Pj Uniform Sdn Bhd v St. John Ambulans Malaysia & 2 Others (BA-22NCVC-141-03/2021)

ST. JOHN AMBULANS MALAYSIA (pertubuhan statutory yang diperbadankan di

YEO KIM THONG

LOW BIN TICK (NO. K/P: 410305-10-5105) …DEFENDAN-DEFENDAN

The proceedings before me arise from the Defendants’ application to strike out the claim brought by the Plaintiff. The application is made pursuant to O. 18 r. 19(1) (a), (b), (c) and/or (d) of the Rules of Court 2012. 2 Background facts

A history of litigation precedes the instant suit and forms the basis of the Plaintiff’s suit. The relevant facts, from the cause papers filed herein, are as follows.

The Plaintiff (“PJ Uniform”) is a locally incorporated company, dealing in school uniforms and school accessories. The 1st Defendant (“SJAM”) is a statutory body established under the St Johns Ambulance Malaysia Act, 1972. At the material time, the 2nd and 3rd Defendant were members of the Council of SJAM.

On 1.2.2013, SJAM instituted a suit vide Civil Suit No. 22 NCVC- 148-02/2013 in the Shah Alam High Court against PJ Uniform for trade mark infringement and passing off of its registered trademark. (“Trademark Suit”). The suit concluded in SJAM’s favour on 4.12.2014. PJ Uniform appealed to the Court of Appeal, but failed in its appeal. It also failed to obtain leave to appeal to the Federal Court.

Subsequent to the judgment obtained, SJAM applied to have damages assessed before the Senior Assistant Registrar. The decision of the Senior Assistant Registrar on damages was appealed to the High Court Judge who then decided that damages of RM 11,797.00 for account of profits and RM 220,000 for the loss of good name and reputation occasioned to SJAM be paid by PJ Uniform. The latter’s attempt to set aside this decision failed as its appeal to the Court of Appeal and subsequent leave to appeal to the Federal Court, was dismissed. 3

In execution of the judgment obtained, SJAM filed several garnishee proceedings. The 1st garnishee proceeding filed in 2016 was dismissed due to some errors in the contents of the affidavit. It then filed a 2nd garnishee proceeding in 2017. PJ Uniform attempted to set aside the garnishee order to show cause but failed. The 3rd garnishee application was filed in 2019 as there were insufficient funds in the garnishee to execute upon. PJ Uniform again failed to set aside the garnishee order to show cause. Its appeal to the High Court Judge against the decision of the Senior Assistant Registrar to allow the garnishee application was dismissed.

The affidavits in support of the garnishee applications were affirmed by the 2nd Defendant. The authority of the 2nd Defendant to act on behalf of SJAM in the Trademark Suit and to affirm affidavits in proceedings arising from the said suit were questioned by the Plaintiff. The Plaintiff then caused a letter dated 17.3.2017 entitled “Request for Confirmation of Authorization by St John Ambulance Malaysia” seeking clarification with regard to the authority of the 2nd Defendant to act for SJAM. The letter was addressed to the Council Members of St. John Ambulance Malaysia, naming them individually.

The contents of the letter prompted the filing of Civil Suit No.BA- 23NCVC-16-08/2017 in the Shah Alam High Court (“Defamation Suit”) by the 2nd Defendant against PJ Uniform and one Madam Yap Kwee Kin. The defamation suit was dismissed by the Shah Alam High Court in December 2019. 4

The Plaintiff claims that during the trial of the Defamation Suit, the 2nd and/or 3rd Defendant admitted for the first time that the Trademark Suit was commenced unilaterally by the 2nd and/or 3rd Defendant under the sole instructions of the 3rd Defendant. In the circumstances, the commencement of the Trademark Suit was without the knowledge and approval of the council members. The Plaintiff further contends that the Trademark Suit and actions taken in respect thereof by the 2nd and 3rd Defendants must be by formal authorization of the council members.

