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2023 MarsdenLR 2093

COURT OF APPEAL PUTRAJAYA
CHUA TIONG HOONG & ORS – Appellant
Versus
N2N CONNECT BERHAD & ORS AND ANOTHER APPEAL – Respondent
[Appeal Suit Nos: W-02(IM)(IPCV)-1985-10-2021 & W-02(IM)(IPCV)-1986-10-2021]



Petitioner Advocates:Wendy Lam Mei Kuan,Wong Jia Ee,Himahlini,Ramalingam,Haiman Haqeem Al Sadat ,Respondent Advocate: Khoo Guan Huat,Suaran Singh,Kuek Pei Yee,Gooi Yang Shuh,Chow Xing Hui,Ashwin Selvanathan

The court established that non-disclosure of material facts and failure to comply with execution safeguards can lead to the setting aside of an Anton Piller Order.

Headnote:(A) Copyright Act 1987 - Anton Piller Order - The court found that the plaintiffs had not made full and fair disclosure in their application for an Anton Piller Order, leading to its setting aside. The defendants successfully argued that the execution of the order lacked necessary safeguards and that material facts were not disclosed. (Paras 10, 14, 39, 64)

(B) Non-disclosure - The court emphasized the necessity for full disclosure of all material facts in ex parte applications, noting that partial disclosure does not suffice. (Paras 39, 57)

(C) Execution of APO - The court outlined the requirements for executing an Anton Piller Order, highlighting the need for compliance with its terms and safeguards. (Paras 14, 62)

Facts of the case:
The plaintiffs alleged copyright infringement and breach of confidentiality against former employees who set up competing companies. An Anton Piller Order was granted to preserve evidence, which defendants later challenged, claiming execution flaws.

Findings of Court:
The appeals were allowed, and the Anton Piller Order was set aside due to non-compliance and non-disclosure of material facts.

Issues: The main issues included the adequacy of disclosure in the application for the Anton Piller Order and compliance with its execution terms.

Ratio Decidendi: The court ruled that the Anton Piller Order must be executed in strict compliance with its terms, and failure to disclose material facts can render it void.

Result: Appeals allowed; Anton Piller Order set aside.

Table of Content
1. background of appeals and parties involved. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8)
2. high court's findings on the anton piller order. (Para 10 , 11 , 12)
3. principles governing anton piller orders. (Para 14 , 15 , 16)
4. safeguards for executing anton piller orders. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23)
5. defendants' complaints regarding execution of the apo. (Para 24 , 25 , 26 , 27 , 28 , 29)
6. non-compliance issues with the apo. (Para 30 , 32 , 33)
7. court's rationale for setting aside the apo. (Para 34 , 35 , 36)
8. non-disclosure of material facts. (Para 39 , 40 , 41 , 42 , 50 , 51 , 52 , 56)
9. conclusion and order of the court. (Para 63 , 64)
See Mee Chun JCA:

Introduction And Background Facts

[1] There are 2 appeals heard together. Parties will be referred to as in the High Court. Appeal 1985 is by Dl, D5 and D6. Appeal 1986 is by D3 and D4. References to enclosures are to appeal 1985 unless otherwise indicated.

[2] The Plaintiffs may be described as a collective group involved inter alia in the business of developing computer software packages, providing designing, programming and consultancy services.

[3] D1, D3 and D4 are the former employees of the Plaintiffs. D5 and D6 are companies that are also in the same line of business as the Plaintiffs. D1 is said to be a director of D5 and D6, and D3 and D4 are said to be currently employed and/or engaged to provide services to D5 and D6.

[4] The claim by the Plaintiffs is for inter alia copyright infringement and breach of confidential information. The Plaintiffs' allegation is that Dl, D3 and D4 had misappropriated the Plaintiffs' software and marketing materials to set up D5 and D6.

[5] On l April 2021, the Plaintiffs applied for an Anton Piller Order (APO) which was granted on 2 April 2021. The APO is in encl 51/77-132, translation. The APO was executed from 5 April 2021 until 15 April 2021.

[6] On 8 April 2021, the Defendants filed applications to set aside the APO and subsequently amended to include a prayer on the assessment of damages.

[7] On 19 April 2021, D1, D5 and D6 filed for a Protective Order wherein an interim order (Interim PO) was granted on 21 April 2021. Accordingly, the Plaintiffs' solicitors delivered copies of documents, storage devices and CDs containing the APO information to the Supervising Solicitors for safekeeping.

[8] On 24 September 2021, the Defendants' setting aside applications were dismissed. Hence the appeals to this Court.

[9] We allowed the Defendants' appeals for the reasons which now follow.

Decision Of The High Court

[10] The grounds of judgment (GOJ) of the High Court (HC) can be found in encl 56/14-36. The HC in para 8 referred to the principles laid down in Arthur Anderson & Co v. Interfood Sdn Bhd 2005 MarsdenLR 83 ; 2005 MarsdenLR 2326 ; ; for the law on granting an APO. It essentially found that the Plaintiffs had fully observed their duty of full and fair disclosure at the ex parte stage and were satisfied that they had successfully shown a strong prima facie case on the claims against the Defendants which affords overwhelming justification for the APO. Refer to para 12.

[11] In para 13, the HC being satisfied that the Plaintiffs had passed the first hurdle, then scrutinised the evidence in the form of affidavits and concluded in para 14:

"[14] Based on the above findings, I came to the conclusion that:

(i) due to the incriminating nature of the evidence which are likely to be found in the possession, custody and control of the Defendants, there exists likelihood of real risk that the evidence being destroyed, hidden or removed; and

(ii) Due to the same nature of the business operated by N2N Group and that of the Defendants, there exist likelihood of copying and/ or reproduction of the Confidential Information and Trade Secrets of the Plaintiffs for further or future use and the same may be stored or relocated by the Defendants to a third party not named in the proceedings as a measure to defeat the intent of the Orders sough

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