MFORCE BIKE HOLDINGS SDN. BHD. v HONDA GIKEN KOGYO KABUSHIKI KAISHA (juga dikenali sebagai Honda Motor Co., Ltd) (WA-23NCvC-68-10/2023)

While, like malice, the tort of abuse of process may be “far more often alleged than proved” [per Lord Sumption’s remarks in Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd [2014] AC 366 Privy Council at [148] cited in Lee Tat Development Pte Ltd v Management Corporation of Grange Heights Strata Title Plan No 301 [2018] SGCA 50 at [156] Singapore CA], the Courts must be vigilant to strike out such suits in appropriate cases and not allow them to proceed to trial due to their chilling effect on the rights of aggrieved persons to seek justice in His Majesty’s courts.

On 24-06-2024 I heard two applications of the defendant. The applications were-i. Application to expunge and/or strike out paragraphs 10(i), 24(c) and Exhibit TLH-3 of the Plaintiff’s Affidavit in Reply of Tan Lean Heah affirmed on 01-02-2024 (Enclosure 18) (“Plaintiff’s Affidavit”) in their entirety, pursuant to Order 41 rule 6 of the Rules of Court 2012 (“ROC”) on the ground they refer to ‘without prejudice communications’. [Enclosure 23]. ii. Application pursuant to Order 18 rule 19(1)(a), (b) and (d) ROC to strike out the plaintiff’s Writ and Statement of Claim dated 13- S/N u3BiGXtz3kuEE/gWPog3jg **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 10-2023 which alleged the tort of abuse of legal process/ collateral abuse of process. [Enclosure 13].

I had allowed both applications with costs on 24-06-2024.

Briefly, my grounds for allowing Enclosure 23 were that paragraphs 10(i), 24(c) and Exhibit TLH-3 of the Plaintiff’s Affidavit [Enclosure 18] refer to ‘without prejudice communications’ and it is settled law that letters written without prejudice are inadmissible in evidence of the negotiations attempted.

My grounds for allowing Enclosure 13 were that the filing of an assessment of damages proceedings by the defendant to assess damages arising from the plaintiff’s infringement of the defendant’s copyright - ordered by the Court of Appeal on 20-04-2021 in an appeal from Kuala Lumpur High Court Civil Suit No. 22IP-37-07/2014 (“Earlier Action”) - cannot amount to the tort of abuse of legal process and should be struck out under Order 18 rule 19 ROC.

The acute issue raised in Enclosure 13 is whether an assessment of damages proceedings filed by the defendant to assess damages pursuant to a court order can give rise to a suit for tort of abuse of legal process by the opposing party. My short answer is No.

The plaintiff on 03-07-2024 has appealed to the Court of Appeal against my decision for Enclosure 13. These are my Grounds of Decision for my decision. I begin with the facts of the case. S/N u3BiGXtz3kuEE/gWPog3jg **Note : Serial number will be used to verify the originality of this document via eFILING portal 4

The plaintiff is MForce Bike Holdings Sdn. Bhd. The defendant is Honda Giken Kogyo Kabushiki Kaisha [also known as Honda Motor Co., Ltd. The plaintiff shall be called plaintiff or MForce and the defendant shall be called defendant or Honda in these Grounds of Decision.

The plaintiff and the defendant were parties to an earlier action commenced by the Defendant under Kuala Lumpur High Court Civil Suit No. 22IP-37-07/2014 (“Earlier Action”). In the Earlier Action, the defendant Honda sued the plaintiff (together with “Malaysian Formula Bikes Sdn Bhd”) for infringing the defendant’s copyright in its “EX-5” Artistic Works, namely, 2-dimensional drawings of the Honda EX-5 motorcycle and the 3-dimensional form of the Honda EX-5 motorcycle.

