Bimach Powerhouse Sdn Bhd v Lee Chung Hoong (BA-22NCvC-469-11/2022)

LEE CHUNG HOONG

WONG MOOI KIEW (NRIC NO.: 610917-08-6650) …DEFENDANTS

These two actions were heard together. The first action is BA- 22NCvC-219-05/2024 ("Suit 219"). It was originally commenced in the Bangi Sessions Court (BI-A52-7-12/2021) and later transferred to this Court. The second action is BA- 22NCvC-469-11/2022 ("Suit 469"). The parties agreed, and the Court directed that both actions be heard together.

For clarity, I refer to the parties by their names. Wong Mooi Kiew is referred to as "Wong". Bimach Powerhouse Sdn Bhd is referred to as "Bimach". Lee Chung Hoong is referred to as "LCH".

Bimach is a private limited company incorporated in Malaysia. Its business concerns shock absorbers, brake pads, parts and components for motor vehicles.

Wong is an individual. She is the mother of LCH. In Suit 219, Wong is the Plaintiff. In Suit 469, Wong is the Second Defendant.

LCH is the First Defendant in Suit 469. He was formerly a director and shareholder of Bimach from about October 2013 until April 2018.

In Suit 219, Wong pleads that she lent RM1,100,000.00 to Bimach. She pleads that Bimach issued twenty-four cheques as repayment. She claims RM242,917.00, being the value of five dishonoured cheques, together with interest under section 57(a)(ii) of the Bills of Exchange Act 1949.

In Suit 469, Bimach pleads that the nineteen honoured cheques amounting to RM923,084.60 were issued without knowledge or authority. Bimach alleges that LCH had access to Bimach's cheque books, that he caused cheques to be issued, and that Wong and LCH received monies to which they were not entitled. Bimach claims RM923,084.60, general damages, exemplary damages, interest and costs.

Wong and LCH also filed a counterclaim in Suit 469. They seek a declaration that Bimach's action is a tort of abuse of process, general damages, exemplary or aggravated damages, costs and other relief.

The background facts are largely not in dispute, though the parties sharply disagree about what those facts mean. I set out the salient facts as they emerge from the pleadings, witness statements, and oral evidence.

The dispute arises from a series of cheques issued from Bimach's Public Bank account. Wong's claim in Suit 219 is for RM242,917.00, being the value of five dishonoured cheques. Bimach's claim in Suit 469 is for RM923,084.60, being the amount paid through nineteen earlier cheques which Bimach says were issued without authority, by mistake, or through misappropriation involving LCH.

Wong's case is simple. She says she advanced RM1,100,000.00 to Bimach between 2010 and 2016. Bimach then issued twenty four cheques in her favour as repayment. Nineteen cheques were honoured. Five cheques were dishonoured after Bimach stopped payment.

Bimach's case is different. Bimach says Wong did not lend RM1,100,000.00. It says the monies were connected to goods supplied, or other dealings involving LCH. Bimach further says that LCH caused cheques to be issued without authority and that Wong was not entitled to receive those payments.

The short question is this. Were the twenty four cheques genuine repayment cheques issued by Bimach to Wong, or were they issued through misappropriation or unauthorised conduct by LCH? Both suits turn on that factual question.

It was not disputed that Bimach issued a letter dated 26 September 2018 to Public Bank Berhad to stop payment of several cheques, including cheque numbers 054542, 054543, 054544, 054545, 054514, 054515, 054516 and 054517.

The evidence shows that twenty four cheques were issued in favour of Wong. Each cheque was for RM48,583.40. Nineteen of the cheques were honoured. Five cheques were dishonoured upon presentation because Bimach issued "payment stopped" instructions. The five dishonoured cheques were cheque numbers 054514, 054542, 054544, 054545 and 054516. The total amount is RM242,917.00. The stop-payment instruction was given by way of a letter dated 26 September 2018 and the stated reason in that letter was "duplicate issuance of cheques."

