Hilti (Malaysia) Sdn. Bhd. v Byteering Sdn Bhd (BA-22NCvC-281-07/2024)

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CHUA YING KERK VINCENT ENG …DEFENDANTS GROUNDS OF JUDGMENT (Enclosure 3) Introduction [1] Enclosure 3 is the Plaintiff's application for an interim injunction pursuant to Order 29 Rule 1 and/or Order 92 Rule 4 of the Rules of Court 2012 (ROC) for the following orders:

An injunction to restrain the Defendants from: Approach, contact, call, correspond, take, entice, induce, solicit, persuade and/or otherwise deal with each and every customer of the Plaintiff whose names are as set out in Annexure A hereto; 27/01/2025 09:42:33 BA-22NCvC-281-07/2024 Kand. 53 Approach, contact, call, correspond, take, entice, induce, solicit, persuade and/or otherwise deal with each and every employee of the Plaintiff to solicit, elicit, procure and/or obtain confidential information and/or materials and/or documents and/or trade secrets as set out in Annexure B; Using, divulging, exploiting, and/or disclosing for the Defendant's benefit or the benefit of others, all or any or more categories of the Plaintiff's confidential information and/or materials and/or documents and/or trade secrets as listed in Annexure B hereto such as information concerning the Plaintiff's customers, candidates or business associates or otherwise exploiting the said confidential information without the Plaintiff's consent irrespective of whether the information are contained in or directly or indirectly derived from any of the Plaintiff's confidential information and/or materials and/or documents and/or trade secrets including but not limited to those particulars set out in Annexure B hereto; Making use of, copying, publishing or reproducing or distributing, circulating or disclosing to any person or causing the publication, reproduction or distribution or circulation or disclosure, the information contained in or directly or indirectly derived from the Plaintiff's confidential information and/or materials and/or documents and/or trade secrets including but not limited to those particulars set out in Annexure B hereto; Disclosing to others or making use of confidential information of the Plaintiff's customers, candidates or business associates or other confidential information as listed in Annexure B hereto to directly or indirectly approach, contact, correspond, take, entice, induce, solicit or persuade any person or entity who or which was or is a customer of the Plaintiff as named in Annexure A hereto to undertake or perform work to undertake or perform work or services for that person or entity to cease doing business with the Plaintiff or reduce the amount of business which the person or entity would normally do with the Plaintiff.

An injunction to compel the Defendants to deliver up all of the Plaintiff's confidential information as listed in Annexure B for safekeeping.