In view of the alleged lack of authority, the Plaintiff’s present suit has been brought to impeach the judgment obtained in the Trademark Suit as the judgment was obtained based on fraud committed by the Defendants. In addition, the Plaintiff contends that judgment obtained was an illegality. The evidence in support of the Plaintiff’s contention in the instant suit was only discovered subsequently. In addition to seeking to impeach the Trademark Suit judgment, the Plaintiff has also relied on the causes of action of fraud and/or conspiracy to defraud as well as tortious interference. Grounds in support of the application

The Defendants have now applied to strike out the Plaintiff’s suit on several grounds, summarised as follows:-

the issue of authority of the 2nd Defendant is barred by the principle of res judicata and issue estoppel; 5

the issue of lack of authority is an internal management issue which the Plaintiff has no right to question;

the principle of laches applies as the judgment in the Defamation Suit relied on by the Plaintiff as a basis for this suit, was given in December 2019. The instant suit to impeach the Trademark Suit based on the evidence in the Defamation Suit, was filed in March 2021, some 15 months thereafter; and

this suit is to scuttle and delay the hearing of the Judgment Debtor Summons (“JDS”) proceedings. The JDS was filed in November 2020 as further execution proceedings against PJ Uniform. However, 2 days before the hearing of the JDS, this suit was filed. In addition a stay filed on the eve of the JDS hearing was refused and is now pending hearing of the appeal against the dismissal of the stay.

The Defendants’ therefore contend that the entire circumstances surrounding the filing of this suit falls within paragraphs (b), (c) and

of O. 18 rule 19(1) of the Rules of Court 2012, to warrant their application being allowed.

In opposition to the Defendants’ application, the Plaintiff asserts that:- 6

the Defendants had taken contradictory stands in both the Trademark Suit and Defamation Suit as in the Trademark Suit, the evidence was that there was due authorization, but in the Defamation Suit, there was an admission by the 2nd and 3rd Defendants that there was no formal authorization. Instead, the 2nd Defendant was instructed by the 3rd Defendant only. In view of the contradiction, the striking out procedure is not suitable to decide the contested issue;

res judicata has no application here as the evidence supporting the causes of action of fraud, tortious interference and impeachment of decision was discovered only subsequently in the Defamation Suit;

the issue of laches does not arise as the evidence of lack of authority from the Defamation Suit was only discovered in 2019; and

the various triable issues raise renders the application inappropriate to be allowed. Analysis and decision of this court The law in relation to striking out

The law on striking out of pleadings is trite. This power is exercised to avoid the unnecessary time and expense of a trial. However, the courts have recognized that as this is a summary power, it is only to be exercised in plain and obvious cases and where the claim is 7 obviously unsustainable. This principle has been restated in many cases. (See: Bandar Builders Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36; Seruan Gemilang Makmur Sdn Bhd v. Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 1 CLJ 1).

I shall now discuss the issues in contention between the parties arising out of the Defendants’ application. A perusal of the Statement of Claim shows that the entire suit of the Plaintiff rests on the complaint of lack of authority on the part of the Defendants to institute the Trademark Suit. Although fraud and illegality are also pleaded, these causes of action turn on the same issue. Whether the Plaintiff’s claim is barred by the principle of res judicata and issue estoppel

The res judicata principle and its application had been succinctly explained in the Federal Court case of Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189 as follows, What is res judicata? It simply means a matter adjudged, and its significance lies in its effect of creating an estoppel per rem judicatum. When a matter between two parties has been adjudicated by a court of competent jurisdiction, the parties and their privies are not permitted to litigate once more the res judicata, because the judgment becomes the truth between such parties, or in other words, the parties should accept it as the truth; res judicata pro veritate accipitur. The public policy of the law is that, it is in the public interest that there should be finality in litigation. 8 …. Thus, there are in fact two kinds of estoppel per rem judicatum. The first type relates to cause of action estoppel and the second, to issue estoppel, which is a development from the first type. …. In order to prevent multiplicity of action and also in order to protect the underlying rationales of estoppel per rem judicatum and not to act against them, such estoppel of cause of action has been extended to all other causes of action (based on the same facts or issues) which should have been litigated or asserted in the original earlier action resulting in the final judgment, and which were not, either deliberately or due to inadvertence.

The issue of lack of authority had in fact been raised in the Trademark Suit, as clearly borne out by the Notes of Proceedings for the Trademark Suit exhibited as “HWT-9”. The notes pertain to the exchange between the learned High Court Judge and counsel for PJ Uniform where the latter contended that the Trademark Suit was filed without any resolution by the SJAM Council. In response, the learned High Court Judge expressed that the point raised was not in the pleadings. The judge added “This is a critical point should apply to strike out if found default of authorization.”

