1. ) Wong Woei Ming v Tan Han Yong (WA-12BNCvC-29-03/2022)

DURIA MANUFACTURING SDN BHD ... APPELLANTS AND TAN HAN YONG ... RESPONDENT (In the matter of Sessions Court Kuala Lumpur In the Federal Territory, Malaysia. Summons No: WA – B52 – 11 – 02/2021 BETWEEN TAN HAN YONG ... PLAINTIFF

DURIA MANUFACTURING SDN BHD ... DEFENDANTS) JUDGMENT Introduction [1] In this judgment, the parties are referred to as they were before the trial court. This is an appeal by the defendants against the decision of the Sessions Court in allowing the plaintiff’s claim. [2] The plaintiff’s claim against the defendants was for failure of the defendants to pay the plaintiff the returns of investment. After a full trial, the Sessions Court found in favour of the plaintiff and allowed the plaintiff’s claim with RM10,000.00 cost. The Sessions Court also allowed general damages in the sum of RM20,000.00. 30/04/2023 15:56:41 WA-12BNCvC-29-03/2022 Kand. 18 S/N 9dZ8twh8L0qc9b9drQmtHA Brief facts [3] The plaintiff met the 1st defendant sometime in 2015. The plaintiff was introduced to the 1st defendant by his friend. In the meet-up, the 1st defendant offered the plaintiff to make some capital investments in his company, the 2nd defendant. The 2nd defendant was running a durian business. [4] It was the plaintiff’s case that the 1st defendant promised him a 3% monthly return for the capital invested by the plaintiff in the 2nd defendant. Based on the representation made, the plaintiff invested in the 2nd defendant for the total sum of RM300,000.00 in three equal payments of RM100,000.00 each. [5] After a year, the 1st defendant neglected to pay the plaintiff the returns as promised. After the plaintiff made a demand, the 1st defendant promised to repay the plaintiff the RM300,000.00 capital investment together with RM60,000.00 profit. Despite repeated demands, the 1st defendant failed to repay the plaintiff. Analysis and findings [6] In dealing with appeals, it is trite that an appellate court will only intervene in the findings made by the learned trial judge—

if there has been a misdirection by the trial judge due to insufficient judicial appreciation of the evidence or if the findings do not accord with the probabilities of the case,

if the trial judge had not properly avail himself of the audio-visual advantage in assessing the credibility of witnesses,

if there was misapprehension of facts or misapplication of the principles of law by the trial judge,

if there was a failure by the trial judge to assess the evidence with available documents and view it with the probabilities of the case, S/N 9dZ8twh8L0qc9b9drQmtHA

if there was a failure by the trial judge to consider the relevancy of contemporaneous documents,

if the findings are against the documentary evidence. (See: Aseambankers Malaysia Berhad v. Shencourt Sdn Bhd [2014] 2 CLJ 773 CA, Arab-Malaysian Finance Bhd v. Steven Phoa Cheng Loon [2003] 1 CLJ 585 CA; [2003] 1 MLJ 567; [2003] 2 AMR 6, Bongsor Bina Sdn Bhd v. Malaysian Building Society Berhad [2014] 1 LNS 1174 CA; [2014] MLRAU 353). [7] It is well-established that the principle on which an appellate court could interfere with findings of fact by the trial court is the “plainly wrong test” principle. (See: Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4 CLJ 309 FC; [2005] 2 MLJ 1). [8] The nature of an appeal from a subordinate court to a High Court is by way of a re-hearing. This is expressly provided for under section 29 of the Courts of Judicature Act 1964 as well as under Order 55 rule 2 of the Rules of Court 2012. [9] It has been held that an appeal serves as a continuation of hearing. (See: QM Resources Sdn Bhd v. Parade Hotel Sdn Bhd & Ors. [2020] 5 CLJ 182 CA; [2020] 5 MLJ 660; [2020] 1 MLRA 227; [2019] AMEJ 0725). As a procedural mechanism for continuation of a trial, an appellate court is not necessarily confined to the findings made by the trial judge. Whether there was in existence an oral agreement between the plaintiff and the 1st defendant [10] An oral agreement is equally enforceable as a written agreement if it is made with valuable consideration. The determination of whether an oral agreement exists is a matter of fact which must be based on the specific circumstances of the case. [11] In the present appeal, the consistency of the plaintiff’s testimony during cross-examination and the undeniable transfer S/N 9dZ8twh8L0qc9b9drQmtHA of funds into the 2nd defendant’s account provided significant support for the plaintiff’s position. By way of analogy, in ruling that there was in fact an oral agreement between the parties the Court of Appeal in John Ambrose v. Peter Anthony & Anor [2017] 6 CLJ 465 CA held, inter alia, as follows: “(1) There were in existence oral agreements between the plaintiff and the first defendant that the payments made to the plaintiff were part payments of the commissions under the oral agreements. These can be seen in (i) the consistency of the plaintiff during cross-examination that the oral agreements took place sometime in 2009 and 2010. The plaintiff’s evidence was supported by PW1 who, in his cross-examination, was also consistent in his evidence that he heard the discussion between the plaintiff and the first defendant on the commissions to be paid to the plaintiff for the projects secured;

