Looi Chee Hong v LCC Builder Sdn Bhjd (WA-12BNCC-3-02/2025)

LOOI CHEE HONG

CHEA AI RENE (NO. K/P: 820901-14-5586) … PLAINTIFFS

LCC BUILDER SDN BHD

LEE CHEE CHUAN

FONG CHONG LAM (NO. K/P: 760624-05-5479) … DEFENDANTS GROUNDS OF JUDGMENT

This is an appeal by Looi Chee Hong (“First Appellant”) and Chea Ai Rene (“Second Appellant”), who were the First and Second Third Parties respectively in the original action below, against the decision of the learned Sessions Court Judge, Puan Zawiyah Binti Saad, dated 28 January 2025. The Sessions Court partially allowed the third-party claim brought by LCC Builder Sdn Bhd (“First Respondent”), Lee Chee Chuan (“Second Respondent”), and Fong Chong Lam (“Third Respondent”) against the Appellants, and ordered that the Appellants jointly and severally contribute to the Respondents’ liability under the judgment obtained against them by the Plaintiff in the primary action, together with costs of RM 6,000.00.

The questions for determination in this appeal, distilled from the Appellants’ five grounds of appeal, are: a) whether the learned Sessions Court Judge erred in failing to appreciate the nature of third-party proceedings, and in finding the Appellants liable notwithstanding the absence of any written guarantee or indemnity between the Appellants and the Respondents; b) whether the learned Sessions Court Judge erred in finding that the First Appellant had borrowed the name and capacity of the First Respondent to secure and execute the project known as the Toyoma Project; c) whether the learned Sessions Court Judge erred in holding that the payment of RM 190,562.50 from the First Respondent to the First Appellant constituted financial proceeds of the Toyoma Project rather than a reimbursement of construction material costs; d) whether the Respondents discharged their burden of proof on the balance of probabilities; and e) whether the credibility findings made by the learned Sessions Court Judge in respect of the Second Respondent (SD1) and the independent witness (SD2) ought to be disturbed on appeal.

Having considered the written and oral submissions of learned counsel, and the record of proceedings below including the learned Sessions Court Judge’s Grounds of Judgment dated 1 September 2025, this Court finds no basis to interfere with the findings of the learned Sessions Court Judge. The appeal is dismissed in its entirety with costs of RM 11,000.00 here and below, subject to allocatur.

The factual background may be shortly stated. The original action in the Sessions Court (Civil Suit No. WA-A52NCC-2323- 11/2021) was commenced by Syn Tai Hung Trading Sdn Bhd (“the Plaintiff”) against the three Respondents for the recovery of RM 96,414.29 in respect of construction materials supplied under a credit facility granted to the First Respondent.

The Plaintiff’s case against the Respondents was founded on two related instruments executed on 21 February 2020. The First Respondent applied for and was granted a credit facility for the supply of construction materials. Contemporaneously, the Second and Third Respondents, as directors and shareholders of the First Respondent, executed a Continuing Guarantee and Indemnity in favour of the Plaintiff, by which they jointly and severally guaranteed the repayment of all sums owed by the First Respondent.

On 17 May 2022, the Plaintiff obtained Summary Judgment against the Respondents in the sum of RM 96,414.29 together with costs and interest. The Respondents’ liability to the Plaintiff was therefore established and quantified at that stage, and is not in issue before this Court.

On 24 January 2022 — prior to the entry of Summary Judgment — the Respondents had issued a Third-Party Notice against the Appellants. The gravamen of the Respondents’ third-party claim is that: a) the construction materials in question were supplied for use in a project known as the proposed redevelopment works on Lots 8 and 9, Jalan 19/1, Seksyen 19, Bandar Petaling, for Toyoma Aluminium Foil Packaging Sdn Bhd (“the Toyoma Project”); b) the Toyoma Project had been secured through the personal efforts and family connections of the First and Second Appellants, but — because the principal contractor required the sub-contractor to hold a Construction Industry Development Board (CIDB) licence — the Appellants utilised the corporate name and CIDB licence of the First Respondent to take up the sub-contract; c) the Appellants and the Respondents thereupon entered into a separate oral or implied collateral agreement under which the Appellants would manage all aspects of the Toyoma Project and bear all profits, losses, and liabilities arising therefrom, the Second Respondent’s only remuneration being an agreed sum of RM 4,000.00 per month for attending the monthly meetings with the main contractor as nominal director of the First Respondent; d) the Appellants ought accordingly to contribute to or indemnify the Respondents for the Respondents’ liability to the Plaintiff arising from the Toyoma Project.