The subsequent written judgment of the learned High Court confirmed the fact that the issue was raised, evident from the portion which read as follows, “As to the locus standi point, it is not a pleaded issue and must be discarded in limine. Nevertheless, the Defendant questioned the regularity of the internal management of the Plaintiff including registration with the Companies Commission of Malaysia, Inland Revenue Department, etc. it is my view that the 9 Defendant as an outsider is itself without locus standi and disentitled to challenge any irregularity in the management and affairs of the Plaintiff.” (See: exhibit “HWT-7”).

The record of proceedings and the judgment of the High Court puts beyond doubt that the issue of lack of authority had been raised and decided.

PJ Uniform again challenged the 2nd Defendant’s authority in the garnishee proceedings filed by SJAM in 2017. The challenge did not succeed when its application to set aside the Garnishee Order To Show Cause was dismissed.

In 2019, the issue was again raised but did not find favour with the Senior Assistant Registrar in the 3rd Garnishee Proceedings when PJ Uniform’s setting aside application was again dismissed. Its appeal to the High Court also failed.

As matters stand, the Trademark Suit has been finally determined when its leave to appeal to the Federal Court was dismissed. The decision is final and binding between the parties and ought not to be allowed to be questioned again in this suit on the basis of lack of authorization to commence the action. The issue was raised, and determined by the High Court on the ground that it was not only an unpleaded case of PJ Uniform, but that as an outsider, it had no locus to question the internal management of SJAM. The issue of lack of authority has now become final and binding on the parties, and ought not to be re-visited nor allowed to be re-litigated in this suit. 10

The Federal Court in Serac Asia Sdn Bhd v Sepakat Insurance Brokers Sdn Bhd [2013] 5 MLJ 1 again re-iterated the need for the observance of the res judicata principle when it held, [45] The re-litigation of a regularly and properly concluded matter as determined by the court is prohibited by the wide doctrine of res judicata. The judicial process rests on the twin pillars of certainty and finality. A final order or a judgment must therefore be vigorously protected by this doctrine a position taken by the common law courts ever since Henderson (1843). Whether the fresh evidence precludes the application of the res judicata principle

The Plaintiff here was at pains to contend that the evidence as to the lack of authority was only discovered during the Defamation Suit, which was filed after the conclusion of the Trademark Suit. The Plaintiff relied on the admission of D2 and/or D3 at the trial that SJAM’s Trademark Suit was commenced unilaterally by D2 under D3’s instructions. In the circumstances the plea of res judicata cannot be taken.

This contention is not credible as the Plaintiff was at all material times made aware that SJAM had authorized the actions taken to enforce its rights. SJAM had issued a letter dated 27.3.2013 which was referred to in the course of the proceedings in the Trademarks Suit. The letter issued by the 3rd Defendant as the Commander in Chief for SJAM, states inter alia that the 2nd Defendant was expressly authorized to do all such acts necessary to enforce the 11 protection of the SJAM’s intellectual property rights, give evidence in court and to affirm affidavits for the purposes of civil proceedings. The contents were confirmed by a second letter dated 18.1.2020.

The letter of 27.3.2013 was referred to in the course of the Trademark Suit trial and the 3rd Defendant was also cross-examined on the import of the letter. To allege that the issue of lack of authority was only discovered at the Defamation Suit is contradicted by the Plaintiff’s questioning of the lack of authority as far back as the Trademark Suit itself.

In any event, having perused the purported new evidence said to contradict the evidence in the Trademark Suit, I do not find any contradiction. The Defendants’ consistent position even in the Defamation Suit is that the 2nd and 3rd Defendants were authorized to initiate proceedings in the name of SJAM without the requirement of a formal resolution. Whether the Plaintiff has a right to question the lack of authority

Apart from relying on the misconstrued evidence in the Defamation Suit, the Plaintiff contends that there was no formal resolution nor mandate given to authorize the commencement of the Trademark Suit. It was done without the knowledge and approval of the council members of SJAM at all material times. Section 6 of the St John Ambulance (Incorporation) Act 1972 [Act 74] stipulates that the affairs of SJAM shall be administered through council members but was not the case here. 12

I do not find any evidence in support of this allegation. Instead, I am of the view that the Plaintiff’s position on the lack of authority goes against the provisions of the St. John Ambulance (Incorporation) Act 1972 [Act 74] and the SJAM Regulations.

