarded to and executed by the Plaintiff. The monies paid in respect of the project was received by the 1st and 2nd Defendant. [2] The 3rd Defendant was not served with the cause papers. Therefore, for all intents and purposes, he is not a party to this action. The 4th Defendant is a former employee of the Plaintiff who subsequently entered into the employment of the 1st Defendant. She was alleged to be equally responsible for the wrongful acts of the 1st and 2nd Defendants. The Plaintiff’s claim [3] The Plaintiff was locally incorporated in 2005. It is a service provider for a comprehensive end to end IP Wireless full turnkey project management. Its services encompass all aspects of the drive testing programs for telecommunications. The Plaintiff was also a key technology partner to GABS Telecommunications Ltd which is an overseas company providing financial support to the Plaintiff. [4] Since its incorporation, the Plaintiff had executed projects with leading telecommunication companies and service providers like Maxis, Advanced Air Traffic Systems (M) Sdn Bhd, Huawei, OCK Group of Companies and Celcom. [5] The 2nd Defendant (“D2”) was appointed the technical director of the Plaintiff on 1.12.2006 by Mr. Rabih Daher (PW1), the Plaintiff’s director. [6] In 2009, the Plaintiff’s paid up capital was increased to RM 1,000,000.00. D2 was offered 15% equity in the Plaintiff’s company. He was then appointed the executive director and the Chief Operations Officer of the Plaintiff. In addition to these benefits, the D2 was also entrusted with 55% of the Plaintiff’s paid-up capital as its trustee. To safeguard the interest of the Plaintiff, a Trust Deed dated 27.7.2009 was executed between the parties. D2 had full access to the Plaintiff’s bank accounts, human resources and tools of the trade, including systems and software specifically developed by the Plaintiff for its business. [7] As PW1 was overseas most of the time, D2 was responsible for the operations of the Plaintiff. He oversaw the technical aspect and execution of the Plaintiff’s services to ensure that it provided high quality services for the Plaintiff’s customers. [8] The 3rd named Defendant, Mohamed Nahu bin Abdullah (“Nahu”) was the Vice-President for Business and Development. [9] The 4th Defendant (“D4”) commenced her employment with the Plaintiff in March 2016. She was the finance executive, tasked with managing the finances of the Plaintiff. She resigned from her employment with the Plaintiff on 4.7.2016. [10] When the dispute between the parties arose in the middle of 2016, the Plaintiff was in the midst of executing a project titled, the Huawei-P1 Project, to conduct drive tests. This project was awarded by Steadcom Sdn. Bhd. (“Steadcom”), which in turn was the main vendor for Huawei Technologies (M) Sdn Bhd. In other words, the Plaintiff was a subcontractor. [11] Purchase Orders for the Huawei-P1 Project were issued by Steadcom to the Plaintiff to execute the project. Work done will be recorded in the Work Acceptance Report forms and timesheets for the approval of Huawei Technologies (M) Sdn. Bhd. for its approval. Upon the approval, the Plaintiff will make its claim for payment from Steadcom. By July 2016, work for the Huawei-P1 Project was near completion. [12] At around the same, the Plaintiff was also interested to undertake another project known as the Huawei-Celcom Project, which had yet to be awarded to the Plaintiff. However, based on past dealings and contracts, the Plaintiff was confident of receiving Purchase Orders from Celcom for the project. [13] PW1 received an unpleasant surprise when D2 sent an email dated 29.6.2016 to inform that he had sold the Huawei-Celcom Project. At the same time, D2 was found to have erased all the records and traces related to Steadcom and directed the Purchase Orders for the Huawei-P1 Project to the 1st Defendant (“D1”). [14] Thereafter D2 refused to respond to attempts by PW1 to communicate with him. PW1 was at all material times the person with whom D2 was in communication with, on the projects undertaken for the Plaintiff. [15] On 4.7.2016, D2 tendered his resignation as a director and employee of the Plaintiff. D4 followed suit by tendering her resignation on the same day. [16] Upon learning about the dire situation of the Plaintiff, PW1 then flew into Malaysia on 7.7.2016. He went to the Plaintiff’s office in Bandar Baru Bangi and was shocked to find the office was empty. There were no employees, tools, laptops, equipment nor office furniture. All the data developed and records kept in the Plaintiff’s office system were either removed or erased. His attempts to contact D2 for a satisfactory answer as to the state of affairs yielded no positive results. [17] PW1 subsequently learnt that D2 had incorporated D1 on 1.7.2016 whilst he was still holding positions in the Plaintiff. He did so in collaboration with Nahu, who was also employed by the Plaintiff at the material time. After its incorporation, D1 then took over the ownership of the Hwawei-P1 Project. [18] Despite having executed the works of the Hwawei-P1 Project pursuant to the numerous Purchase Orders issued by Steadcom, the Plaintiff did not receive any payments pertaining to these Purchase Orders. Instead, the Plaintiff discovered that in September 2016, D2 had collected the money for the Project via three cheques issued by Steadcom. D2 then deposited these cheques into the Maybank account of the Plaintiff, which was a dormant account. On the same day, D2 transferred the funds of these cheques to his personal account in CIMB. [19] The Plaintiff also claims that the name of D1, Gabs Network Solutions Sdn. Bhd., was deliberate and intended to bear a close resemblance to the Plaintiff’s name. The acronym of the Plaintiff’s name is GABS, which D1 then used as its first name. The internet domain of D1, gabsgroup.my imitated that of the Plaintiff’s. All these were done to mislead the Plaintiff’s customers into thinking they were dealing with the Plaintiff. [20] The Plaintiff further alleges that D2 and D4 used the data base information on its clients obtained whilst they were in the employment of the Plaintiff. The actions of D2 and D4 were wrongful and tantamount to stealing of the Plaintiff’s property, for the purpose of enriching all the Defendants. [21] Premised on above facts, the Plaintiff files the present suit founded on the following causes of action:-