Wong's submission describes the arrangement as an "unmistakable structured repayment plan". Wong says the cheques were issued sequentially and regularly. Wong also says that Bimach acknowledged the debt and issued twenty four repayment cheques, nineteen of which were cleared in a one year span. Wong says she had no knowledge of any internal matters of Bimach and simply held and presented the cheques in the ordinary course.

Bimach's case is fundamentally different. It says the RM1.1 million was not a loan. According to Lee Chin Loong (Bimach’s witness), LCH, as a salesman-director working within Bimach, had an arrangement whereby he took goods from Bimach's stock, sold them to customers, and remitted the proceeds through his mother Wong's accounts back to Bimach. This RM1.1 million, says Lee Chin Loong, was the accumulated remittance from LCH for goods he had taken and sold over the years. Further, Bimach says that LCH exploited the company's practice of pre-signing blank cheques, whereby Lee Chin Loong and one other authorised signatory would sign cheques in advance, to issue himself (LCH) and his mother a total of nineteen cheques worth RM923,084.60 without the authority or knowledge of Bimach, thereby misappropriating that amount. Bimach says it discovered this irregularity in September 2018 when the auditor alerted Bimach that cheques had been paid out to a party who was not a known supplier of Bimach.

LCH's evidence, in contrast, is that he had no role whatsoever in the financial administration of Bimach. He says he was a salesman, having joined the company at Lee Chin Loong's invitation despite limited formal education (he did not complete Form 5). He says he had no access to the cheque books, no involvement in issuing any of the twenty-four cheques, and no knowledge of the internal financial arrangements of the company. He points out that his signature does not appear on any of the twenty-four cheques, each was signed by Lee Chin Loong together with one other authorised signatory. He confirms that the RM1.1 million was his mother's loan to Bimach, not a payment by him for goods.

Lee Chin Loong lodged a police report on 14 August 2020. In that report, he complained that LCH had committed criminal breach of trust by withdrawing company monies through company cheques into Public Bank accounts belonging to LCH and Wong. The report also stated that the purpose of the money withdrawal was recorded as "loan repayment to director named Lee Chin Loong", but the money was not handed to Lee Chin Loong.

Wong's response is that there was no contemporaneous complaint, no audit finding, no internal report, no independent witness, and no documentary evidence to support Bimach's serious allegations. Wong and LCH submit that "the problem with Bimach's case is not the law, but the lack of evidence."

Bimach, in reply, says this is incorrect. Bimach says Lee Chin Loong discovered the matter only on or about 26 September 2018 after being inquired by Bimach's auditor, and that he immediately issued the stop payment letter to Public Bank Berhad.

Bimach also says Wong failed to produce a written loan agreement or documents proving the alleged loan of RM1,100,000.00. Bimach relies on the failure to produce cheque images for "Baucar Pembayaran berjumlah RM195,530.00" and "Borang Bayaran berjumlah RM300,000.00", despite a notice to produce.

Wong accepts that the relationship was a family-related transaction and that there was no formal loan agreement. Her answer is that the loan is proven by the flow of funds, Bimach's receipt of RM1,100,000.00, the issue of twenty four cheques, and the fact that nineteen cheques were honoured without protest for about a year. Agreed Issues to be Tried

The parties filed agreed issues to be tried. Since the two suits were heard together, and because the parties occupy different positions in each suit, I reformulate the issues without changing their substance.

The issues are:

Whether Wong advanced RM1,100,000.00 to Bimach.

Whether Bimach promised or agreed to repay that amount to Wong.

Whether the twenty four cheques were issued by Bimach to Wong as repayment.

Whether the five dishonoured cheques amounting to RM242,917.00 give rise to liability under the Bills of Exchange Act 1949.

Whether Bimach has proven that the nineteen honoured cheques amounting to RM923,084.60 were issued by mistake, where there was no reason for Bimach to make payment.

Whether LCH, as director at the material time, was a trustee of Bimach's assets and properties.

