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30th September, 2015

Borneo Rainforest Lodge v Bernama is a copyright claim in the High Court in Kota Kinabalu, Malaysia.

The Plaintiff, Borneo Rainforest Lodge, obtained judgment in default of appearance against the Defendant, Bernama, which is the Malaysian national news agency.

The Defendant filed an application to set aside or vary the judgment based on the following reasons:

(a) the Plaintiff named in this action is not a legal person and does not have the capacity to sue or obtain judgment;

(b) that the Plaintiff’s claim set out in the Statement of Claim was for an unliquidated sum, had failed to comply with the requirement of Order 13 Rule 2 of Rules of the Court 2012 and obtained an interlocutory judgment;

(c) that the terms of the judgment are vague and uncertain and set out in the alternative i.e.: “that the above-named Defendant do pay the Plaintiff the damages for infringement of copyright in the sum of RM2,000,000.00; in the alternative, an enquiry as to damages for infringement of copyright and/or, at the option of the Plaintiff, an account of profits and benefits made by the Defendant through the use, dissemination, release, distribution and/or publication of two copyright Photographs”; and

(d) that the Defendant has a defence on the merits.

The Court noted that unless and until the court has pronounced a judgment upon the merits or by consent, it has discretion to set aside the judgment which was obtained by a failure to follow any of the rules of procedure: Evans v. Bartlam [1937] AC 473; Hasil Bumi Perumahan v United Malayan Banking [1994] 1 MLJ 312. A judgment in default obtained irregularly will be set aside as of right. Where a judgment has been regularly obtained, a defence on the merits will have to be shown: Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565.

The Writ and Statement of Claim had been served on the Defendant on 12 September 2013 and judgment in default was entered on 29 October 2013. The Secretary of the Defendant affirmed in his affidavit that the failure to file an appearance and defence was not willful but was caused by an administrative oversight on the part of the Defendant’s staff. On the other hand, the Plaintiff submitted that from the date of service there was no commitment on the part of the Defendant to enter appearance and to defend the claim without any proper or fundamental reason. The Plaintiff stated that its solicitors received a letter from the Defendant’s solicitor dated 6 December 2013 requesting the Writ and other court documents subsequent to the service of the judgment and there was no reply from the Defendant or its solicitors after the Plaintiff’s solicitors enclosed the relevant documents.

The Court observed that Order 42 rule 13 of the Rules of the Court 2012 provides that a party intending to set aside or vary a judgment shall make an application to the court and serves it on the party who has obtained the judgment within 30 days after the receipt of the judgment. The previous Order 42 rule 13 in the Rules of High Court used the word “must” which contrasted with the word “shall” in the present Order 42 rule 13. The Court stated that it has discretion to set aside a judgment in default provided there is no prejudice caused to the Plaintiff. The Judge found that the Defendant has given an explanation for the delay and the Plaintiff did not execute the judgment up to the date of the judgment and there is no prejudice caused to the Plaintiff by this application or delay in the application.

The Defendant further submitted that the Plaintiff is not a private limited company, neither is it a partnership or sole proprietorship. The Plaintiff “Borneo Lodge” is merely a business name without any legal personality and is not entitled to commence and maintain this action in its name or to obtain judgment against the Defendant. The Defendant submitted that the trading license showed that Borneo Rainforest Lodge was wholly owned by Innoprise Jungle Lodge Sdn. Bhd. and that the proper and correct Plaintiff ought to be Innoprise Jungle Lodge Sdn. Bhd. and not Borneo Rainforest Lodge.

The Court noted that at the time the suit was filed, Innoprise Jungle Lodge Sdn. Bhd. has been incorporated and possessed full legal capacity to bring the action and that the suit should be filed by Innoprise Jungle Lodge Sdn. Bhd. trading under the name of Borneo Rainforest Lodge. Nevertheless, it was held that The non-endorsement of the name of Innoprise Jungle Lodge Sdn. Bhd. on the writ is not fatal, it is only an irregularity which can be cured and that the judgment should not be set aside merely on this ground.

The Defendant also submitted that a perusal of the Statement of Claim clearly showed that the Plaintiff’s claim for damages for infringement of copyright was for an unliquidated sum but in the prayers the Plaintiff has claimed the sum of RM2,000,000.00 without any basis or justification. The Defendant submitted that the Plaintiff has also claimed a prayer in the alternative to an inquiry as to damages and in the premises the Plaintiff had failed to comply with the provisions of Order 13 rule 2 of the Rules of the Court 2012 and should have entered an interlocutory judgment against the Defendant for damages to be assessed. The Defendant submitted that the judgment in default is an irregular judgment and that pursuant to Order 13 rule 2 the Plaintiff was required to enter an interlocutory judgment for damages to be assessed.

The final submission of the Defendant was that it has a defence upon the merits to oppose the Statement of Claim. The Defendant contended that at the time the two photographs were provided to its photographer, the photographer and the Defendant were not aware that the said photographs were subject to any copyright as the photographs were provided to the Defendant’s photographer without any intimation that the Defendant was not at liberty to publish use or disseminate the two photographs in its normal and usual course of business.

The Court noted that the photographs were provided to the Defendant with terms and conditions enclosed via email. Although these terms and conditions were mentioned in the email, both parties did not produce these terms and conditions.

The Court further noted that although the Plaintiff has pleaded that the Defendant has infringed the copyright and has further infringed the copyright of the Plaintiff by distributing the 3 two photographs to its network of news agencies, the Plaintiff did not specifically plead the occasion(s) i.e. the date, place, time or media or the news agencies on such infringements. The Plaintiff did not exhibit any publication by the Defendant which has infringed the copyright of the Plaintiff. The Plaintiff did not plead whether the Defendant had failed to give credits to the Plaintiff when the Defendant used or published these two photographs. The Plaintiff also did not plead the extent of such infringement and this will determine the quantum of damages. The Judge concluded that these issues should go for trial.

The Court held that for reasons mentioned above and the fact that the Defendant should be given the opportunity to file its defence and the issues should be heard and determined on the merits, the judgment in default of appearance was set aside.