The defendant appealed to the Court of Appeal against part of the trial judgment of the High Court delivered on 24-11-2016 in the Earlier Action (“Trial Judgment”). The defendant succeeded on its appeal when on 20-04-2021, the Court of Appeal decided (“Final Appeal Judgment”), amongst others, that:

the plaintiff had infringed the defendant Honda’s copyright. Accordingly, the Trial Judgment which found otherwise was set aside; and

granted reliefs to the defendant including an inquiry as to damages in respect of the plaintiff’s wrongful infringement of the defendant’s S/N u3BiGXtz3kuEE/gWPog3jg copyright or at the defendant's option, an account of profits and payment to the defendant of all sums found due upon taking such inquiry or account together with interest thereon. (See Exhibit FT- 1, Defendant’s Affidavit, Enclosure 14, pages 11 to 35). [11] The Final Appeal Judgment is reported as Honda Giken Kogyo Kabushiki Kaisha (also known as ‘Honda Motor Co Ltd’) v MForce Bike Holdings Sdn Bhd & Anor [2021] 6 MLJ 594 CA. [12] The plaintiff’s application for leave to appeal under Federal Court Civil Application No: 08(f)-469-11/2019(W) was refused. [13] Following reliefs granted by the Final Appeal Judgment, the defendant opted for an inquiry as to damages due to the plaintiff’s wrongful acts of copyright infringement and filed proceedings in the Earlier Action for an assessment of damages before the High Court (“Assessment of Damages Proceedings”). [14] Based on the affidavit evidence filed by the parties, the High Court decided the Assessment of Damages Proceedings on 15-06-2023 (“Assessment Judgment”). The High Court awarded nominal damages, together with interest and costs of the proceedings, all to be paid by the plaintiff to the defendant. (See Exhibit FT-1, Defendant’s Affidavit, Enclosure 14, pages 65 to 69). [15] The Assessment Judgment is reported as Honda Giken Kogyo Kabushiki Kaisha (also known as Honda Motor Co Ltd) v MForce Bike Holdings Sdn Bhd & Anor [2023] 1 LNS 1158 [TAB-7 DBA, S/N u3BiGXtz3kuEE/gWPog3jg pages 71 – 91], also exhibited as Exhibit FT-1, Defendant’s Affidavit, Enclosure 14, pages 70 to 92. [16] The Court stated in the Assessment Judgment that in order to derive its loss of business profits for the Infringing Years, Honda calculated the average annual profits for the non-Infringing Years (2009 to 2013 and 2018 to 2020) by dividing the cumulative total annual profits for those years by the number of years (i.e., 8 years) and the loss of profits for the Infringing Years was the difference between the average annual profits for the non-Infringing Years and the profits made in the Infringing Years (pages 73 - 74, Enclosure 14, Exhibit FT-1). The Court found that Honda did not produce any document to substantiate any of those sums. [17] The Court did not accept Honda’s explanation and awarded Honda nominal damages in the absence of proof of its loss. [See pages 90, 91, Enclosure 14, Exhibit FT-1]. [18] There was no appeal against the Assessment Judgment, and it is now final. All the sums as ordered by the Assessment Judgment have been paid by the plaintiff to the defendant. New suit for tort of abuse of legal process filed by plaintiff [19] The plaintiff filed this suit on 13-10-2023 pleading a sole cause of action against the defendant for the tort of abuse of legal process (also called the “tort of collateral abuse of process”). The defendant then filed a Striking Out Application against this suit in Enclosure 13. S/N u3BiGXtz3kuEE/gWPog3jg The law on the tort of abuse of process [20] The following principles on the tort of abuse of process can be distilled from decided cases. [21] Malaysian courts recognise the tort of abuse of process as a distinct cause of action, unlike the position taken by the Singapore Court of Appeal in Lee Tat Development Pte Ltd v Management Corporation of Grange Heights Strata Title Plan No 301 [2018] SGCA 50. [See Conweld Engineering Sdn Bhd & Ors v Goh Swee Boh @ Goh Cheng Kin & Anor [ 2019] 1 LNS 580 HC per Wong Chee Lin J and affirmed in [2022] 6 MLJ 810 CA per Nantha Balan JCA at [3], [48] and [53]]. [22] To establish the tort of abuse of process, MForce has to prove the following 3 elements-

The process complained of must have been initiated;