Whether LCH breached fiduciary duties, statutory duties, or trust owed to Bimach.

Whether LCH is liable to return RM923,084.60 to Bimach.

Whether Wong assisted or procured LCH to issue or cause Bimach to issue the sum of RM923,084.60.

Whether Wong acted dishonestly in the issuance and receipt of the nineteen cheques.

Whether Wong and LCH conspired to injure or defraud Bimach.

Whether Bimach is entitled to exemplary damages.

Whether Bimach's claim in Suit 469 is an afterthought, abuse of process, or malicious claim.

Whether Wong and LCH are entitled to relief under their counterclaim in Suit 469.

In my view, these issues can be answered through four main questions, that is:

What is the legal effect of the five dishonoured cheques?

Has Bimach proven misappropriation, mistake, breach of trust, or breach of fiduciary duty?

Has Bimach proven that Wong had knowledge of, or participated in, any alleged misconduct?

Has Wong and LCH proven their counterclaim for abuse of process? Analysis and Findings Burden of Proof

The starting point is the burden of proof.

Wong bears the burden of proving her claim in Suit 219. She must prove that the five cheques were issued by Bimach, that she was the payee or holder, that the cheques were presented, and that they were dishonoured.

Bimach bears the burden of proving its defence to Suit 219 and its claim in Suit 469. Bimach asserts misappropriation, mistake, breach of fiduciary duty, breach of trust, dishonest assistance, conspiracy, constructive trust and unjust enrichment. These are positive allegations. Bimach must prove them.

Wong and LCH submit that the legal burden to prove "misappropriation, breach of trust, mistake, or any vitiating factor" rests squarely on Bimach as the party making those allegations. They also submit that Bimach cannot reverse the burden by suggesting that Wong must disprove wrongdoing before statutory liability on the cheques can arise.

I agree. The burden does not shift merely because Bimach makes a serious allegation. Serious allegations require proof. A party who alleges misappropriation must prove facts which support that allegation. Suspicion is not enough (see the case of H&T Industries (JB) Sdn Bhd v Lee Fook Heng [2013] MLRAU 231 – "..mere suspicion and perception do not constitute legal evidence..").

Bimach relies on the absence of a written loan agreement and missing cheque images for two payments. It says Wong failed to prove the loan. That point must be considered. But it does not relieve Bimach from proving its own pleaded case that the cheques were issued without authority or through misconduct.

I therefore approach the case in this way. Wong must first prove the cheque claim. If she does, Bimach must prove a valid answer to those cheques. Separately, Bimach must prove its own claim for RM923,084.60 in Suit 469.

Wong relies on the Bills of Exchange Act 1949. Her submission is that the five dishonoured cheques are valid bills of exchange, that Wong is the holder, that Bimach is the drawer, and that Bimach is liable once dishonour is established.

Under section 73, a cheque is a bill of exchange drawn on a banker payable on demand. Wong also relies on section 30, which provides that every party whose signature appears on a bill is prima facie deemed to have become a party for value, and section 27(1), which recognises antecedent debt or liability as valuable consideration.

Wong further relies on Yee Teck Fah v Lee Chee Meng [2020] MLJU 1054, where the High Court referred to Ong Guan Hua v Chong [1963] 29 MLJ 6 and held that in an action on a negotiable instrument, consideration is presumed and the maker or endorser who wishes to defend must prove that there was no consideration.

Wong also relies on section 2 of the Bills of Exchange Act 1949, which defines "holder" as the payee or indorsee of a bill who is in possession of it. Wong says all twenty four cheques, including the five dishonoured cheques, were made payable to her in her personal capacity.

On dishonour, Wong relies on section 47 of the Bills of Exchange Act 1949. That provision states that when a bill is dishonoured by non-payment, an immediate right of recourse against the drawer and indorsers accrues to the holder.

Wong relies on Gan Kok Hwa v Loo Chooi Ting [2021] MLJU 2336, where the High Court held that the plaintiff, as holder of the cheque, had a statutory cause of action under section 47(2) for immediate recourse against the defendant as drawer by virtue of section 55(1)(a) for the full face value of the cheque.

