Selver Rani A/P Maniyan v Nasir Bin Tajuruddin (AA-22NCvC-93-10/2023)

SELVER RANI A/P MANIYAN (Identity Card No.: 780724-08-6218)

MURUGAN A/L RAJANGAM (Identity Card No.: 780528-08-5453)

GEORGE PAKIANATHAN A/L SEBASTIAN (Identity Card No.: 790820-08-6321)

NASIR BIN TAJURUDDIN (Identity Card No.: 840522-08-5665)

NASIR BIN TAJURUDDIN (Identity Card No.: 840522-08-5665 Berniaga di bawah nama dan gaya 'MIG GAS') [Registration No.: LA0049316-V] ...DEFENDANTS GROUNDS OF JUDGMENT INTRODUCTION [1]. This is a dispute arising out of a small commercial partnership which, on the Plaintiffs' case, was conceived for the sale and distribution of refillable gas tanks and related welding and gas supply equipment under the business name "MIG GAS ENTERPRISE". The Plaintiffs contend that the 1st Defendant, Nasir bin Tajuruddin, induced them to contribute substantial capital to the business, thereafter withheld all information and profits, and eventually diverted the business, customers, goodwill and income of the partnership to a new business, "MIG GAS", operated by him alone. [2]. The Plaintiffs' claim is not merely for repayment of monies. It is, more fundamentally, a claim grounded upon partnership obligations, fiduciary duties, the duty to account, and the alleged misuse of partnership assets and opportunities. The Plaintiffs seek, among other reliefs, special damages representing their capital contributions, liquidated ascertained damages under the Partnership Agreement dated 13.10.2020, accounts and inquiries in respect of both "MIG GAS ENTERPRISE" and "MIG GAS", exemplary damages, interest and costs. The Plaintiffs' post-trial submissions describe the action as one arising from the breakdown of a partnership and the breach of fiduciary duties owed by the 1st Defendant as a partner in "MIG GAS ENTERPRISE". [3]. The Defendants resist the claim on several fronts. First, the Defendants deny that the Plaintiffs have proved payment of the sums claimed into the account of "MIG GAS ENTERPRISE". Secondly, the 1st Defendant denies the validity of the Partnership Agreement dated 13.10.2020 and asserts that his signature thereon was forged. Thirdly, the Defendants contend that the Plaintiffs, or persons aligned with them, controlled the accounts and financial affairs of "MIG GAS ENTERPRISE", such that the 1st Defendant had no true knowledge of the transactions complained of. Fourthly, the Defendants argue that the Plaintiffs' failure to lodge police reports in respect of the alleged fraud or misappropriation casts doubt on the claim. These points are substantially set out in the Defendants' written submissions. [4]. The trial was heard over two days, namely 5.1.2026 and 6.1.2026. The Plaintiffs called four witnesses: George Pakianathan a/l Sebastian, Selver Rani a/p Maniyan, Murugan a/l Rajangam and Gunesparant a/l Ramu. The Defendants called two witnesses: Nasir bin Tajuruddin and Sagadevan a/l Shanmuganathan. [5]. I have considered the pleadings, the witness evidence, the agreed facts and issues, the documents contained in the bundles, the posttrial submissions, and the reply submissions. I have also considered the competing legal authorities cited by both parties. For the reasons which follow, I am satisfied that the Plaintiffs have proved the essential foundation of their claim on the balance of probabilities. The Partnership Agreement dated 13.10.2020 is valid and binding. The 1st Defendant owed fiduciary and statutory duties as a partner. He breached those duties by withholding profits and information, and by establishing and operating "MIG GAS" in a manner which diverted or appropriated the business, name, customers and opportunities of "MIG GAS ENTERPRISE". The Plaintiffs are entitled to relief, subject to the Court's assessment of the precise form and quantum of relief. THE SALIENT FACTUAL BACKGROUND [6]. The material chronology is largely not difficult. On or about 20.7.2020, the 1st Defendant represented to the Plaintiffs that they should enter into a mutually beneficial business arrangement concerning the sale and distribution of refillable gas tanks. The Plaintiffs say that the business was presented as profitable and lucrative. The Defendants' own submissions recite the Plaintiffs' version that the 1st Defendant met the Plaintiffs on 20.7.2020 for the purpose of entering into a partnership concerning the sale and supply of refillable gas tanks. [7]. On 26.7.2020, "MIG GAS ENTERPRISE" was registered with the Companies Commission of Malaysia. The Plaintiffs' case is that it was registered as a partnership consisting of the 1st Defendant and the 1st Plaintiff. The Plaintiffs' submissions refer to the SSM registration documents at pages 5 to 9 of Bundle B and state that the business was registered as a partnership comprising Nasir bin Tajuruddin and Selver Rani a/p Maniyan. [8]. On 13.10.2020, a written Partnership Agreement was executed. The Agreement concerned the business operations of "MIG GAS ENTERPRISE". The named participants and shareholdings were stated to be Nasir bin Tajuruddin at 40%, Selver Rani a/p Maniyan at 25%, Sagadevan a/l N. Shanmuganathan at 25%, and George Pakianathan a/l Sebastian at 10%. The Plaintiffs' submissions state that the Agreement provided that the partnership would operate under the name "MIG GAS ENTERPRISE", would last for a term of ten years, and that any partner who breached the partnership would be liable to compensate RM180,000.00 to all other partners. It also prohibited use of the partnership's name, likeness or logo for any purpose outside those related to the agreement. [9]. The Plaintiffs say that, relying on the 1st Defendant's representations and the existence of the partnership, capital was contributed into the business. The 1st and 2nd Plaintiffs, husband and wife, claim that they paid RM201,447.99 into "MIG GAS ENTERPRISE", with payments made through SP4, Gunesparant a/l Ramu, on their instructions. The 2nd Plaintiff further claims to have purchased a lorry bearing registration number WBM 6649 for RM24,000.00 for the business. The 3rd Plaintiff claims to have paid RM109,500.00 into the business. [10]. It is also the Plaintiffs' case that no profits were ever distributed to them and that their repeated inquiries concerning the progress and profits of the business were ignored. They later discovered that the 1st Defendant had launched and registered a new business under the name "MIG GAS". The Plaintiffs' submissions state that "MIG GAS" was registered on 22.8.2022, approximately two years after the formation of "MIG GAS ENTERPRISE", with the same business type, namely "PENGEDAR PERALATAN BEKALAN KIMPALAN DAN GAS". [11]. The Defendants' answer is that the 1st Defendant was the person who registered "MIG GAS ENTERPRISE", that he was allegedly uneducated and inexperienced in the gas business, and that he merely sought assistance from the 2nd and 3rd Plaintiffs to find customers, with commissions to be paid according to customers introduced. The Defendants further allege that the 2nd Plaintiff caused his niece, Dharshini, to be employed as a clerk and that the Plaintiffs then took control of the accounting and financial affairs of "MIG GAS ENTERPRISE". [12]. The Defendants also say that the 1st Defendant only later discovered that the 1st Plaintiff's name