K Seng Seng Corporation Berhad v Tan Lian Choon (BA-12B-53-06/2024)

The process complained of must have been initiated;

The purpose for initiating that process must be for some purpose other than to obtain genuine redress which the process offers. In other words, the dominant purpose for which the process was invoked must be collateral, that is to say, aimed at producing a result not intended by the invocation of the process; and

The Defendant must have suffered some damage or injury in consequence. [12] The case turned on the second element of the cause of action. As pleaded, the fact that the Defendant had to prove to the trial Judge on a balance of probabilities was that the allegations made by the Plaintiff in the main action were fabricated to intimidate and pressure the Defendant to withdraw her claim at the Industrial Court, vex and embarrass the Defendant and cause her mental distress. [13] that the Plaintiff did have such a dominant collateral purpose for initiating the main action in this case was inferred from the following findings:

the Plaintiff failed to prove that it had a cause of action or a basis to file the main action against the Defendant;

the presumption of adverse inference was invoked against the Plaintiff for failing to call Jason Koh who initiated the idea of investigating the Defendant and who appointed LGMS.

the evidence of the chair of the audit department (SP-2) who had full knowledge of the LGMS Report was discredited as hearsay.

the witness from LGMS (SP-3) did not conclude that there were any breaches or misappropriation of confidential information.

discontinuing the main action i.e. that the Plaintiff had suffered a financial downturn.

the main action was discontinued after the award of the Industrial Court in favour of the Defendant. [14] In other words, the trial Judge found it more probable that the Plaintiff filed this action for the dominant reason of pursuing a collateral purpose rather than to seek any genuine redress that the law allows based on the above considerations. Whether a collateral purpose was proved [15] Mahadev Shankar J cited the Lord Scarman in Goldsmith v. Sperrings Ltd [1977] 2 All ER 566 in Gasing Heights Sdn Bhd v Aloyah Bte Abd Rahman & Ors [1996] 3 CLJ 695: Men go to law to redress a grievance. They may not know or understand the limits of the remedies provided by law - though no one suggests that the plaintiff's advisers could be said to suffer from ignorance of the law. But equally a man, while pursuing the remedies offered by law, may negotiate, to secure by agreement with the parties sued, terms more favourable than, or different from, what he would get in the absence of agreement. Such a negotiation, undertaken by properly advised parties, each of whom may have a legitimate interest in avoiding litigation and may be prepared to concede more than the law requires of them to achieve that end, does not necessarily mean that the plaintiff by his litigation is reaching out to secure a collateral advantage [16] In finding that the Plaintiff failed to prove that it had a cause of action or a basis to file the main action against the Defendant, the trial Judge had overlooked the pleaded case and erroneously shifted the burden of proof to the Plaintiff, and that too not just to prove the negative proposition that its case was not fabricated, but to prove that its case was made out. [17] fabricated. evidence, a term with various formulations, the most famous of which is from Belhaven and Stenton Peerage [1875] 1 Appeal Cases 278: ...in dealing with circumstantial evidence we have to consider the weight which is to be given to the united force of all the circumstances put together. You may have a ray of light so feeble that by itself it will do little to elucidate a dark corner. But on the other hand you may have a number of rays, each of them insufficient, but all converging and brought to bear upon the same point, when united, producing a body of illumination which will clear away the darkness which you are endeavouring to dispel. [18] Where the evidence is entirely circumstantial, the court should not draw the inference in question unless the facts relied on are not reasonably capable of any other explanation. This Court can only assume that the trial Judge must have relied on the following summary of the findings at paragraph [13] above as circumstantial evidence:

the Plaintiff had no reasonable cause of action;

the Plaintiff did not prove its claim at the trial of the counterclaim;