The purpose for initiating that process must be 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 plaintiff must have suffered some damage or injury in consequence. S/N u3BiGXtz3kuEE/gWPog3jg [Emphasis added] [See Malaysia Building Society Bhd v Tan Sri General Ungku Nazaruddin Mohamed [1998] 2 CLJ 340 CA; [1998] 2 MLJ 425 CA and followed in Conweld Engineering Sdn Bhd & Ors v Goh Swee Boh @ Goh Cheng Kin & Anor [2022] 6 MLJ 810 CA per Nantha Balan JCA at [2]]. [23] The burden of proof is on MForce to prove on a balance of probabilities the satisfaction of all three elements. [See Conweld Engineering Sdn Bhd & Ors v Goh Swee Boh @ Goh Cheng Kin & Anor [2022] 6 MLJ 810 CA per Nantha Balan JCA at [52]]. [24] A claim under the tort of abuse of process will fail if damages are not proven. MForce must establish that Honda’s suit has caused damage to MForce. There is no room for nominal damages. [See Conweld Engineering Sdn Bhd & Ors v Goh Swee Boh @ Goh Cheng Kin & Anor [2022] 6 MLJ 810 CA at [75 and 76] per Nantha Balan JCA]. [25] The courts must be cautious in making a finding that the dominant purpose for which the suit was invoked must be collateral that is to say, aimed at producing a result not intended by the invocation of the process. [See Gasing Heights Sdn Bhd v Aloyah Bte Abd Rahman & Ors [1996] 3 MLJ 259 at 271 - 272 HC, per Mahadev Shankar J] [24]. [26] The caution expressed by Mahadev Shankar J in Gasing Heights Sdn Bhd v Aloyah Bte Abd Rahman & Ors [1996] 3 MLJ 259 at 271 - 272 HC bears setting out in extenso – S/N u3BiGXtz3kuEE/gWPog3jg The passages from decision of Lord Denning MR in Goldsmith v Sperrings Ltd [1977] 2 All ER 566 which developer’s counsel cited, came from a dissenting judgment. The reasons given by the majority, i.e. Scarman & Bridge LJJ are so compelling that I would echo Lord Scarman’s comment (at p 582j) that, ‘The logic (of Denning MR in this case) is superficially attractive but the conclusion is suspect’. These passages from the judgment bear repetition. Lord Scarman stated at p 583: 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. At pp 585-586, Lord Bridge stated: S/N u3BiGXtz3kuEE/gWPog3jg Counsel for the defendants relied, in support of the submissions which I have summarized in paras 1 and 2 above, on the dictum of Evershed MR in Re Majory [1955] 2 All ER 65 at p 78: ‘The so-called ‘rule‘ in bankruptcy is, in truth, no more than an application of a more general rule that court proceedings may not be used or threatened for the purpose of obtaining for the person so using or threatening them some collateral advantage to himself, and not for the purpose for which such proceedings are properly designed and exists; and a party so using or threatening proceedings will be liable to be held guilty of abusing the process of the court, and, therefore, disqualified from invoking the powers of the court by proceedings he has abused.‘ For the purpose of Evershed MR’s general rule, what is meant by ‘collateral advantage’? The phrase manifestly cannot embrace every advantage sought or obtained by a litigant which it is beyond the court’s power to grant him. Actions are settled quite properly every day on terms which a court could not itself impose on an unwilling defendant. An apology in libel, an agreement to adhere to a contract of which the court could not order specific performance, an agreement after obstruction of an existing right of way to grant an alternative right of way over the defendant’s land, these are a few obvious examples of such proper settlements. In my judgment, one can certainly go so far as to say that when a litigant sues to redress a grievance no object which he may seek to obtain can be condemned as a collateral advantage if it is S/N u3BiGXtz3kuEE/gWPog3jg reasonably related to the provision of some form of redress for that grievance. On the other hand, if it can be shown that a litigant is pursuing an ulterior purpose unrelated to the subject-matter of the litigation and that, but for his ulterior purpose, he would not have commenced proceedings at all, that is an abuse of process. These two cases are plain, but there is, I think, a difficult area in between. What if a litigant with a genuine cause of action, which he would wish to pursue in any event, can be shown also to have an ulterior purpose in view as a desired by-product of the litigation. Can he on that ground be debarred from proceeding? I very much doubt it. But on the view I take of the facts in this case the question does not arise and it is neither necessary nor desirable to try to lay down a precise criterion in the abstract. (Emphasis mine.) [Emphasis added] Honda’s pleaded case [27] Honda contends in its written submissions Enclosure 29- 44 “ … the Plaintiff pleads that the Defendant’s predominant purpose in pursuing the Assessment of Damages Proceedings was to “Obtain Collateral Advantage” for payment of loss of profits due to the Plaintiff’s infringement and the said Proceedings were wrongful because Defendant Honda was unable to prove the sum it had claimed as damages (p. 8 Reply, para c.). The “collateral advantage” pleaded by the Plaintiff is not any collateral advantage S/N u3BiGXtz3kuEE/gWPog3jg or benefit but is the very objective of the order for an inquiry as to damages granted to the Defendant by the Final Appeal Judgment. The Assessment Judgment in subsequently finding that the Defendant had not proven the sum does not provide the element of “collateral advantage” necessary to proving the tort of abuse of legal process. Otherwise, all litigants who commence legal actions or proceedings and later found to have failed to prove the same would be liable for the tort of abuse of legal process.”

