Yau Enterprise Sdn. Bhd. v 1. ) Yau See Keng (BA-22NCvC-334-08/2022)

YAU SEE KENG (No. K/P: 651105-08-5741)

YAU LEONG SEN @ YOW LEONG FATT (No. K/P: 340715-08-5353)

ALPHA VET SDN. BHD. (No. Syarikat: 201801024230 [1286250-M]) − DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT Introduction [1] Yau Enterprise Sdn Bhd (the Plaintiff) is a private limited liability company incorporated under the laws of Malaysia. The Plaintiff carries out the business of trading in veterinary products. 11/07/2024 22:11:10 BA-22NCvC-334-08/2022 Kand. 99 [2] The cause of action against the Defendants are that the Plaintiff contends that the Defendants and each of them are liable for the following:

the First and Second Defendants had breached their fiduciary duties and duty of fidelity owed to the Plaintiff while they were still directors of the Plaintiff;

the Defendants have unlawfully interfered with the Plaintiff’s economic interests; and

the Defendants have conspired and agreed together to interfere with the Plaintiff’s economic interests. [3] As a result of the acts of the Defendants and each of them, the Plaintiff has suffered loss and damage, namely −

loss of profits; and

diminution in the value of shares of the Plaintiff. [4] The Plaintiff claims against the Defendants and each of them jointly and severally for the following:

RM8,376,626.68 being the loss of profits or such other sum as this Court deems fit;

in the alternative, RM24,923,575.63 or RM28,891,599.04 being the diminution in value of the shares of the Plaintiff or such other sum as this Court deems fit;

exemplary damages;

in the alternative, general damages;

in the alternative, equitable compensation;

interest at the rate of 5% per annum from the date of filing of the writ or from such other date as this Court deems fit, until the date of full settlement;

costs;

any expert costs; and

such further or other relief as this Court may deems fit. The Parties [5] In the statement of claim, the Plaintiff has stated about and, among others − • The Plaintiff’s present directors are Yau See Hing and Yau Sze Jiun. • the Plaintiff was incorporated on 18-11-1982. The Plaintiff was founded under the joint efforts of − ➢ the Second Defendant Yau Leong Sen @ Yow Leong Fatt. ➢ the late You Leong Song @ Yau Leong Chong (the father of Yau See Hing). ➢ the late Yau Tet See @ Yau Leong Yook (the father of Yau Sze Jiun. • Yau See Keng (the First Defendant), Yau See Hing and Yau Sze Jiun are the second generation who inherited the shares of the Plaintiff from their respective fathers/founders of the Plaintiff. • the shareholding in the Plaintiff are − Yau See Keng (the First Defendant) 40% Yau See Hing 30% Yau Sze Jiun 30% • the Second Defendant (Yau Leong Sen @ Yow Leong Fatt) is the father of the First Defendant. The Second Defendant was a director of the Plaintiff from 18-11-1982 until 1-7-2018. The Second Defendant was appointed as the Managing Director of the Plaintiff on 2-9-2013. • the Third Defendant (Alpha Vet Sdn Bhd) carries out the business of investment advisory services, export and import of a variety of goods without any particular specialization and the export and import of prepared animal feeds. The facts The Plaintiff’s version: [6] Disagreement between Yau See Keng (the First Defendant), Yau See Hing and Yau Sze Jiun: On 7-3-2016, in the Extraordinary General Meeting of the Plaintiff, Yau See Keng (the First Defendant), Yau See Hing and Yau Sze Jiun had resolved and approved that the shareholders were allowed to propose for the disposal of their respective shares in the Plaintiff and/or to propose to acquire the other shareholders’ shares in the Plaintiff. The price of the shares is to be determined by an independent valuer to be appointed by the Plaintiff. However, this did not materialize. On 11-11-2016, Yau See Keng (the First Defendant) has filed a legal action under section 181 of the Companies Act 1965 against the Plaintiff, Yau See Hing and Yau Sze Jiun in Shah Alam High Court (“Originating Summons”). On 17-11-2017, SAHC dismissed the OS with costs and no appeal was filed. On 30-5-2018, the Second Defendant (Yau Leong Sen @ Yow Leong Fatt) is the father of the First Defendant voluntarily gave one month notice for his resgnation as the Managing Director of the Plaintiff. The notice of resignation is to inform the Plaintiff that the Second Defendant wished to retire in view of his age 84 years. The offer made by the Plaintiff to the Second Defendant to appoint him as the Plaintiff’s consultant. This offer was declined by the Second Defendant. Then, the Plaintiff had voluntarily paid RM200,000.00 to the Second Defendant as gratuity and had transferred a company car to the Second Defendant as a token of appreciation. On 1-7-2018, the Second Defendant effectively resigned as the director and the Managing Director of the Plaintiff. [7] Events occurred after the resignation of the Second Defendant: On 6-7-2018, i.e. after 5 days of the Second Defendant’s resignation, the Second Defendant has incorporated the Third Defendant. The directors of the Third Defendant are the Second Defendant and an individual named Hoh Yook Peng, who is the First Defendant’s sister in law. The Second Defendant is the sole shareholder in the Third Defendant. The Plaintiff pleaded in paragraph 14 of the statement of claim that the Third Defendant is a direct competitor of the Plaintiff. On 3-9-2018, Yau See Hing discovered that the Second Defendant had incorporated the Third Defendant and Yau See Hingg notified the Plaintiff’s management. Yau See Hing had sought the First Defendant assistance to inform the Second Defendant not to visit the Plaintiff’s office ant to request the confidential information relating to the Plaintiff. On 12-11-2018, Yau See Hing was appointed as the Managing Director of the Plaintiff vide the Plaintiff’s resolution during the Board of Directors’ meeting. The First Defendant disagreed with the appointment. [8] The Plaintiff pleaded that from 2018 onwards or earlier, the first and Second Defendants had committed various of fiduciary duties and duty of fidelity as the directors of the Plaintiff. This had caused the Plaintiff to lose 3 distributorships. The distributors now had businesses with the Third Defendant. [9] On 1-2-2019, the Plaintiff issued a letter to the First Defendant regarding the breaches and on 16-2-2019, the First Defendant was removed as a director of the Plaintiff via a resolution passed during the Extraordinary Meeting. [10] On 4-4-2019, the First Defendant filed an OS at SAHC under section 346 of the Companies Act 2016 against the Plaintiff, Yau See Hing and Yau Sze Jiun. On 6-10-2021, SAHC dismissed the OS with costs. No appeal to the Court of Appeal filed by the First Defendant. [11] At present, the First Defendant is working in the Third Defendant. The Plaintiff has pleaded that many of the Third Defendant’s customers and suppliers were previously the major customers and suppliers of the Plaintiff. [12] The breaches of duty of fiduciary and duty of fidelity by the First and Second Defendants: The Plaintiff pleaded that as the directors of the Plaintiff, the First and Second Defendants owed the Plaintiff duty −

to act honestly;

to act in good faith;

of fidelity;

not to put themselves in a position of conflict of interest;

to act in the best interest of the Plaintiff and not to advance their personal interest;

to exercise reasonable care, skill and diligence;

not to act in any way that would bring any benefit or advantage to themselves, whether directly or indirectly, to the detriment of the Plaintiff; and

not to cause damage and loss to the Plaintiff. [13] The Plaintiff has particularized the breaches committed by the First Defendant as follows:

termination of 3 major distributorships i.e. Diasham Resources Pte Ltd, a Singapore company (Diasham), Wuxi Zhengda Biology Co. Ltd., a China company (Wuxi); and Gasolec B. V, a Holland company (Gasolec).

these 3 major distributorships were all under the care of the First Defendant i.e. the First Defendant was in charge of the sales, marketing activities, ordering of the products, and the key contact person. The First Defendant is also the key contact person who dealt with the majority of the customers of the products from these 3 major distributorships.

the Plaintiff has entered into agreements with the 3 major distributorships. Prior to the termination of the 3 major distributorship, Plaintiff was the sole distributor of the 3 major distributorships’ products in Malaysia.

the Plaintiff pleaded that the First Defendant had caused the Plaintiff to lose the 3 major distributorships. The First Defendant did not take any proactive steps to save the 3 major distributorships and/or safeguard the Plaintiff’s interest; had refused to carry out marketing activities to prevent the loss of the customers and/or business; failed in making any plans and/or finding any replacement distributorship despite being aware that the Plaintiff will suffer major losses of revenue arising from the loss of the 3 major distributorships; did not appear to be concerned with the loss of the 3 major distributorships and/or the loss of customers arising from the loss of the 3 major distributorships.

the Plaintiff pleaded that the loss of the 3 major distributorships by the Plaintiff had a significant and adverse impact on the financial performance of the Plaintiff. This is because the 3 major distributorships contributed to more than 20% of the Plaintiff’s revenue and more than 35% of the gross profit margins recorded by the Plaintiff during the financial years 2015, 2016, 2017 and 2018. [14] Paragraphs 33 to 60 of the statement of claimed list out the particulars to show that the Plaintiff has loss the businesses with Diasham, Wuxi and Gasolec due to the First Defendants acts not to take any steps to try to save these 3 major distributorships. The First Defendant had assisted the Second Defendant to set-up the Third Defendant and undertook the affairs of the Third Defendant. [15] The Plaintiff has particularized the breaches committed by the Second Defendant as follows:

as the director and then the Managing Director of the Plaintiff, the Second Defendant has committed the acts, namely − i. from 2018 onwards or earlier, together with the First Defendant, the Second Defendant were making plans to set up a new company, which was later incorporated as the Third Defendant, at the expense of the Plaintiff. ii. in communication with the customers and/or suppliers of the Plaintiff regarding his plans to set up another company in competition with the Plaintiff. iii. encouraged the Plaintiff’s key supplier include Diasham, Wuxi and Gasolec to stop supplying products to the Plaintiff. iv. caused and/or facilitated a reduction in the Plaintiff’s customers, business and/or profits.

as a consequence of the Second Defendant’s acts, the Plaintiff has suffered loss and damage. [16] The Plaintiff has particularized the tort of unlawful interference with the Plaintiff’s economic interests committed by all of the Defendants as follows:

the Defendants being aware that the Plaintiff was the exclusive distributor and as one of the Plaintiff’s main source of profits under and for the 3 major distributors i.e. Diasham, Wuxi and Gasolec, had intended to unlawfully interfere with the Plaintiff’s economic interests.

after the resignation (on 1-7-2018), the Plaintiff has pleaded that the Second Defendant had continued to visit the Plaintiff’s office and warehouse. The Second Defendant had − • asked the staff of the Plaintiff for information pertaining to the Plaintiff’s customers, suppliers, pricing, sales and other information. • viewed the customers’, and creditors’ ledger cards of the Plaintiff. • took goods out from the Plaintiff’s warehouse and claiming that they were samples for customers. • took photographs of products and made photocopies of the documents in the Plaintiff’s office and warehouse. • used the Plaintiff’s office utilities, to wit, the facsimile machine and photocopying machines.

the Second Defendant also continued to use the letterhead of the Plaintiff to facilitate the business of the 3rd Defendant, in or around September 2018, to instruct a forwarding company used by the Plaintiff, Puma Logistics Sdn Bhd (or its other related companies) to forward goods of the Third Defendant to its customers or other consignee for the benefit of the Third Defendant. The Plaintiff discovered about this event after being informed by Puma Logistics Sdn Bhd (or its other related companies);

by obtaining and using the Plaintiff's confidential details and information as stated above, the First and Second Defendants managed to grow the business of the Third Defendant rapidly within 3 years since the Third Defendant’s incorporation on 6.7.2018.