The Defendants must file an affidavit confirming compliance with the prayers set out above within ten (10) days. [2] On 16.10.2024, after hearing both parties, I dismissed the Plaintiff's application with cost. The Plaintiff has now appealed to the Court of Appeal, and my reasons are below. Brief Facts [3] The Plaintiff's cause of action against the Defendants is for breach of fiduciary duties, confidentiality as employees of the Plaintiff, trade secrets, interference with Plaintiff's business and conspiracy to injure by unlawful means. [4] The Plaintiff, HILTI (Malaysia) Sdn Bhd is a company incorporated in Malaysia since 1986 and in the business of trading power tools, industrial fasteners and accessories. The Plaintiff's primary area of business is supplying construction equipment and materials. [5] The 1st Defendant, Byteering Sdn Bhd (Byteering), is a company incorporated in Malaysia on 19.06.2023. Byteering's nature of business is providing information technology services and general contractors for renovation and construction works and dealing with building and construction materials of all kinds and descriptions. [6] The 2nd Defendant, Azteering Sdn Bhd (Azteering), is a company incorporated in Malaysia on 02.02.2024. Azteering's nature of business is to provide engineering services and construct other engineering projects. [7] The 3rd Defendant, Tham Kuan Jian (Tham), is a former employee of the Plaintiff from 02.03.2015 up to 23.04.2024. Tham was the Area Sales Manager Energy & Industry of the Plaintiff and is the current director and shareholder of Byteering. At the incorporation of Byteering on 19.06.2023, Tham was registered as the director of Byteering, though he was still in the employment of the Plaintiff. [8] The 4th Defendant, Sim Jong Ing (Sim), was an employee of the Plaintiff from 01.06.2021 until 31.03.2024. On 28.02.2024, Sim resigned from her position as the Plaintiff's Account Manager KV Specialist. Sim is the current director and shareholder of Byteering. Sim has been the director since the incorporation of Byteering on 19.06.2023 and is also the current director and shareholder of Azteering. Sim has been the director since the incorporation of Azteering on 02.02.2024. [9] The 5th Defendant, Marvin Kho Tzyy Yaw (Marvin), was an employee of the Plaintiff from 16.07.2018 until 30.04.2024. He was the Solution Area Sales Manager of the Plaintiff and is currently the director and shareholder of Byteering. [10] The 6th Defendant, Chua Ying Kerk (Chua), was an employee of the Plaintiff from 03.04.2023 until 12.05.2024. He was also known as "Macpher". Prior to his termination, Chua was Plaintiff's Account Manager. [11] The 7th Defendant, Vincent Eng (Vincent), was an employee of the Plaintiff from 15.03.2018 until 21.06.2024, and he was the Firestop Specialist of the Plaintiff. [12] It was submitted that Plaintiff's business of sales and distribution of its products, through its sales teams, deals with customers and connects with them to help them find products that meet their specific requirements. [13] Due to the nature of the Plaintiff's business, the Plaintiff's employees and/or sales teams allegedly possess and/or have access to the Plaintiff's confidential information. Therefore, being employees of the Plaintiff, it was contended that Tham, Sim, Marvin, Chua and Vincent each owed fiduciary duties of loyalty and fidelity to the Plaintiff. [14] On 14.3.2024, Plaintiff became aware of the existence of Byteering, and it was discovered that the company (Byteering) was operating in a similar area of business and offered identical products and services as the Plaintiff. [15] It was subsequently discovered that Tham and Sim were involved in the operations of Byteering, and Sim allegedly was appointed as a director even when she was still employed by Plaintiff. [16] As of 20.5.2024, Tham, Marvin and Sim are the directors and shareholders of Byteering. [17] Plaintiff further discovered that Sim had incorporated Azteering in February 2024 while she was still employed by the Plaintiff. She is also the director and shareholder of Azteering as of 31.5.2024. [18] Following the Plaintiff's discovery of Byteering on 14.3.2024, Plaintiff initially commenced an investigation into Tham to determine his involvement in Byteering and subsequently discovered numerous breaches by all of them, leading to this action against the Defendants. [19] The breaches were allegedly:

Breach of confidentiality;

Breach of fiduciary duties; and

Conspiracy to injure by unlawful means and/or unlawful interference with the Plaintiff's business and/or dishonest assistance. [20] In an effort to preserve its rights and position, the Plaintiff filed this application to seek the reliefs as prayed. [21] The 1st, 3rd, 4th, 5th and 7th Defendants (Byteering, Tham, Sim, Marvin and Vincent) objected to this application on the following grounds:

The injunctive relief sought by the Plaintiff in the Plaintiff's Notice of Application is similar and/or identical to the reliefs sought by the Plaintiff in their Writ and Statement of Claim, i.e., Encl. 1 and Encl. 2, where the liability of the Defendants cannot be proven through an interlocutory application without giving the Defendants the opportunity to defend the Plaintiff's claim through a full trial

As the 1st Defendant ("D1") is a company conducting ongoing business, an injunction as sought by the Plaintiff in paragraphs (a) and (b) of the Plaintiff's Notice of Application (Encl. 3) is harmful and will cause far greater hardship than any potential hardship the Plaintiff may face, especially as the Defendants' liability has yet to be proven through a full trial;

The injunctive relief sought by the Plaintiff in paragraph (a)(i) of the Plaintiff's Notice of Application is also contrary to Section 28 of the Contracts Act 1950, as the injunction seeks to prevent the Defendants from conducting a legally valid business regardless whether the business is conducted with the Plaintiff's existing or former customers as listed in Annexure A of their Notice of