Infringement of trademark, goodwill and passing-off;

(ii) Fraud/embezzlement and misconduct;

(iii) Fraud and misrepresentation;

(iv) Breach of contract/equity and fiduciary duty; and

Breach of confidentiality. [22] Consequent upon the alleged wrongs of the Defendants, the Plaintiff seeks an order for inquiry and assessment against D1 and damages against all the Defendants, individually and collectively. The damages sought comprise of monies wrongly taken by D2 from the Huawei-P1 Project contract with Steadcom. In addition, it also claimed for the profits it would have earned from both the Huawei-P1 Project and the Huawei-Celcom project amounting to RM 3 million and RM 5 million respectively. [23] The Plaintiff also claims for losses incurred from the erasure of the software belonging to the Plaintiff as well as the loss of computers and other office equipment removed from its premises. As a result of the Defendant’s actions, aggravated and exemplary damages are also sought against them. The defence of the Defendants [24] The defences of the respective Defendants are as follows. D1 denies any infringement of trademark, goodwill and passing-off. The company name was approved by the Companies Commission of Malaysia at the time of incorporation. The Plaintiff has no exclusive right to the name GABS. The internet domain of gabsgroup.my is not exclusive to the Plaintiff as there is no registration of any patent or copyright for that name. [25] The alleged erasure of documents in the computer system of the Plaintiff is denied as the documents were stored in the cloud drive and remained in the Plaintiff’s server. [26] All the allegations of wrongdoing in respect of the Huawei-P1 Project and the Huawei-Celcom Project were denied. Instead, the actions/decisions taken were reasonable in view of the situation D2 faced at the material time. [27] In June 2016, D2 was informed by Nahu about the possibility of undertaking the Hwawei-Celcom Project which was offered by Nahu, the project owner. [28] D2 then communicated with PW1 requesting for his assurance on the funding for the Huawei-Celcom Project before committing the Plaintiff to the project. The funding was to finance the drive test engineers and analysts whose engagement was necessary if Plaintiff was to undertake the project. [29] The assurance and the funds however, was not forthcoming from PW1. By the 30.6.2016, it was already apparent to D2 that the Plaintiff was not going to fund the execution of the Huawei-Celcom Project. As a result of the Plaintiff’s inaction to obtain the necessary funding, D2 was compelled to return the Huawei-Celcom Project to Nahu. [30] At the same time, the Plaintiff had also stopped funding the ongoing Hwawei-P1 Project. Faced with the possible penalty imposed by Huawei/Steadcom for its failure to complete the Hwawei-P1 Project, D2 together with Nahu, then made the decision to incorporate D1. This was also done to avoid jeopardizing the ongoing project. D2 required a platform to allow the project costs/income to be channeled to and from D1, as PW1 had frozen the CIMB account of the Plaintiff. This was a business judgment he had to make in view of the situation he found himself in, to overcome the hurdle he now faced in the execution of the project. [31] To sustain the Hwawei-P1 Project, D2 was compelled to advance payments for the project costs for the months of July, August and September 2016. When Steadcom paid for the work done in 3 cheques, he credited the monies into his personal account. D2 explained that he did so to reimburse himself and D1 for funding the project costs. [32] In relation to the other causes of action alleged by the Plaintiff, D2 denies them as being baseless as there is no evidence to support these causes of action. [33] D4’s defence essentially adopts the stand taken by D1 and D2. Although she left her employment with the Plaintiff to join D1, she did so without breaching any employment contract with the Plaintiff. Counterclaim of D2 [34] Apart from defending the claim of the Plaintiff, D2 