Wong also relies on Development & Commercial Bank Bhd v Brimal Sdn Bhd (Syarikat Oriental Elastic Industries, Third Party) [1991] 3 MLJ 187. In that case, the High Court held that in an action on a bill of exchange, a mere assertion of fraud or illegality affecting the bill is not enough. Bills of exchange are treated as cash, and unless exceptional circumstances exist, judgment will not be delayed on account of a counterclaim.

I accept these principles. The five cheques were drawn from Bimach's account. They were made payable to Wong. They were presented. They were dishonoured after Bimach stopped payment. The total amount is RM242,917.00.

Wong is the named payee of the five dishonoured cheques. She received and presented the cheques in the ordinary course. There is no evidence that she had knowledge of any alleged irregularity in the issuance of the cheques.

On the facts of this case, Bimach has not discharged the burden of establishing a valid defence to payment. Bimach's sole defence is that the cheques were issued without authority because LCH misappropriated the pre-signed blank cheques. For all the reasons set out above, that defence has not been proven. The Court is satisfied that Bimach received Wong's loan of RM1.1 million, issued the twenty-four cheques as repayment, and is bound by those cheques.

Bimach's submission that the Bills of Exchange Act was not pleaded does not assist Bimach. Wong pleaded the material facts of issuance, presentation, dishonour and non-payment. Wong also specifically prayed for statutory interest under section 57(a)(ii) of the Bills of Exchange Act 1949.

In pleadings, parties are required to plead material facts and not every legal provision relied upon. The purpose of pleadings is to give fair notice of the case to be met. In Boustead Trading

Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331, the Federal Court emphasised that pleadings concern material facts rather than evidence or technical legal formulations. Similarly, in Vellasamy Pennusamy & Ors v Gurbachan Singh Bagawan Singh & Ors [2015] 5 MLJ 437, the Federal Court reiterated that pleadings must contain material facts relied upon, and not the evidence by which those facts are to be proved. Here, Wong pleaded the material facts concerning issuance, presentation and dishonour of the cheques, together with the claim for statutory interest. In the circumstances, I do not accept Bimach's submission that the claim fails merely because the Bills of Exchange Act 1949 was not specifically cited in the body of the pleading.

I therefore find that Wong has established the factual and legal foundation of her claim on the five dishonoured cheques.

The remaining question is whether Bimach has proven a defence that defeats Wong's claim. Whether the RM1,100,000.00 was Advanced by Wong

Bimach's strongest attack on Wong's case is the absence of a written loan agreement. Bimach says Wong failed to produce a loan agreement despite the amount being RM1,100,000.00. Bimach also says Wong failed to produce cheque images for two payments, namely the RM195,530.00 payment voucher and RM300,000.00 payment form.

This criticism has force at first glance. A loan of RM1,100,000.00 would usually be supported by written terms, especially in a commercial setting. There was no written loan agreement. There was no formal repayment schedule. The interest figure was not supported by a clear written calculation.

However, the Court must decide the issue on the whole evidence, not on the absence of one category of document alone.

The evidence shows that Bimach received RM1,100,000.00. Wong and LCH relied on Lee Chin Loong's admission in cross-examination. The question put to him was whether it was not disputed that Bimach had received RM1.1 million from Wong. He answered, "Tidak dipertikaikan."

That admission is important. It does not by itself prove every term of the loan. But it proves receipt. Once receipt is accepted, Bimach must give a credible explanation for what the money was for.

Bimach's explanation is that the money was not a loan from Wong, but related to goods supplied, cash sales, advances by Lee Chin Loong, or repayment connected to LCH. Bimach says it produced annual account statements, details of cash sales from July 2012 to June 2013, proof of cash sales totalling RM1,371,545.85, proof of payment of RM1,000,000.00, and general ledgers showing payments for goods supplied.

