JUDGMENTBY: KAMALANATHAN RATNAM JC

Facts

The plaintiff deals in very specialized equipment and instruments which are imported from an overseas principal/supplier to be sold to various hospitals, research centres, universities and industries throughout Malaysia. The plaintiff had signed an exclusive distributorship agreement for the sale of testing equipment (the Tabai products) with the overseas principal/supplier, Tabai Espec Corp but the agreement was made non-exclusive when the fifth defendant was appointed as a distributor in April 1994. The sale of other testing equipment (Suga products) was made through Yamato Scientific Co Ltd (Yamato). It was an understanding that Yamato would only sell Suga products to the plaintiff in Malaysia.

The first, second, third and fourth defendants were at all material times employees of the plaintiff. The first defendant was employed in 1979 and he was a director when he left the plaintiff at the end of December 1992. The second defendant was employed in April 1989 and he was the Manager of the Technical Instrumentation Division when he left the employment of the plaintiff on 5 December 1993. The third defendant was employed in 1967 and was holding the post of Project Manager when he resigned from the plaintiff on 31 August 1993. The fourth defendant was employed in January 1989, and he was the Service Manager when he left the plaintiffs employment on 2 December 1993. The fifth defendant was a company incorporated by the first, second, third and fourth defendants on 6 December 1993. They are the only shareholders and directors of the fifth defendant. In the contract of employment between the plaintiff and the second and fourth defendants, there was a fidelity clause which read as follows:

Fidelity

During the employment with the company you shall not have any direct or

indirect interest in any business similar to the companys business and

you shall direct all your efforts, duties and responsibilities to

further the interests of the company.

Any information about the company, its dealings, transactions and

financial matters are regarded as confidential and are not allowed to

be divulged to any person whatsoever.

Between the period of December 1993 and January 1994, the fifth defendant had approached the existing customers of the plaintiff -- namely, Sharp Roxy Corp (M) Sdn Bhd, Sime Darby Tyre Technology Centre (M) Sdn Bhd and Matsushita Electric Co (M) Bhd -- for the sale of Tabai and Suga products and quotations were sent out by the fifth defendant to these customers of the plaintiff. At the material time, the fifth defendant was not the authorized agent/distributor for the sale of Tabai and Suga products. It is clear that the quotations sent out by the fifth defendant to these same customers of the plaintiff were in respect of the same equipment/instruments for which the plaintiff had earlier given its quote with the exact specifications except that the fifth defendant had quoted a reduced price. It is also a fact that in any event the plaintiff managed to secure the contract for the sale of the equipment/instruments with Sharp Roxy Corp (M) Sdn Bhd and Sime Darby Tyre Technology Sdn Bhd, but at a lower price than was initially quoted. The plaintiff contended that it had suffered losses by reason of a special discount which it had to give these customers as a result of the fifth defendants low quotation. However, the sale to Matsushita Electric Co (M) Bhd was lost to the fifth defendant. The fifth defendant had admitted that Matsushita Electric Co (M) Bhd had purchased the same equipment/instruments that were earlier offered by the plaintiff. The fifth defendant also admitted making a profit of between RM26,000 to RM27,000 out of this sale. The fifth defendant had also approached the overseas principal/supplier, Tabai Espec Corp and was appointed the distributor for the Tabai products with effect from 1 April 1994. Hence, the distributors