Ali Said Hamdan Al Rawahi v Ahmad Bin Hassan (BA-12BNCvC-27-05/2024)

This is an appeal by the Appellant, Ali Said Hamdan Al Rawahi, against the decision of the learned Sessions Court Judge (SCJ) dated 10 May 2024, which dismissed the Appellant’s claim against the Respondent, Ahmad bin Hassan, following a full trial.

The material facts are largely undisputed.

The Appellant, a citizen of Oman, invested RM960,000.00 in Bidara Flour Sdn Bhd pursuant to a Share Purchase Agreement dated 28 July 2016, under which he was to hold 48% of the company’s ordinary shares. Payment was made into the company’s account, and the Appellant was appointed as a director.

In March 2022, the Appellant discovered through a Companies Commission of Malaysia (SSM) search that his shareholding had been reduced to 32%, while the Respondent’s shareholding had increased to 68%. He claimed that this reduction occurred without his knowledge or consent, and that the Respondent had fraudulently misrepresented his entitlement to 48% of the shares. S/N nzFQcwbbfkaIwWxoSmx0Ew

The Respondent’s defence was that the Appellant had voluntarily executed a Members’ Resolution and Circular Resolution dated 5 April 2019, approving an increase in paid-up capital from RM2,000,000 to RM3,000,000, and agreeing that the Respondent be allotted an additional 1,000,000 shares, thereby diluting the Appellant’s shareholding to 32%.

After hearing evidence from both parties, the Sessions Court dismissed the Appellant’s claim, finding that the Appellant failed to establish the elements of fraudulent misrepresentation as laid down in Megat Munir bin Megat Abdullah Rafaie & Ors v Mohd Nasri bin Abdul Rahim & Ors [2022] MLJU 2712.

The Appellant argued that the learned Sessions Court SCJ misdirected herself by focusing on the company’s financial status rather than the essence of the misrepresentation. According to the Appellant, the fraudulent misrepresentation was the Respondent’s assurance that he would own 48% of the company’s shares, which led him to pay RM960,000.00, not any assertion regarding the company’s profitability.

The Appellant argued that the Defendant’s conduct, continuing to state in the letter dated 9 March 2022 that the Appellant still held 48% shares, demonstrated clear deceit, as the Respondent was aware by then that the shares had already been reduced to 32%. S/N nzFQcwbbfkaIwWxoSmx0Ew

It was also argued that the Respondent’s reliance on the 5 April 2019 Resolution was unfounded. The Appellant provided documentary evidence, including his passport, visa, and travel tickets, demonstrating he was in India for medical treatment on that date, and therefore could not have signed the Resolution.

The Appellant contended that the company secretary, Salmi binti Salleh (SP2), stated in her statutory declaration that she had never seen the Appellant’s signature and that the Respondent had deceived her into believing the Appellant was in Malaysia, which was not the case.

The Appellant referred to Sarawak Building Supplies Sdn Bhd v Director of Forests & Ors [2009] MLJU 625, to argue that unchallenged evidence must be accepted as true on a balance of probabilities. The Appellant emphasised that the Respondent failed to rebut the testimony of the Appellant and his witnesses, and even admitted in cross-examination that he had induced the Appellant to believe he would own 48% of the shares.

Finally, the Appellant argued that the Defendant’s subsequent criminal charge at the Sessions Court in July 2024 regarding the alleged forged Resolution further supported the inference of fraudulent conduct and falsity in the Respondent’s defence. S/N nzFQcwbbfkaIwWxoSmx0Ew

The Respondent argued that the learned SCJ, having observed the witnesses, was correct to conclude that the Appellant failed to prove fraud or forgery to the required standard. The Respondent maintained that the Appellant merely made bare assertions unsupported by cogent evidence.

The Respondent contended that allegations of fraud and dishonesty require clear and detailed evidence, which was absent in this case.

The Respondent also cited Omega Securities Sdn Bhd v Kok Fook Loy [2010] 9 MLJ 224, arguing that the burden of proof rested on the Appellant to prove that his signature was forged. The Appellant failed to appoint a handwriting expert or present evidence of forgery, and the Sessions Court was therefore justified in dismissing the allegation.

The Respondent further contended that there was no basis to hold him personally liable because the Share Purchase Agreement was between the Appellant and the Company, not between the Appellant and the Respondent individually. Therefore, he was not privy to the agreement and could not be sued in his personal capacity.