The relationship between the parties is material. The First Appellant is an acquaintance of the Second Respondent and a partner with him in a registered business known as CH Renovation & Construction Works (Registration No. 201403218632/002358363-W). The Second Appellant is the wife of the First Appellant, and at the material time was employed as a clerk by the First Respondent. The Second and Third Respondents are the directors and shareholders of the First Respondent. The father of the Second Appellant was, on the Respondents’ pleaded case, an employee of the project owner, Toyoma Aluminium Foil Packaging Sdn Bhd — the family connection by which the Toyoma Project was said to have come to the Appellants.

A key piece of documentary evidence is a series of three direct bank transfers from the First Respondent into the personal account of the First Appellant, all bearing the payment reference “toyoma”: RM 41,445.95 on 11 January 2020, RM 49,116.55 on 13 February 2020, and RM 100,000.00 on 20 March 2020, totalling RM 190,562.50.

The Appellants denied any involvement in or control over the Toyoma Project. In respect of the RM 190,562.50 payment, the Appellants contended that it represented reimbursement of construction material costs which the First Appellant had personally advanced on behalf of the project. In support of this contention the Appellants tendered receipts at trial. Those receipts were billed not to the First Appellant personally but to CH Renovation & Construction Works — the partnership business of which the First Appellant and the Second Respondent are partners.

The trial below proceeded over nine days between August 2023 and October 2024. The Respondents called two witnesses: SD1, the Second Respondent (Lee Chee Chuan), and SD2, Mr. Lee Sow Yoong (also referred to as Brandon Lee Sow Yoong), a former site supervisor of the First Respondent. The Appellants called two witnesses: SPK1, the First Appellant (Looi Chee Hong), and SPK2, the Second Appellant (Chea Ai Rene)

On 28 January 2025, the learned Sessions Court Judge partially allowed the third-party claim and ordered that the Appellants jointly and severally contribute to the Respondents’ liability under the Plaintiff’s Summary Judgment, together with costs of RM 6,000.00. The learned Sessions Court Judge’s Grounds of Judgment were delivered on 1 September 2025. It is from that decision that the Appellants now appeal.

The Appellants’ case The Appellants advanced the following five principal grounds of appeal, each of which this Court has considered:

First Ground — the learned Sessions Court Judge erred in failing to appreciate the nature of the third-party action and in disregarding the principle that the Appellants were not privy to the credit facility and Continuing Guarantee between the Plaintiff and the Respondents;

Second Ground — the learned Sessions Court Judge erred in holding that the First Appellant had borrowed the name and capacity of the First Respondent to secure the Toyoma Project, the evidence of SD2 being hearsay and the documents signed by the First Appellant being mere acknowledgements of receipt;

Third Ground — the learned Sessions Court Judge erred in holding that the RM 190,562.50 payment represented profit from the Toyoma Project, the payment being properly characterised as reimbursement supported by receipts and as a discretionary token of appreciation from the Second Respondent;

Fourth Ground — the Respondents failed to discharge their burden of proof in that no written guarantee or indemnity from the Appellants in favour of the Respondents was tendered, no documentary evidence supported the alleged oral arrangement, and certain assertions (in particular the alleged “abuse of trust”) were unpleaded; and

Fifth Ground — the Second Respondent (SD1) was not a credible witness, his testimony being internally inconsistent with his witness statement and materially contradicted by the evidence of SD2.

The Respondents’ case The Respondents submitted that the learned Sessions Court Judge correctly evaluated the totality of the evidence and that no basis for appellate interference had been established. The Respondents emphasised three principal strands of evidence supporting the finding below: the independent testimony of SD2 that the First Appellant had personally secured and managed the Toyoma Project; the First Appellant’s own admission that he had signed work orders, site memoranda, correspondence from the First Respondent to the main contractor, and the Final Account Statement; and the three contemporaneous bank transfers totalling RM 190,562.50 from the First Respondent’s account to the First Appellant’s personal account, each bearing the payment reference “toyoma”.

The Respondents further submitted that the third-party claim was founded not upon the credit facility between the Plaintiff and the First Respondent, but upon a separate and distinct collateral arrangement between the Appellants and the Respondents — to which the doctrine of privity has no application.

IV. ISSUES FOR DETERMINATION Having considered the parties’ submissions, this Court identifies the following issues for determination: i. what is the applicable standard of appellate intervention in respect of findings of fact made by a trial court; ii. whether the Appellants’ privity argument is well founded, having regard to the nature of third-party proceedings under Order 16 of the Rules of Court 2012; iii. whether the learned Sessions Court Judge’s finding that the First Appellant exercised de facto control over the Toyoma Project, and had borrowed the name and capacity of the First Respondent to that end, was plainly wrong; iv. whether the learned Sessions Court Judge’s rejection of the Appellants’ reimbursement defence in respect of the RM 190,562.50 payment was plainly wrong; v. whether the learned Sessions Court Judge’s credibility findings ought to be disturbed on appeal, having regard to the Appellants’ specific attacks on the testimony of SD1 and SD2; and vi. whether the Second Appellant, Chea Ai Rene, is properly held jointly and severally liable, and whether her appeal stands on the same or different footing as the First Appellant’s.