I considered that submission. But I am not persuaded that it displaces Wong's case.

The difficulty with Bimach's explanation is that it does not satisfactorily explain the twenty four cheques issued to Wong, each in the same amount of RM48,583.40. It also does not satisfactorily explain why nineteen cheques were honoured without protest. Internal ledger entries, even if they exist, do not by themselves prove misappropriation or defeat the legal character of cheques issued to Wong.

Wong and LCH submit that Bimach's reliance on adverse inference from missing cheque images is misplaced. They submit that the existence of the loan is not proved solely by Wong's recollection but by Bimach's own cheques, banking records and repayment behaviour. They further submit that adverse inference cannot override positive evidence.

I agree in substance. The missing cheque images are a matter to be weighed. They do not answer the core contemporaneous conduct. Bimach received RM1.1 million. Bimach issued twenty four cheques to Wong. Bimach honoured nineteen cheques over time. These facts are more consistent with a repayment arrangement than with Bimach's shifting explanations.

I therefore find, on the balance of probabilities, that Wong advanced RM1,100,000.00 to Bimach and that the twenty four cheques were issued as repayment.

The nineteen honoured cheques are central to the case.

Bimach says these nineteen cheques, amounting to RM923,084.60, were issued without authority and through misappropriation. Wong says those nineteen cheques are the clearest evidence that Bimach treated the arrangement as valid repayment.

The evidence supports Wong's position.

For about one year, from October 2017 to August 2018, nineteen cheques were honoured. Wong and LCH submit that Bimach did not raise any "protest, objection, or reservation" during that period. They also submit that the later attempt to characterise the remaining five cheques as misappropriated is untenable because all twenty four cheques came from the same pattern.

Bimach's answer is that Lee Chin Loong discovered the problem only on 26 September 2018 after the auditor inquired about it. Bimach says the absence of earlier protest is therefore explained by lack of knowledge.

I considered that answer. I accept that a company may sometimes discover irregularities late. But the Court must still ask whether the alleged late discovery is supported by reliable evidence.

In this case, no auditor was called. No audit finding was produced to show misappropriation. No internal investigation report was produced. No forensic report was produced. No direct evidence was given by the person who allegedly discovered the irregularity.

This matters because Bimach's explanation depends substantially on what the auditor allegedly found. If the auditor's inquiry was the trigger for the discovery, the auditor's evidence would have assisted the Court. Without it, the Court is left mainly with Lee Chin Loong's assertion.

I do not treat the absence of the auditor as automatically fatal. But I do treat it as a serious evidential gap. It weakens Bimach's allegation that the honoured cheques were discovered to be wrongful only on 26 September 2018.

The nineteen honoured cheques are objective evidence. They were not mere oral statements. They were banking transactions. Their repeated clearance over time supports Wong's case that the payments were treated as legitimate when made.

I therefore find that Bimach has not proven that the nineteen honoured cheques were unauthorised or misappropriated.

Bimach relies on the stop payment instruction dated 26 September 2018 and the police report dated 14 August 2020.

The stop payment letter proves that Bimach stopped payment on the remaining cheques. It does not prove misappropriation. Wong and LCH submit that the stop payment letter cited duplicity (duplicate issuance of cheques) and not misappropriation, theft, forgery or unauthorised issuance.

I accept that point. If misappropriation was already known and clearly identified, it would have been expected that Bimach would say so in clear terms. The word "duplicity" is not sufficient to prove the serious allegation now advanced.

The police report was lodged on 14 August 2020, almost two years after the stop payment instruction. Bimach says the delay is explained because Wong and LCH had requested Lee Chin Loong not to lodge a police report earlier. Wong and LCH say the police report is self-serving and carries no evidential weight.

A police report may show that a complaint was made. It is not proof that the complaint is true. The truth of the allegation still depends on admissible evidence at trial.