had also filed a counterclaim against PW1 and the Plaintiff, premised on the following facts. [35] D2 was requested by PW1 to apply for a loan from CIMB to purchase a property in Seksyen 9, Bandar Baru Bangi, Selangor to be used for the Plaintiff’s business. The said property was used as security for the loan. [36] When differences arose between them, PW1 proposed that D2 resign as a director and promised to discharge D2 from all liabilities in respect of the loan. PW1 however, failed to keep his end of the bargain, notwithstanding D2’s resignation in July 2016. [37] As the borrower, D2 was then compelled to continue servicing the loan instalments, which he did from July 2016 until July 2018. Thereafter when he defaulted, CIMB instituted foreclosure proceedings. [38] D2’s counterclaim is to recover the loan instalment payments for period from July 2016 until July 2018 amounting to RM 57,264.00 as well as refund of GST paid by him totaling RM 25,852.21. D2 further seeks aggravated, exemplary and general damages against PW1 and the Plaintiff. [39] Both PW1 and the Plaintiff failed to file a defence to the counterclaim. Judgment in default of defence was entered on 15.7.2019 for the liquidated sum claimed. [40] The counterclaim is pursued in this action for the award of general, aggravated and exemplary damages. Issues for determination by this court [41] The issues for determination of this court are primarily factual issues arising from the various causes of action upon which the Plaintiff’s case is founded. This court is to determine if the evidence sufficiently establishes the various causes of action pleaded by the Plaintiff, bearing in mind the principle of trite law that he who asserts a fact bears the burden of proof. (See: sections 101 and 102 of the Evidence Act, 1950 and Letchumanan Chettiar Alagapan (as executor to SL Alamelooo Achi (Deceased) & Anor v Secure Plantation Sdn. Bhd.) [2017] 5 CLJ 418). [42] Apart from the merits of the Plaintiff’s causes of action, the reliefs sought must also be considered in the light of the evidence adduced. The appropriateness of D2’s counterclaim in these proceedings will also be dealt with. [43] Analysis and decision of this court Infringement of trademark, goodwill and passing-off [44] The allegation of infringement of trademark, goodwill and passing-off on the part of D1 and D2 is premised on the following facts. Firstly, the name of D1 which has the word GABS, is in fact an acronym of the Plaintiff. Secondly, the logos of both companies are not dissimilar in design as both have the word GABS. Thirdly, the slogan of the Plaintiff is GO GLOBAL, whereas that of D1 is GO GLOCAL. Finally, the domain name of the Plaintiff is gabsgroup.com and that of D1 is gabsgroup.my. [45] The Plaintiff concedes that the Plaintiff does not possess a registered trademark. Therefore, the provisions of section 38 of the Trademark Act 1976 has no application. Nonetheless, it contends that D1 and D2 committed the tort of passing off. [46] The Federal Court explained the tort of passing off in Skyworld Holdings Sdn Bhd & Ors v Skyworld Development Sdn Bhd & Anor [2022] 3 MLJ 426 as follows, [21] While the law of trademarks in Malaysia is governed by Act 175, the law of passing off is very much rooted in the common law. In Reckitt & Colman Products Ltd v Borden Inc and Others [1990] LRC (Comm) 417, the House of Lords through Lord Oliver of Aylmerton has stated at p 880 the following elements to prove passing off: … the law of passing off can be summarised in one short general proposition, no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying ‘get-up’ (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff’s goods or services. Second, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff’s identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely on a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Third, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff. (Emphasis added) [22] In short, in order to prove passing off, the plaintiffs must establish:

