NEO LAY HONG (NRIC No.: 630417-02-5198) (trading as NLH WAY ENTERPRISE) (Business Registration No.: AS0291800-A) --- RESPONDENTS Grounds of Order (Assessment of Damages) Introduction and Background [1] This is an application for assessment of damages (“this Application”) arising from a Trade Description Order (“TDO”) obtained by the Applicant on an ex parte basis on 22 January 2017. The TDO led to enforcement actions, including raids at the Respondents' business premises and the seizure of tobacco products. [2] This dispute arose on 22 January 2017, when the Applicant, S.P. Yam Huat Sdn. Bhd., obtained an ex parte Trade Description Order (“TDO”) from the High Court at Alor Setar. The order was sought on the basis that the Respondents had allegedly infringed the Applicant’s registered trademark (No. 2011010139) and industrial design (No. MY 15-01507-0101) in relation to tobacco products. 4 [3] Pursuant to the TDO, enforcement officers from the Ministry of Domestic Trade, Co-operatives and Consumerism (KPDNKK) conducted raids on 15 March 2017 at the Respondents’ premises. Substantial quantities of tobacco products were seized on the allegation that they were counterfeit. Business assets were also seized, including a delivery van belonging to the Second Respondent. [4] The Respondents subsequently challenged the TDO. The order was stayed by consent on 14 August 2017, pending the disposal of the setting-aside applications. The High Court later set aside the TDO in its entirety. First as against the Second Respondent on 3 February 2020, and thereafter as against the Third and Fourth Respondents on 19 July 2021. [5] Following the setting aside of the TDO, the Respondents are now seeking damages for losses allegedly suffered during the period the order was in force. Their case is that the TDO prevented them from carrying on business in relation to the affected products and caused financial loss. [6] Through this Application, the Respondents claim damages under several heads. These include the value of seized goods which became unsaleable, loss of business profits, some exceeding RM1 million, and general damages for injury to goodwill said to have arisen from the enforcement actions and related publicity. 5 [7] The Applicant disputes the claims. Its primary contention is that the Respondents have failed to prove their losses. It is submitted that in the absence of audited accounts, tax records, or evidence of net profit, the claims are speculative and incapable of proper assessment. Preliminary Objection [8] The Applicant raised a preliminary objection, contending that the Respondents are procedurally barred from pursuing this assessment of damages. The Applicant argued that the Respondents failed to file their Notice of Directions within the strict one-month period required under Order 37 Rule 1(1) of the Rules of Court (ROC) 2012, relying on authorities that suggest mandatory compliance. In advancing this preliminary objection, the Applicant strongly contended that the time period stipulated under Order 37 Rule 1(1) of the ROC is absolutely mandatory. The Applicant relied on cases such as Low Cheng Soon v. TA Securities Sdn Bhd [2003] 1 MLJ 389 and the Federal Court decision in Duli Yang Amat Mulia Tunku Ibrahim Ismail ibni Sultan Iskandar Al-Haj v. Datuk Captain Hamzah Mohd Noor & Another Appeal [2009] 4 CLJ 329, arguing that the use of the word 'shall' imposes a strict obligation. Consequently, the Applicant argued that the Respondents' failure to file the Notice of Directions within the one-month timeframe constitutes a fatal non-compliance that irreparably bars their right to assessment. In rebuttal, the Respondents (particularly the Second Respondent, the Third Respondent, and the Fourth Respondent) submitted that the prescribed time frame is merely directory. They rightly pointed out that the structure of Order 37 itself contains 6 'saving provisions' under Rules 1(3) and 1(7), which provide alternative mechanisms should a party fail to act within one month. Furthermore, the Respondents argued that any technical non-compliance should not extinguish a substantive right to damages and can be cured by the Court's inherent powers under Order 1A and Order 2 Rule 1 of the ROC, especially since the Applicant suffered no prejudice.