Indadi Utama (M) Sdn Bhd v Kwah Peng Kun

Case Significance

Illustrates that an employer's breach-of-fidelity claim over an employee's deletion of files fails where the employer cannot prove the files belonged to the company, and that unsupported damages claims attract at most nominal damages.

This High Court decision concerns an appeal in a suit brought by a former employer against a former employee, framed not as embezzlement, misappropriation of confidential information or diversion of business opportunities, but as a breach of the duty of fidelity. The appellant, Indadi Utama (M) Sdn Bhd, complained that the respondent, before leaving its employment, had deleted 9,245 files from a company-issued laptop, and alleged that this was a vindictive act in breach of duty; the respondent maintained that his conduct was justified. The Sessions Court found in favour of the respondent, and the employer appealed. The core issues were whether the respondent owed a duty in respect of the files and folders stored on the company-issued laptop and, if so, whether he had breached it, and what relief, if any, followed. The High Court held that the employer had failed to prove, on a balance of probabilities, that the deleted files rightfully belonged to the company. It noted that while the employer emphasised the deleted files, it did not address the fact that a number of files and folders had been returned with the laptop, and that nothing in the evidence — including the Employee Handbook — expressly stated that all files stored on the company laptop were the property of the company and must not be deleted. The court therefore answered the question of breach in the negative and disallowed the claim for special and general damages, adding that even if liability had been established it would have awarded only nominal damages of RM10,000.00, given the absence of supporting evidence for the sums claimed. The court affirmed the Sessions Court's decision and dismissed the appeal with costs of RM10,000.00 to the respondent. The judgment illustrates that a breach-of-fidelity claim over deleted data requires proof that the data belonged to the employer.