The court ruled that the transfer of proceedings to the Kuala Lumpur High Court was justified based on the location of the cause of action and the convenience for the defendants.

JUDGMENT

Anand Ponnudurai J:

Introduction

[1] Order 57 of the Rules of 2012 (hereinafter referred to as "ROC 2012") is the relevant and applicable rule that is invoked by parties and relied upon when making an application to transfer proceedings from one Court to another. Transfer applications are often made for a variety of reasons and this is one such case where a Defendant had applied to transfer the proceedings from this Court to the High Court of Kuala Lumpur. Such application was allowed and I will now provide the background facts and the reasons as to why this Court allowed the transfer application.

The Background Facts/The Claim, Defence and Counterclaim

[2] The 1st Plaintiff (P1) is a director and 51 % shareholder in the 2nd Plaintiff company (P2). The 1st and 2nd Defendants (D1 and D2) are also directors of P2 who own 20% and 9% shares respectively. The remaining 20% is held by one Poh Meng Cheong.

[3] The Plaintiffs' pleaded case vide its statement of claim can be summarised as follows.

[4] P2 was established by the parties to sell food and drinks through a cafe called "BeAngels Specialty Coffee" ("BeAngels") in G-08, Island Plaza, Jalan Tanjung Tokong, 10470 Penang for which P1 was entrusted to find investors and financiers whereas D1 and D2 were responsible for the operations of the cafe (hereinafter referred to as "the Penang cafe").

[5] The Plaintiffs' cause of action against D1 and D2 are inter-alia premised on allegations of conspiracy to injure P1 and P2 as P1 has discovered that D1 has incorporated a sole proprietorship "Lokal Bakery Resources" which in turn opened a cafe called "BeanGood" (hereinafter referred to as "the KL cafe") at No 27G, Jalan Dama Raya 6, Taman Alam Damai Circle, Cheras, Selangor which had a similar business to that of the Penang cafe.

[6] In addition, the Plaintiffs plead that the Defendant had inter-alia solicited the staff of the Penang cafe to work in the KL cafe and alleged that they had misappropriated trade secrets, misused social platforms for purposes of marketing BeanGood products etc.

[7] The Plaintiffs further plead that the Defendants had breached their fiduciary duties as a director of P2 by establishing the KL cafe, its soliciting of staff and misappropriation of trade secrets.

[8] The Plaintiffs also plead that the Defendants had committed the tort of passing off as the cursive font used for BeanGood's logo is similar to BeAngels and the design and marketing style employed by Lokal Bakery Resources are identical to P2.

[9] Finally, at para 28 of the statement of claim, the Plaintiffs plead that this claim was filed pursuant to an Ex-Parte Order obtained in the Penang High Court for leave to commence this derivative action pursuant to ss 347 and 348 of the Companies Act 2016 .

[10] The Defendants in their statement of defence have inter-alia pleaded as follows:

a. that they have not breached their fiduciary duties;

b. that the Penang cafe had closed down and was not doing well;

c. that P1 had treated the Defendants in an oppressive manner;

d. that they deny any allegation of passing off; and

e. they mount a counterclaim against P1 and one Lynette Tan Zhu Lyn who is PTs daughter for conspiracy to injure D1 as well as minority oppression.

[11] Thereafter, D1 filed encl 7 seeking to transfer this entire Suit to the Kuala Lumpur High Court. The Plaintiffs opposed encl 7. Although encl 7 was filed by D1, D2 supports such an application and is also of the view that the matter ought to be transferred to the Kuala Lumpur High Court.

[12] The Court will now set out the contentions of both parties in respect of the transfer application and the Court's reasons for having allowed encl 7 and transferring the matter to the Kuala Lumpur High Court.

The Defendants' Contention In Support Of The Transfer

[13] The reasons and grounds advanced in support of the transfer application can be summarised as follows:

a. that the cause of action against D1 arose in Kuala Lumpur;

b. that both Defendants reside in Kuala