As a result, the Plaintiff has suffered loss and damage arising from the Defendants’ unlawful interference with the Plaintiff’s economic interests. [17] The tort of conspiracy to injure the Plaintiff by the Defendants: The Plaintiff pleaded that from year 2018 onwards or earlier, the Defendants and each of them had conspired, agreed and combined among themselves to perform certain overacts with the sole or predominant purpose of injuring the Plaintiff’s business and depriving the Plaintiff from the profits and gains which the Plaintiff could have made from the 3 major distributorships. [18] In pursuance and in furtherance of the conspiracy, the Defendants performed the following overt acts, namely −

while as a director of the Plaintiff, the First Defendant took steps to plan and assist the Second Defendant in the setting up of the Third Defendant with the view of diverting the Plaintiff’s major customers and business including the 3 major distributorships to the Third Defendant;

the Defendants encouraged the Plaintiff’s customer and suppliers to shift their business to the Third Defendant;

a substantial part of the revenue of the Third Defendant’s company was derived from the distribution and sales of the products under the 3 major distributorships; and

ss a result, the Plaintiff has suffered loss and damage arising from the Defendants’ conspiracy to injure the Plaintiff. [19] For the damages suffered by the Plaintiff that were caused by the Defendants as pleaded in the statement of claim, are − • since the year 2019 until 2021, the Plaintiff’s sales, revenue and profits were adversely affected as a result of the loss of the 3 major distributorships. • after the incorporation of the Third Defendant on 6-7-2018, the Third Defendant had grew rapidly and significantly based on its audited financial statements for the financial year ended 30-6-2019 until 30-6-2021. • loss of Profits: The termination of the 3 major distributorships (Diasham, Wuxi and Gasolec) had resulted in the Plaintiff losing one of its main sources of profits and business because the Plaintiff was no longer allowed to distribute and sell the products from the 3 major distributorships; as such, the Plaintiff was no longer able to accept or fulfil the purchase orders from its customers for the products sourced from the 3 major distributorships; hence, the Plaintiff lost the majority of its top customers. The distributorship agreement between the Plaintiff and Diasham had continued for at least 17 years before it was terminated by Diasham on 5-11-2018, the distributorship agreement between the Plaintiff and Wuxi had continued for a period of 10 years before it was terminated by Wuxi on or around 29-11-2018, and, the distributorship agreement between the Plaintiff and Gasolec had continued for a period of at least 30 years before it was terminated by Gasolec on or around 10-12-2018. There was no expiry date for the 3 distributorship agreements with Diasham, Wuxi and Gasolec. In this regard, the Plaintiff has suffered loss of profits of RM8,376,626.68 from the year 2019 until 2021 arising from the loss of the 3 major distributorships. This is the profits that the Plaintiff would have made from the sales of the products under the 3 major distributorships for the next 3 years if the Plaintiff had not lost the 3 major distributorships. • Diminution in the Value of the Shares of the Plaintiff: Further and/or in the alternative, the Plaintiff has also suffered loss and damage in the form of diminution in value of the shares of the Plaintiff’s company arising from the loss of the 3 major distributorships. The Plaintiff, being a trading company, the 3 major distributorships were essentially its underlying assets. The loss of the underlying assets had a significant impact on the profitability and the feasibility of the Plaintiff; and had affected the economic value of the Plaintiff which correspondingly have a natural negative impact on the value of the shares of the Plaintiff. • For claiming the Exemplary Damages, the Plaintiff contends that the Defendants and each of them have committed the acts complained of, having calculated that the benefit to them would outweigh any compensation payable to the Plaintiff. The defence The First Defendant’s version of fact: [20] The First Defendant’s version is derived from its defence and the learned counsel for the First Defendant written submission. [21] The First Defendant pleaded that the Plaintiff’s claim against him are mere afterthought and conjectures, misconceived, bad in law, discloses no reasonable cause of action, frivolous, vexatious, scandalous or is otherwise an abuse of process of this Court. The Plaintiff is not entitled to any or all the reliefs and remedies sought in the statement of claim. [22] The present directors of the Plaintiff are Yau See Hing (is called as a witness in the trial/PW-3) and Yau Sze Jiun. Yau See Hing, Yau Sze Jiun and Yau See Keng (the First Defendant) are cousins. Yau See Hing and Yau Sze Jiun are brothers. Yau Leong Sen @ Yow Leong Fatt (the Second Defendant) is the father of Yau See Keng (the First Defendant) and Yau Set Mei (is called as a witness in the trial/PW-2). [23] In early 2013, Yau See Hing, Yau Sze Jiun and Yau See Keng (the First Defendant) inherited their shareholdings in the Plaintiff company from their fathers respectively, i.e. they are the second-generation shareholders. [24] Yau See Hing and Yau See Keng (the First Defendant) did not have cordial relationship and that both do not see eye to eye in most matters concerning the business and administration of the Plaintiff. This was admitted by Yau See Hing in his testimony. [25] On 1-7-2018, the Second Defendant resigned as the Managing Director of the Plaintiff company. And about 2 months later, on 10-9-2018, the Plaintiff had circulated a notice through email to all its suppliers to say that the Second Defendant has set-up a new company and wished the Second Defendant well in his new endeavour and hoped that the competition will remain healthy and professional, like any other industry players. [26] Yau See Hing was appointed as the Managing Director of the Plaintiff vide a resolution passed on or about 12-11-2018. [27] On 16-2-2019, Yau See Keng (the First Defendant) was removed from the directorship of the Plaintiff. Due to the pandemic crisis, the First Defendant has not been able to secure a job and his father/the Second Defendant offered the First Defendant a job in the Third Defendant. Since 16-2-2019 the First Defendant was no longer a director of the Plaintiff. [28] On 1-11-2021 the First Defendant was employed by the Third Defendant as its Manager. The First Defendant is neither a shareholder nor a director of the Third Defendant till this date. The 3 major distributorships of the Plaintiff and the involvement of the Defendants: [29] On 29-6-2018, the Plaintiff sent out emails to Diasham Resources Pte Ltd, Wuxi Zhengda Biology Co Ltd and Gasolec B.V respectively informing about the resignation of the Second Defendant as the Managing Director of the Plaintiff and stated that the Sales and Marketing of the Plaintiff is handled by the First Defendant, Yau See Hing and Yau Set Mei, whilst the finance is under Yau Sheue Chin. [30] On 5-11-2018, Diasham terminated its distributorship with the Plaintiff. Diasham by way of letter dated 5-9-2018 gave notice to terminate the distributorship with the Plaintiff effective from 5.11.2018. [31] On 29-11-2018, Wuxi issued its notice to terminate its distributorship with the Plaintiff. Wuxi terminated the distributorship of just one product named Excellent Growing Peptides and not the whole distributorship with the Plaintiff. [32] On 10-12-2018 the Plaintiff was informed that Gasolec will not accept any more order from the Plaintiff, thus it has terminated its distributorship. [33] On 1-2-2019, the Plaintiff issued a show cause letter to the First Defendant alleging that the First Defendant purportedly involved with the Third Defendant being a competitor, and purportedly assisted the Third Defendant with a Delivery Order issued by the Third Defendant to a customer known as CF Farms and allegedly failed to take any action to save the 3 distributorships of the Plaintiff (Diasham, Wuxi and Gasolec). [34] On 15-2-2019, by a letter the First Defendant categorically denied all the allegations and inter alia explained that −

he was not involved with the Third Defendant, at that material time;

(ii) the Delivery Order dated 5-1-2019 from CF Farm was accidentally sent to the First Defendant by mistake and provided the Plaintiff with a copy of the WhatsApp message confirming this with CF Farm.

(iii) the loss of distributorship with Diasham was entirely attributed by the lack of performance of the Plaintiff.

(iv) Plaintiff undermined the First Defendant’s authority and efforts by putting on hold, thus effectively cancelled, the orders that have been placed with Diasham on 27.9.2018.

on 16-9-2018 the Plaintiff was well informed of the First Defendant’s visit to VIV China Expo in 2018 and that the Second Defendant/the First Defendant’s father did accompany him.

(vi) Wuxi terminated their distributorship on 29-11-2018 and the Plaintiff accepted the termination without any complaint and without seeking any explanation and reasons only known to Yau Set Mei.