A.Burden and standard of proof The burden of proof in civil proceedings rests upon the party who asserts the affirmative of the issue. The standard is that of a balance of probabilities. In Miller v Minister of Pensions [1947] 2 All ER 372, Denning J (as he then was) stated the standard in terms that have been universally adopted: proof on the balance of probabilities does not require certainty, but only that the event asserted is more probable than not. In Malaysia, the burden is statutorily anchored in sections 101 to 103 of the Evidence Act 1950.

Section 101 of the Evidence Act 1950 provides: a. “(1)Whoever desires any court to give judgment as to any legal right or liability, dependent on the existence of facts which he asserts, must prove that those facts exist.(2)When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person.”

The distinction between the legal burden (which remains stable upon the party asserting the affirmative throughout the trial) and the evidential burden (which may shift as the evidence unfolds) was authoritatively explained by the Federal Court in International Times & Ors v Leong Ho Yuen [1980] 2 MLJ 86, and applied in Tan Kim Khuan v Tan Kee Kiat (M) Sdn Bhd [1998] 1 MLJ 697 — both cited to this Court by the Appellants. In the present case, the legal burden of establishing the oral collateral agreement and the Appellants’ liability under it lay throughout upon the Respondents.

B.Appellate intervention — the “plainly wrong” standard The principles governing appellate intervention in findings of primary fact are well settled. The Federal Court in Gan Yook Chin & Anor v Lee Ing Chin & Ors [2004] 4 CLJ 309, affirming the Court of Appeal in Lee Ing Chin & Ors v Gan Yook Chin & Anor [2003] 1 MLRA 95, held that an appellate court will not interfere with a trial judge’s findings of fact unless the trial judge is shown to have been plainly wrong, or unless there has been no or insufficient judicial appreciation of the evidence.

The Federal Court re-stated the test in Ng Hoo Kui & Anor v Wendy Tan Lee Peng & Ors [2020] 10 CLJ 1 in the following terms: so long as the trial judge’s conclusion can be supported on a rational basis in view of the material evidence, the fact that an appellate court might have decided differently is irrelevant; a finding of fact that is not repugnant to common sense ought not to be disturbed; and the trial judge is to be accorded a margin of appreciation, having had the singular advantage of seeing and hearing the witnesses give their evidence — an advantage which an appellate court, reviewing only the record of proceedings, does not share.

The Court of Appeal in Sivalingam Periasamy v Periasamy & Anor [1996] 4 CLJ 545 and in S Quarry Sdn Bhd v Desaru Development Corporation Sdn Bhd & Ors [2019] MLJU 99 elaborated on the circumstances in which a decision may be characterised as plainly wrong: where the trial court has misdirected itself on the evidence, failed to consider material evidence, made wrong inferences, misapprehended facts, or given reasons which are unsatisfactory or self-contradictory. This Court must therefore ask itself whether the decision below falls within any of those categories — not whether this Court would have reached the same conclusion.

C.Third-party proceedings under Order 16 of the Rules of Court 2012 The Appellants’ First Ground of Appeal proceeds upon the doctrine of privity. It is therefore necessary to set out the position. Order 16 rule 1(1) of the Rules of Court 2012 provides: “Where in any action a defendant who has entered an appearance —(a)claims against a person not already a party to the action any contribution or indemnity;(b)claims against such a person any relief or remedy relating to or connected with the original subject matter of the action and substantially the same as some relief or remedy claimed by the plaintiff; or(c)requires that any question or issue relating to or connected with the original subject matter of the action should be determined not only as between the plaintiff and the defendant but also as between either or both of them and a person not already a party to the action,then, subject to paragraph (2), the defendant may issue a notice in Form 19 (in this Order referred to as a third party notice), containing a statement of the nature of the claim made against him and, as the case may be, either of the nature and grounds of the claim made by him or of the question or issue required to be determined.”

Order 16 establishes that a third-party notice founds an independent cause of action between the defendant and the third party. The defendant’s claim against the third party is not derivative of, nor does it depend upon, the contract between the plaintiff and the defendant. The Appellants’ reliance on the doctrine of privity — and on Kepong Prospecting Ltd & Ors v Schmidt [1968] 1 MLJ 170, Razshah Enterprise Sdn Bhd v Arab Malaysian Finance Bhd [2009] 2 MLJ 102, and Law Kam Loy and Anor v Boltex Sdn Bhd and Others [2005] MLJU 225 — is therefore misconceived as applied to the present facts. Those authorities are unimpeachable in their proper scope, but they have no application where the third-party claim is founded, as it is here, upon a separate collateral agreement between the defendant and the third party. Privity of contract is, in this context, beside the point.