had been inserted into the business registration without his knowledge, and that upon discovering this, he exited "MIG GAS ENTERPRISE" and registered a new business, "MIG GAS". [13]. In my judgment, the central contest is not whether there had been business dealings between the parties. Plainly, there had been. The central contest is whether those dealings amounted to a legally binding partnership arrangement and whether the 1st Defendant thereafter dealt with the partnership's assets, name, profits, customers and opportunities in breach of his contractual, statutory and fiduciary obligations. THE ISSUES FOR DETERMINATION [14]. Having regard to the pleadings, the evidence and the submissions, I consider the issues to be determined in the following order. [15]. First, whether the Partnership Agreement dated 13.10.2020 is valid and binding upon the relevant parties, particularly the 1st Defendant. [16]. Secondly, whether a partnership existed in law in respect of the business known as "MIG GAS ENTERPRISE". [17]. Thirdly, whether the 1st Defendant owed statutory and fiduciary duties to the Plaintiffs in relation to the partnership business. [18]. Fourthly, whether the 1st Defendant breached those duties by withholding accounts, profits and information, by diverting business, customers and opportunities, and by establishing or operating "MIG GAS" in competition with or as a substitute for "MIG GAS ENTERPRISE". [19]. Fifthly, whether the Plaintiffs proved their pleaded payments and special damages on the balance of probabilities. [20]. Sixthly, whether the Plaintiffs are entitled to accounts and inquiries in respect of "MIG GAS ENTERPRISE" and "MIG GAS". [21]. Seventhly, whether the Plaintiffs are entitled to liquidated ascertained damages in the sum of RM180,000.00 under the Partnership Agreement, and if so, whether such sum is recoverable as reasonable compensation under Malaysian contract law. [22]. Eighthly, whether exemplary damages ought to be awarded. [23]. Ninthly, the consequential orders on interest and costs. THE APPLICABLE LEGAL FRAMEWORK [24]. The starting point is s. 3(1) of the Partnership Act 1961, which defines partnership as the relation which subsists between persons carrying on business in common with a view of profit. The Federal Court decision in Chooi Siew Cheong v Lucky Height Development Sdn Bhd & Anor [1995] 2 CLJ 11 confirms that the statutory elements require more than mere cooperation or exchange of benefit. There must be a business carried on in common, and that common business must be pursued with a view to profit. The Defendants themselves rely on this authority in contending that there was no true partnership. A publicly available summary of Chooi Siew Cheong similarly records the Federal Court's reasoning that where each party intended a wholly separate business and there was no "business in common", there would be no partnership. [25]. Section 26(a) of the Partnership Act 1961 provides default rules as to the interests and duties of partners, subject to any agreement express or implied. In the absence of contrary agreement, partners are entitled to share equally in capital and profits and must contribute equally towards losses. In the present case, however, there is an express agreement prescribing percentage shares. The statutory default rule does not override the express bargain. Rather, the statute recognises the primacy of the parties' agreement. [26]. Section 30 of the Partnership Act 1961 is of central importance. It provides that partners are bound to render true accounts and full information of all things affecting the partnership to any partner or his legal representatives. The Plaintiffs' submissions correctly emphasise that the duty to render accounts is not a minor procedural obligation but a substantive duty inherent in the fiduciary nature of partnership. [27]. The relationship between partners is one of mutual trust and confidence. The authorities have often described the duty as one of utmost good faith, or uberrimae fidei. A partner who controls the books, accounts, bank access, customers, invoices or receipts of the firm must deal candidly with the other partners. He may not treat partnership assets or partnership opportunities as his own. [28]. In Tham Kim Fai @ Tham Kim Fay v Ng Kon Seong [2006] 7 MLJ 1, relied upon by the Plaintiffs, the principle is that a partner's duty to account and disclose partnership information is strict. A failure to disclose material partnership affairs may suffice to found a breach of the duty to account, without the innocent partner having to prove a separate fraudulent design. The Plaintiffs' submissions set out this proposition expressly. [29]. As to burden of proof, ss. 101 and 102 of the Evidence Act 1950 provide that he who asserts must prove. The Plaintiffs bear the legal burden of proving the facts necessary to establish their claim. However, where the Defendants assert forgery, lack of capacity, unauthorised transfers by Dharshini, or unilateral control by the Plaintiffs, the evidential burden lies on the Defendants to adduce credible evidence supporting those positive allegations. The Defendants themselves rely on s. 101 of the Evidence Act in their reply submissions. [30]. The Court must also distinguish between the legal burden and the evidential burden. The legal burden remains on the Plaintiffs to establish their cause of action. But once the Plaintiffs produce a stamped agreement, SSM records, evidence of business operations, admissions concerning "MIG GAS", invoices, and evidence of nondistribution of profits, the evidential burden shifts in a practical sense to the Defendants to answer those facts. A mere denial, without contemporaneous documents or expert evidence where such evidence is naturally expected, may not suffice. [31]. In Letchumanan Chettiar Alagappan @ L Allagappan & Anor v Secure Plantation Sdn Bhd [2017] 5 CLJ 418, the Federal Court considered, among other matters, issues concerning forgery, burden of proof and whether forgery can only be proved by handwriting expert evidence. The publicly available case summary records that the questions before the Federal Court included whether a complaint of forgery should be treated as fraud, whether forgery can only be proved by handwriting expert opinion, and where the burden should lie. The case supports the broader proposition that the Court must assess the whole evidential matrix and not apply a mechanical rule that expert evidence is invariably required. But where a party alleges forgery and yet adduces no expert evidence, no contemporaneous complaint, and no coherent surrounding evidence, the Court is entitled to treat the allegation with caution. [32]. As to contemporaneous documents, the Court is entitled to prefer contemporaneous documentary evidence over later oral assertions. The Plaintiffs rely on Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 and Foo Sam Ming v Archi Environ Partnership [2004] 1 MLJ 449 for the proposition that oral testimony must be tested against the contemporaneous documents. That principle is particularly apt in this case, where the 1st Defendant's oral denial is to be weighed against a stamped agreement, SSM records, invoices, WhatsApp materials, and admissions under cross-examination. WHETHER THE PARTNERSHIP