goodwill or reputation attached to his goods or services (goodwill or reputation);

the plaintiffs must prove that a misrepresentation is done by the defendants (misrepresentation); and

the plaintiffs must also prove that he has suffered a loss due to the defendants’ misrepresentation (damage). [47] The burden of establishing the existence of goodwill or reputation lies on the party making the claim, in this case the Plaintiff. (See: Meidi (M) Sdn Bhd v Meidi-Ya, Japan & Anor [2008] 6 MLJ 433, CA). [48] I do not find the 3 elements set out in Skyworld Holdings Sdn Bhd & Ors v Skyworld Development Sdn Bhd & Anor to have been satisfied. There is no evidence on the goodwill or reputation which is attached to the services of the Plaintiff. I also do not find the company name to be so similar as to mislead the public. The Plaintiff is known as Global Advanced Broadband Solutions. The word GABS although an acronym of the Plaintiff’s name, is not the entire name of D1. It is known as GABS Network Solutions Sdn Bhd. The words ‘Network Solutions’ is not in the Plaintiff’s name. I therefore find the names of both companies to be clearly distinct and different. [49] Similarly, the company logo which has the full name of both the Plaintiff and D1 is unlikely to create confusion. The logo of both companies are as below:- In my view, there is an obvious difference between both logos. [50] The slogan GO GLOCAL which is that of D1’s is not likely to be mistaken for that of the Plaintiff’s GO GLOBAL, as the word GLOCAL is unusual. I also find the domain name to be also dissimilar as D1’s which is gabsgroup.my. can be clearly distinguished from the domain name of the Plaintiff, gabsgroup.com. ‘my’ in the domain name of D1 is the internet country code for Malaysia. This is not present in the domain name of the Plaintiff. [51] More importantly, there is absolutely no evidence of loss suffered by the Plaintiff as a result of the passing off. The requisite elements of passing off have not been established. Breach of fiduciary duties, confidentiality and contractual obligations [52] These causes of actions are alleged principally against D2 as a director, and against both D2 and D4 as former employees of the Plaintiff. [53] At the time of incorporation of D1 on 1.7.2019, D2 was still a director of the Plaintiff. The business of D1 described as ‘telecommunications activities and other technology service activities’ was similar to that of the Plaintiff. Three days later, by an email sent on 4.7.2016, he notified PW1 that he was resigning from all current positions held in the Plaintiff with effect from the said date. The Plaintiff contends that the incorporation of D1 of which he was a director, and to be engaged in a business in competition to the Plaintiff, constituted a breach of his fiduciary duties as a director and employee. [54] The principle that a director owes fiduciary duties to a company is well settled. Section 213 of the Companies Act 2016 codifies the common law duties of a company director to act in good faith and in the company’s best interests when performing their duties. [See: Pioneer Haven Sdn Bhd v Ho Hup Construction Co Bhd & Anor and other appeals [2012] 3 MLJ 616, CA]. [55] Section 213 provides, Duties and responsibilities of directors

(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.