Here, the police report is late. It repeats Lee Chin Loong's complaint. It does not add independent proof. No investigation outcome, prosecution, audit finding, or forensic tracing was produced. I therefore give limited weight to the police report. Whether Misappropriation was Proven

Misappropriation is a serious allegation. It cannot be established by suspicion, family relationship, or internal accounting entries alone.

Bimach's pleaded and submitted case is that LCH caused cheques to be issued from Bimach's account without authority. Bimach relies on the "common practice" of pre-signing blank cheques, access to the office drawer, and the fact that some cheques were issued after LCH had resigned.

I accept that the practice of signing blank cheques is poor internal/administrative control. But poor internal control does not itself prove misappropriation by LCH or dishonest receipt by Wong.

Bimach had to prove who filled in the cheques, when they were filled in, how LCH obtained them, and how Wong knew or participated in the alleged misuse. The evidence does not sufficiently prove those facts.

Wong and LCH submit that Bimach did not identify a single document evidencing misappropriation. They point to the absence of an audit finding, internal complaint, board resolution, forensic report, police action, or witness with direct personal knowledge.

I agree with that assessment. The allegation was not supported by cogent independent evidence.

Gan Jing Yi's (Bimach’s witness) evidence also did not cure the problem. Her evidence was substantially based on information from others, including the auditor and Lee Chin Loong. She could not provide direct proof that LCH misappropriated the cheques.

The law does not require every fact to be proven by direct evidence. Circumstantial evidence may prove a civil case (see Lee Ah Chor v Southern Bank Bhd [1991] 1 MLJ 428). However, the surrounding circumstances must sufficiently support the conclusion sought. Here, the surrounding circumstances do not sufficiently support the allegation of misappropriation.

I therefore find that Bimach has not proven misappropriation on the balance of probabilities. Mistake under Section 73 of the Contracts Act 1950

Bimach also puts its claim as one for money paid by mistake. It relies on section 73 of the Contracts Act 1950. It provides: "73. Liability of person to whom money is paid, or thing delivered, by mistake or under coercion. A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it."

Bimach cites Telekom Malaysia Bhd v KLK Electronic Sdn Bhd [2019] MLJ 631 and Malayan Banking Bhd v Ching Suit Fee [2012] 2 MLJ 289 for the principle that section 73 applies to payments made under mistake and that money paid by mistake may be recovered.

I accept the legal principle. Money paid by mistake may be recoverable. But the question is whether the facts show a mistake.

I find that they do not.

The payments were made through cheques issued in a series. Nineteen cheques were honoured over time. The cheques were not one accidental transfer. They were repeated payments of identical amounts to the same payee. That pattern is not consistent with a mere mistake. The repeated and structured nature of the payments over approximately twelve months is inconsistent with Bimach’s pleaded case of mistaken payment.

Bimach's mistake case also overlaps uneasily with its misappropriation case. One case says payment was unintended by mistake. The other says payment was deliberately caused through dishonesty or breach of trust. Pleading in the alternative is allowed, but the evidence must still support at least one pleaded route. Here, the evidence does not prove either mistake or misappropriation.

I therefore reject Bimach's claim under section 73 of the Contracts Act 1950.

Bimach says LCH, as a director at the material time, was a trustee of Bimach's assets and properties. It says he breached fiduciary duties, statutory duties, and trust by issuing or causing the issuance of cheques.

I accept that a director owes fiduciary duties to the company. LCH was a director of Bimach until April 2018. If Bimach had proven that LCH misused company cheques or procured payment for an improper purpose, he could be liable.

But liability does not follow merely from his former status as director. Bimach must prove the breach.

The evidence does not show, with sufficient clarity, that LCH filled in the cheques, removed them from the office drawer, or caused their issuance without authority. Bimach relies on access and opportunity. Access and opportunity are relevant, but they are not enough when tested against the objective evidence that the cheques were signed by authorised signatories, were issued in a structured pattern, and nineteen were honoured over time.