AGREEMENT DATED 13.10.2020 IS VALID AND BINDING [33]. I turn first to the validity of the Partnership Agreement. This is logically prior to the other issues, because the Plaintiffs' pleaded claim substantially rests upon contractual and fiduciary obligations said to arise under or in connection with the said Agreement. [34]. The Plaintiffs rely on the following circumstances. First, "MIG GAS ENTERPRISE" was registered as a partnership involving the 1st Defendant and the 1st Plaintiff. Secondly, a Partnership Agreement dated 13.10.2020 was executed and stamped. Thirdly, the Agreement bears the name and signature of the 1st Defendant. Fourthly, there is no timely and contemporaneous police report or expert report alleging forgery. Fifthly, the parties acted in a manner consistent with the existence of a partnership. Sixthly, the 1st Defendant admitted matters which are consistent with his participation in the business and inconsistent with his complete denial. [35]. The Defendants rely on a police report made by the 1st Defendant and by Sagadevan denying entry into the Partnership Agreement and denying their signatures. They also argue that if the Agreement existed at all, the Plaintiffs did not comply with it because they failed to prove the capital contributions in the percentage shares stated therein. The Defendants further contend that the absence of initials on every page and the absence of witnessing of signatures undermine the Agreement. [36]. In my judgment, the Plaintiffs' evidence on the existence and validity of the Partnership Agreement is substantially stronger than the Defendants' denial. [37]. First, the Agreement is a contemporaneous document. It is not an isolated sheet produced for the first time at trial. The Plaintiffs' reply submissions trace a chronology in which the Agreement was executed on 13.10.2020, referred to in a letter of demand dated 8.5.2023, pleaded in the Writ and Statement of Claim dated 18.10.2023, included in the application for accounts and inquiries filed on 29.12.2023, and contained in the Common Bundle filed on 15.7.2024. [38]. Secondly, the Agreement bears an LHDN stamp. The Plaintiffs submit that under s. 37 of the Stamp Act 1949, a duly stamped instrument is receivable in evidence and may be acted upon as if originally duly stamped. The stamp does not, by itself, conclusively prove that every signature is genuine. But it is a relevant mark of contemporaneity and formality. It is one factor, among several, which undermines the suggestion that the Agreement is a casual fabrication. [39]. Thirdly, the 1st Defendant's denial of signature was not supported by handwriting expert evidence, a chemist's report, or any other forensic evidence. I do not hold that expert evidence is legally indispensable in every forgery case. It is not. Forgery may be proved or disproved by the totality of circumstances. However, where the document relied upon is stamped, contained in the parties' litigation materials, consistent with SSM records, and followed by conduct consistent with partnership, a bare assertion of forgery is insufficient. [40]. Fourthly, the timing of the police report is troubling. The Plaintiffs' reply submissions assert that the police reports by D1 and Sagadevan were only made on 23.3.2025 and 24.3.2025, after the Agreement had already been pleaded, relied upon in an application, and included in the Common Bundle. The Defendants' own reply submissions confirm their reliance on those police reports to deny signature and entry into the Agreement. [41]. The lateness of the complaint does not automatically render it false. But it significantly reduces its probative value, particularly where the 1st Defendant had ample opportunity to object earlier and where the Agreement had formed part of the Plaintiffs' pleaded and interlocutory case long before the report was lodged. In Wong Hon Leong David v Noorazman bin Adnan [1995] 3 MLJ 283, cited in the Plaintiffs' reply submissions, the Court of Appeal treated a late complaint, raised only after litigation had commenced, with serious caution. [42]. Fifthly, the Defendants' argument about absence of initials on every page or absence of attesting witnesses is not compelling. Commercial agreements, especially among small business operators, are often imperfectly documented. The law does not require every page of a contract to be initialled before it can be valid. Nor does the absence of a witness necessarily invalidate a commercial agreement unless the law governing that particular class of document requires attestation. What matters is whether, on the balance of probabilities, the parties agreed to the terms and acted upon them. [43]. Sixthly, the Agreement is consistent with the surrounding commercial reality. "MIG GAS ENTERPRISE" was not an abstract proposal. It was registered. It traded. It had invoices. It had customers. It had accounts and financial documents. It had WhatsApp communications among the parties. It generated sales and commission. The Plaintiffs' evidence that the business was carried on under the name "MIG GAS ENTERPRISE" is supported by the Defendants' own admissions that a new business "MIG GAS" was subsequently created and that the business type of "MIG GAS" and "MIG GAS ENTERPRISE" was the same. [44]. Seventhly, the 1st Defendant's own evidence contains matters which sit uneasily with a total denial. The Plaintiffs' submissions record that D1 admitted during cross-examination that "MIG GAS" was his sole proprietorship, that it was established two years after "MIG GAS ENTERPRISE", and that the business type was "100%' the same. The establishment of a near-identical business after the partnership business had been operating is more consistent with a breakdown of a prior common business than with a case where the Plaintiffs were merely outsiders or commission agents. [45]. I therefore find, on the balance of probabilities, that the Partnership Agreement dated 13.10.2020 is valid and binding upon the parties to it, including the 1st Defendant. I reject the allegation of forgery as unproved. WHETHER A PARTNERSHIP EXISTED IN LAW [46]. The existence of a written Partnership Agreement is not the end of the matter. The Court must still be satisfied that the arrangement had the legal character of a partnership within s. 3(1) of the Partnership Act 1961. [47]. The Defendants rely on Chooi Siew Cheong v Lucky Height Development Sdn Bhd & Anor [1995] 2 CLJ 11. That reliance is understandable but ultimately misplaced. In Chooi Siew Cheong, the Federal Court held that there was no partnership because the arrangement did not involve a business carried on in common with a view to profit. Each party intended, in substance, to take separate subdivided lots for its own use or disposal. There was no single common business. The Defendants cite this authority to argue that the alleged Agreement here was ineffective because not all parties contributed capital as stated. [48]. The present case is materially different. The business here was not a one-off allocation of property or a division of assets into separate lots for separate exploitation. The business was a trading concern under a common name, "MIG GAS ENTERPRISE". It dealt with the sale and supply of gas and welding-related products. It had customers. It