A director who contravenes this section commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding three million ringgit or to both. [56] The approach to the phrase ‘best interest of the company’ was explained by the Federal Court in Tengku Dato’ Ibrahim Petra bin Tengku Indra Petra v Petra Perdana Bhd and another appeal [2018] 2 MLJ 177 where it held, [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. 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. [57] This court is ultimately tasked with the responsibility of determining whether D2 acted in the best interest of the company upon an objective assessment of the evidence. [58] D2 does not deny that D1 was incorporated whilst he was still a director of the Plaintiff. It was also not disputed that the business of D1 is similar to that of the Plaintiff. In fact, D2 went so far as to admit that D1 was initially incorporated to continue with the Huawei-P1 project. [59] On the face of it, D2 appears to have acted contrary to the best interest of the Plaintiff by incorporating a company in direct competition to the Plaintiff whilst he was a director and employee. His actions will however have to be viewed in the context of the situation he found himself in, at the material time. [60] D2 contends that the incorporation of D1 was a business judgment he made in view of the compelling situation. His evidence in chief was this, Rabih Daher enggan menyediakan saluran kewangan yang diperlukan untuk meneruskan project Huawei-P1 yang pada persekitaran bulan Jun 2016 semakin menghampiri fasa terakhir sebelum projek tamat. Dari pihaknya, tidak ada apa-apa bentuk sumber kewangan yang memasuki akaun Global untuk membiayai gaji pekerja dan kos projek-projek yang sedang berlangsung pada masa itu, Saya sebagai Pengarah Syarikat Global yang melakukan kesemua kerja lapangan di Malaysia berasa amat tertekan dengan perubahan sikap rakan pengarah saya yang tidak mahu membantu saya. Tekanan kerja bagi projek-projek yang sedang berlangsung juga semakin bertambah dan oleh kerana tiada wang untuk membayar gaji dan penerusan projek, saya juga mula ditekan oleh pekerja dan pemilik projek tentang perkembangan projek. Saya menjangkakan bahawa jika perkara ini dibiarkan supaya berlanjutan, pasti Syarikat Global, saya dan Rabih akan diheret ke Mahkamah atas sebab kegagalan menyelesaikan gaji, bayaran statutory KWSP serta kos-kos lain bagi projek yang kami laksanakan. Oleh itu, sebagai Pengarah Syarikat Global, saya mengambil langkah proaktif untuk menubuhkan GABS Network Solutions Sdn Bhd pada 1.7.2016. Melalui penubuhan syarikat GABS tersebut, dengan bantuan rakan-rakan saya yang lain, saya telah dapat meneruskan projek-projek Syarikat Global yang sedang berlangsung… [61] In his oral evidence, he reiterated the same. He said, I needed a platform to source some funds and then to pay the payroll to prepare everything because the D1 was set up is not one day to be completed…..D1 is just to provide the platform to pay all the necessary cost for the Plaintiff’s project under Huawei-P1. [62] In support of D2’s allegations that he was concerned about the continued funding for the Huawei-P1 project, email exchanges with PW1 sometime end of June 2016 were referred to. The emails mentioned his concerns about requisite funds to sustain the project to which PW1 gave no express assurance. [63] In cross, PW1 admitted that he was the financial resource person in the Plaintiff. I find it significant that he did not rebut D2’s allegation that no funding was forthcoming from him. There was no evidence that he made the funds available. He even admitted to freezing the CIMB account of the Plaintiff. As a result of PW1’s actions, D2 had to eventually pay the salaries of the employees and all costs involved in the project for the subsequent months. [64] I therefore accept the explanation of D2 that D1 was incorporated as a platform to continue with the ongoing Huawei-P1 Project. He was compelled to take the necessary action to avoid having the project stalled. I am satisfied that D2 had sufficiently rebutted the allegation that he acted in breach of his fiduciary duties. In any event, his fiduciary duties owed to the Plaintiff came to an end soon after the incorporation of D1, when on 4.7.2016, he vacated all posts held in the Plaintiff. [65] The Plaintiff also claims that the D2 acted contrary to its interest by failing to procure the Huawei-Celcom Project, and selling it to a third party. Reference is made to D2’s email dated 29.6.2016 wherein he admitted to having sold the project. [66] In his evidence, D2 stated that the contents of his email must be viewed in its proper context. His email stated that, ‘I just finished meeting with Celcom, they cut off 7 teams from original requirement of 17 teams. this is because we are late due to insufficient funds. We have wasted all the hard work and i’d no choice other than to sell the celcom project to other company because its need to fly 5 teams from Indonesia by Saturday and a lot more costing ahead to prepare. Celcom want to see 5 team on Sunday morning.’ [67] In his evidence in court, he explained, Istilah “sell” di dalam emel tersebut hanya bermaksud melepaskan tawaran untuk melobi projek Huawei-Celcom yang dikemukakan kepada Global kini kepada syarikat lain yang berkemampuan dari segi funding dan bersedia untuk memulakan projek tersebut pada kadar segera. [68] Thus, the failure to procure the project was the result of PW1’s non-commitment to provide the necessary funding. Having considered D2’s explanation in the light of the other available evidence, I have no reason to disbelieve him. [69] Plaintiff relies on the same set of facts to allege that D2 breached his contract of employment with the Plaintiff. For the same reasons I do not find D2 to have breached his fiduciary duties, I do not find him to be in breach of his contract as an employee. [70] The same allegations of breach of fiduciary duties and contract was made against D4. She was merely the finance executive at the material time. The Plaintiff appears to have overlooked the fact that both D2 and D4 were in different capacities at the material time. This broad-brush approach is wholly unsatisfactory. I find the Plaintiff’s case against D4 baseless, devoid of convincing evidence. [71] In addition, although D4 is alleged to have breached her contract of service, no evidence was adduced as to how she had done so. There is no reference to any particular term in her contract of service. In the circumstances, I find the Plaintiff’s case against D4 for breach of fiduciary duties and contract to be without merit. Fraud/embezzlement and misconduct; [72] The Plaintiff alleges that D2’s conduct in banking in the cheques by Steadcom into his personal account is tantamount to fraud, embezzlement and misconduct. The details of the cheques are as follows:-