Thus, on the Plaintiff’s pleadings, the essential requirement of the pleaded tort that the Defendant must have a predominant purpose to obtain a collateral advantage/ benefit from the Assessment of Damages Proceedings, is obviously and patently absent.

Paragraph 23 of the Statement of Claim further pleads as follows, with respect the damage and injury which the Plaintiff alleges it had suffered due to the Defendant pursuing the Assessment of Damages Proceedings following orders granted by the Final Appeal Judgment to allegedly obtain a collateral benefit – “23. Defendant’s action in continuing with the Compensation Assessment Application has caused a Bad Effect on Plaintiff especially: S/N u3BiGXtz3kuEE/gWPog3jg [a] The Defendant’s actions have already put the Plaintiff in pain, anxiety, worry and distress; [b] … [c] The Development Plans to improve the Performance and Business of the Plaintiff are very stunted and cannot be implemented as a result of the anxiety and worry experienced by the Plaintiff due to the Compensation Assessment Application.” [Emphasis ours]

47.As the Plaintiff has pleaded, the alleged “Bad Effect” or damage which the Plaintiff claimed to have suffered were due to it having to defend the Assessment of Damages Proceedings (which Assessment took place only because the Plaintiff had wrongfully infringed the Defendant’s copyright as ruled by the Final Appeal Judgment) and not due to or as a consequence of any collateral advantage or benefit which the Plaintiff claims the Defendant obtained from the Assessment of Damages Proceedings. This essential element of the pleaded tort is thus, also absent and not disclosed by the Plaintiff’s pleadings. The plaintiff’s pleaded case [28] MForce contends this is not a suitable case for striking out. Court’s analysis Approach to take when considering an application to strike out a suit filed based on the tort of abuse of process S/N u3BiGXtz3kuEE/gWPog3jg [29] In my view the Courts should be robust when considering an application to strike out a suit filed based on the tort of abuse of process. [30] This is because “Men do go to law to redress a grievance” as stated by Lord Scarman in Goldsmith v Sperrings Ltd [1977] 2 All ER 566 and cited with approval by Mahadev Shankar J in Gasing Heights Sdn Bhd v Aloyah Bte Abd Rahman & Ors [1996] 3 MLJ 259 at 271 - 272 HC. It will be a sorry day if a plaintiff litigant is easily found liable for the tort of abuse of process solely because he goes to court to seek redress. A defendant may well feel he is wrongly sued and feel harassed. But his remedy lies in an award of costs if the claim is dismissed. Access to justice is a pillar of democracy. It must not be easily deterred by the fear of being liable for the tort of abuse of process. [31] The other factors favouring a robust approach when considering an application to strike out a suit filed based on the tort of abuse of process are reasons of policy based on finality and floodgates. There will be ‘fresh litigation about prior litigation’. Such fresh litigation may well be brought on by parties who have animosity between them. It will also create a chilling effect on regular litigation and deter a party from going to the courts to redress a grievance. [32] Such concerns resulted in the Singapore Court of Appeal in Lee Tat Development Pte Ltd v Management Corporation of Grange Heights Strata Title Plan No 301 [2018] SGCA 50 to refuse to recognise the tort of abuse of process as a distinct cause of action under Singapore law. [See Conweld Engineering Sdn Bhd & Ors v S/N u3BiGXtz3kuEE/gWPog3jg Goh Swee Boh @ Goh Cheng Kin & Anor [ 2019] 1 LNS 580 HC [45 - 47] per Wong Chee Lin J]. [33] So, while Malaysian courts recognise the tort of abuse of process as a distinct cause of action under Malaysian law, we should take a robust approach to scrutinise the pleaded case and strike out such a suit if the elements are not satisfied. [34] I will now consider the elements of the pleaded case of MForce for the tort of abuse of process. The purpose for initiating that process must be 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. [35] In my view, this element is not present based on the pleaded case of MForce. In its Statement of Claim at paragraph 18 MForce pleaded that Honda has committed the tort of abuse of process as it could not prove its losses in the Assessment of Damages Proceedings as the judge had only awarded nominal damages. This plead does not satisfy the first element. [36] The very objective of Honda filing an application to assess damages was to obtain damages pursuant to the order for an inquiry as to damages granted to Honda by the Final Appeal Judgment. It is not for a collateral purpose. The fact that the award was nominal damages S/N u3BiGXtz3kuEE/gWPog3jg does not make the filing of the application to assess damages a filing for a collateral purpose. MForce must have suffered some damage or injury in consequence. [37] This element is also clearly not satisfied by MForce. MForce is a corporate entity which by its very nature is devoid of body and mind. Thus, MForce is incapable of experiencing any “pain, anxiety, worry and distress” as pleaded in the Statement of Claim at paragraph 23. [38] In Asia Pacific Information Services Sdn Bhd v Cycle & Carriage Bintang Berhad & Anor Mercedes Benz Malaysia Sdn Bhd [2010] 6 CLJ 681 HC Mah Weng Kwai JC held– “34 … as a corporation, there is no question of any damages suffered by the plaintiff by reason of ‘discomfort, inconvenience, distress, anxiety and severe embarrassment’”. [39] I thank counsel for their thorough and helpful submissions. S/N u3BiGXtz3kuEE/gWPog3jg