(ii) the first defendant’s admission in his evidence to the various payments made to the plaintiff and it was more probable than not that the payments made to the plaintiff were part payments of the commissions pursuant to the oral agreements; (iii) the plaintiff’s possession of the first defendant’s property without any rental which lend support to the plaintiff’s assertion on the variation of the oral agreement where payment of the sum of RM500,000 was to be paid in kind; and (iv) a letter addressed to the first defendant’s solicitors explicitly stating the existence of the oral agreements.”. [12] The following cheques were remitted into the account of the 2nd defendant at Maybank:

Hong Leong Bank Berhad Cheque No. 098576 for the sum of RM100,000.00,

AmBank Cheque No. 323563 for the sum of RM100,000.00, and

AmBank Cheque No. 323564 for the sum of RM100,000.00. [13] It was irrefutable that the sum of RM300,000.00 has been remitted and cleared into the account of the 2nd defendant. This was evidenced by the statements of account, testimonies of the operations manager (PW5) for Hong Leong Bank Berhad at the S/N 9dZ8twh8L0qc9b9drQmtHA Setapak branch and the assistant manager (PW6) for AmBank

(M) Berhad at the Bandar Mahkota Cheras branch. [14] I hold the considered view that the remittance of the total amount of RM300,000.00 into the 2nd defendant’s account provides substantial support for the proposition that an oral representation regarding capital investment in the 2nd defendant’s business was indeed made. There was no evidence that showed the plaintiff had any other dealings with the 2nd defendant that would explain why a particular amount of money was transferred into the 2nd defendant’s account. There was no evidence that showed any other connection with the plaintiff that could explain why money was transferred to the 2nd defendant’s account. [15] I hasten to add that to suggest the 1st defendant was unaware of the aforementioned remittances into the 2nd defendant’s account is implausible given that the 1st defendant held a position as director and the majority shareholder of the latter. [16] In his police report lodged on 01.11.2017 vide Ampang Baru Report No. 1600/17, the plaintiff recounted the same events to the police. The plaintiff also reported the fact that the defendants failed to pay the monthly investment returns and after a year, the 1st defendant pledged to repay the invested capital along with a profit of RM60,000.00. This was further corroborated by a notice of demand sent to the defendants by the plaintiff’s solicitors on 18.01.2021. It is noteworthy that the response issued on 27.01.2021 by the solicitors representing the defendants merely dismissed the demand with an outright denial contending that it lacked merit. Nothing further was said. [17] Upon objective assessment of the facts and evidence, it appears probable that there existed an oral agreement between the parties. It appears probable that the 1st defendant has made a statement to the plaintiff regarding the capital investment. It appears probable that the entire amount of RM300,000.00 was transferred to the 2nd defendant with the intention of investing the S/N 9dZ8twh8L0qc9b9drQmtHA same as represented to the plaintiff by the 1st defendant. It also appears probable that there was a subsequent oral agreement for a return of RM60,000.00 instead of the initial 3% agreed upon. [18] The learned Sessions Court Judge made a finding that DW1 was not consistent in his testimony. This can be seen in her grounds of judgment reproduced in its original language as follows: “[63] Mahkamah juga berpuas hati dan mendapati atas imbangan kebarangkalian bahawa SD1 merupakan seorang saksi yang tidak ‘consistent’ dalam keterangannya. Walau pun mengakui bahawa beliau merupakan seorang Pemegang Saham dan Ketua Pegawai Eksekutif (CEO) semasa dalam pengurusan lama dan dalam pengurusan baru, beliau merupakan Pengarah dalam syarikat Defendan 2 serta melibatkan diri dalam pengurusan syarikat Defendan 2, SD1 masih menyatakan tidak pasti tentang kemasukan wang sebanyak RM300,000.00. SD1 juga menyatakan dia tidak pasti akaun bank Maybank milik Defendan 2 dan dengan jelas menyatakan bahawa beliau telah lupa akaun tersebut. Walau bagaimanapun, semasa disoal balas, SD1 menyatakan pula yang akaun tersebut telah lama tidak digunakan. SD1 juga dilihat tidak konsisten apabila menafikan mengecam Plaintif sedangkan dalam pembelaannya, SD1 mengakui mengenali Plaintif sebagai seorang rakan.”