MBB Cheque No. 968171 RM 120,598.62

(ii) MBB Cheque No. 968218 RM 120,598.62

(iii) MBB Cheque No. 968243 RM 160,798.16 [73] The total amount of RM 401,995.40 was transferred to D2’s personal account in CIMB on 2.9.2016, 20.9.2016 and 30.9.2016 respectively. [74] The fact of transfer to D2’s account in CIMB is not denied. However, his explanation is relevant. It was to reimburse the expenses he paid to execute the project. He said in his evidence, Pemindahan wang ke akaun persendirian saya hanyalah sebagai pembayaran semula wang pendahuluan yang telah didahulukan untuk tujuan menampung gaii pekerja dan kos lain bagi projek-projek yang berjalan atas sebab keengganan Rabih menyediakan sumber kewangan. [75] In support of this assertion, D2 tendered in evidence a summary prepared by him of the cash outflow and expenditure incurred for the Huawei-P1 Project from July to October 2016. They were in respect of the following:-

Global office loan;

(ii) Payment of salaries;

(iii) Tool rental from its suppliers;

(iv) Car rental and driver;

Hospitality costs as part of its project management costs; and

(vi) Deployment costs. There was cross reference to supporting documents evidencing the above expenditure. Having examined the documents, I find the contention of the Defendant proven. [76] I therefore accept his explanation that the monies were utilized as reimbursements for the Huawei-P1 project. The funds had been depleted by June 2016, as PW1 had withdrawn all the monies. PW1 himself admitted to freezing the Plaintiff’s CIMB account in mid-July. In cross examination he conceded that he did so without any company resolution to sanction it. [77] The lack of funds was confirmed by D4 in her evidence. She stated that there were no funds in the CIMB account to pay the salaries of its employees. Faced with this situation, D2 had no option but to personally pay for the salaries of the employees involved with the project. D2 used the payroll facility of D1 for this purpose. [78] Although PW1 claimed that he was in a position to continue financing the project, he failed to adduce evidence of having done so. It was apparent that the business relationship between both D2 and PW1 had, by end June, become less than harmonious. [79] As the Huawei-P1 project had taken off, D2 was anxious to see it completed. D2 had also earlier explained that D1 was incorporated to ensure that the Huawei-P1 would be continued. He then bore the costs of the project for July, August and September 2016, for which he reimbursed himself when the payments were made by Steadcom. I find his explanation credible. [80] D2 submitted that the Plaintiff incurred no loss as Steadcom was ordered to pay RM 160,798.16 to the Plaintiff in respect of a suit filed in the Shah Alam Sessions Court vide Civil Suit No: BA-B52NVCV-332-10/2017. The Plaintiff would be unjustly enriched if D1 is ordered to pay the same amount over to the Plaintiff. [81] The argument of unjust enrichment to me, is no defence to the Plaintiff’s claim of fraud and embezzlement. Rather, it is whether D2 has satisfactorily refuted such an allegation by his evidence. I find on the evidence that he has. [82] As for the allegation of misconduct, both D2 and D4 were alleged to have destroyed all information stored in the Plaintiff’s system including information on purchase orders issued to the Plaintiff, its financial records and documents pertaining to the contracts procured. [83] In defence, both D2 and D4 categorically stated that all the information pertaining to the Plaintiff was stored in Cloud. This fact was agreed to by PW1 in cross. The information can be easily retrieved from the Plaintiff’s server with the requisite password. In the circumstances, theft of the Plaintiff’s data is not proven. [84] The Plaintiff further alleges that the discovery by PW1 of an empty office without any employees, tools, laptops, equipment and office furniture showed that the defendants had unlawfully removed them. In the absence of further proof of such assertion, which was denied by D2, I do not find the allegation proven on a balance of probabilities. [85] The Plaintiff discovered that about 20 of its employees (comprising of engineers and technicians) had joined D1 upon coercion and persuasion by the Defendants without tendering any resignation notice to the Plaintiff. The Plaintiff then alleges that this was done in bad faith and malice to rob the Plaintiff of its skilled employees to put an end to the Plaintiff’s operations in Malaysia. [86] None of the former employees of the Plaintiff were called to testify. I find that these allegations to be bare assertions unsupported by further evidence, and I give no credence to it. [87] To conclude the allegation of fraud, embezzlement and misconduct, I do not find the Plaintiff to have established this cause of action. Breach of confidentiality [88] The Plaintiff claims that D2 conspired with Nahu to develop the business of D1 using information in their possession obtained whilst employed in the Plaintiff. The confidential information referred to is the Plaintiff’s client contact database and client specific demands. [89] The question as to the information which qualifies as confidential information was dealt with in the Court of Appeal case of Seven Seas Industries Sdn Bhd v Philips Electronic Supplies (M) Sdn Bhd & Anor [2008] 5 MLJ 157 where it was held, The learned judge in dismissing the appellant's claim referred to Coco v AN