D.Oral and collateral contracts It is settled law that a binding contract may arise from oral communications, from conduct, or from a combination of the two, provided the essential elements of offer, acceptance, consideration, and intention to create legal relations are present. No particular form is required. In Heilbut, Symons & Co v Buckleton [1913] AC 30, the House of Lords cautioned that alleged oral collateral contracts must be examined with care, since the absence of writing increases the risk of reconstruction after the event. This Court accepts that caution as sound. But caution is not refusal: where the evidence of an oral collateral agreement is corroborated by contemporaneous documentary records and by independent testimony, a court may properly find that the agreement was made and given effect to.

E.Contemporaneous documentary evidence and the rejection of evasive testimony Where there is a conflict between a witness’s oral testimony and contemporaneous documentary evidence, a court is entitled — and frequently bound — to place greater reliance on the documentation. The Federal Court in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 1 LNS 119 stated the principle in terms that bear repetition: the acts and deeds of a witness which are contemporaneous with the events in question carry greater probative weight than the same witness’s subsequent oral recollection, particularly where the witness has a purpose of his own to serve.

A trial judge is fully entitled to reject the evidence of a witness who gives evasive or blanket denials, displays selective memory in the face of contradictory documentary evidence, or otherwise shows himself unreliable. This Court was referred by both sides to a line of authority including Lee Lai Cheng v Lim Hooi Teik [2017] 1 MLRH 197, Bulau Bekenu Plantation Sdn Bhd & Anor v Amin bin Antin & Ors [2017] 1 LNS 153, Hong Chee Meng & Anor v Fang Chee Peng & Ors [2021] 1 LNS 643, and Chandrasegaran a/l Balakrishnan v Patrisa a/p Selvarajoo & Ors [2022] MLJU 1455. These authorities affirm, consistently, that a witness who blows hot and cold, or whose recollection is conveniently selective, may be disbelieved.

F.Parties are bound by their pleadings The Federal Court in Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1 affirmed the long-standing rule that parties are bound by their pleadings and may not run a case which has not been pleaded. The earlier Federal Court decision in Yew Wan Leong v Lai Kok Chye [1990] 2 MLJ 152 is to the same effect. This Court will accordingly give effect to the rule — in particular when considering the Appellants’ submission that the Respondents’ reliance on “abuse of trust” was an unpleaded case.

G.Partnerships and sole proprietorships: legal personality It is necessary to dispose of one preliminary matter of legal characterisation. CH Renovation & Construction Works is registered under the Registration of Businesses Act 1956. It is, on the evidence and the parties’ pleadings, a partnership between the First Appellant and the Second Respondent. Neither a sole proprietorship nor an unincorporated partnership has legal personality separate from the natural persons who constitute it. Receipts billed to CH Renovation & Construction Works are therefore, in law, receipts billed to the First Appellant and the Second Respondent jointly. That legal proposition has consequences for the Appellants’ reimbursement defence to which this Court returns under Issue (iv) below.

Issue (i): Standard of Appellate Intervention This Court sits as an appellate court reviewing the decision of the learned Sessions Court Judge. Its function is not to retry the case or to substitute its own assessment of the evidence for that of the trial court. The sole question is whether the learned Sessions Court Judge was plainly wrong in her findings, or whether there has been any failure to evaluate the evidence judicially. This Court is acutely mindful, throughout its analysis, that the learned Sessions Court Judge had the distinct and irreplaceable advantage of observing the witnesses as they testified over nine days of trial — an advantage that this Court, reviewing only the record of proceedings, does not possess. Issue (ii): The Privity Argument and the Nature of Third-Party

Proceedings The First Ground of Appeal proceeds on the premise that, since the Appellants were not privy to the credit facility or to the Continuing Guarantee and Indemnity executed between the Plaintiff and the Respondents, they cannot be held liable thereunder. The premise is correct. The conclusion does not follow.

The Respondents’ third-party claim is not, and has never been, founded upon the credit facility or the Continuing Guarantee. The third-party claim is founded upon a separate and distinct oral or implied collateral agreement between the Appellants and the Respondents — namely, the alleged arrangement under which the Appellants borrowed the corporate name and CIDB licence of the First Respondent to execute the Toyoma Project, and undertook in return to bear all liabilities arising from that execution. Order 16 of the Rules of Court 2012, set out at paragraph 23 above, expressly contemplates the bringing of a third-party claim for contribution or indemnity founded upon such an independent cause of action.

It follows that Kepong Prospecting Ltd v Schmidt and the privity line of authority, whilst correctly stated by learned counsel for the Appellants, are simply directed at a different question. They establish that a stranger to a contract cannot sue or be sued upon it. They do not establish — nor could they — that a stranger to one contract may not enter into a separate and quite different contract under which he assumes liability to one of the parties to the first. The Respondents’ case is of the second kind. The privity argument fails.