. [19] It is settled law that an appellate court should exercise restraint when it comes to interfering with the findings of facts made by the trial judge particularly in light of the entirety of the evidence presented and the credibility of the witnesses as assessed by the trial judge. In delivering the decision of the then Supreme Court, the Right Honourable Hashim Yeop Sani CJ (Malaya) in Dalip Kaur Gurbux Singh v. Pegawai Polis Daerah (OCPD), Bukit Mertajam & Anor [1991] 1 CLJ Rep 77 SC; [1992] 1 MLJ 1, observed as follows: “As an appellate Court we would not like to interfere with the findings of fact of the trial Judge who saw and heard the witnesses and made an assessment on the credibility and weight of evidence before him. He did not misdirect himself in law or in fact.”. S/N 9dZ8twh8L0qc9b9drQmtHA [20] In light of contemporaneous documents and testimonies of witnesses, I hold the considered view that the learned Sessions Court Judge had taken proper leverage of her audio-visual advantage as the trial judge and made a correct observation when she found that DW1 was not a consistent witness. There are no cogent reasons for this Court to interfere with the findings of the learned trial judge on the credibility of DW1. Origin of the funds [21] It is a well-established principle that a corporation has a distinct legal personality. Despite the fact that the plaintiff held the position of director at TH Dream World Sdn Bhd, the plaintiff himself is not the company. This was plainly evident. The learned counsel for the defendants brought up this point when he disputed the plaintiff’s claim to the funds contending that they rightfully belonged to the company given that the cheques were issued under its name. Now, it is crucial to bear in mind the circumstances surrounding this argument. [22] Notwithstanding the fact that the cheques in question were issued under the name of TH Dream World Sdn Bhd, it is imperative to consider that the plaintiff occupied the position of director at the corporation. Whether or not the plaintiff obtained the requisite authorization from the company is a matter that pertains solely to the relationship between the plaintiff and the company. If indeed such authorization was not obtained, it is only incumbent upon the company to pursue an action against the plaintiff. It did not concern others. [23] However, upon taking a moment to contemplate, it would become apparent that the corporation did not engage in any transactions with the 2nd defendant. Given the lack of business-related affiliation between the two parties, what rationale justifies the company’s payment to the 2nd defendant? In light of the entire sequence of events, wouldn’t the plaintiff’s account be more plausible? In my opinion, it would. S/N 9dZ8twh8L0qc9b9drQmtHA [24] What carries greater significance that tilts the scale of probabilities in favour of the plaintiff in this instance was the fact that the funds were transferred into the account of the 2nd defendant, the transfers were done at the behest of the plaintiff and the plaintiff was one of the directors of TH Dream World Sdn Bhd as well as its majority shareholder. Whether damages were proven [25] According to established legal precedents, it is impermissible for a litigant to succeed in an appeal based on a matter that was not previously raised or pleaded in the court of first instance. This principle is grounded in the fundamental tenets of natural justice. (See: Veronica Lee Ha Ling & Ors v. Maxisegar Sdn Bhd [2009] 6 CLJ 232 FC; [2011] 2 MLJ 141). [26] At the onset, it is observed that this was not part of the grounds relied on by the defendants in the appeal. Despite submitting that the trial judge failed to provide his reasons in making a global