I therefore find that Bimach has not proven breach of fiduciary duty or breach of trust by LCH in relation to the RM923,084.60. Wong's Knowledge, Participation and Receipt

Bimach's claim against Wong depends on proof that Wong participated in, assisted, procured, or knowingly received the proceeds of the alleged misconduct.

There is no evidence that Wong had access to Bimach's cheque books. There is no evidence that she prepared the cheques. There is no evidence that she instructed any authorised signatory to sign the cheques. There is no evidence that she knew the cheques were allegedly unauthorised.

Bimach relies on Wong's relationship with LCH. Wong is LCH's mother. That relationship may explain why the transaction was not formally documented. But relationship is not proof of dishonesty. It is also not proof of collusion.

Wong and LCH submit that Bimach did not allege, let alone establish, wrongdoing by Wong in relation to the issuance of the cheques. They also submit that there is no evidence of collusion, inducement or participation by Wong in any internal irregularity.

I accept that submission. Bimach has not proven that Wong participated in any alleged misconduct or had knowledge of it. On the evidence, Wong received the cheques as payee and holder. Bimach has not proven that her receipt was dishonest or wrongful. Dishonest Assistance, Conspiracy and Unjust Enrichment

Bimach also pleads dishonest assistance, conspiracy, constructive trust and unjust enrichment.

These causes of action fail for the same basic reason. The factual foundation is not proven.

Dishonest assistance requires proof of dishonest assistance in a breach of trust or fiduciary duty. Bimach has not proven the underlying breach in relation to the cheques. It has also not proven dishonest assistance by Wong.

Conspiracy requires proof of a combination or agreement to injure or defraud Bimach. Bimach has not proven any agreement between Wong and LCH to injure Bimach.

Constructive trust and knowing receipt require proof that Wong received property in circumstances making it unconscionable for her to retain it. That was not proven.

Unjust enrichment requires an unjust factor. Since I have found that the payments were made pursuant to repayment of monies received from Wong, there is no unjust factor.

Wong and LCH submit that internal ledger entries and internal arrangements cannot override the legal effect of cheques issued to Wong. They say Bimach's internal accounting treatment does not establish misappropriation or displace statutory liability. I agree.

Both sides attacked credibility.

Bimach attacked Wong's credibility. It said Wong was inconsistent, evasive, and unable to explain the loan documents fully. It relied on the absence of a written loan agreement and missing cheque images.

Wong and LCH attacked Lee Chin Loong's credibility. They said his explanation shifted, that he relied on matters allegedly discovered by the auditor, and that the auditor was not called.

I do not decide this case based only on demeanour. The better approach is to test oral evidence against contemporaneous documents and conduct.

Wong's evidence had weaknesses. There was no written loan agreement. Her explanation on interest was not precise. Some parts of her oral evidence were not detailed. But her central account is supported by objective facts. Bimach received RM1.1 million. Twenty four cheques were issued to her. Nineteen cheques were honoured. Five cheques were stopped. Those facts support her case.

Lee Chin Loong's evidence also had weaknesses. His explanation depended heavily on the alleged auditor discovery. The auditor was not called. His explanation of goods supplied, share purchase, advances and internal accounting did not satisfactorily explain why twenty four cheques of identical amounts were issued to Wong and why nineteen were honoured.

Wong and LCH submitted that Bimach's case shifted from all cheques being stolen or misappropriated, to some being legitimate repayments, to explanations involving share purchase, goods supplied and advances. I do not adopt counsel's characterisation that Bimach was "trying its luck". But I accept that Bimach's narrative was not sufficiently coherent.

I find Wong's version more consistent with the objective documents and the commercial pattern of the cheques.

Both sides raised missing documents.

Bimach says Wong failed to produce cheque images for two payments despite notice to produce. Wong says Bimach failed to call the auditor and failed to produce any audit finding, internal complaint, board resolution or forensic report.

Section 114(g) of the Evidence Act 1950 permits the Court, in appropriate cases, to draw an adverse inference where evidence which could be and is not produced would, if produced, be unfavourable.

