Failure to register a franchise under the Franchise Act results in the franchise agreement being deemed void, affecting all associated contracts.

Lau Bee Lan JCA:

Introduction

[1] This is an appeal by the appellant against the decision of the learned Judicial Commissioner ('Judge') made on 19 January 2018 dismissing the appellant's claim with no order as to costs and dismissing the Counterclaim of the 1st to 3rd respondents with no order as to costs.

[2] The 1st to 3rd respondents filed a cross-appeal dated 20 April 2018 against the said High Court's decision in relation to the High Court's refusal to order restitution of the monies paid by the 1st respondent to the appellant under the illegal MLA 2013.

[3] We shall for easy reference refer to the parties as they were in the Court below.

Brief Facts

[4] The plaintiff, Dr H K Fong Brainbuilder Pte Ltd is a company incorporated in Singapore by Dr Fong Ho Keong ('Dr Fong'), a Singaporean citizen. Dr Fong claims to have developed 'Dr Fong's Method' of teaching mathematics to students in primary and secondary schools. The 2nd and 3rd defendants were Dr Fong's best friends for 55 years and interested in the business. Pursuant to that, the 1st defendant was established; the 2nd and 3rd defendants owned 85% of the 1st defendant while Dr Fong owned the remaining 15%.

[5] There is another company called Dr Fong BrainBuilder Pte Ltd ('DFB') which was owned by Dr Fong as well. DFB entered into a Master License Agreement with the 1st defendant on 26 February 2008 ('MLA 2008') which expired on 30 June 2012. On 18 December 2013, another MLA, ('MLA 2013'), a Guarantee and Power of Attorney were executed ('the 3 Documents'). The MLA 2013 allows the 1st defendant to, among others, operate and manage the 'BrainBuilder' business (a business to teach mathematics to students) ('BrainBuilder Business') in Malaysia.

[6] The 4th defendant is the 2nd defendant's daughter and former employee of the 1st defendant. The plaintiff alleged the 4th defendant had taken over a registered business called "Pusat Latihan Perkembangan Kaji Kreatif ('PLPKK') from the 2nd and 3rd defendants. The 2nd and 3rd defendants established the 5th and 6th defendants.

[7] The plaintiff claimed that: (i) 1st defendant had breached the MLA 2013 by awarding a sub-license to En Suhaimi bin Ramly to operate a franchise in Setapak; and (ii) PLPKK and the 5th and 6th defendants are competing businesses with the BrainBuilder Business and had used Dr Fong's Method which is the plaintiff's confidential information. The plaintiff then terminated the MLA 2013 on 8 October 2015. The 1st defendant did not comply with the post-termination provisions in the MLA 2013 to enable the plaintiff to take over the 1st defendant's BB centres, ie BrainBuilder Business centres operated by the 1st defendant to teach Mathematics using Dr Fong's Method.

[8] The plaintiff prayed, among others, (i) that the 2nd to 6th defendants be restrained from dealing with the 1st defendant's customers and from disclosing the plaintiff's confidential information and other business techniques; (ii) that the 2nd to 6th defendants be compelled to cease all business that are in competition with the plaintiff; (iii) for the return of all materials resembling the BrainBuilder Business to the plaintiff; (iv) for an injunction to restrain the defendants from destroying, among others, the 1st defendant's business details; (v) that 1st to 3rd defendants provide a complete business account derived by the 1st defendant arising from the BrainBuilder Business; (vi) that the Receiver be appointed over the 1st, 4th, 5th and 6th defendants; (vii) that general, aggravated and exemplary damages be payable by the defendants jointly and severally; (viii) that the 1st, 2nd and 3rd defendants make restitution to the plaintiff for loss and damage; and (ix) costs and interest be payable to the plaintiff.

[9] The defendants asserted: that Dr Fong's Method is based on Singapore's Mathematics Syllabus ('Singapore Maths') owned by the Singapore Government and that Singapore Maths has been taught by many tuition and learning centres in Malaysia; t