The Appellants further submitted that no written guarantee or indemnity from the Appellants in favour of the Respondents was ever tendered. That is true; it is also irrelevant. The Respondents’ case is not that the Appellants gave a written indemnity. The Respondents’ case is that the parties entered into an oral or implied collateral arrangement, the existence of which falls to be proved by all relevant evidence — oral, documentary, and circumstantial. As stated at paragraph 25 above, no particular form is required for the formation of a contract. The absence of writing is a matter going to proof and to the weight of evidence; it is not a bar to liability. Issue (iii): Existence of the Collateral Agreement and the First

Appellant’s De Facto Control The existence of the oral collateral agreement and the First Appellant’s de facto control of the Toyoma Project were findings of primary fact made by the learned Sessions Court Judge upon her assessment of the totality of the evidence. This Court is not persuaded that those findings are plainly wrong. On the contrary, they are amply supported by three distinct and mutually reinforcing strands of evidence: the independent testimony of SD2, the contemporaneous project documents bearing the First Appellant’s own signature, and the RM 190,562.50 transferred to the First Appellant’s personal account under the reference “Toyoma”.

The Appellants attacked SD2’s evidence as hearsay, contending that since SD2 served on the project for only approximately three months he could not have had personal knowledge of how the project was “secured”. This Court accepts that SD2 was not present at the meetings at which the project was awarded, and to that extent his evidence of the original lobbying of the project is necessarily based on what was contemporaneously communicated to him on site. But the bulk of SD2’s material evidence — that the First Appellant chaired site meetings on the project, that the First Appellant gave directions on procurement and material movements, that the First Appellant settled site issues, and that all project documentation was processed through the Second Appellant — is direct evidence of matters within his personal knowledge as site supervisor. The principle in Leong Hong Khie v Public Prosecutor [1986] 2 MLJ 206 does not exclude such direct evidence.

More significantly, SD2’s evidence does not stand alone. It is corroborated by the First Appellant’s own admissions in cross-examination. The First Appellant accepted that he signed (i) work orders for the Toyoma Project (Bundle B1, pages 25 to 30); (ii) site memoranda (page 35); (iii) correspondence from the First Respondent to the main contractor, Crest Builder Sdn Bhd (pages 69 and 70); and (iv) the Final Account Statement with the main contractor (page 138). The Appellants sought to characterise these signatures as mere acknowledgements of receipt by a person assisting on a temporary or caretaker basis. This characterisation cannot bear the weight placed upon it. The Final Account Statement, in particular, is not a document that any person without authority over the project would be permitted to sign on behalf of the contracting company. The learned Sessions Court Judge drew the inference that a person who voluntarily executes such documents on behalf of a company, in the presence of and with the acquiescence of the company’s own directors, must have possessed at the least some material authority or interest in the project. This Court finds no error in that inference. It is the irresistible inference open on the admitted facts.

The Appellants further submitted that the letter dated 24 September 2019 from Creator Builder Sdn Bhd to Crest Builder Sdn Bhd shows that Creator Builder — a separate entity — was awarded only the sub-contract for architectural works, and not the construction works. This Court accepts that proposition as far as it goes. But it does not assist the Appellants. The argument confuses the question. The issue is not whether some other entity was awarded architectural works; it is whether the First Appellant exercised de facto control over the First Respondent’s execution of its sub-contract for the construction works. The documentary record — work orders, site memoranda, correspondence with the main contractor, and the Final Account Statement, all signed by the First Appellant on the First Respondent’s behalf — speaks directly to that question, and is overwhelmingly against the Appellants.

Considered in their totality, the independent testimony of SD2 and the First Appellant’s own admissions as to the official project documents he executed amply support the finding that the First Appellant exercised de facto control and management over the Toyoma Project, and that he did so by way of borrowing the corporate name and CIDB licence of the First Respondent. The finding is not plainly wrong, and this Court declines to disturb it. Issue (iv): The Reimbursement Defence and the RM 190,562.50

Payment The three contemporaneous bank transfers totalling RM 190,562.50, all bearing the reference “toyoma”, moved a substantial sum from the First Respondent’s corporate account into the First Appellant’s personal account. On its face, this documentary record is wholly inconsistent with the Appellants’ pleaded case that they had no financial stake in or involvement with the Toyoma Project.

The Appellants explained these payments as reimbursement of construction material costs personally advanced by the First Appellant on behalf of the First Respondent, tendering some 50 pages of receipts in support. The Appellants quantified those receipts at RM 76,692.40 and accounted for the balance by reference to mislaid or illegible receipts, petrol expenses, and an allowance for the First Appellant’s caretaker assistance on site.

This Court has examined that defence with care and concludes that it is wholly inconsistent with the documentary record and with ordinary commercial practice, for the following cumulative reasons.