The appellate jurisdiction of this Court is governed by well-established principles. An appellate court should be slow to disturb S/N nzFQcwbbfkaIwWxoSmx0Ew findings of fact made by a trial judge who had the benefit of observing witnesses' demeanour. Interventions are only justified if the decision is “plainly wrong” or demonstrates an “insufficient judicial appreciation of the evidence” (see: Sivalingam a/l Periasamy v Periasamy & Anor [1995] 3 MLJ 395, Gan Yook Chin & Anor v Lee Ing Chin & Ors [2004] 4 CLJ 309, Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67).

It is trite law that appellate intervention is warranted if the trial judge failed to evaluate the evidence and issue before him in its entirety and made bare findings of fact with no justifiable reason to substantiate them (MMC Oil & Gas Engineering Sdn. Bhd. v Tan Bock Kwee & Sons Sdn. Bhd. [2016] 2 MLJ 428). Upon perusal of the Records of Appeal and having considered the written and oral submissions by the parties, I find that an appellate intervention is not warranted. My reasons are stated below.

The Court of Appeal cases of Yeohata Machineries Sdn Bhd & Anor v Coil Master Sdn Bhd & Ors [2016] 2 CLJ 414 and UMW Toyota Sdn Bhd & Anor v Allan Chong Teck Khin & Anor [2021] 5 CLJ 193 set out five elements of fraudulent misrepresentation, which were followed in Megat Munir bin Megat Abdullah Rafaie & Ors v Mohd Nasri bin Abdul Rahim & Ors (supra). The Sessions Court applied the correct legal test and found that the Appellant S/N nzFQcwbbfkaIwWxoSmx0Ew failed to prove that the Respondent knowingly or recklessly made a false representation.

This finding was supported by evidence that the Appellant was indeed issued 48% of the company’s shares upon payment of RM960,000.00, in accordance with the Share Purchase Agreement. The Respondent’s explanation that the subsequent reduction resulted from an agreed increase in paid-up capital was accepted by the Sessions Court as a plausible explanation based on contemporaneous documents and the conduct of the parties.

The Court agrees with the Respondent’s submission that the Appellant’s claim of dishonesty was not supported by clear or detailed evidence. Mere suspicion, inconsistency, or dissatisfaction with the share reduction cannot constitute proof of fraudulent intent.

The learned SCJ found that the Appellant failed to prove forgery. The burden of proof was on the Appellant, who did not provide expert evidence or forensic verification of the disputed signature. Consistent with Omega Securities (supra), the absence of such evidence meant the allegation remained unproven.

While the Appellant provided travel documents indicating he was abroad on 5 April 2019, the learned SCJ accepted the Respondent’s explanation that company documents were often signed by the Appellant overseas and returned via email. There was no conclusive proof that this was not the case here. S/N nzFQcwbbfkaIwWxoSmx0Ew

This Court finds that the Sessions Court was entitled to prefer the Respondent’s evidence on this issue. Findings of fact based on witness credibility should not be interfered with unless they are plainly wrong (Gan Yook Chin & Anor v Lee Ing Chin & Ors (supra)).

The Sessions Court found that the Share Purchase Agreement was between the Appellant and the Company, not the Respondent personally. The Appellant himself paid the RM960,000.00 into the company’s account and acquired his shares through the company’s share register. Therefore, any claim arising from that agreement should properly lie against the company, not the Respondent individually.

Having reviewed the entire record, this Court is satisfied that the learned SCJ did not misdirect herself in law or fact. The judge applied the correct principles, assessed the witnesses, and provided adequate reasons. The findings were supported by evidence and the relevant authorities cited by both parties.

The alleged criminal charge against the Respondent, being subsequent to the trial and not part of the trial evidence, does not affect this Court’s appellate assessment.

In light of the foregoing, the Appellant has not proven that the Sessions Court’s decision was incorrect in law or fact, or that there S/N nzFQcwbbfkaIwWxoSmx0Ew was any miscarriage of justice warranting appellate intervention. The appeal is therefore dismissed with costs of RM10,000.00. Dated 27 OCTOBER 2025 -sgd-JAMHIRAH ALI JUDGE HIGH COURT OF MALAYA SHAH ALAM To the parties’ solicitors: For the Appellant : Chu Chin Lee (Messrs Rabinder Budiman & Associates) For the Respondent: Aizzat Musthafa & Ozier Farhan (Messrs Chambers of Solehuddin & Ozier) S/N nzFQcwbbfkaIwWxoSmx0Ew