issued invoices. It maintained accounts. It had sales and commission receipts. It had a common commercial object: profit from the supply and distribution business. It therefore satisfies the legal notion of a business carried on in common with a view to profit. [49]. The Plaintiffs' submissions refer to the Profit and Loss Account for the year ended 31.12.2021, which recorded sales and commission received of RM356,999.00 and gross profit of RM190,785.00. Whether those figures are ultimately to be verified through accounts and inquiries, the document is strongly probative of an operating business. A business which records sales, commission and gross profit is not merely an intended or theoretical arrangement. [50]. The Defendants' own case that the 1st Defendant sought the assistance of the 2nd and 3rd Plaintiffs to find customers is also revealing. Even on the Defendants' version, the parties were not strangers. The dispute is whether the Plaintiffs were mere introducers of customers or partners. Having considered the Agreement, the SSM records, the pleaded representations, the admitted business operations, the WhatsApp group, the claimed capital contributions, and the subsequent registration of "MIG GAS", I find that the relationship was that of partnership, not mere commission agency. [51]. I also reject the argument that failure to prove exact capital contribution in the precise proportions stated in the Agreement renders the entire partnership void. Section 26(a) of the Partnership Act operates subject to agreement. It does not say that a partnership is void if a partner contributes less than expected or if there is later dispute about contribution. At most, failure to contribute agreed capital may give rise to a claim between partners, an accounting adjustment, or a defence to a particular monetary claim. It does not retrospectively erase the existence of a partnership where the parties did carry on a common business with a view to profit. [52]. The Defendants' submission that the whole Agreement becomes "null and void" because of alleged non-contribution is unsupported by the language of the Partnership Act and is inconsistent with commercial reality. Partnerships often begin with uneven, delayed or disputed contributions. Such disputes do not automatically nullify the relationship. The correct remedy is accounting and adjustment, not denial of the partnership's existence. [53]. Accordingly, I find that "MIG GAS ENTERPRISE" was a partnership in law. CREDIBILITY AND EVALUATION OF THE WITNESSES [54]. Before turning to breach, it is necessary to state my view on credibility. This is because the dispute involves not only documents but sharply conflicting oral evidence. [55]. The Plaintiffs' evidence is not without difficulty. There are issues concerning the mode of payment, the extent of documentary proof, the role of SP4, and the fact that some payments are said to have been made in cash. These matters require careful scrutiny. Special damages must be specifically pleaded and strictly proved, although strict proof does not mean proof beyond all practical reality or proof only by one form of document. [56]. However, the Defendants' evidence suffers from more serious difficulties. The 1st Defendant's denial of the Partnership Agreement is inconsistent with the surrounding documents and with the timing of his police report. His contention that he had no meaningful knowledge of the account is also difficult to reconcile with his admission that OTPs for partnership transactions were received on his own mobile phone. The Plaintiffs' reply submissions correctly say that this admission undermines the Defendants' allegation that the Plaintiffs unilaterally controlled the accounts. [57]. The Defendants allege that Dharshini made unauthorised transfers from the partnership account to the Plaintiffs' accounts. That is a serious allegation. Yet the Defendants produced no bank statements of Dharshini, no complete tracing analysis, and no independent evidence establishing that she acted on unauthorised instructions. The Plaintiffs' reply submissions emphasise this absence of evidence. [58]. The 1st Defendant's assertion that he was uneducated or incapable of understanding the documents was likewise unsupported by cogent evidence. Such an assertion, even if true to some degree, does not by itself prove that he did not sign the Agreement, did not understand its commercial substance, or was not a partner. Many small traders operate businesses without formal education. Commercial capacity is not defeated by limited schooling. [59]. I also consider it significant that the 1st Defendant admitted that no profits were distributed to the Plaintiffs. The Plaintiffs' submissions reproduce his evidence in cross-examination where, when asked whether he did not give any profits to the Plaintiffs, he answered, "Setuju". This admission is highly material. If the Plaintiffs were partners, non-distribution of profits and non-rendering of accounts are prima facie breaches of duty. If the Plaintiffs were not partners but had contributed funds or procured customers, the admission still calls for explanation as to what happened to the fruits of the business. [60]. The Defendants' position that the Plaintiffs controlled the account is also not wholly reconcilable with the 1st Defendant's receipt of OTPs and the financial documents bearing his name. The Plaintiffs' submissions refer to the balance sheet of "MIG GAS ENTERPRISE" bearing D1's name as preparer or approver and to his evidence that OTPs came to his telephone number. [61]. I accept the principle in Wong Swee Chin v PP [1981] 1 MLJ 1 that material matters not challenged in cross-examination may, in appropriate cases, be treated as accepted. But that principle is not a mechanical rule. It applies most strongly where a fact is crucial, distinctly asserted, and left wholly unchallenged despite the other party having a fair opportunity and obligation to confront it. It does not require the Court to accept evidence that is contradicted by contemporaneous documents, inherently improbable, or unsupported by evidence where evidence would naturally exist. [62]. In the present case, the Plaintiffs did challenge the substance of the 1st Defendant's case. The Plaintiffs challenged him on the establishment of "MIG GAS", the identical business type, the withholding of profits, the invoices and stamp, and the use of the partnership identity. The Plaintiffs' reply submissions make this point expressly. [63]. In assessing credibility, I therefore prefer the evidence supported by contemporaneous documents and admissions. Where the 1st Defendant's oral denials conflict with the stamped Partnership Agreement, SSM records, business documents, invoices, WhatsApp materials and admissions, I prefer the contemporaneous materials. THE ALLEGED FAILURE OF THE PLAINTIFFS TO LODGE POLICE REPORTS [64]. The Defendants submit that the Plaintiffs made serious allegations of fraud, misappropriation and diversion but lodged no police report. The Defendants say that this failure creates suspicion. Their written submissions refer to the Plaintiffs' allegations of fraud and misappropriation and contend that, because these allegations were serious and criminal in character, the absence of any police report