First, the receipts tendered are billed to CH Renovation & Construction Works. As this Court has explained at paragraph 29 above, that business is a partnership between the First Appellant and the Second Respondent himself. Receipts billed to that partnership are not, in law, receipts of personal expenditure by the First Appellant alone. If the materials were indeed acquired for the First Respondent through CH Renovation, the natural expectation would be a corresponding invoice or claim from CH Renovation to the First Respondent. No such invoice, claim, statement of account, or contemporaneous documentation of any kind has been produced. The Appellants point to no agreement, oral or written, under which the partnership was to advance funds and seek reimbursement from the First Respondent.

Secondly, in ordinary commercial practice a party who advances a sum in excess of RM 190,000.00 on behalf of another contracting party would ensure that the arrangement is documented at the time — by way of invoice, request for reimbursement, statement of account, or contemporaneous correspondence. The total absence of any such documentation in this case, either before or contemporaneous with the payments, is both material and telling. This Court does not say that an oral reimbursement arrangement is legally impossible. It says only that the proponent of such an arrangement carries the evidential burden of making it good, and that the present record falls far short of that burden.

Thirdly, the First Appellant’s own characterisation of the payment shifted in the course of his testimony. At one point, the payment was said to be a reimbursement of advanced costs. At another, the First Appellant told the Court that the Second Respondent had given the sum as a “token of appreciation” and as a share of “untung niaga” (business profit) for the First Appellant’s assistance. The two explanations are inconsistent. A reimbursement of out-of-pocket expenditure is not a share of profit, and a share of profit is not a reimbursement. The learned Sessions Court Judge was entitled to take this shift in characterisation against the First Appellant’s credibility.

This Court records that it does not adopt the reasoning that the payment reference “toyoma”, considered in isolation, is necessarily inconsistent with reimbursement. The reference identifies the project to which the payment relates; it does not by itself distinguish between profit and reimbursement, since both would naturally bear the project reference. What is dispositive is not the reference taken in isolation but the absence of any underlying documentation supporting the reimbursement characterisation, the legal nature of the partnership receipts, and the internal inconsistencies in the First Appellant’s own account. The learned Sessions Court Judge was fully entitled to reject the reimbursement defence, and this Court finds no error in that rejection.

The Appellants made a further submission on this issue — that the total value of the Toyoma Project was RM 3,208,863.00, that the labour and material costs amounted to over RM 1.4 million, and that it would be commercially absurd for the First Respondent to have received over RM 1.6 million in profit on the project while the First Appellant received only RM 190,562.50. The arithmetic, even if it were accepted, does not advance the Appellants’ case. The Respondents do not say that the entire profit of the Toyoma Project flowed to the First Appellant; they say that the First Appellant exercised control over and stood to bear the profits, losses, and liabilities of the project, of which the RM 190,562.50 represented a documented disbursement to him personally. The Appellants did not put before the trial court any account of where the balance of the project funds went or how they were applied. In the absence of such an account, the bare arithmetic does not displace the documentary record of what was paid into the First Appellant’s personal account.

Issue (v): Credibility of Witnesses The learned Sessions Court Judge made credibility findings adverse to the First Appellant. The Appellants in turn mounted a credibility attack on the Second Respondent (SD1) and submitted that material inconsistencies between SD1 and SD2 rendered both witnesses unreliable. This Court considers each witness separately, mindful that the learned Sessions Court Judge had the direct advantage of observing them give their evidence.

As to SD2 (Lee Sow Yoong), this Court finds him to have been a credible witness. He is an independent witness with no apparent personal stake in the outcome of these proceedings, having ceased to be employed by the First Respondent. His evidence on his direct dealings with the First Appellant on site — that the First Appellant chaired meetings, settled site issues, directed material procurement, and that all documentation passed through the Second Appellant for processing — was clear, internally consistent, and held up under cross-examination. The Appellants’ hearsay objection has been addressed at paragraph 36 above. This Court accepts the learned Sessions Court Judge’s assessment of SD2 as credible.

As to the First Appellant (SPK1), this Court has set out at paragraphs 37, 45, and 46 above the principal features of his evidence which the learned Sessions Court Judge was entitled to find unreliable: his denial of control over the project despite his own admitted signatures on its most important documents; the shifting characterisation of the RM 190,562.50 payment; and the absence of any contemporaneous documentation supporting the reimbursement defence. Applying the principle in Tindok Besar Estate Sdn Bhd v Tinjar Co, the First Appellant’s subsequent verbal denials must yield to the contemporaneous documentary record which shows him acting as a principal in the project. This Court finds no basis to disturb the adverse credibility finding.

As to SD1 (Lee Chee Chuan, the Second Respondent), the Appellants pointed to two principal inconsistencies. The first concerns the Continuing Guarantee and Indemnity dated 21 February 2020: SD1 stated in his witness statement that he and the Third Respondent signed that document, but during cross-examination said he could not recall having seen it. The second concerns the RM 4,000 monthly payment: SD1 said in his witness statement that the Appellants had failed to pay him the agreed monthly sum, but in cross-examination said the sum was automatically deducted from the First Respondent’s account and that he could not recall how many months it had been paid.