By virtue of section 3 of the St. John Ambulance (Incorporation) Act 1972 [Act 74] SJAM is a body corporate which may sue and be sued in all courts, and conferred with powers incidental to or appertaining to a body corporate. Section 6 provide that the affairs of SJAM shall be administered by a Council constituted in accordance with the Rules. The relevant rules are housed in the SJAM General Regulations. In this regard, the following is relevant,

1.4 General The SJAM is operated and administered under the authority of the Council, acting through the Commander-In-Chief, which is the ultimate bond or identity of the SJAM.

The then Commander-In-Chief was the 3rd Defendant. He issued the letter of 27.3.2013 confirming that the 2nd Defendant was duly authorized by SJAM to act and initiate the Trademark Suit. The administration and management relating to SJAM’s affairs, including commencement of suits are well within the command of the 3rd Defendant who performs his duties under the authority vested in him in accordance with the Regulations. No formal resolution of the Council is necessary. This fact ought to put paid to the issue of lack of authority raised by the Plaintiff. 13

In any event, the Plaintiff has no right to question the internal management of SJAM. The issue of whether the members have given authority to SJAM to sue by way of a mandate or resolution passed is an internal matter which the courts would hesitate to embark on an inquiry into. In this regard, the Federal Court’s judgment in Ulimas Sdn Bhd v Hi-Summit Construction Sdn Bhd and other appeals [2017] 2 MLJ 153 particularly instructive when it held as follows, [19] In short, it is apparent in the present case that there was unanimous assent by all the directors of the respondent for the commencement of the suit and the continuation of the same. …. [21] Accordingly, we hold that even though the warrant to act dated 3 December 2003 does not carry with it the formalities of a written resolution, the contents and intention expressed are clear to constitute a decision or a resolution in writing made pursuant to article 109. Therefore, the warrant to act may, in the circumstances, be construed as a resolution in writing under article 109. Accordingly, we hold that the suit was duly authorised by the board. …. [23] As alluded to earlier, there is no provision in the Companies Act 1965 stipulating that a formal board resolution is required in order for a company to appoint solicitors and we find no plausible reason for such a restriction to be read into the Act. In the present case, it is only Abdul Rahmat bin Ramli, the director who did not sign the warrant to act, who is in a position to complain. He did not do so. On the contrary, it can be inferred from his conduct that he had assented to the commencement of the suit. [24] As a general rule, the courts have always refrained from interfering with the internal management of company. Similarly, when dealing with 14 authority to commence legal proceedings, it is absurd for us to go behind the written warrant to act as the board can always ratify any action commenced without proper authority. To require the court to go behind a warrant to act and investigate the internal management of a corporate litigant would be an affront to the fundamental principles of company law and the proper administration of justice. Whether the conduct of the Plaintiff amounts to an abuse of the court’s process

The Defendants question the filing of the present suit some 19 months after the existence of the ‘fresh evidence’ in the Defamation Suit, and 15 months after the decision of the suit. This suit was also filed two days before the JDS hearing.

Whilst the timing of the present suit may lend some validity to the Defendants’ contention, nonetheless I would not go so far as to draw the inference that on this ground alone, the Plaintiff’s suit is to prejudice, embarrass and to delay the fair trial or that it is tantamount to an abuse of the process of the court.

However, I find that on the grounds of res judicata and no locus to question the internal management of SJAM, the Defendants have succeeded in establishing the Plaintiff’s pleadings to fall under O 18 r 19 (1) (b) and (d). 15

Premised on the foregoing reasons, the Defendants’ application in enclosure 8 is allowed. Consequently, the action filed by the Plaintiff is dismissed. I also order that costs of RM 4000 be paid to the Defendants. Dated : 28th January 2022 …………-sgd-…………. Alice Loke Yee Ching Judicial Commissioner High Court of Malaya at Shah Alam 16 Counsel for the Plaintiff : Mr. Ooi Chih Jen (Ms. Ng Yong Yee and Mr Tan Joon Meng with him) (Tetuan Chris Lim Su Heng ) Counsel for the Defendant : Miss Cyndi Chow Li Kian (Ms. Jolene Tham with her) (Tetuan Josephine, L K Chow &