the Plaintiff discontinued its claim before it was tried. Reasonable cause of action [19] As mentioned, the Plaintiff pleaded that the Defendant committed breach of her terms of employment and breach of her fiduciary duties based on the results of the LGMS Report. [20] The LGMS Report contained an analysis of activities on the computer she used during her employment and allegedly found an unusually high volume of file transfers to an external storage in June 2020. [21] These are particularized as invoices, quotations, correspondence, tax documents, internal minutes of meeting, audited and unaudited accounts, documents concerning cash flow and banking facilities and other confidential documents ( ). [22] This Court finds that the pleading of the main action would not have been liable to be struck out for disclosing no reasonable cause of action. Merits of the main action [23] Having shifted the burden of proof to the Plaintiff, the trial Judge further required the Plaintiff to prove the merits of its discontinued case at the trial of the counterclaim to a standard that is unsupportable for a charge of abuse of process. [24] The Plaintiff relied on the case of Philip Morris Brands Sarl v Goodness for Import and Export & Ors [2018] 7 MLJ 350 to contend that there can only be an abuse of process if the case advanced is so unsustainable that it is liable to be struck out under Order 18 Rule 19(1) of the Rules of Court 2012. [25] Philip Morris was a trademark/passing off action in which the first defendant counterclaimed on grounds that the suit was frivolous, vexatious and/or an abuse of court process. The Court dismissed the oes not ipso facto abuse of court process. [26] In finding that the LGMS Report did not conclude that there was a case of misappropriation of the Data, there was insufficient judicial appreciation of the evidence. It was not within the purview of LGMS as independent forensics experts to form a judgement or opinion whether their analytic results showed a misappropriation of data. That would have been the function of the Court in a trial of the main action. [27] The evidence adduced by the Plaintiff to prove that it had sustainable claims against the Defendant in the main action was as follows:

The IT executive of the Plaintiff (SP-1) testified that after the Defendant left, he was instructed to disconnect the computer used by the Defendant when she was employed and send it to LGMS for the investigation.

The Senior Digital Forensic Consultant of LGMS (SP-3) was engagement, which was to create a forensic image of the hard disk extracted from the computer and establish the digital

SP-3 explained that LGMS had conducted a detailed analysis of the user file and folder activities and the results were, inter number of files, including those containing confidential information, to be downloaded from her computer into an external storage device in the last month of her employment after her dismissal.

The Non-Independent and Non-Executive Director of the Plaintiff who was the Chairman of the Audit Committee of the the trial, the Chief Executive Officer of the Plaintiff (SP-2), testified that the results of the LGMS Report were discussed and a decision was taken to take appropriate action in the interest of the company and its shareholders. [28] There was by any reasonable account of the facts and evidence adduced, a prima facie case to be answered on the claims advanced by the Plaintiff in the main action. [29] Further, it was unclear why the trial Judge rejected SP-as hearsay and invoked the presumption of adverse inference because the Plaintiff did not call the former Chief Operating Officer of the Plaintiff, Jason Koh, to the stand. According to SP-2, Jason Koh initiated the investigation into the possible data breach and SP-2 recommended LGMS. The Plaintiff then engaged LGMS to conduct the investigation. [30] In order for the presumption of adverse inference to be invoked against a party, it must be shown that there was suppression of material witness or evidence that would have proved adverse to the party whose burden it was to call such a witness. As it related to the substantive content of the LGMS Report, there is no explanation what material evidence was said to have been Discontinuance of the main action [31] This Court also considered the act of discontinuing the main action by the Plaintiff as a further piece of circumstantial evidence to prove that the allegations in the main action were fabricated. [32] downturn and the Plaintiff decided to withdraw the main action to save legal costs and redirect resources towards other more pressing matter. Also the management of the Plaintiff had changed and new management was of the opinion that a protracted legal action would not be beneficial. [33] The trial Judge disregarded the above evidence and inferred a collateral purpose from the fact that the main action was discontinued after the award of the Industrial Court was delivered in favour of the Defendant. However, this Court finds no obvious rationale to associate the discontinuance of the action with the award of the Industrial Court. [34] The Industrial Court decision was premised on an entirely different factual matrix from the intended main action i.e. the dismissal was not based on misconduct and the same facts pleaded in the main action here. It was not as if the pleaded case here was ventilated before another trier of fact and failed. [35] The more relevant question is why the main action was commenced in the first place. On the facts, it was commenced about 2 years after the Industrial Court case was filed and when the Industrial Court action was already drawing to a close. The timing did not support the theory of the case that the main action was filed to pressure the Defendant to drop the Industrial Court claim. [36] The initiation of an action and its subsequent withdrawal are by itself, insufficient factors to constitute abuse of process. A multitude of suits that are ever filed are withdrawn for any number of reasons cost, risk assessment, death of key witness, loss of crucial evidence or even loss of interest. Conclusion [37] For these reasons, I allow the appeal on liability and set aside the decision of the Sessions Court. I have not considered the appeal on damages which is now academic. Costs here and below in the sum of RM20,000.00 as reasonable costs on a standard basis. Bertarikh : 16 Januari 2025 SGD ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam Untuk Perayu : Stanley Phang Weng Lam (with Lee Wing Hang), Messrs Marcus Tan & Co. Untuk Responden : Beh Chee Wei, Messrs Beh & Co.