These inconsistencies are real and this Court does not minimise them. They go, however, to peripheral matters — the precise execution circumstances of a document collateral to the Respondents’ third-party case, and the precise mechanics of a payment whose existence is not in any event the core question. They do not bear on the central issue of who controlled the Toyoma Project and who received the RM 190,562.50. On the central issue, SD1’s evidence is corroborated by SD2 (whose independent status is undisputed) and by the contemporaneous documents. Applying the principle that an appellate court is bound to look at the totality of the evidence, this Court is not persuaded that the inconsistencies identified by the Appellants are of such gravity as to render the entirety of SD1’s testimony unreliable, still less to displace the corroborated finding below.

The Appellants invoked Mforce Bike Holdings Sdn Bhd v Allianz General Insurance Company (M) Bhd [2026] MLJU 519 for the proposition that the cumulative effect of inconsistencies may justify the rejection of a witness’s testimony in its entirety. The principle stated in that case is unimpeachable; its application is fact-sensitive. In Mforce, the inconsistencies were on material issues and rendered the case-theory unsafe. In the present case, the inconsistencies are on peripheral matters and the case-theory is independently supported. The learned Sessions Court Judge was entitled to attach the weight she did to SD1’s evidence on the matters which mattered, and this Court declines to substitute its own assessment.

Issue (vi): The Second Appellant, Chea Ai Rene The Second Appellant occupies a different evidential position from the First Appellant, and her case requires separate examination. This Court has approached her case on the footing that an administrative role in handling project documentation is not, by itself, sufficient to make a person a contracting party to a collateral agreement. The question is whether, on the totality of the evidence, the learned Sessions Court Judge was entitled to find the Second Appellant jointly and severally liable with the First Appellant.

Several strands of evidence converge against the Second Appellant. First, on the Respondents’ pleaded case, the Toyoma Project came to the Appellants because the Second Appellant’s father was an employee of the project owner, Toyoma Aluminium Foil Packaging Sdn Bhd. The family connection is the genesis of the project. Secondly, the Second Appellant was employed as a clerk of the First Respondent at the material time, and was on SD2’s evidence the person to whom all project documentation, including delivery orders and salary disbursements, was channelled for processing. Thirdly, the Second Appellant is the wife of the First Appellant, the principal beneficiary of the RM 190,562.50 paid out of the First Respondent’s account. Fourthly, on SD1’s evidence (accepted by the learned Sessions Court Judge), the Second Appellant personally prepared and presented the documents — including the Continuing Guarantee and Indemnity — for the Second and Third Respondents’ execution.

Taken cumulatively, these strands support an inference that the Second Appellant was not a passive employee mechanically processing documents handed to her, but an active participant in the arrangement: she was the link between the project owner and her husband; she was the conduit through whom the documentation of the borrowed corporate vehicle was managed; and she stood, with her husband, to benefit from the proceeds. In a closely-held family-based arrangement of this kind, it is not unreasonable for a trial court to draw the inference that husband and wife acted in concert as principals. The learned Sessions Court Judge’s finding to that effect is not plainly wrong.

By way of observation only and not forming part of this Court’s ratio, this Court records that had the only evidence against the Second Appellant been that she processed documents in her capacity as clerk, the outcome of her appeal might well have been different. It is the combination of administrative role with family connection to project origin, marital relationship with the First Appellant, and conduct as the conduit for the borrowed-vehicle documents, that sustains the finding. Future cases on different facts will turn on their own evidence.

Other matters raised by the Appellants The Appellants submitted that the Respondents’ reliance on the Second Appellant’s alleged “abuse of trust” was unpleaded, citing Samuel Naik Siang Ting v Public Bank Bhd. This Court accepts that any case founded on an independent cause of action for breach of fiduciary or other trust duty would have to be pleaded as such. It does not appear, however, that the learned Sessions Court Judge relied on any such independent cause of action. The Second Appellant’s conduct in processing the documents was relied upon as evidence going to her participation in the pleaded oral collateral agreement, not as a separate claim. The pleadings point therefore does not assist the Appellants on this appeal.

The Appellants also submitted that the Respondents adduced no evidence that a CIDB licence was a prerequisite to undertaking the Toyoma Project. That is true. But the Respondents’ case does not stand or fall on whether the CIDB licence was strictly required. The Respondents’ case is that the parties operated on the basis that the licence was required, which is why the First Respondent’s corporate name and licence were borrowed. Whether the licence was in fact a strict prerequisite under any particular contract or regulation is a separate question that the parties did not put in issue at trial. The learned Sessions Court Judge cannot be faulted for not deciding it.