In this case, damages prove to be a more suitable and adequate remedy if the

Plaintiff successfully proves their claim against the Defendants; and The injunctive relief sought by the Plaintiff in paragraph (b) of the Plaintiff's Notice of Application is also an attempt at a fishing expedition. [22] The 2nd Defendant's (Azteering) objection was as follows: As for the 2nd Defendant, the Plaintiff had alleged a conspiracy as the involvement of the 4th Defendant with the 2nd Defendant occurred during the period of employment of 4th Defendant with the Plaintiff. On another note, the shareholders of the 2nd Defendant are also among the clients of the Plaintiff which hold 80% of the shareholding meanwhile the 4th Defendant held the balance of 20%, Adatech. At all material times the 2nd Defendant is not the party within the employment contract entered into between the 2nd Defendant and the Plaintiff thus the terms set forth in the contract shall not cause the 2nd Defendant to be involved in this matter The allegations and facts laid down by the Plaintiff have not shown any clear and/or obvious nexus between the 2nd Defendant and the allegation being made. The only facts relied on by the Plaintiff are the directorship and the usage of business card of the 2nd Defendant by the 4th Defendant alleging that it has been used to communicate with the clients of the Plaintiff However, the Plaintiff has not provided any evidence and /or facts that the 2nd Defendant had in any situation gain any profit that causes losses to the Plaintiff whereby the Plaintiff in any situation has not specified any losses suffered from the act of the 2nd Defendant. The 2nd Defendant hereby premise in submitting its objection to the relief seek by the Plaintiff on the following grounds; i. The 2nd Defendant is not privity to the employment contract between the Plaintiff and the 3rd to 7th Defendants; ii. The relief sought against the 2nd Defendant was premised on assumption. iii. The Plaintiff has not complied with the element in seeking injunctive relief. [23] The 6th Defendant (Chua), a former account manager of the Plaintiff, asserts that he was under the supervision of Tham. He claimed that he had no knowledge of Plaintiff's assertions and denied all allegations against him. He submitted as follows: a. All the confidential information that was alleged by the Plaintiff are not confidential information but are information that are available in the public domain; b. At all material times after his termination, the 6th Defendant do not have any copies and/or access to the alleged confidential information. c. The Plaintiff had not in any way proved that the 6th Defendant have copies and/or access to the alleged confidential information. d. In fact, Plaintiff had only showed that the 6th Defendant had emailed the quotations to his personal email in which the said quotations are to be sent to the relevant customers via WhatsApp. e. This practice existed in the Plaintiff's company and the 6th Defendant was suggested by the Plaintiff and/or its employees to use this practice or method to transfer not just quotation, but also other relevant document, such as statement of accounts and/or delivery orders to the Plaintiff's customers. f. The 6th Defendant submits that he has no knowledge of how the alleged confidential information was used by the other Defendants, namely Tham, Sim, Marvin and Vincent. g. The 6th Defendant further submits that if the alleged confidential information was ever given to the 6th Defendant during the course of employment (which is denied), he had performed his duty and obligation to protect the said information and had not in any event misused the alleged confidential information. In essence, Chua submitted that he had acted in good faith when he sought advice from his supervisor, Tham, relating to his duties. The Law on Interlocutory Injunction [24] The principles governing the grant of interlocutory injunctions are well-established. In American Cynamid Co v. Ethicon Ltd [1975] 1 AER 504; [1975] AC 396, Lord Diplock laid down three key elements that must be fulfilled:

There is a serious question to be tried;

Damages would not be an adequate remedy; and

The balance of convenience lies in favour of granting the injunction. [25] These principles were adopted in Malaysia in Keet Gerald Francis Noel John v. Mohd Noor Bin Abdullah [1995] 1 CLJ 293; where Gopal Sri Ram JCA (as he then was) held that the Court should:

Consider whether there is a bona fide serious issue to be tried;