undermines the Plaintiffs' case. [65]. I do not accept that submission in the broad manner advanced. A civil claim for breach of partnership duty, breach of contract, fiduciary breach, accounts and recovery of partnership monies does not depend upon the making of a police report. A litigant may pursue civil remedies without invoking the criminal process. The absence of a police report may be relevant in assessing allegations of fraud in a proper case, but it is not fatal. [66]. The Plaintiffs' reply submissions correctly distinguish between a cause of action founded on fraud or deceit and a cause of action founded upon breach of fiduciary duty, breach of partnership obligations and breach of contract. They submit that references to "fraud" or "misrepresentation" in describing misappropriation do not transform the entire claim into one for deceit. I accept that submission. [67]. The essential liability in this case does not require a finding of criminal fraud. It requires findings on whether there was a partnership, whether duties were owed, whether accounts and profits were withheld, and whether the 1st Defendant diverted partnership business or opportunities. Those matters can be proved by civil evidence and on the civil standard. [68]. It would be wrong to impose, as a general principle, an obligation on commercial litigants to lodge police reports before they can pursue fiduciary or contractual claims. Such a requirement would be inconsistent with the nature of civil litigation and with the equitable jurisdiction to order accounts. [69]. In contrast, the 1st Defendant's own late police report alleging forgery is a different matter. He relies on that report as affirmative proof that the Agreement was forged. A police report is not proof of the truth of its contents. It is merely proof that a complaint was made. Where the report is late, unsupported by expert evidence, and inconsistent with the surrounding commercial documents, it carries little weight. CONCLUSION ON VALIDITY AND PARTNERSHIP [70]. I therefore make the following findings at this stage of the judgment. [71]. First, the Partnership Agreement dated 13.10.2020 is valid and binding. [72]. Secondly, "MIG GAS ENTERPRISE" was a partnership within the meaning of s. 3(1) of the Partnership Act 1961. [73]. Thirdly, the 1st Defendant was a partner and owed contractual, statutory and fiduciary duties to the other partners. [74]. Fourthly, the 1st Defendant's denial of the Agreement and allegation of forgery are rejected as unproved. [75]. Fifthly, the Defendants' allegations that the Plaintiffs or Dharshini unilaterally controlled the account and made unauthorised transfers are not proved on the evidence presently before the Court. [76]. Sixthly, the Plaintiffs' failure to lodge police reports does not defeat their civil claim. [77]. The remaining questions concern breach, diversion, proof of damages, accounts and inquiries, LAD, exemplary damages, interest and costs. Those matters are dealt with in the continuation of this judgment. WHETHER THE 1ST DEFENDANT BREACHED THE PARTNERSHIP AGREEMENT AND HIS FIDUCIARY DUTIES [78]. I next consider whether the 1st Defendant breached the Partnership Agreement and the fiduciary duties arising from the partnership relationship. [79]. The Plaintiffs' case on breach is multi-layered. They say, first, that the 1st Defendant controlled the accounts of "MIG GAS ENTERPRISE". Secondly, he withheld all profits from the Plaintiffs. Thirdly, he incorporated or registered a substantially identical business under the name "MIG GAS". Fourthly, he used the invoices, stamp, name and customer base of "MIG GAS ENTERPRISE" interchangeably with "MIG GAS", thereby diverting customers and business opportunities. Fifthly, he used partnership funds for personal or non-partnership purposes. [80]. The Defendants deny breach and say that the Plaintiffs controlled the accounts through Dharshini. They say that the 1st Defendant had no knowledge of the deposits and withdrawals. They further say that the 1st Defendant was entitled to leave "MIG GAS ENTERPRISE" upon discovering that the 1st Plaintiff's name had been inserted in the SSM registration without his knowledge, and to thereafter register "MIG GAS". [81]. In my judgment, the Plaintiffs have proved breach on the balance of probabilities. [82]. The first and most important point is that the 1st Defendant admitted that no profits were paid to the Plaintiffs. The Plaintiffs' submissions reproduce the relevant cross-examination, where the 1st Defendant was asked whether he agreed that he did not give any profits to the Plaintiffs, and he answered "Setuju". [83]. That admission is decisive in its context. The business had generated sales and commission. The Plaintiffs' submissions refer to the Profit and Loss Account for the year ended 31.12.2021, which recorded sales and commission received of RM356,999.00 and gross profit of RM190,785.00. If the business generated sales and gross profit, and if the Plaintiffs were partners, then the 1st Defendant was bound to render accounts and distribute profits according to the agreed shares or otherwise account for why no distributable profits existed. [84]. It is not enough for a partner in control of the business to say merely that no profits were paid. Section 30 of the Partnership Act 1961 imposes a positive obligation to render true accounts and full information of all things affecting the partnership. The duty is proactive. It does not wait until the aggrieved partner files suit. [85]. Secondly, the 1st Defendant had material control over the accounts. He admitted that OTP numbers for "MIG GAS ENTERPRISE" transactions were received on his own mobile number and that he provided the OTP number for transactions. The Plaintiffs rely on this as showing account control, and I accept that submission. [86]. The Defendants say that the clerk, Dharshini, performed the transfers and that she was connected to the Plaintiffs. But that explanation does not assist the Defendants unless supported by proper tracing evidence. If the 1st Defendant's mobile phone received the OTP, he was not a stranger to the account. If he chose to provide OTPs to another person, that was still an act of authorisation or, at the very least, acquiescence. A person cannot simultaneously provide transaction authentication and later claim complete ignorance of the transactions. [87]. Thirdly, the 1st Defendant registered and operated "MIG GAS". The Plaintiffs' submissions record that the 1st Defendant admitted "MIG GAS" was his sole proprietorship, that it was established two years after "MIG GAS ENTERPRISE", and that the business type of "MIG GAS" and "MIG GAS ENTERPRISE" was the same. [88]. This is not an innocent coincidence. The similarity of name, business type and timing is highly material. "MIG GAS" was not a wholly different venture in another industry. It was a business in the same field, bearing substantially the same trading identity, established by the partner who had failed to distribute profits to the other partners. [89]. Fourthly, the Partnership Agreement contained express prohibitions against using the partnership name, likeness or logo for purposes outside the Agreement and against conduct interfering with the partnership business. The Plaintiffs' submissions