(vii) the termination by Gasolec was on its own choice and coupled with the disappointments as stated in Gasolec’s email on 10-12-2018. [35] The First Defendant asserts and pleads that −

despite the mistreatment, mismanagement, incompetence and rude attitude of Yau See Hing as the Plaintiff’s Managing Director, the First Defendant as a director of the Plaintiff has acted with his best ability and effort to promote and improve the sales of the Plaintiff.

the business activities and sales of the Plaintiff were severely affected and/or curtailed because of the Covid-19 Pandemic, MCO by the Government and also the disease outbreak such as bird flu in the poultry industry and African Swine Fever in the swine industry. All these had attributed to substantial drop in revenue and profit for the Plaintiff. [36] Paragraphs 38 to 46 in the First Defendant’s defence explained and averred pertaining to the termination of the distributorship agreement by Diasham. The First Defendant stated that the Plaintiff loss of the distributorship because of the incompetence and/or poor management decisions and/or mishandling by the Plaintiff itself, specifically by Yau See Hing. [37] Paragraphs 47 to 55 in the First Defendant’s defence explained and averred pertaining to the termination of the distributorship agreement by Wuxi. The First Defendant stated that the Plaintiff loss of the distributorship only for one product named Excellent Growing Peptides AB01 and not the whole distributorship. Wuxi has emailed the notice of termination to the Plaintiff. Yau Set Mei has knowledge about the termination and the information that Wuxi will be supplied the same product to the Third Defendant. [38] Paragraphs 56 to 66 in the First Defendant’s defence explained and averred pertaining to the termination of the distributorship agreement by Gasolec. The First Defendant stated that after the Plaintiff and Managing Director of Gasolec (Mr. Henk Ruiken) met, Gasolec has decided to stop the cooperation with the Plaintiff. Mr. Henk Ruiken has spoken with Yau Set Mei (the Business Manager of the Plaintiff) that “his gut feeling is that both Gasolec and the Plaintiff were drifting apart and there were fundamental differences in their thinking.”. Mr. Henk Ruiken also has sent an email to the Plaintiff. [39] The dealing to save the business relationship with the 3 major distributorships is upon the Plaintiff and Yau See Hing has taken on his own actions including meeting with the distributors without discussing or without the knowledge of the First Defendant. [40] Hence, the First Defendant denied that the termination of the 3 major distributorship with the Plaintiff is caused by the First Defendant. The Plaintiff is put to strict proof. Further, in any event, the 3 major distributorships had the prerogative to appoint any company they had faith in to market their products. Therefore, the Plaintiff’s claim does not disclose reasonable cause of action. Confidential information of the Plaintiff being disclosed by the First Defendant: [41] The First Defendant denied that he had procured any confidential information whether unlawfully or otherwise from the Plaintiff. [42] The First Defendant and the Second Defendant is in family relationship, i.e. son and father, and this relationship per se be used by the Plaintiff that the First Defendant had supplied the confidential information of the Plaintiff to the Second and Third Defendants. The First Defendant has no duty to disclose to the Plaintiff the fact that the Second Defendant is the shareholder and the director of the Third Defendant. In early September 2018, Yau See Hing had already informed the Plaintiff’s management about the Third Defendant being the competitor of the Plaintiff. [43] The First Defendant is just the employee of the Third Defendant and he is not the shareholder nor a director of the Third Defendant. Therefore, there is no conflict between the First Defendant’s duty towards the Plaintiff The Second and Third Defendants’ version of fact: [44] The Second and Third Defendants’ version is derived from their amended defence and the learned counsel for the Second and Third Defendants’ written submission. [45] The Second and Third Defendants pleaded that − • the incorporation of the Third Defendant by the Second Defendant is for the purposes of engaging the business of, inter alia, exporting and importing animal feeds. • The Third Defendant is entitled to carry on veterinary products business in a free and open market. Its incorporation is not to be a direct competitor of or for the purpose of injuring the Plaintiff’s business or interest. • the Second Defendant is experienced, engaged and gained vast knowledge in agricultural supply, livestock health products and veterinary products for a period from 1960 to August 1980. • despite his advanced age, the Second Defendant has never expressed any intention to “retire” from the Plaintiff. [46] The Second and Third Defendants denied that the Plaintiff is the sole and/or exclusive agent of and did not have any monopoly over any of its customers and/or suppliers. The Plaintiff did not secure or enjoy any exclusive distributorship in respect of all or any of the products supplied by by Diasham, Wuxi and Gasolec. [47] After the resignation as a director and Managing Director of the Plaintiff, the Second Defendant was approached by some of the Plaintiff’s customers and/or suppliers and want to carry on their business with the Third Defendant. The 3 major distributorships of the Plaintiff: [48] The Second and Third Defendants did not dispute that the Third Defendant had been given the distributorship by Diasham, Wuxi and Gasolec respectively in respect of some of their products and the First Defendant was generally involved in the sales of these products during his tenure as a director of the Plaintiff. [49] The Second and Third Defendants denied the Plaintiff’s allegations and stated that −

Diasham, Wuxi and Gasolec had the discretion to appoint any authorized dealers in Malaysia including the Third Defendant to distribute their products; and

the Plaintiff’s loss of the 3 major distributorships was not caused by and/or could not be attributable to the Second and Third Defendants. [50] The Second Defendant admits that he often travels to China with his son (the First Defendant) for vacation and/or visiting their relatives in Shenzen, China. In September 2018, the Second and First Defendant did travel to China in attending the VIV China Expo 2018 (Feed and Food Convention). Therefore, the Plaintiff’s suggestion that the Second and First Defendant were in China for the purpose of securing a termination of the Plaintiff’s distributorship of Wuxi’s product named Excellent Growing Peptide AB01 or a distributorship of the same product in favour of the Third Defendant is baseless, unwarranted and denied. [51] The Second Defendant admits that he did visit or come to the Plaintiff’s office on 8-9-2018 i.e. after his resignation. The Second Defendant states that − • as a founder and former director and Managing Director of the Plaintiff, the Second Defendant merely follow up on certain delayed and/or unfulfilled purchasing orders which were brought to his attention by the customer. This is solely for the Plaintiff’s benefits. • the Second Defendant did not take away, retain and/or utilize any of the Plaintiff’s information, documents and/or goods in the Plaintiff’s office, be that for his own use or the Third Defendant’s use without the Plaintiff’s consent. [52] The Second Defendant pleaded that “lt is imperative to note that the Second Defendant had served the Plaintiff for nearly 36 years and his last day of employment with the Plaintiff was 30-6-2018; The Third Defendant was incorporated by the Second Defendant on 6-7-2018; the Second Defendant was and is still the sole shareholder of the Third Defendant; the Second Defendant and Hoh Yook Peng were and are still the only directors of the Third Defendant. Issues to be tried: [53] The common issues to be tried filed by the Plaintiff and the Defendants. This Court finds that the following issues are to be determined:

whether the First and Second Defendants had breached his director’s duties, duty of fiduciary and duty of fidelity owed to the Plaintiff?

(ii) whether the Second Defendant is entitled to carry on veterinary products business after his resignation as the director and Managing Director of the Plaintiff?

(iii) whether the Plaintiff was given and/or enjoyed any exclusive distributorships in respect of the products of Diasham, Wuxi and Gasolec?

(iv) whether it was wrong for the Third Defendant to accept the distributorships from Diasham, Wuxi and Gasolec?

whether the Defendants had unlawfully interfered with the Plaintiff’s economic interests or are liable for the alleged interference?

(vi) whether any of the Defendants is liable for the Plaintiff’s loss and/or damage?

(vii) whether it was wrong for the Second Defendant to visit the Plaintiff’s office and the Second Defendant commits the acts as pleaded by the Plaintiff during his visit? The decision on 30-4-2024 [54] I dismiss the Plaintiff’s suit against the Defendants and the decision as pronounced by this Court on is as follows: “Dalam perbicaraan penuh, Mahkamah ini telah dibentangkan mengenai identiti pihak-pihak dan latar belakang syarikat Plaintif dan syarikat Defendan Ketiga. Selain itu, insiden/peristiwa berlakunya apa yang diplidkan oleh Plaintif mengenai − a) perselisihan Defendan Pertama dengan syarikat Plaintif. b) peletakan jawatan Defendan Kedua. c) tanggungjawab fidusiari Defendan Pertama dan Defendan Kedua kepada Plaintif. d) butiran perlanggaran/kemungkiran kewajipan fidusiari oleh Defendan Pertama dan Defendan Kedua kepada Plaintif. e) tort gangguan salah terhadap kepentingan ekonomi Plaintif. f) tort komplot untuk merosakkan/merugikan Plaintif. Berdasarkan keterangan di hadapan Mahkamah ini, atas imbangan kebarangkalian, Plaintif gagal membuktikan mengenai − a) perlanggaran/kemungkiran kewajipan fidusiari oleh Defendan Pertama dan Defendan Kedua kepada Plaintif, termasuk penubuhan Defendan Ketiga. b) isu mengenai pengedaran eksklusif dan pengedar sah bagi produk Diasham Resources Pte. Ltd, Wuxi Zhengda Biology Co. Ltd. dan Gasolec B.V kepada Plaintif telah diganggu secara salah dari segi kepentingan ekonomi oleh Defendan Ketiga. c) komplot oleh Defendan-Defendan untuk memudaratkan perniagaan Plaintif dari segi keuntungan dan pendapatan. Kegagalan Plaintif melepasi beban pembuktiannya maka Mahkamah ini menolak relief kehilangan keuntungan sebanyak RM8,376,626.68 atau apa-apa jumlah lain untuk Mahkamah ini anggap wajar; penyusutan nilai saham Plaintif sebanyak RM24,923,575.63 atau RM28,891,599.04 atau apa-apa jumlah lain untuk Mahkamah ini anggap wajar; dan Ganti rugi Teladan; sebagai alternatif Ganti rugi Am; sebagai alternatif pampasan ekuiti. Bagi kos, Mahkamah memutuskan untuk pihak-pihak menanggung kos masing-masing bagi keseluruhan tindakan di hadapan Mahkamah ini.”. [55] The Plaintiff is unsatisfied and aggrieved by the decision had then filed an appeal to the Court of Appeal. The trial & the witnesses [56] The trial dates are on 16-1-2024, 17-1-2024, 18-1-2024, 19-1-2024, 24-1-2024 and 7-2-2024 total 6 days). [57] The witnesses who gave evidence during the full trial of this action are − The Plaintiff’s witnesses:

Choi Soon Ping, Admin Coordinator of the Plaintiff (PW-1).

(ii) Yau Set Mei, Marketing & Business Development Manager of the Plaintiff (PW-2).

(iii) Yau See Hing, Managing Director of the Plaintiff (PW-3).

(iv) Liew Kim Yuen, Plaintiff’s Expert Witness (PW-4). The First Defendant’s sole witness is the First Defendant himself, Yau See Keng, Alex (DW-1). The Second and Third Defendants witnesses are −

Yau Leong Sen @ Yow Leong Fatt (DW 2&3-1).