Consider where the justice of the case lies; and

Take into account all relevant matters, including the practical realities of the case. [26] The aim of the Court in granting an interlocutory injunction is to prevent mischief and to maintain the status quo until the full trial is completed. At this stage, the hearing is not a trial on the merits. This can be seen in the Court of Appeal decision in Tenaga Nasional Berhad v Teobros Development Sdn Bhd [2008] 6 MLJ 391: "[6] Essentially, the object of the Court in granting an interlocutory injunction is to prevent mischief and to keep things in status quo until the hearing is completed… [8] It must be borne in mind that the hearing of an application for an interlocutory injunction is not a trial on the merits. At that stage, there will be no oral evidence nor an opportunity for cross examination." [27] With these principles in mind, considering all relevant matters, I will need to deliberate whether there were serious issues to be tried, where the justice of the case lies, whether damages would be an adequate remedy and on whom the balance of convenience lies. Analysis and Findings [28] In Lian Keow Sdn Bhd & Anor v. Overseas Credit Finance (M) Bhd & Ors [1982] CLJ 350, Salleh Abas FJ (as he then was) explained what is meant by "interlocutory injunction" in the following manner: "Interlocutory injunction is a temporary and discretionary remedy. To consider whether to grant it or to refuse it the Court is not concerned with the chances of success or failure of the appellants in proving their civil suit at the forthcoming trial, neither is the Court's function to evaluate the evidence and materials before it for that purpose. The Court is simply concerned with what it has to do in the meantime in order to protect the right of the parties so that no irreparable injury would be caused to either of them. Further whilst the Court is not concerned with such questions the Court must however, be satisfied that there are serious questions to be gone into in that suit, lest an application for an injunction should be made on frivolous and vexatious grounds." - Emphasis added [29] The need to establish serious issues or questions to be tried was enunciated by the Supreme Court in the case of Alor Janggus Soon Seng Trading Sdn Bhd & Ors v. Sey Hoe Sdn Bhd & Ors [1995] 1 CLJ 461 where the Court led as follows: "[5] at an interlocutory proceeding for an injunction, the Court must be satisfied that there is a serious issue to be tried, which issue, before anything else, must first be established by the applicant." [30] Thus, the key word here is that the purpose of an interim injunction is to protect the parties' rights from irreparable injury and for serious issues to be determined in that process. As to irreparable injury that would be caused, I must also consider whether damages would be an appropriate remedy in the given circumstances. [31] The Plaintiff's case lies in the alleged breach of employment contracts by the 3rd to 7th Defendants, undisputedly employees of the Plaintiff. It was also not denied that Tham and Sim incorporated Byteering and Azteering and became directors and shareholders of the companies even within their tenure as employees of the Plaintiff. [32] On the face of it, it is apparent that Plaintiff might have a valid claim against their employees on the alleged breaches if sufficiently proven in the circumstances of the case. However, upon careful deliberation of all relief sought in this application, I find that the injunctive relief has a blanket effect on all Defendants and mirrored substantially the final prayers in the Statement of Claim. [33] I agree with the Defendants' contention that the alleged confidential information by Plaintiff was too vague and ambiguous. Reference was made to the case of Sigma Glove Industries Sdn Bhd v Ong Chin Kok

8 MLJ, in which the learned Judge had discussed and referred to cases decided by the higher Courts the need for the Plaintiff to define with some precision the information or communication which is alleged to be confidential. [34] Though the merits of the case are not to be decided as yet, but to establish serious issues to be tried to justify for a restraining order as in this application, I would say, particularly in this nature of cause of action, it would be necessary for Plaintiff to ascertain the nature of information which they claim was breached to give value for this decision-making process. [35] From the series of events extensively explained by Plaintiff, I would agree that Plaintiff does have a good arguable case against Tham, Sim, Marvin and Vincent, but to allow an injunction, even temporarily, would cause injustice to all Defendants as at this juncture, no finding of fact could be made to justify for interim orders as sought. The relief in this application is not limited to restraining the Defendants from continuing an alleged wrongful act but also an order to surrender and deliver detailed information listed in the given annexure by way of an affidavit. [36] Furthermore, the relief sought against Byteering, Azteering, and Chua is questionable, mere speculation, and seemingly based on assumptions that require them to first establish their case to warrant injunctive relief. [37] I also find merits in Chua's submission that in the event this Court allow an injunction against him (Chua), it would affect his current employment with Lisega Southeast Asia Sdn Bhd and tantamount to a restrain of trade, which would be in conflict with s. 28 of the Contract Act. [38] That being the case, I am of the opinion that the balance of convenience is not in the Plaintiff's favour. Upon perusing the affidavits filed, I also find that Plaintiff failed to show that they will suffer irreparable damage, and I am satisfied that they can still be adequately compensated in the event that their claim is allowed after trial. [39] I refer to the case of Tung Ah Leek v Peruding DJA Sdn. Bhd.

