MALAYSIA: IMPORTANCE OF ADDUCING PROPER EVIDENCE TO SUBSTANTIATE YOUR CLAIMS
This article summarizes the judgement on the amount of damages awarded to the Plaintiff against the Defendants for their acts of copyright infringement in the case of Honda Giken Kogyo Kabushiki Kaisha (hereinafter referred to “the Plaintiff” or “the Appellant”) and Mforce Bike Holdings Sdn Bhd & Malaysian Formula Bikes Sdn Bhd (hereinafter referred to as “the Defendants”).
The Plaintiff in this case had filed an action under the Copyright Act 1987 alleging the SYEM E-Smart Motorcycle produced by the Defendants infringed the Plaintiff’s copyright to its artistic works in the EX-5 Motorcycles. The High Court’s decision was a dismissal of the Plaintiff’s claim with costs that the Defendants did not infringe on the Plaintiff’s artistic works.
This led to the Appellant filing an appeal to the Court of Appeal against the High Court’s finding of non-infringement which was successful. However, the Court of Appeal only allowed part of the relief the Appellant claimed in respect of damages. For which the case was referred back to the High Court in order to determine the amount of damages to be awarded.
The Plaintiff had elected to claim loss of business profits. The basis for this claim was that the infringing acts were committed over the years 2014 to 2017 (hereinafter referred to as Infringement Years) and following the letter sent by the Defendants’ solicitors stating that the Defendants ceased dealing in the SYEM E-Smart Motorcycle in 2017. The Plaintiff noted a drop in its annual profits for the sale of the EX-5 Motorcycles compared to its profits for the years before and after the Infringement Years. As such the Plaintiff’s loss of business profits was the difference between the average annual profits for the non-infringing years and the profits made in the Infringing Years.
The Defendants in this case contended that they had no knowledge of the Plaintiff’s alleged annual profits because no evidence was adduced to substantiate the figures the Plaintiff was claiming. Since the figures were not proven, the Plaintiff is not entitled to the alleged loss of business profits.
Thus, the High Court’s judgement on the damages to be awarded to the Plaintiff focused on whether the Plaintiff had proved the profits that it allegedly made in the non-infringing years and Infringement Years.
Pursuant to Sections 101-104 of the Evidence Act 1950 (hereinafter referred to as EA 1950), the burden of proof lies with the party who is asking the court for a judgement on any legal right or liability, in this case it is the Plaintiff. The Plaintiff bears the burden to prove the figures of profits made over the material time, especially since it is only within its knowledge and no one else.
The Plaintiff in its affidavits merely had set out a table of profits for both the non-infringing and Infringing Years but did not adduce any documents to substantiate any of those figures. The Plaintiff believed the number of documents to be adduced to substantiate the figures were too voluminous and contained private and confidential information as such it was not practical to be adduced in the High Court. The Plaintiff further had relied on Sections 63(e) and 65(1)(g) of the EA 1950 which defined secondary evidence and when such evidence may be adduced, justifying its choice to not adduce any documents to substantiate the figures of profits. Also stating that in the event the High Court requires evidence, the Plaintiff will provide its financial records in a summary form together with a sworn declaration as to the truth and accuracy of that information.
The High Court rejected the Plaintiff’s arguments re-asserting that it was the Plaintiff’s responsibility to adduce sufficient evidence to prove its claims and not for it to ask the court what evidence to adduce and only upon getting the court’s directions to proceed to adduce accordingly. Further to that the High Court pointed out that the Plaintiff’s unilateral decision on the volume and confidentiality of the evidence as well as believing the statements in its affidavits were sufficient to prove the figures was not acceptable and those matters are for the court to judge and decide on.
The High Court emphasized that the Defendants had the right to insist on proper proof in the form of documentary evidence due to the substantial amount of damages claimed. Lastly the High Court referred to the EA 1950 and clarified that the Plaintiff’s reliance on Section 63 secondary evidence cannot be looked at in isolation from primary evidence, which is to be first adduced, i.e. the actual financial records that substantiated the figures of profits.
Considering the above, the judge held that the Plaintiff did not prove its loss of business profits and thus can only be awarded nominal damages. The Plaintiff in this case had claimed for a loss of business profits amounting to MYR304,659,268.00 but was only awarded MYR1,000.00 as nominal damages.