reproduce Section IX of the Agreement, which includes the prohibition against using the partnership name, likeness or logo and against conduct that might interfere with the partnership business. [90]. The creation and operation of "MIG GAS" therefore breached both the letter and spirit of the Agreement. It appropriated the essential identity of "MIG GAS ENTERPRISE" and enabled the 1st Defendant to trade on the goodwill of the partnership without accounting to the Plaintiffs. [91]. Fifthly, the invoice evidence supports diversion. The Plaintiffs' submissions refer to invoices issued to Ren Steel Sdn Bhd under "MIG GAS ENTERPRISE", then invoices bearing a "MIG GAS" rubber stamp, and later invoices issued by "MIG GAS" to the same customer. The Plaintiffs contend that this demonstrates a systematic substitution of trading identity and customer diversion. [92]. The Defendants did not provide a convincing innocent explanation for this sequence. In a small trading business, customers, invoices, stamps and payment channels are not neutral details. They are the practical machinery through which business is carried out. If an existing partnership customer is progressively dealt with through the new sole proprietorship, that is strong evidence of diversion of partnership opportunity. [93]. Sixthly, the 1st Defendant's own evidence, as summarised in the Plaintiffs' reply submissions, was materially challenged on the substantive breaches: diversion of customers through Ren Steel invoices, withholding of profits, and use of the partnership stamp for "MIG GAS" invoices. I reject the Defendants' submission that the Plaintiffs failed to confront the 1st Defendant on the core issues. [94]. In law, a partner may not, without consent, appropriate for himself a business opportunity belonging to the firm. A partner must not make a secret profit from partnership assets, information, goodwill or customers. Where a partner does so, the proper remedy is not confined to ordinary damages. The Court may order accounts and inquiries so that the defaulting partner disgorges profits made from the breach. [95]. I therefore find that the 1st Defendant breached the Partnership Agreement and his fiduciary duties by failing to render accounts, failing to distribute profits, registering and operating "MIG GAS" in the same business, using or appropriating the partnership's name and goodwill, and diverting customers or opportunities of "MIG GAS ENTERPRISE" to "MIG GAS". WHETHER THE 2ND DEFENDANT IS LIABLE [96]. The 2nd Defendant is described as Nasir bin Tajuruddin trading under the name and style of "MIG GAS". The 2nd Defendant is not, in substance, a separate incorporated company with a legal personality distinct from the 1st Defendant. It is the trading vehicle or sole proprietorship through which the 1st Defendant carried on the new business. [97]. The Plaintiffs' claim against the 2nd Defendant is therefore properly understood as a claim against the business name under which the 1st Defendant traded. The evidence connecting "MIG GAS" to the 1st Defendant is clear. The Plaintiffs' submissions state that "MIG GAS" was registered by D1 as a business entity on 22.8.2022, and that D1 confirmed in testimony that "MIG GAS" was his sole proprietorship. [98]. Accordingly, any order for accounts and inquiries in relation to "MIG GAS" is, in substance, an order against the 1st Defendant in respect of the books, accounts, records and profits of the business carried on by him under that trading name. PROOF OF PAYMENTS AND SPECIAL DAMAGES [99]. I now turn to the more difficult question of special damages. The Plaintiffs claim RM334,947.99, consisting of RM201,447.99 said to have been contributed by the 1st and 2nd Plaintiffs, RM24,000.00 for the lorry purchased by the 2nd Plaintiff, and RM109,500.00 said to have been contributed by the 3rd Plaintiff. The Plaintiffs' concluding prayers set out these figures. [100]. The Defendants submit that the Plaintiffs failed to strictly prove those sums. In particular, the Defendants say that the 1st and 2nd Plaintiffs pleaded payments of RM190,000.00 and RM11,447.99 on two occasions, but later called SP4 to say that he made multiple payments on their instructions. The Defendants further say that SP4 could only show approximately RM50,000.00 entering the "MIG GAS ENTERPRISE" account and that some transfers were small amounts such as RM70.00 and RM40.00. [101]. The Defendants also rely on concessions allegedly made by the 3rd Plaintiff in cross-examination, namely that the bank statement did not show RM109,000.00 being transferred to "MIG GAS ENTERPRISE" and that he had no documentary proof before the Court showing that he transferred RM109,000.00 to the Defendants. [102]. The Plaintiffs answer that special damages may be proved by oral evidence where documentary evidence is unavailable; that cash payments were corroborated by WhatsApp group extracts; that SP4's evidence merely explained how pleaded payments were effected; and that the Defendants' objection confuses material facts with evidence. The Plaintiffs also say that small transfers are not suspicious because they were part of the actual mode by which payments were made. [103]. The law on special damages is settled. Special damages must be specifically pleaded and strictly proved. However, "strict proof" does not mean that the Court can only act on perfect documentary proof. The Court may accept oral evidence if it is credible, probable, and supported by surrounding circumstances. The degree of proof required depends on the nature of the claim, the availability of documents, the course of dealing, and the probabilities of the case. [104].In the present case, I separate the question of liability from the question of exact quantum. I have found that the partnership existed and that the 1st Defendant breached his duties. But the Plaintiffs must still prove the exact sums claimed if they seek immediate judgment for special damages. [105]. On the evidence as presented in the submissions, there is some force in the Defendants' criticism. The pleading appears to state that the 1st and 2nd Plaintiffs paid RM190,000.00 and RM11,447.99 on two occasions. The trial evidence through SP4 appears to involve multiple payments, partly cash and partly online. That is not necessarily fatal. As the Plaintiffs say, material facts need not plead every evidential mechanism. But it does require the Court to scrutinise the proof carefully. [106]. I accept that SP4's evidence was admissible to explain the mode of payment. I do not accept the Defendants' submission that SP4's evidence was inadmissible merely because his role was not pleaded in detail. The material fact pleaded was payment or contribution to the business. The identity of the person used as a channel for some payments is evidential. [107].However, admissibility is not the same as sufficiency. The Court must ask whether the full amount of RM201,447.99 has been proved on the balance of probabilities. If the documentary proof directly shows only part of the amount, and the rest depends on oral evidence and WhatsApp corroboration, the Court must decide whether the oral evidence is sufficiently cogent. [108]. On the present record, I am satisfied that the Plaintiffs made substantial contributions to "MIG GAS ENTERPRISE". That conclusion is supported by the partnership arrangement, the business operations, the WhatsApp evidence referred to by the Plaintiffs, the involvement of SP4, and the overall probabilities of the case. It would be commercially unreal to conclude that the Plaintiffs became involved in this business, entered into a written partnership, participated in communications, and then contributed nothing. [109].But I am not prepared, on the material presently extracted in the submissions, to enter immediate final judgment for the full special damages sum of RM334,947.99 without an accounts and inquiries process or further assessment. The pleaded and evidential discrepancies concerning the precise payment trail, especially for the 3rd Plaintiff's RM109,500.00 and the 1st and 2nd Plaintiffs' RM201,447.99, should be resolved through the accounts and inquiries ordered below. [110]. This approach is consistent with the nature of partnership litigation Where the dispute concerns contributions, accounts, withdrawals, profits, expenses and diversion of business, an accounts and inquiries order is often the more just and precise remedy. It avoids both under-compensating the innocent partners and over-awarding sums not yet fully reconciled. [111]. The lorry claim of RM24,000.00 stands on somewhat different footing. The Plaintiffs' submissions state that P2 purchased a lorry bearing registration number WBM 6649 for RM24,000.00 for the business and refer to Bundle B and Bundle E. The Defendants also acknowledge that P2 accused D1 of using the lorry bought for "MIG GAS ENTERPRISE" for "MIG GAS". [112]. If the lorry was bought for partnership use and then used or retained for the benefit of the 1st Defendant or "MIG GAS", the value of that asset must be brought into account. Whether the proper order is repayment of RM24,000.00, return of the asset, allowance for depreciation, or credit in the partnership account is best determined in the accounts and inquiries process. [113]. Accordingly, I decline at this stage to grant immediate final judgment for the full special damages of RM334,947.99 as a separate money judgment. Instead, I order accounts and inquiries to ascertain the capital contributions, assets, withdrawals, profits, losses and sums due to each Plaintiff. This does not mean that the Plaintiffs have failed in their claim. It means that the proper remedy, in a partnership dispute with incomplete records and disputed payment trails, is accounting first, with monetary judgment thereafter. ACCOUNTS AND INQUIRIES [114]. The Plaintiffs seek an order for accounts and inquiries pursuant to Order 43 of the Rules of Court 2012 to ascertain all accounts and profits of "MIG GAS ENTERPRISE" and "MIG GAS" since inception. Their concluding prayer expressly seeks such an order. [115]. I am satisfied that this is an appropriate case for accounts and inquiries. The reasons are straightforward. [116]. First, there was a partnership. Secondly, the 1st Defendant was in a position of control or material access over the accounts. Thirdly, no profits were distributed to the Plaintiffs. Fourthly, the business generated sales and gross profit. Fifthly, "MIG GAS" was registered and operated by the 1st Defendant in substantially the same field and under substantially the same name. Sixthly, invoice evidence suggests diversion of customers from "MIG GAS ENTERPRISE" to "MIG GAS". [117]. In such circumstances, ordinary damages assessed on the limited documents presently before the Court would be inadequate. The Plaintiffs cannot know the full extent of the profits withheld or diverted because the relevant books and records are in the possession or control of the 1st Defendant. Equity and partnership law exist precisely to address such situations. [118].An order for accounts and inquiries is not punitive. It is restorative. It compels the fiduciary to disclose what he has done with the partnership assets, opportunities and profits. If the account shows that the Plaintiffs are owed money, judgment may then be entered for the amount found due. If the account shows credits in favour of the 1st Defendant, those credits can be taken into account. The process therefore protects both sides, but especially the innocent partners who have been kept out of the financial information. [119].I therefore order accounts and inquiries in respect of "MIG GAS ENTERPRISE" from its inception and in respect of "MIG GAS" from its registration on 22.8.2022, insofar as the business, customers, invoices, receipts, assets, goodwill, stock, funds or opportunities of "MIG GAS" are connected to, derived from, substituted for, or diverted from "MIG GAS ENTERPRISE". [120].The accounts shall include all bank statements, cash receipts, invoices, delivery orders, customer ledgers, supplier records, tax filings, SSM records, accounting worksheets, WhatsApp instructions concerning payments, records of the lorry WBM 6649 records of stock and cylinders, records of sales and commission, and any documents showing the transfer or use of customers from "MIG GAS ENTERPRISE" to "MIG GAS". LIQUIDATED ASCERTAINED DAMAGES [121]. The Plaintiffs claim RM180,000.00 as liquidated ascertained damages under Section III of the Partnership Agreement. They say the clause was freely agreed and that the 1st Defendant admitted during cross-examination that the contract stated that RM180,000.00 would be compensated by the breaching party to all other partners. [122]. The Plaintiffs submit that the sum of RM180,000.00 was a genuine pre-estimate or reasonable contractual sum agreed by all parties, and that D1 is a breaching party within the meaning of the Agreement. [123]. The modern Malaysian approach to agreed damages clauses is governed by s. 75 of the Contracts Act 1950 and the Federal Court's restatement in Cubic Electronics Sdn Bhd v Mars Telecommunications Sdn Bhd [2019] 6 MLJ 15. The Court is no longer confined to the old rigid dichotomy between genuine preestimate and penalty in the manner historically understood. The innocent party must show breach and the existence of a damages clause. The stipulated sum is recoverable if it represents reasonable compensation, subject to the Court's power to reduce it if it is out of proportion to the legitimate interest sought to be protected. [124].Applying that principle, I accept that the RM180,000.00 clause is binding in principle. The 1st Defendant agreed to it. The Partnership Agreement has been found valid. The 1st Defendant breached the Agreement. The clause was designed to protect the partners from serious breach in a ten-year trading partnership where loss may include not only immediate cash loss but also goodwill, customers, business opportunity, confidence and disruption. [125]. The sum of RM180,000.00 is not extravagant when compared with the nature of the partnership, the alleged capital contributions exceeding RM300,000.00, the recorded gross profit figure of RM190,785.00 for 2021 referred to in the submissions, the ten-year term, and the commercial harm of diverting the business to a competing sole proprietorship. [126].I therefore award RM180,000.00 as liquidated damages payable by the 1st Defendant. This sum is awarded once to the Plaintiffs collectively, unless the wording of the Agreement at assessment or