award of RM20,000.00 as general damages, the defendants did not raise this issue in the memorandum of appeal as one of the grounds of appeal. In the proceedings before the trial court, the defendants too did not address the issue of general damages. [27] In SPM Membrane Switch Sdn Bhd v. Kerajaan Negeri Selangor [2016] 1 CLJ 177 FC, the Federal Court restated the legal principles of compensating the injured party in a breach of contract case which aims to restore him to the same position as if the contract had been properly executed and allowing him to recover lost profits or benefits he would have received under the agreement. The apex Court also affirmed that in order for a party to claim damages for breach of contract, the loss suffered must have been foreseeable by both parties and must have been a natural and probable consequence of the breach. In delivering the decision of the Federal Court, Her Ladyship Zainun Ali FCJ (as Her Ladyship then was) said as follows: “[117] Section 74(1) and (2) in Hamdan Johan & Ors v. Felcra Bhd & Ors And Another Case [2010] 3 CLJ 474 was held to substantially S/N 9dZ8twh8L0qc9b9drQmtHA affirm the common law rule laid down in Hadley v. Baxendale [1854] 9 Ex. 341; 165 ER 145 where in the general assessment of damages for breach of contract, the general rule is that the aggrieved party is to be put in the same position as they would be if the contract had been properly performed, so that normally he is entitled to recover from the contract breaker his loss of profit or the benefit of the bargain. The other cases cited by the appellant include Bank Bumiputera Malaysia Bhd Kuala Terengganu v. Mae Perkayuan Sdn Bhd & Anor [1993] 2 CLJ 495; [1993] 2 MLJ 76 and Nikmat Masyhur Sdn Bhd v. Kerajaan Negeri Johor Darul Ta’zim [2008] 9 CLJ 46 essentially set forth the same propositions i.e., that the damage or loss suffered must be within the contemplation of both parties whether actual or constructive, that the loss suffered was a natural and probable result of the defendant's breach and that it included loss of profits. We have no disagreement with the statements of principle in this case. It is clear that a rate of commission amounting to 20% was agreed for the collection of the arrears, and it therefore would be the natural and probable result, as well as have been in the contemplation of the parties that premature termination would result in the loss of those profits.”. [28] In the present appeal, the plaintiff was promised a 3% monthly return on his investment of RM300,000.00. This was sufficiently adduced in evidence from the testimony of the plaintiff himself. For the year which the plaintiff did not receive the returns, the amount would obviously be much higher than the award of RM20,000.00 made by the learned trial judge. The loss of 3% monthly return based on the RM300,000.00 investment was obviously foreseeable by both parties and was the natural and probable consequence of the breach by the defendants. [29] The learned trial judge likely considered the fact that the plaintiff’s claim for the return of his capital had already been allowed when making the global award of RM20,000.00. Additionally, the plaintiff’s claim for RM60,000.00 as promised profits which was made subsequent to the plaintiff’s initial demand was also allowed. In addition, this was not brought up as a ground in the memorandum of appeal. Therefore, it was not one of the bases for the defendants’ appeal. As such, I find no merit on this ground. S/N 9dZ8twh8L0qc9b9drQmtHA Conclusion [30] Under these circumstances, I hold the considered view that the plaintiff has succeeded in proving his case on the balance of probabilities. There are no compelling justifications for this Court to intervene in the findings made by the learned Sessions Court Judge. Therefore, I dismiss the appeal and order the payment of RM5,000.00 in cost. Dated 17 April 2023. sgd AHMAD SHAHRIR MOHD SALLEH JUDGE HIGH COURT OF MALAYA KUALA LUMPUR. For the appellant: Tan Chi Sian (Messrs. P.Y. Hoh & Tai) For the respondent: Khairul bin Mukhtar (Messrs. Khairul Anan & Partners) S/N 9dZ8twh8L0qc9b9drQmtHA