Clark (Engineers) Ltd [1969] RPC 41 which sets out the three elements to be established in order to succeed in an action for breach of confidence, that is to say, firstly, the information sought to be protected has the necessary quality of confidence; secondly, the information was communicated in circumstances importing an obligation of confidence; and, thirdly, there must be unauthorised use of that information to the detriment of the party communicating it. We are of the view that the learned judge has adopted the right approach in the determination of this issue. [90] The Plaintiff has merely made vague allegations bereft of specifics. I am of the view that a client’s database per se is not confidential information, unless the Plaintiff is able to show that the nature of the information is unique and therefore necessary to be protected. The Plaintiff has also failed to show how the information if it was in fact used, was to its detriment. The claim for breach of confidentiality therefore fails. Fraud and misrepresentation [91] The allegation of fraud which is premised on the fact that D2 credited the payment from Steadcom to his personal account, has been dealt with earlier. The claim of fraudulent misrepresentation however, pertains to the use by D2 and D4 of the company name, logo, domain which are similar to the Plaintiff to mislead its customers into believing they were dealing with the Plaintiff. [92] I find this allegation to be wholly misconceived. The elements of fraudulent misrepresentation have not been satisfied. The Court of Appeal in Yeohata Machineries Sdn Bhd & Anor v Coil Master Sdn Bhd & Ors [2015] 6 MLJ 810 held, [23] In order to sustain an action for fraudulent misrepresentation, the plaintiffs must establish five essential facts. First, there must be a representation of fact by words or by conduct and mere silence is not enough. Second, the representation must be made with the knowledge that it is false, ie it must be willfully false or at least made in the absence of any genuine belief that it is true or recklessly (ie without caring whether his representation is true or false (Derry v Peek (1889) 14 App Cas 337). Third, the representation must be made with the intention that it should be acted upon by the claimant, or by a class of persons which will include the claimant, in the manner which resulted in damage to him. Fourth, it must be proved that the claimant acted upon the false statements. Lastly, it must be proved that the claimant has sustained damage by so doing (see Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at p 211, per Viscount Maugham). [93] The facts relied on to establish fraudulent misrepresentation barely fits the elements enunciated in the case above. The misrepresentation must be relied on by the Plaintiff, and not third parties. [94] In any event, the claim with regard to the wrongful use of the Plaintiff’s name, logo, slogan and domain name have been dealt with earlier in relation to the tort of passing off. Reliefs [95] For the sake of completeness, I shall also deal with the reliefs sought by the Plaintiff. The specific reliefs are pleaded at paragraph 47 of the Statement of Claim. [96] The claim for RM 402,024.02 is for the amount credited into the account of D2. This amount was to reimburse D2 for what he expended in order to continue the Huawei-P1 Project. Further, from the end of June 2016, the Plaintiff did not inject any further funds into the project. In view of this, I find no loss occasioned to the Plaintiff. [97] The claim for forecast profits of RM 400,000.00 from the Purchase Order issued by Steadcom for the Huawei-P1 project is not supported by credible documentary proof. In any event, the project was subsequently continued by D1, and not the Plaintiff. [98] The Plaintiff also claims an amount of RM 5 million as forecast profit for the Huawei Celcom project. However, at the material time, the Plaintiff had not secured the contract for this project. The profit forecast is therefore merely speculative. Further, the basis for the quantum is not supported with credible evidence. [99] The Plaintiff claims that had D1 not been incorporated, it would have secured further contracts from Steadcom for which would have received an expected profit of RM 3 million. Again, I consider this amount to be speculative. [100] As for the losses arising out of the alleged stolen hardware and software, quite apart from lack of proof that they were stolen, there is no cogent evidence as to the value of these items. It is trite law that the burden of proof when damages are claimed, lies on the Plaintiff. The onus is on the Plaintiff to establish with precision, its losses. D2’s Counterclaim [101] D2’s counterclaim arose from the judgment in default of defence (“JID”) obtained earlier on 15.7.2019. He obtained JID against PW1 and the Plaintiff, the terms of which are as below:- [102] D2 seeks to have the amount for general damages assessed and the amount for exemplary and aggravated damages determined in these proceedings. [103] I am of the view that it is inappropriate to pursue the assessment of damages in these proceedings. The counterclaim has been adjudged, and judgment obtained. Any assessment of damages ought to be pursued pursuant to the provisions relating to assessment of damages as provided in Order 37 of the Rules of Court 2012 as set out below, ORDER 37 ASSESSMENT OF DAMAGES Assessment of damages by Registrar (O. 37, r. 1)