[40] For the reasons above, I allow Enclosure 13 and strike out the writ with costs of RM 10,000 subject to allocatur. …………(signed)…………… Leong Wai Hong Judicial Commissioner High Court of Malaya Kuala Lumpur (NCVC 10) Dated: 22th July 2024 COUNSEL: 1) Aswandi bin Haji Mohamed Hashim, Sulaiman bin Ismail and Mohammad Irwan Shah Asri for plaintiff. (Aswandi Hashim & Co. (Alor Setar)) 2) Linda Wang, Elica Wong Ying Shaang and Ding Eelyn for defendant. (Linda Wang Su & Boo (Kuala Lumpur)) CASES REFERRED TO: 1) Asia Pacific Information Services Sdn Bhd v Cycle & Carriage Bintang Berhad & Anor Mercedes Benz Malaysia Sdn Bhd [2010] 6 CLJ 681 HC. S/N u3BiGXtz3kuEE/gWPog3jg 2) Conweld Engineering Sdn Bhd & Ors v Goh Swee Boh @ Goh Cheng Kin & Anor [ 2019] 1 LNS 580 HC. 3) Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd [2014] AC 366. 4) Gasing Heights Sdn Bhd v Aloyah Bte Abd Rahman & Ors [1996] 3 MLJ 259. 5) Goldsmith v Sperrings Ltd [1977] 2 All ER 566. 6) Honda Giken Kogyo Kabushiki Kaisha (also known as ‘Honda Motor Co Ltd’) v MForce Bike Holdings Sdn Bhd & Anor [2021] 6 MLJ 594 CA. 7) Honda Giken Kogyo Kabushiki Kaisha (also known as Honda Motor Co Ltd) v MForce Bike Holdings Sdn Bhd & Anor [2023] 1 LNS 1158. 8) Lee Tat Development Pte Ltd v Management Corporation of Grange Heights Strata Title Plan No 301 [2018] SGCA 50. 9) Malaysia Building Society Bhd v Tan Sri General Ungku Nazaruddin Mohamed [1998] 2 CLJ 340 CA; [1998] 2 MLJ 425 CA. 10) Re Majory [1955] 2 All ER 65. LEGISLATION REFERRED TO: 1) Order 18 rule 19 Rules of Court 2012. 2) Order 18 rule 19(1)(a) Rules of Court 2012. 3) Order 18 rule 19(1)(b) Rules of Court 2012. 4) Order 18 rule 19(1)(d) Rules of Court 2012. 5) Order 41 rule 6 of the Rules of Court 2012. S/N u3BiGXtz3kuEE/gWPog3jg