extraction clearly provides that the sum is payable separately to each non-breaching partner. The Plaintiffs' own prayer states "RM180,000.00 to be paid by D1 to the Plaintiffs", which I construe as a collective award. [127]. To avoid double recovery, the RM180,000.00 shall be taken into account when final sums are assessed after accounts and inquiries. If the accounts establish additional loss, diverted profits or sums due exceeding the LAD, the Plaintiffs may recover the additional amount if legally permissible. If the accounts overlap with the same loss compensated by the LAD, there must be appropriate set-off to prevent duplication. EXEMPLARY DAMAGES [128]. The Plaintiffs seek exemplary damages of RM100,000.00 for each Plaintiff. They say the 1st Defendant's conduct was calculated, profit-driven, contumelious, and involved abuse of fiduciary position. [129]. The Plaintiffs rely on authorities including Big Junkyard Sdn Bhd & Anor v Chan Kah Wai, where the principle of exemplary damages was stated by reference to "outrageous" conduct and the categories in Rookes v Barnard, as reiterated by the Federal Court in Koperal Zainal bin Mohd Ali & Ors v Selvi a/p Narayan and Tenaga Nasional Bhd v Evergrowth Aquaculture Sdn Bhd. [130]. Exemplary damages are exceptional. They are not awarded merely because a defendant has breached a contract, committed a civil wrong, or behaved badly. They are awarded to punish and deter where the defendant's conduct falls within recognised categories and is so outrageous that ordinary compensatory damages are insufficient to mark the Court's condemnation. [131].In a commercial partnership dispute, the Court must be careful. Breach of fiduciary duty may be serious, but the ordinary remedies of account of profits, equitable compensation, injunctions and costs often provide adequate relief. Exemplary damages should not become an automatic addition to every fiduciary breach. [132]. I accept that the 1st Defendant's conduct was deliberate and commercially improper. He withheld profits, failed to account, and operated a substantially identical business. However, in my judgment, the appropriate primary response is a robust account of profits, the award of LAD, interest and costs. Those remedies are substantial and directly connected to the wrong. [133]. I am not satisfied that a separate award of RM100,000.00 to each Plaintiff is necessary or proportionate at this stage, particularly where accounts and inquiries may reveal the actual extent of profits diverted and permit disgorgement. To award exemplary damages now risks duplication and over-punishment before the full financial picture is known. [134].I therefore decline to award exemplary damages at this stage. However, I expressly reserve liberty to the Plaintiffs to apply, after completion of the accounts and inquiries, for further consequential relief if the accounting process reveals deliberate concealment, falsification of accounts, destruction of records, or profits so consciously extracted from the partnership that compensatory and account-based remedies are shown to be inadequate. INTEREST [135].The Plaintiffs seek interest at 5% per annum on the judgment sum from the date of judgment until full settlement. [136].I award interest at 5% per annum on the RM180,000.00 liquidated damages sum from the date of judgment until full realisation. As for sums found due after accounts and inquiries, interest shall be determined at the assessment stage, taking into account the nature of each sum, the dates of receipt or diversion, and whether the sum represents contribution, profit, asset value or compensation. COSTS [137]. Costs follow the event unless there is reason to order otherwise. The Plaintiffs have succeeded on the principal issues of validity of the Partnership Agreement, existence of partnership, breach of fiduciary duty, breach of contract, and entitlement to accounts and inquiries. The Defendants have failed on their denial of the Agreement and their allegation of forgery. [138]. Although I have not granted the Plaintiffs immediate final judgment for the full special damages and have declined exemplary damages at this stage, those matters do not alter the substantial outcome. The Plaintiffs are the successful parties. [139].I therefore award costs to the Plaintiffs, to be agreed or taxed/assessed by the Registrar. FINAL ORDERS [140]. For the reasons stated above, I make the following orders. [141].It is declared that the Partnership Agreement dated 13.10.2020 is valid and binding. [142].It is declared that "MIG GAS ENTERPRISE" was a partnership within the meaning of the Partnership Act 1961. [143].It is declared that the 1st Defendant breached the Partnership Agreement and his fiduciary duties owed to the Plaintiffs by failing to render true accounts, failing to distribute profits, establishing and operating "MIG GAS" in substantially the same business, and diverting or appropriating the partnership's business, customers, goodwill and opportunities. [144]. Judgment is entered for the Plaintiffs against the 1st Defendant in the sum of RM180,000.00 as liquidated damages under the Partnership Agreement. [145]. The 1st Defendant shall pay interest on the RM180,000.00 judgment sum at 5% per annum from the date of judgment until full realisation. [146]. There shall be an order for accounts and inquiries against the 1st Defendant and the business carried on by him under the name "MIG GAS" to ascertain the accounts, profits, assets, contributions, withdrawals, customer receipts, diverted business and sums due in respect of "MIG GAS ENTERPRISE" and "MIG GAS". [147]. The accounts and inquiries shall include, but are not limited to, the following: all bank accounts used for "MIG GAS ENTERPRISE" and "MIG GAS"; all invoices, receipts, payment vouchers, cash records and delivery orders; all customer ledgers and supplier records; all sales and commission records; all accounting records and tax filings; all records concerning the lorry bearing registration number WBM 6649; all documents concerning Ren Steel Sdn Bhd and any other customer common to "MIG GAS ENTERPRISE" and "MIG GAS"; and all records showing any transfer, use or diversion of stock, funds, goodwill, customers or business opportunities. [148]. The issue of the Plaintiffs' special damages, including the claimed RM201,447.99, RM24,000.00 and RM109,500.00, shall be determined upon completion of the accounts and inquiries, with liberty to enter judgment for any sum found due. [149]. The claim for exemplary damages is declined. [150]. The Plaintiffs shall have costs of the action to be paid by the Defendants [151]. Judgment is accordingly entered for the Plaintiffs in the terms above. Dated 15 July 2026 (ABDUL WAHAB BIN MOHAMED) JUDGE HIGH COURT OF MALAYA IPOH, PERAK Solicitor For the Plaintiffs Tetuan Maxwell, Kenion, Cowdy & Jones Advocates & Solicitors Wisma Makencone, No. 31, Jalan Tun Sambanthan, 30000, Ipoh, Perak Phone: 05-255 1225 Faks : 05-249 2106 Email : maxwell@mkcj.my [RAJ/SD/sl/pg/2300477] Lawyer : Mr. Jeyaramm A/L Rajan Solicitor For the Defendant Tetuan J Hari Vivega Advocates & Solicitors No. 3-1, Jalan Tanjung, SD 13/2, Bandar Baru Sri Damansara 55200 Kuala Lumpur Phone: 03-62629470 Faks :- Email : jharivivega@gmail.com [Ref. No.: JHV113/NSR/LIT/11/2023]