(ii) Sanjay Sidhu, the Second and Third Defendants’ Expert Witness (DW 2&3-2) Evaluation & Findings of this Court [58] It is the basic legal principle provided in section 101 of the Evidence Act 1950 that −

Whoever desires any court to give judgment as for any legal right or liability, dependent on the existence of facts which he asserts must prove that those facts exist.

When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person. And in the case of Formosa Resort Properties Sdn Bhd v. Bank Bumiputra Malaysia [2010] 6 CLJ 530, the Court of Appeal, Suriyadi Halim Omar JCA held that “It is trite in civil cases that he who asserts must prove, and here the appellant is the asserting party … on that premise the appellant had failed to prove its case on a balance of probability.”. [59] When the Plaintiff pleaded that its claims against the Defendants need this Court to determine on the loss of profits, the diminution in value of the shares of the Plaintiff, exemplary damages, and general damages, the Plaintiff sought this Court to give such other sum as this Court deems fit. How to do that? [60] The Plaintiff must show that all the incidents and acts done by the Defendants are founded on any real evidence be that in oral testimony and/or the documentary evidence. [61] The Plaintiff and the First Defendant and the Second Defendant are in family relations. This relationship been extended when their fathers formed an Enterprise and involved in businesses. This Court finds that the Plaintiff’s business is not a small scale. Diasham, Wuxi and Gasolec are the international company. [62] The facts that the First Defendant is the son of the Second Defendant and both of them been appointed as the directors of the Plaintiff and also actively involved in the Plaintiff’s business are a common phenomenon in business. [63] After the removal of the First Defendant from the directorship and the resignation of the Second Defendant from the Plaintiff, the averments by the Plaintiff in its statement of claim must have basis in fact and in law otherwise this Court agrees that the Plaintiff had made such unwarranted allegations against the First and Second Defendants. Issue (i): whether the First and Second Defendants had breached his director’s duties, duty of fiduciary and duty of fidelity owed to the Plaintiff? [64] The learned counsel for the Plaintiff’s written submission has submitted and explained in length that while the First and Second Defendants were still the directors of the Plaintiff, both of them had duties to act in good faith and in the best interest to the company, duty of fidelity, duty to exercise reasonable care, skill and diligence, duty to avoid conflict of interest, and duty not to act in any way that would bring any benefit or advantage to themselves, whether directly or indirectly to the detriment of the Plaintiff. [65] After the trial, the learned counsel for the Plaintiff submitted that the First and Second Defendants had breached their directors’ duties and fiduciary duties by not acting in the best interest of the Plaintiff, causing damage and loss to the Plaintiff and allowing their interests to conflict with that of the Plaintiff. [66] This Court has read the written submission of the learned counsel for the Plaintiff about the provisions in section 213 (1) and (2) of the Companies Act 2016, case laws Zaharen Hj Zakaria v. Redmax Sdn Bhd & Other Appeals [2016] 7 CLJ 380; Avel Consultants Sdn Bhd v. Mohd Zain Yusof & Ors [1985] CLJ Rep 37 at page 39; Pioneer Haven Sdn Bhd v. Ho Hup Construction Co Ltd & anor and Other Appeals [2012] 3 MLJ 616; book titled Malaysia Company Law: Principles and Practices by Aiman Nariman Mohd Sulaiman and Effendy Othman at page 580; and others, which can be found at paragraphs 76 to 90. [67] In applying the laws to the present case, the learned counsel for the Plaintiff submitted that the tenure of the First Defendant as the director of the Plaintif about 6 years i.e. 2-9-2013 until 16-2-2019 means that the First Defendant owed fiduciary duties to the Plaintiff and as an employee of the Plaintiff, the First Defendant owed fidelity duties towards the Plaintiff. [68] The Plaintiff claimed that the breaches by the First Defendant are because of his actions as follows:

involved (as early as in March 2018) buying/purchasing of a property which was intended to be used as the Third Defendant’s office.

deliberately concealed and/or withheld his knowledge about the setting up of the Third Defendant (prior to July 2018) especially to the present directors of the Plaintiff.

failed to inform that CF Farm (the Plaintiff’s customer) was purchasing the same products from the Third Defendant (as competitor to the Plaintiff).

visited the Ministry of Agriculture and Agro-based Industry (at the Registration Department) in August, September and October 2018 for the registration of the products or licensing connected to the Third Defendant.

failed to carry out marketing activities for the Plaintiff. The First Defendant’s lack of action in the marketing activities of the Plaintiff’s business is apparent after the setting up of the Third Defendant. The First Defendant’s refusal to carry out the marketing activities of the Plaintiff’s business was due to his conflict of interest with the Second Defendant’s interest and also the Third Defendant’s interest.

caused the Plaintiff to lose the 3 major distributorships. As the key contact person of the Plaintiff, the First Defendant is responsible for the sales, marketing activities and ordering of the products from the 3 major distributorships. The First Defendant is not concerned with the loss of the 3 major distributorships and/or loss of customers arising from the loss of the 3 major distributorships. The First Defendant also failed to take proactive steps or efforts to save the 3 major distributorships despite being aware that the Plaintiff will suffer major losses of revenue arising from the loss of the 3 major distributorships. The summary of the particulars of the First Defendant’s actions is at paragraph 123 to 137 of the learned counsel for the Plaintiff’s written submission. [69] For the cause of action on unlawful interference with the Plaintiff’s economic interest, the learned counsel for the Plaintiff submitted that by the conduct of the First Defendant, the First Defendant had wrongfully interfered with the Plaintiff’s economic interest. The learned counsel for the Plaintiff elaborates this point in paragraphs 146 to 151 of the learned counsel for the Plaintiff’s written submission. [70] The learned counsel for the Plaintiff submitted that the First Defendant’s conduct showed that he had conspired with the Second and Third Defendants to injure the Plaintiff. The learned counsel for the Plaintiff elaborates this point in paragraphs 207 to 216 of the learned counsel for the Plaintiff’s written submission. [71] Now for the Second Defendant, the Plaintiff claimed that the Second Defendant had breached the fiduciary duties and director duties: The Second Defendant had − ➢ making plans with the First Defendant to set up the Third Defendant at the expense of the Plaintiff from the year 2018. ➢ communicating with the Plaintiff’s customers and/or suppliers regarding his plans to set up a competitor company (i.e. the Third Defendant). ➢ encouraging the Plaintiff’s key suppliers including Diasham, Wuxi and Gasolec to stop supplying products to the Plaintiff and shift their business to the Third Defendant. ➢ caused and/or facilitated a reduction in the Plaintiff’s customers, businesses and/or profits; unlawful interference with the Plaintiff’s economic interests. ➢ conspiring with the First and Third Defendants to injure the Plaintiff. The learned counsel for the Plaintiff cited the case of Avel Consultants Sdn Bhd v. Mohd Zain Yusof & Ors [1985] CLJ Rep 37 and submitted that the facts of that case are quite similar to the Plaintiff’s case. [72] The Plaintiff pleaded that the formation of the Third Defendant in the present case was carefully planned with the involvement of the First and Second Defendants. There is ample evidence to show that it was the First and Second Defendants who engineered in the setting up of the Third Defendant, a direct competitor who is involved in the same nature of business of the Plaintiff and encouraged the key suppliers and customers of the Plaintiff to shift their business to the Third Defendant. [73] To conclude on this issue (i), the learned counsel for the Plaintiff submitted that there are clear evidences that the First and Second Defendants had breached their fiduciary duties when they had engaged themselves in a business which was in competition with the Plaintiff to gain, directly or indirectly, a benefit for themselves and the Third Defendant. Findings of this Court: [74] The Plaintiff’s business and the Third Defendant’s business are similar i.e. they involved in the veterinary products. The persons in charge of the Plaintiff enterprise are from the same family i.e. with the surname of Yau. The first generation in the Plaintiff is now left with only the Second Defendant. The children of Yau’s families now is the second generation. Unlike the founder and their fathers, the dispute occurred and here comes the legal action taken by the Plaintiff. [75] The First Defendant and his father (the Second Defendant) were working in the Plaintiff until the First Defendant was removed as a director of the Plaintiff on 16-2-2019 while the Second Defendant had resigned from holding any post in Plaintiff. [76] It is undisputed that the First Defendant had joined the Third Defendant. After been removed from his job in the Plaintiff, the First Defendant was unemployed and then, his father (the Second Defendant) “invite” an employ the First Defendant in the Third Defendant (Alpha Vet Sdn Bhd). The First Defendant is appointed as a manager of the Third Defendant sometime on 1-11-2021, which was more than 2 years and 10 months since the First Defendant has been removed as the director of the Plaintiff. [77] During the tenure the First Defendant as a director of the Plaintiff, is the First Defendant failed to discharge his duties? The Plaintiff pleaded case had listed out all the conduct that are wrongful in the eyes of the Plaintiff. And there are no good things done by the First Defendant in the Plaintiff’s business? There are no minutes of meeting of the Board of Directors of the Plaintiff or the ordinary management meeting of the Plaintiff to take any action for any wrongful actions done by the First Defendant. This Court found that the First Defendant is the only director who has a good academic qualification and skill in handling the Plaintiff’s business. The First Defendant had communicated well with the Plaintiff’s international suppliers. From the evidences adduced and tendered in the trial, this Court finds that the First Defendant had and did discharge his duties as a director of the Plaintiff. [78] Pertaining to the formation and setting up the Third Defendant at the expense of the Plaintiff, the matters raised about the preparation to set up the Third Defendant are about the booking of the property by the First Defendant’s wife was done on 6-3-2018, which was nearly 4 months before the Third Defendant was incorporated. The First Defendant pleaded that the proprietor of the property happened to be the First Defendant’s mother-in-law. The First Defendant gave evidence that the renting of the property by the Third Defendant is a matter between the owner and the Third Defendant and it has nothing to do with the First Defendant. The purchase of the property was done well before the Second Defendant announced his intention to resign as the Plaintiff’s director. This Court finds that the preparation to set up the Third Defendant is absolutely no connection with the Plaintiff and it is in no way interferes with the First Defendant’s duties as a director of the Plaintiff. This Court agrees with the learned counsel for the First Defendant that “The First Defendant as a director does not owe any duty to disclose his private and family matters to the Plaintiff, as there is no conflict.”. In Pharmmalaysia Bhd v Dinesh Kumar Jashbhai Nagjibha Patel [2004] 7 CLJ 465 at page 493 Abdul Malik Ishak J. explained − “In Mills v. Mills [1938] 60 CLR 150, the court there held that in equity directors have a duty to exercise their powers for proper corporate purposes. … directors of a company are fiduciary agents and that a power exercised by them cannot be exercised in order to obtain some private advantage or for any purpose foreign to the power. The courts will usually ask the pertinent question, “But for the improper purpose, would the directors have exercised their powers that way?”. [79] On the issue raised by the Plaintiff that whilst the First Defendant is still with the Plaintiff, the Third Defendant has been set up by his father. As the Second Defendant stay and live together in the same house with the First Defendant and not with the First Defendant’s sister (Yau Sze Jiun/the Second Defendant’s daughter) it is common fact that the First Defendant know about the Second Defendant’s plan to have a new company and to start business. The First Defendant was only helping his father (the Second Defendant) and there is no proof adduced by the Plaintiff that the First Defendant had neglected his duties as a director of the Plaintiff. [80] Since the Plaintiff’s business and the Third Defendant’s business are on the veterinary products, The First Defendant genuinely testified that the Third Defendant is one of the competitors of the Plaintiff. [81] Since Yau Sze Jiun (one of the present directors of the Plaintiff) had actual knowledge, if not imputed knowledge, about the existence of the Third Defendant as early as August 2018 because of the email on 5-8- 2018, Yau Sze Jiun did not confront his father (the Second Defendant) about any matters pertaining to the formation of the Third Defendant that is or will sabotage the Plaintiff’s business. Yau Sze Jiun and another director of the Plaintiff then filed this whole suit against the Defendants. [82] For the acts done by the Second Defendant as listed by the Plaintiff, the incorporation and the “existence” of the Third Defendant after the Second Defendant left the Plaintiff, has caught the attention of the Plaintiff where the Plaintiff pleaded that the Second Defendant was in communication with the Plaintiff’s customers and suppliers. Be that as it may, the Second Defendant was the founder of the Plaintiff and had involved in the veterinary products business for 62 years had left the Plaintiff “with broken heart”, took a new chapter by setting up a new company and starts the business all over again with the assistance of his son, the First Defendant. The nature of the business of the Third Defendant is similar to the Plaintiff is due to the Second Defendant wish to continue on the same business as his old enterprise. Is this nature of business wrongful in law? Or it is wrongful in the eyes of the Plaintiff? [83] This Court will proceed with the next issue that is connected with the Second Defendant. [84] Issues no (ii) and (v) are combined since they are inter-related. Issue (ii): whether the Second Defendant is entitled to carry on veterinary products business after his resignation as the director and Managing Director of the Plaintiff? and Issue (v): whether the Defendants had unlawfully interfered with the Plaintiff’s economic interests or are liable for the alleged interference? [85] Before answering issue (ii), it is best to find the answers for issue