(1) Where judgment is given for damages to be assessed and no provision is made by the judgment as to how they are to be assessed, the damages shall, subject to the provisions of this Order, be assessed by the Registrar, and the party entitled to the benefit of the judgment shall, within one month from the date of the judgment, apply to the Registrar for directions and the provisions of Order 34 shall, with the necessary modifications, apply.

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If that party does not file the notice of appointment for assessment of damages within the prescribed period, any other party may apply for directions. [104] The rules stipulate the time frame upon which the D2 has to apply for directions in relation to the assessment of damages, which is one month from the date of the judgment. Clearly, D2 has not done so. Although the rules allow the opposing party to apply for directions, neither PW1 nor the Plaintiff has done so, for obvious reasons. [105] D2 cannot be allowed to circumvent the provisions of the rules by requesting this court to assess damages here. The present proceedings are only to determine the merits of the Plaintiff’s case. In the circumstances, I make no award of damages in respect of the counterclaim. Conclusion [106] Upon considering the totality of evidence in support of the Plaintiff’s case and weighing it against that adduced by the defence case, I do not find a preponderance of evidence to favour the Plaintiff. Consequently, I find that the Plaintiff has not succeeded in establishing its case on a balance of probabilities. [107] In the result, the Plaintiff’s claim against D1, D2 and D4 is dismissed. I also order that costs of RM 40,000.00 be paid to all the three defendants. Dated : 24th day of May 2024 -sgd- ....………………..….... Alice Loke Yee Ching Judge High Court in Malaya at Shah Alam Counsel for the Plaintiff : Mr. Mahendran Mahason (Miss Patricia with him) Messrs. Shree Harry & Co. Counsel for 1st, 2nd and 4th Defendant : Mr. Sritharan C. Nadarajan (Mr. Praveen Paniselvam with him) Messrs. Nor Affiza & Co.