CLJU 591, which states as follows and I agree that: "Even if, the issues are considered as triable issues, the Court is satisfied that interlocutory injunction (as in encl. 4 and encl. 21) should not be granted on the ground that damages in the form of financial remedy as claimed by the Plaintiffs, would be adequate remedy recoverable at common law. This is the principle enunciated in American Cynamid Co. v. Ethicon Ltd. [1975] AC 369, which reads as follows:- "... the Court should first consider whether, if the Plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the Defendant's continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages is the measure recoverable at common law would be adequate remedy and the Defendant would be in a financial position to pay them, no interlocutory injunctions should be normally be granted, however strong the Plaintiff's claim appeared to be at that state." The Plaintiffs' Claim is all about the moneys that are due to them. They have claimed in their Statements of Claim and in their affidavit that the 1st Defendant company is a single-purpose company, solely to carry out the Istana Project. That statement can only be taken to mean, that after completion of the said Istana project, the 1st Defendant company would be liquidated and the profits be shared amongst the shareholders. Clearly what the Plaintiffs are interested in is the moneys that are due to them. To grant the injunction as prayed by the Plaintiffs will only cause more hardship to the Defendants particularly the 1st Defendant as well as the other subcontractors who are waiting to be paid for their works done in the project. To make the 1st Plaintiff a signatory to the cheque of the 1st Defendant, would cripple the 1st Defendant as it is a well admitted fact that the relationship between the Plaintiffs and the 1st Defendants no longer exist. Thus the prayers sought under encl. 4 and encl. 21 would only damage the economy of the 1st Defendant. If the Plaintiff succeed at the trial, then they can be compensated with damages. Damages here is an adequate remedy." -emphasis added Conclusion [40] The discretion of whether to grant the injunctive relief is vested with the Court. It is the inalienable duty and power of the Court to exercise such discretion, and it will not be exercised lightly (see AV Asia Sdn Bhd v Measat Broadcast Network System Sdn Bhd (2014) 1 AMR 593). [41] Hence, having considered all of the above established legal principles and the relevant statutory provisions, as well as the written and oral submissions of the parties, I am of the view that, while Plaintiff might have an arguable case against some of the Defendant but not against all, therefore, being purely a contractual dispute/alleged misconduct, an award of damages would nevertheless be an appropriate remedy should the Plaintiff succeed in their claim. [42] On that account, after weighing one need (Plaintiff) against the other (Defendants), I find the balance of convenience favoured refusal of the injunction. [43] Based on the above analysis, I am satisfied that Plaintiff had not met the threshold requirements for granting an interlocutory injunction as laid out in the case of Keet Gerald Francis Noel John. I also find that damages would be an adequate remedy and the balance of convenience tilts in favour of refusing the injunction. [44] Accordingly, the Plaintiff's application for an interlocutory injunction is hereby dismissed with cost of RM5000 to all 1st, 3rd, 4th, 5th and 7th Defendants and RM3000 to 2nd and 6th Defendants (subject to the allocator). Dated this: 22nd January 2025 ~signed~ (NOOR HAYATI BINTI HAJI MAT) Judge Shah Alam High Court NCVC 9 Counsels: For the Plaintiff: Ahmad Fadzly Abdul Ghani Messrs Azmi Fadzly Maha & Sim For the 1st, 3rd to 7th Defendants EE Yen Chin together with Amorine Zubir Messrs Ee Yen Chin & Co For the 2nd Defendant Mohd Iskandar Ismail together with Mohamad Nasrom Rashid and Nur Shahiran Mohd Sani Messrs Bashaaruddin Iskandar