(v). [86] The learned counsel for the Plaintiff cited the High Court’s decision in the case of Worldwide Rota Dies Sdn Bhd v. Ronald Ong Cheow Joon [2010] 8 MLJ 297 and the Court of Appeal’s decision in the case case of Ly Furniture Sdn Bhd v. Lifestyle Inc [2015] MLJU 2347 regarding the meanings/elements encompass of the phrases “unlawful interference” and “unlawful means”. [87] The learned counsel for the Plaintiff cited the case of Borneo Technical Co. (M) Sdn Bhd v. Yokohama Batteries Sdn Bhd & Ors and another appeal [2020] MLJU 1235 and submitted that the facts of that case are relevant to the Plaintiff’s case, namely −

the plaintiff was the exclusive distributor of batteries manufactured by the first defendant, until the first defendant wrongfully terminated the distribution agreement.

the second defendant, a company related to the first defendant, took over the distributorship. The third defendant (chairman and director of the plaintiff) left the plaintiff and became president of the second defendant.

the second defendant had started preparation for business even while the distributorship agreement between the plaintiff and the first defendant was still in force.

the third defendant while he was still the chairman and director of the plaintiff, had spearheaded the second defendant’s business by getting himself involved in the preparation for the new distributor network.

a few months before the distributorship ended, the second and third defendants had already begun soliciting employees of the plaintiff away. At that time, the third defendant was the chairman and director of the plaintiff. The Court of Appeal held that the acts of the defendants above amount to unlawful interference with the economic interest of the plaintiff. The action of the first and second defendants together with the breach of fiduciary and fidelity duties committed by the third defendant constitute the unlawful interference of economic loss of the plaintiff. Their intention could be inferred from their actions (see paragraph [73] of the judgment). [88] As far as the First Defendant is concerned, the learned counsel for the Plaintiff submitted that despite the bad relationship between the First Defendant and Yau See Hing, the First Defendant continued to stay on the Plaintiff’s company after the incorporation of the Third Defendant after July 2018. During this period, the First Defendant had full access of the Plaintiff’s confidential information including the customers’ information. [89] According to the Plaintiff, even though the Second Defendant had tendered his resignation to the Plaintiff and represented to the Board of Directors that he wished to retire in view of his age (84 years, at that time), the Plaintiff pleaded that the Second Defendant is not at all retire from the veterinary products business. The Second Defendant also gave evidence that he has no intention to retire from the Plaintiff and/or the veterinary products business. [90] The Plaintiff has made the retirement announcement of the Second Defendant via an email and at that date (29-6-2018), the Second Defendant was still the Managing Director of the Plaintiff and also the First Defendant was still the director of the Plaintiff. The announcement is to alert the Plaintiff’s customers and suppliers. [91] The setting up/formation/incorporation of Alpha Vet Sdn Bhd (the Third Defendant) is materialized and the Second Defendant’s intention is that he bought products from the Plaintiff to sell to the Third Defendant’s customers and vice versa the Plaintiff can buy products from the Third Defendant and sell the products to its customers. Paragraph 159(c) of the learned counsel for the Plaintiff stated that the Plaintiff has never purchased products from the Third Defendant and the Third Defendant has never purchased products from the Plaintiff. [92] The Plaintiff stick to its finding that the setting up of the Third Defendant is to injure the Plaintiff due to the Second Defendant ill-feeling against Yau See Hing, Yau Sze Jiun and the Second Defendant felt disrespected by his daughter, Yau See Hing. Further, the learned counsel for the Plaintiff submitted that the Third Defendant is incorporated for the following purposes:

become a direct competitor of the Plaintiff. It was admitted by the First Defendant.

divert the Plaintiff’s major customers and businesses including the 3 major distributorships to the Third Defendant, in order to cause a reduction in the Plaintiff’s revenue and profits. [93] The Plaintiff claimed that the deliberate nature of the Defendants’ i.e. communicating with the 3 major distributorships regarding the Second Defendant plan to set up the new company (the Third Defendant), encouraging 3 major distributorships to stop supplying products to the Plaintiff and shift their business to the Third Defendant, were the acts in interfering the Plaintiff’s economic interest and had caused the Plaintiff to lose the 3 major distributorships and Eco Animal Distributorship. [94] By obtaining and using the Plaintiff’s confidential details and information, the learned counsel for the Plaintiff submitted that the First and Second Defendants managed to grow the business of the Third Defendant rapidly within 3 years since the 3rd Defendant’s incorporation on 6.7.2018. Findings of this Court: [95] The nature of business of these 2 companies i.e. the Plaintiff (an enterprise) and the Third Defendant (a sendirian berhad) are similar. Both are competing with each other in the open market. Whether the customers and/or the suppliers want to have and continue doing business with the Plaintiff or the Third Defendant, it is nothing to blame the First and the Second Defendants. The Plaintiff must proof for the reasons that the customers and/or the suppliers had shifted to the Third Defendant. none of the customers and/or the suppliers been called to state their reasons be that in any documentary evidence. [96] Whether the Plaintiff is the exclusive distributor of the products as per the agreements or dealing between the Plaintiff and Diasham, Wuxi and Gasolec, in the trial none of the agreements been tendered to verify that the Plaintiff is or has the exclusive distributor of the products. Without that evidence, this Court should not apply the case of Borneo Technical Co. (M) Sdn Bhd v. Yokohama Batteries Sdn Bhd & Ors and another appeal (supra). [97] The matter about soliciting the customers’ information done by the Second Defendant that occurred during the Second Defendant’s visit to the Plaintiff’s office, the evidence of PW-1 (Mrs Choi Soon Ping, Administration Coordinator of the Plaintiff) is not sufficient enough for this Court to rule that the soliciting of the Plaintiff’s customers did occur. [98] Be that as it may, if the incidents that the Second Defendant had soliciting the Plaintiff’s customers information, this can be stopped by any of the staff or the present directors of the Plaintiff immediately and the Second Defendant ought to be caught red handed. But there is no action by the Plaintiff. The Plaintiff want to bring this wrong doing in a legal suit. [99] Issues no (iii) and (iv) are combined since they are inter-related. Issue (iii): whether the Plaintiff was given and/or enjoyed any exclusive distributorships in respect of the products of Diasham, Wuxi and Gasolec? Issue (iv): whether it was wrong for the Third Defendant to accept the distributorships from Diasham, Wuxi and Gasolec? [100] The Plaintiff claimed that the Plaintiff had the sole and exclusive distributorships for the products supplied by the 3 Distributorships in Malaysia; and the 3 Distributorships were the major suppliers and main sources of profits of the Plaintiff. After the termination of the 3 Distributorships, the Plaintiff − ➢ was no longer allowed to distribute and sell the said products from the 3 Distributorships. ➢ the Plaintiff will never be able to find new replacement products supplied by the 3 Distributorships. The said products are irreplaceable. Even if there is a replacement product, it will not be similar or identical products of the 3 Distributorships; This is because when the Plaintiff’s customers get used to the products of the 3 Distributorships, it is unlikely for the customers to switch to a new product as it would require additional time and resources for the customers to conduct the necessary testing on the effectiveness and safety of the new products. ➢ the customers would normally opt not to switch products in order to minimise the inconvenience and disruption to their operations. Instead, the customers would rather switch to the supplying company who can supply to them the products of the 3 Distributorships that they had originally used, i.e. the Third Defendant. It was therefore obvious to the Defendants that their actions would result in significant and adverse impact on the financial performance and profitability of the Plaintiff. The learned counsel for the Plaintiff submitted that in fact, the First Defendant (DW-1) admitted that the loss of the 3 Distributorships would have significant impact on the Plaintiff’s profitability. [101] Next, the learned counsel for the Plaintiff submitted that the intentional acts by the Defendants had caused the Plaintiff to suffer severe financial injury and/or losses. If not for the interference by Defendants or any one of them, there were no commercial reasons for the 3 Distributorships to terminate the long-established relationships with the Plaintiff (over 20-30 years) and went to a newly incorporated company, and spearheaded by a founder who was 84 years old (which is well-past the normal retirement age). From a commercial point of view, it is unusual for the Distributors to make such a move as there was no high prospect of long-term cooperation with the Second and Third Defendants since the Second Defendant had well past the usual retirement age of 60 years. The 3 Distributorships would not have terminated their relationships with the Plaintiff simply due to the appearance of an alternate trading company. All of the above points, taken together with all the circumstantial evidence and the conducts of the Defendants at the material time, suggests that there was unlawful interference and conspiracy by the Defendants which resulted in the Distributors making such a move. [102] The evidences in the trial pertaining to the termination of 3 major distributorship by Diasham, Wuxi and Gasolec, are as follows:

there is a Notice of Termination dated 5-9-2018 from Diasham that Diasham is terminating the Distributor Agreement pursuant to clause 14(a) of the Agreement and gave 2 months’ notice and that clause 14(a) of the Distributor Agreement gave Diasham the right to terminate the distributorship with the Plaintiff. [Encl. B2, page 104]. The learned counsel for the First Defendant submitted that the learned counsel for the Plaintiff has failed to mention the contents of the notice.

Yau See Hing’s (PW-3) email dated 13-9-2018 had stated that due to Plaintiff’s poor sales performance for the past six years Diasham decided to offer the distributorship to another company. [Encl. B1, page 63]. Further, PW-3’s email dated 25-9-2018 to Mr. Chow Tuck Onn (CEO of Diasham) has admitted that the Plaintiff has reviewed its past sales performance of Diasham’s products and totally agreed that there is more to be achieved to meet Diasham’s expectation. [Encl. B1, page 70] Therefore, the learned counsel for the First Defendant submitted that − ➢ the termination of the distributorship by Diasham was an independent decision based on the past sales performance of the Plaintiff and during which period both Yau See Hing (PW-3) and Yau Sze Jiun were also directors of the Plaintiff. ➢ the Plaintiff has failed to adduce an iota of evidence to show any involvement of the First Defendant in respect of the decision by Diasham to terminate its Distributor Agreement with the Plaintiff. On this point alone, the Plaintiff’s claim ought to fail against the 1st Defendant.

Further, the Plaintiff’s contention that it had an exclusive Distributor Agreement with Diasham is baseless as the Plaintiff did not challenge or refute Diasham’s right to terminate the Distributor Agreement at the material time. The agreement with Diasham does not state that the Plaintiff had exclusive distributorship, thus Plaintiff’s submission is misleading.

It is not true to say that the First Defendant failed to come out with the marketing/strategy plan. The First Defendant in his email dated 16-9-2018, expressly stated that the management of the Plaintiff should discuss, plan and be prepared to address the termination by Diasham before meeting Mr. Chow Tuck Onn. Further, the First Defendant also asserted that he will continue to promote the products of Diasham in future and Yau See Hing (PW-3) should look for more efforts to increase the sales of the Diasham’s products. [Encl. B1, page 68]. There is nothing in the First Defendant’s email dated 16-9-2018 states that the First Defendant purportedly refusing to prepare marketing/strategy plan for Diasham. The 1st Defendant had explained his views in his email on 16- 9-2018 but Yau See Hing (PW-3) and the rest did not pay any attention to the First Defendant’s suggestions nor called for a meeting instead Yau See Hing (PW-3) had submitted his own proposal without consulting the First Defendant and now trying to blame the First Defendant for the termination.

the true facts are that the First Defendant had successfully placed and convinced Diasham to accept an order on 27-9- 2018, after the notice of termination, which was ruined by Yau See Hing (PW-3) by putting the order on hold on 4-10-2018. [Encl. B1, pages 119 -123]

the Plaintiff did not call Mr. Chow Tuck Onn or anyone from Diasham to prove its allegations against the First Defendant, and for that matter against any of the Defendants.

the Plaintiff has held its Management Meeting on 1-10-2018, which was after the termination notice dated 5-9-2018 from Diasham, which was after the meeting between Yau See Hing (PW-3) and Mr. Chow Tuck Onn. In that Management Meeting, Yau See Hing (PW-3) neither raised any complaint against the First Defendant’s conduct regarding the termination of distributorship by Diasham, nor disclosed what had transpired during his meeting with Mr. Chow Tuck Onn in Singapore.

it is incumbent upon Yau See Hing (PW-3) who had the meeting with Diasham to report to the Management of the Plaintiff on what had transpired and his failure to do so is in actual fact clear breach of his duty as a director. [Encl. B1, pages 36-37]

Termination of Distributorship by Wuxi: It was the Second Defendant who accompanied the First Defendant to the VIV China Expo 2018 during their holiday in China, and not as alleged by the Plaintiff.

there is no mention about the 3rd Defendant nor the 2nd Defendant having his own business in the articles referred to by the Plaintiff. [Encl. B17 page 3]. At the material the Plaintiff was fully aware of the First and Second Defendants visited VIV China Expo 2018 as Wuxi had already provided the Plaintiff with their Multimedia Booklet that contains the photos. The Plaintiff is merely assuming that this visit to VIV China Expo has caused Wuxi to terminate the distributorship with Plaintiff. Yau See Hing (PW-3) during cross examination has admitted that it is merely his own assumption.

there is no evidence in the email dated 30-11-2018 to show that Yau Set Mei (PW-2) purportedly attempted to save the Plaintiff’s distributorship with Wuxi. [Encl. B1 page 81] Further, in the Management Meeting dated 3-12-2018, which took place just 3 days after the notice of termination dated 29- 11-2018 from Wuxi, Yau Set Mei (PW-2) did not disclose the actual reason why Wuxi has terminated the supply of the product Excellent Peptide AB01. [Encl. B1 page 41-42]. The irony in this case is that Wuxi has informed the Plaintiff the reason why Wuxi has terminated its distributorship with Plaintiff of the product Excellent Peptide AB01 and yet the Plaintiff chose not to disclose to this Court the actual reason albeit both Yau Set Mei (PW-2) and Yau See Hing (PW-3) having admitted of knowing the reason for the termination by Wuxi. This alone proves that the First Defendant was not in any way responsible for the termination by Wuxi. The Plaintiff’s witnesses, despite admitting that till to date the Plaintiff is still distributing other products of Wuxi yet refused to call any witness from Wuxi to prove its case thus the benefit of adverse inference under section 114(g) of the Evidence Act 1950 ought to be given to the First Defendant.

Termination of Distributorship by Gasolec: it is not true that the First Defendant was assigned to lead the discussion with Mr. Henk.

the Plaintiff has referred to Bundle B1 pages 79-80, which pages contain email dated 18-11-2018 from Mr. Henk to the First Defendant and email dated 19-11-2018 from the First Defendant to Yau Sze Jiun, Yau See Hing (PW-3), Yau Sheue Chin and Yau Set Mei (PW-2) merely informing Mr. Henk’s visit to Malaysia on 3rd to 6th December 2018 and requested for proposal of the program for Mr. Henk so that the First Defendant can coordinate. These emails do not say that the First Defendant was assigned to lead the discussion with Mr. Henk. Further, Yau Set Mei (PW-2) and Yau See Hing (PW-3) during cross examination admitted that the First Defendant was not assigned to lead the discussion with Mr. Henk. [Encl. 75 page 92-93] and [Encl. 75 page 198-200] 40. Paragraph 47 of the Plaintiff’s submission is misleading because Henk’s email dated 10-12-2018 was addressed to the Plaintiff and copied to Yau See Hing (PW-3) and the First Defendant and not as alleged by the Plaintiff that it was only addressed to the First Defendant, as if not to anyone else.

email dated 13-12-2018 from Yau See Hing (PW-3) to the First Defendant does not contain any complain about the First Defendant’s failure to reply to Henk’s email dated 10-12-2018. In the email dated 13-12-2018, Yau See Hing (PW-3) merely stated “You are hereby requested to reply to Mr. Henk not later than 17 Dec 2018 in order to clear the air and safeguard the company’s reputation.” Therefore, how could there be a failure to reply to Henk when in the same email Yau See Hing is asking the 1st Defendant to reply not later than 17.12.2018? [Encl. B1 page 84]

a complete reading of the First Defendant’s email dated 17- 12-2018 would prove that the First Defendant did take prudent steps, gave proper explanation on issues raised and acted in the best interest of the Plaintiff under the circumstances prevailing at the material time. [Encl. B1 page 85-88]

at the time Mr. Henk visited the Plaintiff between 3rd and 6th of December 2018, it was also well known to the Plaintiff that Mr. Henk would also be visiting the Second Defendant (who has left the Plaintiff). Hence, it was prudent for the First Defendant to inform the Plaintiff well in advance that he might be in a difficult position knowing that he is a director of the Plaintiff and at the same time Mr. Henk would be meeting the Second Defendant. The First Defendant was forthright in his conduct with the Plaintiff, and wanted to avoid situations that might put him in a conflicting position, so he wanted to avoid situations where he must be alone with Mr. Henk to avoid any misgiving on his part.

although Yau Set Mei (PW-2) had placed an order with Gasolec on 6-12-2018 but Mr. Henk has outright refused to accept the order. Therefore, there was nothing more the First Defendant could have possibly done at the material time. [Encl. B1 page 82-83].

on the allegation that Yau See Hing (PW-3) cannot communicate well in English is an afterthought given the fact that every email from him were written in good English and he has travelled to Singapore and Netherlands without informing and without inviting the First Defendant.

both Yau See Hing (PW-3) and Yau Set Mei (PW-2) admitted of visiting Mr. Henk in Netherlands without the First Defendant’s knowledge and yet did not disclose to this Court on the reason why Gasolec terminated the distributorship with Plaintiff. They also did not disclose why they could not convince Gasolec to continue its distributorship with the Plaintiff. The Plaintiff failed to prove its case on balance of probability.