VII. CONCLUSION AND ORDERS For the reasons set out above, this Court finds that the learned Sessions Court Judge was not plainly wrong in her findings of fact, and that there was no failure on her part to evaluate or appreciate the evidence judicially. The three central planks of her decision — the independent testimony of SD2, the First Appellant’s own admitted execution of the project documents, and the RM 190,562.50 transferred to the First Appellant’s personal account under the reference “toyoma” — amply support the finding that the Appellants exercised de facto control over the Toyoma Project under a collateral arrangement with the Respondents. The Appellants’ five grounds of appeal, individually and cumulatively, do not establish a basis for appellate interference.

This Court accordingly makes the following orders: i. the appeal is dismissed in its entirety; ii. the decision of the Sessions Court dated 28 January 2025 is affirmed; and iii. costs of RM 11,000.00 here and below (inclusive of the RM 6,000.00 awarded by the Sessions Court) are awarded to the Respondents, to be paid by the Appellants jointly and severally, subject to allocatur. The quantum has been fixed by this Court in the exercise of its discretion having regard to the length of the trial below (nine days), the volume of the appeal record, the complexity of the issues, and the standards reflected in the Practice Direction on Costs.

VIII. APPRECIATION This Court places on record its appreciation to learned counsel for both parties for their well-prepared written submissions and for the measured quality of their oral advocacy, which greatly assisted the Court in the determination of this appeal. Dated 05hb May 2026 (MOHAMAD REDZUAN BIN IDRUS) JUDICIAL COMMISSIONER KUALA LUMPUR HIGH COURT NCC 5 WILAYAH PERSEKUTUAN KUALA LUMPUR APPEARANCES For the Appellants (Looi Chee Hong & Chea Ai Rene): Mr. Tan Hock Ann (and Aireen with him), of Messrs. Ng, Zainurul, Seke & Khoo, Advocates and Solicitors, OT-9F-03A, 2 Rio Office Tower, Persiaran Rio, Bandar Puteri, 47100 Puchong, Selangor. For the Respondents (LCC Builder Sdn Bhd, Lee Chee Chuan & Fong Chong Lam): Mr. Goh Kee Seng, of Messrs. Kelvin Wong, Phang & Associates, Advocates and Solicitors, Block J-3A-04, Setiawalk, Pusat Bandar Puchong, 47160 Puchong, Selangor.

Bulau Bekenu Plantation Sdn Bhd & Anor v Amin bin Antin & Ors [2017] 1 LNS 153 2. Chandrasegaran a/l Balakrishnan v Patrisa a/p Selvarajoo & Ors [2022] MLJU 1455 3. Gan Yook Chin & Anor v Lee Ing Chin & Ors [2004] 4 CLJ 309 (Federal Court)

Heilbut, Symons & Co v Buckleton [1913] AC 30 (House of Lords)

Hong Chee Meng & Anor v Fang Chee Peng & Ors [2021] 1 LNS 643

International Times & Ors v Leong Ho Yuen [1980] 2 MLJ 86 (Federal Court)

Kepong Prospecting Ltd & Ors v Schmidt [1968] 1 MLJ 170 (Privy

Law Kam Loy and Anor v Boltex Sdn Bhd and Others [2005]

Lee Ing Chin & Ors v Gan Yook Chin & Anor [2003] 1 MLRA 95 (Court of Appeal)

Lee Lai Cheng v Lim Hooi Teik [2017] 1 MLRH 197

Leong Hong Khie v Public Prosecutor [1986] 2 MLJ 206 (Federal

Court) Mforce Bike Holdings Sdn Bhd v Allianz General Insurance

Company (M) Bhd [2026] MLJU 519

Miller v Minister of Pensions [1947] 2 All ER 372 Ng Hoo Kui & Anor v Wendy Tan Lee Peng & Ors [2020] 10 CLJ 1 (Federal Court)

Ratnam v Cumarasamy & Anor [1965] 1 MLJ 228 (Privy Council)

Razshah Enterprise Sdn Bhd v Arab Malaysian Finance Bhd [2009] 2 MLJ 102 (Court of Appeal)

S Quarry Sdn Bhd v Desaru Development Corporation Sdn Bhd & Ors [2019] MLJU 99 (Court of Appeal)

Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1 (Federal Court)

Sivalingam Periasamy v Periasamy & Anor [1996] 4 CLJ 545 (Court of Appeal)

Tan Kim Khuan v Tan Kee Kiat (M) Sdn Bhd [1998] 1 MLJ 697 (High Court)

Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 1 LNS 119 (Federal Court)

Yew Wan Leong v Lai Kok Chye [1990] 2 MLJ 152 (Supreme Court)

Rules of Court 2012 — Order 16 (Third-Party and Similar

Evidence Act 1950 — sections 101, 102 and 103 3. Contracts Act 1950 — by way of general reference to the law of contract 4. Registration of Businesses Act 1956 — by way of general reference to the legal personality of registered businesses 5. Construction Industry Development Board Act 1994 — by way of general reference to the CIDB licensing regime