Kuan Kong Hong 1. ) NG KIM CHEONG 2. ) KCSM KUAN PLT

Kuan Kong Hong 1. ) NG KIM CHEONG 2. ) KCSM KUAN PLT

Interpreting clause 8.1 in its commercial context the court held the Succession Plan and clause 8.1 encompassed a restriction against causing the LLP's clients to be siphoned off; the Defendant, by introducing and facilitating transfer of 30 clients to a competing firm and attending EGMs as company secretary, breached the Sale Agreement; no adverse inference was required against the Plaintiff because admissions and documentary evidence sufficed; quantification of damages could not be based solely on LLP gross fees so the matter is remitted to the High Court for assessment of true loss of profits; the Defendant's counterclaim for defamation and breach of confidentiality was dismissed.

Citation
W-02(NCvC)(W)-317-02/2022 (Mahkamah Rayuan)
Parties
Appellant Defendant: Kuan Kong Hong; Respondent Plaintiff: Ng Kim Cheong; Respondent: KCSM Kuan Plt
Court
NCvC
Jurisdiction
Malaysia
Judgment Date
26 July 2023
Case Number
W-02(NCvC)(W)-317-02/2022 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal / Court of Appeal Judgment and Remittal to High Court for Assessment of Damages
Outcome
Appeal dismissed on liability; appeal allowed in part on quantum and remitted to High Court for assessment of damages; counterclaim dismissed; costs awarded to respondent
Legal Topics
Breach of Contract, Non Competition, Enticement of Clients, Interpretation of Contract, Adverse Inference Under Evidence Act, Quantification of Damages, Locus Standi
Source Language
Malay/English
Contract Law Commercial Law Evidence Company/llp Law Breach of Contract Non Competition Enticement of Clients Interpretation of Contract +3 more

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Parties

Kuan Kong Hong

Appellant Defendant

Ng Kim Cheong

Respondent Plaintiff

KCSM Kuan Plt

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment and Remittal to High Court for Assessment of Damages

Legal Issues

  1. 1 Whether clause 8.1 and the Succession Plan include a restriction against enticement of clients
  2. 2 Whether the Defendant breached the Sale Agreement by causing clients to leave the LLP
  3. 3 Whether an adverse inference should have been drawn against the Plaintiff for not calling client witnesses

Ratio Decidendi

Interpreting clause 8.1 in its commercial context the court held the Succession Plan and clause 8.1 encompassed a restriction against causing the LLP's clients to be siphoned off; the Defendant, by introducing and facilitating transfer of 30 clients to a competing firm and attending EGMs as company secretary, breached the Sale Agreement; no adverse inference was required against the Plaintiff because admissions and documentary evidence sufficed; quantification of damages could not be based solely on LLP gross fees so the matter is remitted to the High Court for assessment of true loss of profits; the Defendant's counterclaim for defamation and breach of confidentiality was dismissed.

Court Disposition

Appeal dismissed on liability; appeal allowed in part on quantum and remitted to High Court for assessment of damages; counterclaim dismissed; costs awarded to respondent

Orders

  • High Court finding of liability against Appellant affirmed
  • Appeal allowed limited to quantum of damages; matter remitted to High Court for assessment of loss of profits (not LLP gross fees) arising from the breach