the Plaintiff did not call Mr. Henk as a witness and neither there is any evidence to suggest that the First Defendant was responsible for the termination of the distributorship by Gasolec. There is also no evidence whatsoever on why did Gasolec gave the distributorship to the Third Defendant. Findings of this Court: [103] The termination of the 3 major distributorships (Diasham, Wuxi and Gasolec) did happen and to blame the First and Second Defendants, the Plaintiff must prove that the Plaintiff is the sole and exclusive distributor for the products supplied by the 3 distributorships in Malaysia vide any documentary evidence and/or the oral testimony from representative of Diasham, Wuxi and Gasolec. If this be done and supported then this Court can determine the fact that during the subsistence of the distributorship agreements with the 3 Distributorships, there were no other companies in Malaysia distributing the same products supplied by the 3 major distributorship in Malaysia. [104] The relationship in business between the Plaintiff and the 3 major distributorships i.e. between the Plaintiff and Diasham for at least 17 years; between the Plaintiff and Wuxi for a period of 10 years; and between the Plaintiff and Gasolec for a period of at least 30 years, and there was no expiry date for the said 3 distributorship agreements with Diasham, Wuxi and Gasolec, means that the Plaintiff has a good reputation with the 3 major distributorships. When the termination occurred, the reason/s for the termination now be put in the shoulder of the First and Second Defendants. This also can be implied that the 3 major distributorships are fond to work and deal with the First and Second Defendant and not with the Plaintiff (i.e. the present directors). [105] The learned counsel for the First Defendant has rebutted the allegations made against the First Defendant and also the learned counsel for the Second Defendant, this Court is satisfied, on the balance of the probabilities, the Defendants had successfully proved the particular facts and facts especially within their knowledge under sections 103 and 106 of the Evidence Act 1950 (Act 56). Issue (vi): whether any of the Defendants is liable for the Plaintiff’s loss and/or damage? [106] Based on the evidences, the Plaintiff pleaded that it is clear that the Defendants caused and/or facilitated a reduction in the Plaintiff’s major customers, suppliers, business and profits with the view of diverting them to the Third Defendant. The Plaintiff was no longer able to accept or fulfil the purchase orders from its customers for the products sourced from the 3 Distributorships, following this, the Plaintiff has suffered loss of profits that would have been derived from the sale of the products from the 3 Distributorships; and the Plaintiff lost the majority of its top customers, which eventually become the top 10 customers of the Third Defendant. The termination of the 3 Distributorships by Diasham, Wuxi and Gasolec resulted in the Plaintiff losing one of its main sources of profits and business because the Plaintiff was no longer allowed to distribute and sell the said products from the 3 Distributorships. [107] The Plaintiff’s Expert Report (Exhibit P1-A) (Encl. 11) stated that the Plaintiff had suffered approximately 39% dropped in revenue and approximately 50% dropped in gross profit margin in year 2019 following the loss of the 3 Distributorships after the incorporation of the Third Defendant. [108] Loss of Profit: The loss of profit of RM8,376,626.68 as per the Plaintiff’s relief is based entirely on Liew Kim Yuen’s computation, the Plaintiff’s expert witness/the Accountant (PW-4). The learned counsel for the Defendants (both learned counsel for the First Defendant and the Second & Third Defendants) submitted that the computation is flawed, incredible and unreliable for the following reasons: (a) PW-4’s views are inferences drawn from the Plaintiff's contentions as pleaded in the statement of claim and various unproven facts represented and documents provided by “the Company’s management” (which identity remains unknown as of today) (see pages 21 to 64 of Bundle P1A). This is confirmed by PW-4 as follows (Enclosure 76, page 32); there had there been a direct causal relationship between the incorporation of the Third Defendant and the alleged fall of more than 50% in purchases by the Plaintiff, it would be expected that purchases made by the Plaintiff in the Financial Year ended 31 December 2018 to have halved in comparison to 2017. The learned counsel for the Defendants submitted that PW-4’s analysis ignored the fact that the pattern of purchases by the Third Defendant in the changeover months was relatively small and does not account for the reductions in purchases experienced by the Plaintiff between Financial Years 2017 and 2018; PW-4 has failed to produce the Plaintiff’s purchase analysis for Financial Year 2019 and such omission has prevented further analysis of the Plaintiff’s purchases to establish if SP4’s claim in respect of the drop in purchases by the Plaintiff is supported, particularly in view of the timing of commencement of purchases from the 3 major distributorships; PW-4’s assertion that Wuxi and Diasham ceased to be in the top suppliers to the Plaintiff from 2019 onwards is not supported by the data presented in his report as he has failed to present the related analysis for Financial Year 2019 and onwards; PW-4 is wrong in stating that the financial year ends of both the Plaintiff and the Third Defendant are on 31st December (see Bundle P1A, pages 47- 48, paragraph 65 and page 76, paragraph 130) when in fact, the financial year end of Third Defendant is on 30th June; PW-4 had also failed to recognize the impact on the poultry farming industry of the aftermath of the Covid-19 pandemic despite this information being in the public domain; had there been a causal relationship between the incorporation of the Third Defendant and any reduction in revenues of the Plaintiff, it would be expected that sales made by the Plaintiff in the Financial Year ended 31 December 2018 to have reduced significantly in comparison to 2017. [109] The Second and Third Defendants has an expert witness where Mr. Sanjay Sidhu has testified that − “ln normal business environment, and l’m going to step back and give a very practical example, if l’m a distributor of a product and I am going or I am planning to change over from using, sorry, if l’m a principal of a product and l’m planning to change over from using distributor A to distributor B to protect my own revenue stream, because as has been pleaded repeatedly here, these distributorships were sole distributorships. They were sole distributorships. So, the principal would want to ensure no disruption to their income stream. I would therefore expect any rational business of the sort to ensure that the income stream from the incoming distributor, the Defendant in this case, would be immediate upon its decision, if it were an organized or premeditated decision to terminate the outgoing distributor, the Plaintiff in this case, they would have taken steps to ensure that there would be no disruption at all, not even a couple of days, not even a couple of weeks. The evidence shown by the patterns of sales and purchases here suggest otherwise. And that is why I conclude there is no causal link. Distributors of this nature would not tolerate that gap.”. [110] Diminution in value of the Plaintiff’s shares: The Plaintiff had prayed in the alternative for the Defendants to pay for the alleged diminution in value of its shares in a sum of RM24,923,575.63 or RM28,891,599.04. [111] The issue that the Plaintiff suffered loss in the form of diminution in value of its shares must reflect that the loss of profits cum the loss of diminution of shares. This Court refers to the case cited by the learned counsel of the Defendants, the UK House of Lords in Macaura v Northern Assurance Co Ltd and others 11925 1All ER Rep 51 − “the corporator, even if he holds all the shares, is not the corporation, and that neither he nor any creditor of the company has any property, legal or equitable, in the assets of the corporation”. In applying to the present case, the shares in the Plaintiff (including the share value) do not belong to and are not assets of the Plaintiff. The diminution or loss in the value of the shares in the Plaintiff is not a loss to the Plaintiff (as a company) but only to its shareholders. This is not an action commenced by the shareholders of the Plaintiff. Hence, the alleged diminution or loss in the value of the shares in the Plaintiff is completely irrelevant. “the reflective loss principle only applies when a company suffers loss caused by the breach of duty owed both to the company and the shareholder”, per Zulkefli PCA in Rinota Gonstruction Sdn Bhd v Mascon Rinota Sdn Bhd & others [2018] 1 MLJ 141, FC (Encl. 83, page 212). [112] In this case, the Plaintiff’s shareholders are not a party to the proceedings; and it is not the Plaintiff’s pleaded case that the Second and Third Defendants owed any duty to the shareholders of the Plaintiff; and the alleged diminution or loss in the shares in the Plaintiff is not recoverable by the Plaintiff. [113] This Court agrees with the learned counsel for the Second and Third Defendants that PW-4 (the Plaintiff’s expert witness) used the companies as comparison in his Relative Valuation Analysis for the purpose of computing the alleged loss of diminution, are public listed companies which are significantly different in size and activity levels as compared to the Plaintiff (an Enterprise), which is a private limited and trading company. This Court dismissed the Plaintiff’s claim for the loss of diminution of the shares in the Plaintiff in a sum of RM24,923,575.63 or RM28,891,599.04. Issue (vii): whether it was wrong for the Second Defendant to visit the Plaintiff’s office and the Second Defendant commits the acts as pleaded by the Plaintiff during his visit? [114] The evidence produced by the Plaintiff showed CCTV photos about the presence of the Second Defendant (after his resignation as the director and the Managing Director of the Plaintiff) to the Plaintiff’s office and warehouse. [115] The learned counsel for the Plaintiff submitted that this means the Second Defendant had visited the Plaintiff’s office and warehouse on few occasions after the setting up of the Third Defendant. These visits are wrongful as it was carried out pursuant to his act to injure the Plaintiff and/or to interfere with the economic interest of the Plaintiff. This is because the purposes of his visits were to, inter alia, (a) the Second Defendant did ask the Plaintiff’s staffs (PW-1 and PW-2) and obtain confidential information and documents pertaining to the Plaintiff’s customers, suppliers, pricing, sale records, ledger cards of the Plaintiff’s customers and creditors; (b) taking goods out from the Plaintiff’s warehouse and by claiming that the Second Defendant was helping the Plaintiff’s customer who yet to receive goods from the Plaintiff; (c) taking photocopies of the Plaintiff’s documents; and, (d) using the Plaintiff’s office utilities such as the fax and photostat machines. [116] The learned counsel for the Plaintiff submitted that the Second Defendant’s visits to the Plaintiff’s office and warehouse on the occasions were clearly wrongful and shows deliberate interference by the Second Defendant’s on the Plaintiff’s economic interest. The learned counsel for the Plaintiff submitted that the Second Defendant bears the burden of proof under section 106 of the Evidence Act 1950 since the actual documents that he was printing on the said occasions are facts especially within the knowledge of the Second Defendant. [117] As regards to the Plaintiff’s claim that the Second Defendant continued to use the Plaintiff’s letterhead to facilitate the business of the Third Defendant (after he ceased to be the director of the Plaintiff on 1.7.2018), including but not limited in using the Plaintiff’s letterhead in or around September 2018 to instruct the Plaintiff’s forwarding company in Ipoh, i.e. Puma Logistics Sdn Bhd to forward goods of the Third Defendant to its customers for the benefit of the Third Defendant, the learned counsel for the Plaintiff submitted that this is wrong and shows deliberate interference by the Second Defendant’s on the Plaintiff’s economic interest. Findings of this Court: [118] In order to allege that the visits to the Plaintiff’s office and warehouse by the Second Defendant on the dates as claimed by the Plaintiff, and the visits had caused the loss and damage the Plaintiff business i.e. loss of customers and/or the suppliers, this Court is opined that the Plaintiff has not made out its case against the Second Defendant that he had allegedly obtained and used the Plaintiff’s confidential information when he visited the Plaintiff's office premises. [119] The Plaintiff has failed to specifically identify and prove the alleged confidential information; there is not an iota of documentary evidence produced before the court to show that Second Defendant had obtained or used any of the alleged confidential information; the CCTV photographs/footage (see Bundle 84, pages 272-275 and Bundle 8121217) relied on by the Plaintiff are vague and incomplete and do not at all show that the Second Defendant had taken out or used the alleged confidential information for his own benefit and to the detriment of the Plaintiff; 3 of the Plaintiff’s witnesses, namely Chooi Soon Ping (PW-1), Yau Set Mei (PW-2) and Yau See Hing (PW-3) had testified during cross-examination that there is no evidence that the Second Defendant had taken away or used the alleged confidential information. [120] The Second Defendant also testified that in respect of his visit to the Plaintiff’s premises on 16-10-2018, “l was there once on 16-10-2018 to help Muafakat Majujaya Sdn Bhd (a company based in Kuala Terengganu) to collect certain goods from the Plaintiff. The boss of Muafakat Majujaya Sdn Bhd was in Kuala Lumpur on 16-10-2018 and he requested me for help to collect the goods on 16-10-2018 and pass them to him in the evening of 16-10-2018.”. Taking out goods for the benefit of the Plaintiff’s customer by the Second Defendant is not at all for the detriment of the Plaintiff. The Plaintiff’s witness, Yau Set Mei (PW-2) had further confirmed that the Second Defendant would not be able to take any goods out from the Plaintiff’s premises without its knowledge or consent. Yau Set Mei (PW-2) had also testified during cross-examination, when referred to the photographs adduced in Bundle 84, pages 274-275 and Bundle 812, page 217, that there is no allegation of theft against the Second Defendant. [121] On the Plaintiff’s allegation that the Second Defendant had used its letterhead to appoint a forwarder, Puma logistics to forward the goods of the Third Defendant is a bare assertion which is not supported by any evidence. The Plaintiff had failed to any witness and produce the letterhead that was purportedly used by the Second Defendant. Other findings by this Court [122] When the suppliers i.e. the 3 major distributorships stop supplying products to the Plaintiff and shift their business to the Third Defendant, there is legal action for breach of agreement taken by the Plaintiff against its suppliers/distributors. The Plaintiff only focussed on the Defendants. [123] Although the Plaintiff has listed out the customers and/or suppliers, it remains only list, no customers who turn to the Third Defendant are call to affirm this fact. The method of buying the products from the Plaintiff is by way of agreement or just invoices, purchase orders, and delivery orders but none of the customers, distributors or suppliers been called to confirm the reasons for purchasing and selling to the Third Defendant. Before using the circumstantial evidence, the Plaintiff must have the direct evidence and documentary evidence. [124] The Third Defendant as a company just run its business as usual and the Plaintiff allegations that the Third Defendant had took over the role of the Plaintiff as the sole and exclusive distributor in Malaysia for the products supplied by the 3 Distributorships; and encouraged the Plaintiff’s customers and suppliers to shift their business to the Third Defendant, bound to fail. [125] In analysing the evidence after the trial, there is absolutely no proof and not an iota of documentary evidence to show that Second Defendant was in communication with the Plaintiff’s customers and suppliers. None of the Plaintiff’s customers and suppliers was called to give evidence. PW- 1, PW-2 and PW-3 failed to lead evidence to show that the Second Defendant had at any time encouraged its key suppliers including Diasham, Wuxi and Gasolec to stop supplying their products to the Plaintiff; and the termination of the agreement is because of the Defendants. [126] To avoid any confusion, the Plaintiff had informed its key suppliers including Diasham, Wuxi and Gasolec regarding the departure/resignation of the Second Defendant from the Plaintiff and that the Second Defendant had set up a new company i.e. the Third Defendant. This shows that the Plaintiff has the intention to alert its key suppliers that there are 2 companies in veterinary products. [127] In hearing the evidence from the Second Defendant (Yau Leong Sen @ Yow Leong Fatt, despite of his old age (84 years) with poor health condition when he appeared in court on the trial dates and the extensive cross-examination by the Plaintiff's counsel, he was not shaken and has good memory and consistently maintained that he did not cause the loss of the 3 distributorships. [128] This Court is not bound to agree with the PW-3 that Yow Leong Fatt and Alpha Vet are free to do veterinary business and compete in the free market, here in this country anyone can sell their products and there is no monopoly to one company. [129] The allegation that the Second Defendant has obtained and used the Plaintiff’s confidential details and information to grow the Third Defendant’s business, is also bound to fail. At the outset, it is imperative to note that the Second Defendant is an experienced businessman having vast experience in the veterinary products business since 1960. When he left the Plaintiff on 30-6-2018 and then set up the Third Defendant on he is knowledgeable in the veterinary products and business and there was absolutely no reason or necessity for him to take away or utilize any “confidential information” allegedly belonging to the Plaintiff in order for him to carry on his new business/company. The case cited by the learned counsel for the Second and Third Defendants, i.e. the case of Repco (M) Sdn Bhd v Tan Toh Fatt & Ors [2013] 7 MLJ 408 at 424 to 425, it was held − “(b) the first, second, third and fourth defendants were senior employees of the plaintiff with extensive experience in the automotive industry, having served the plaintiff for a considerable number of years and for most part of their career in the automotive industry. ln view of their length of experience in the industry dealing solely with the distribution and sale of automotive spare parts these defendants would have undoubtedly acquired the information and about the customers through their years of dealings with these customers as part and parcel of their scope of duties in the plaintiff. ln short the first, second, third and fourth defendants could not help acquiring the knowledge of some of the matters in the course of their employment with the plaintiff. So long as the defendant did not obtain the information and or acquire the knowledge surreptitiously it could not be said that it constitutes a trade secret. Knowledge on the part of the defendants of the information do not constitute trade secrets which are considered proprietary rights which warrants protection by this court (VSL Prestressing Australia Pty Ltd v DJ Mulholland [1971] 2 MLJ 89)”. Conclusion on issue of liability in Repco (M) Sdn Bhd v Tan Toh Fatt & Ors (supra) 2013], the court dismissed the Plaintiff’s claim on the principal grounds, inter alia, that the Plaintiff had failed to −