I do not draw an adverse inference against Wong merely because two cheque images were not produced. The issue is not whether every bank-in image exists. The question is whether, on the whole evidence, Wong proved the transaction. I find that she did.

I also do not treat the failure to call the auditor as automatically conclusive against Bimach. But I do take it into account. The auditor was said to be the person whose inquiry led to the discovery of the alleged wrongdoing. On that issue, the absence of the auditor leaves an important gap in Bimach's case.

The Court must assess the totality of the evidence. Having done so, I find that the evidence favours Wong.

Bimach claims exemplary damages.

Since I have found that Bimach has not proven misappropriation, breach of fiduciary duty, dishonest assistance, or conspiracy, the claim for exemplary damages cannot stand.

Bimach relied on authorities on exemplary damages and submitted that the conduct of Wong and LCH was reprehensible. But the factual foundation for such relief is absent. Without proof of wrongdoing, there is no basis for exemplary damages.

Wong and LCH submitted that Bimach's claim for exemplary damages was inconsistent with its mistake case. They argued that a payment made by mistake cannot simultaneously be the product of calculated fraud or malicious conduct. I accept that the inconsistency further weakens Bimach's prayer for exemplary damages.

The claim for exemplary damages is dismissed.

Wong and LCH counterclaim in Suit 469 on the basis that Bimach's action is a tort of abuse of process.

Bimach relies on Conweld Engineering Sdn Bhd & Ors v Goh Swee Boh @ Goh Cheng Kin & Anor [2022] 6 MLJ 810. The Court of Appeal stated that the essential elements of the tort of abuse of process are: the process complained of must have been initiated; the purpose for initiating it must be some purpose other than genuine redress which the process offers; and the claimant must have suffered damage or injury.

Bimach also relies on Richard Curtis & Co Sdn Bhd v Khatijah Abdul Majid [2012] MLJU 1815, where the High Court held that the claim must be based on the action being commenced in bad faith with ulterior motive, and not merely for the protection of a legitimate interest. In that case, the counterclaim failed because the defendant failed to prove the elements of the tort.

I accept these principles.

Wong and LCH say Suit 469 was "weaponised to compel surrender" and was not a genuine suit for redress. They rely on the timing of Suit 469 and the weakness of Bimach's claim.

I find that Bimach's claim failed because Bimach did not prove misappropriation, mistake or dishonest receipt on the balance of probabilities. That does not mean the suit was necessarily filed for an improper purpose. An unsuccessful claim is not, by itself, an abuse of process.

There was a stop payment letter. There was a police report. There were internal concerns raised by Lee Chin Loong. Although I have found those matters insufficient to prove Bimach's claim, they show that Bimach had a factual basis to investigate and bring its claim. The evidence does not prove that Bimach's dominant purpose was collateral or improper.

Further, Wong and LCH have not proven damage flowing from the alleged abuse of process. Bimach's submission specifically raised this point, relying on the requirement that damage is an essential component of the tort.

I therefore dismiss the counterclaim for abuse of process.

Having considered the pleadings, the evidence, the documentary exhibits, and the submissions of the parties, I find that Wong has established her claim in Suit 219.

As for Suit 469, Bimach has failed to prove its claim against Wong and Lee Chung Hoong. I also dismiss Wong and Lee Chung Hoong's counterclaim, as the evidence does not establish abuse of process.

The Court therefore orders as follows:

Wong's claim against Bimach in Suit 219 is allowed in the sum of RM242,917.00.

Bimach's claim in Suit 469 is dismissed.

The counterclaim in Suit 469 is dismissed.

Costs of proceedings are awarded to Wong in the sum of RM20,000.00, subject to allocator. Dated this: 13 May 2026 ~signed~ (NOOR HAYATI BINTI HAJI MAT) JUDGE HIGH COURT OF MALAYA SHAH ALAM, SELANGOR Representative: For the Plaintiff : Phang Weng Lam Messrs Marcus Tan & Co. For the Defendant : Ong Swee Long together with