call its customers and suppliers to give evidence at the trial;

give particulars and/or show that the specific needs and requirements of the customers could be termed as confidential information;

adduce evidence that the 1st to 7th defendants had stolen or taken information from the plaintiff;

prove that the defendants had utilised confidential information or trade secrets belonging to the plaintiff for their personal gains or advantage; and

adduce evidence to support its case of conspiracy against the defendants on the standards required by law. The High Court also said in Repco that “failure on the part of the Plaintiff to call these witnesses would definitely attract the presumption of adverse inference pursuant to s 114(g) of the Evidence Act 1950 against the plaintiff.”. [130] In my decision, when the Plaintiff has failed to prove on the balance of probabilities that the Defendants had committed the acts as pleaded in the statement of claim, the Plaintiff’s entire case must fail and consequently, the issue of damages allegedly suffered by the Plaintiff is irrelevant and does not require any consideration or determination by this Court. The monetary damages claimed by the Plaintiff that this Court can ordered “such other sum as this Court deems fit” should not be fit at all. The Plaintiff has failed to prove and is not entitled to the damages sought. In Teoh Kah Keng v Chow Chee Keong [2019] 12 MLJ 334 the Court held that − “I can do no better than to quote what was stated in the judgment of Edgar Joseph Jr J (as he then was) in the well-known case of Popular Industries Limited v Eastern Garment Manufacturing Sdn Bhd [1989] 3 MLJ 360 where His Lordship said this − In all the circumstances, reason and justice point to the inevitable conclusion that although the plaintiffs had shown the fact of damage, no evidence or no sufficient evidence has been adduced as to its amount with the perhaps unfortunate result that it is virtually impossible to assess damages (see Dixon v Deveridge and Twyman v Knowles). In this context, I am reminded of Lord Goddard’s dictum in Bonham-Carter v Hyde Park Hotel quoted with approval by Thomson CJ in Lee Sau Kong v Leow Cheng Chiang [2019] 12 MLJ 334 at 350, namely, that − Plaintiffs must understand that if they bring actions for damages it is for them to prove their damage; it is not enough to write down the particulars, and so to speak, throw them at the head of the court, saying. ‘This is what I have lost, I ask you to give me these damages’. They have to prove it.” Conclusion [131] Given the aforementioned, can the Plaintiff be said to have discharged its burden of proving the loss of profit it claimed to have; can the Plaintiff be said to have discharged its burden of proving the loss of profit it claimed to have suffered, on the balance of probabilities? I find that based on the evidence presented in Court during the trial, the answer is a definite NO. [132] In view of the foregoing reasons, I therefore dismiss the Plaintiff claim. And “Bagi kos, Mahkamah memutuskan untuk pihak-pihak menanggung kos masing-masing bagi keseluruhan tindakan di hadapan Mahkamah ini.”. Dated: 11 July 2024. RoziBainon ( ROZI BINTI BAINON ) Judicial Commissioner Shah Alam High Court Civil NCvC12 Counsels: For the Plaintiff: Wong Hin Loong together with Soh Jing Han and Lee Kuan Wing Tetuan HL Wong, Soh & Co., Kuala Lumpur For the First Defendant: K. Ganesan together with R. Subashini and Luqman Zainal Tetuan Ganesan & Irmohizam, Kuala Lumpur For the Second & Third Defendants: Lau Kee Sern together with Eunice Aw Suze Xiau Tetuan Kee Sern, Siu & Huey, Kuala Lumpur