(M) Sdn Bhd (“Dtrans”) and Hatyai Pongsiri Forwarding Co. Ltd. S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 5 (“Hatyai Pongsiri”) and also in the quotation between the Defendant (“City Zone”) and Dtrans. [19] Therefore, the LSJ assumed that surely the contract between Plaintiff and Hatyai Pongsiri to transport the consignment up to the Malaysia-Thailand border would also contain a similar waiver of subrogation clause. [20] Hence according to the LSJ, this is why the Plaintiff did not produce the contract between them and Hatyai Pongsiri since it is prejudicial to them. [21] Therefore, the LSJ decided that with the existence of waiver of subrogation clause, the Plaintiff cannot subrogate its right to the insurer to bring this claim against the Defendant (“City Zone”). ANALYSIS AND FINDING [22] This Court is mindful of the fact that in hearing this appeal, it only exercises appellate jurisdiction and is guided by the principles propounded by the Federal Court in S Quarry Sdn Bhd v Desaru Development Corporation Sdn Bhd & Ors [2019] 1 LNS 193 concerning appellate intervention. In summary, the test is whether the LSJ was plainly wrong or the decision is one that no reasonable judge could have reached. [23] Guided by these principles, I will now proceed to consider whether the LSJ committed any errors that warrant interference by this Court. S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 6 Failure to prove negligence against the Defendant [24] The LSJ held that the Plaintiff failed to prove negligence against the Defendant that due to the Defendant’s negligence, the Plaintiff’s consignment was damaged. [25] The Plaintiff pleaded res ipsa loquitor against the Defendant based on the fact that the Defendant had custody of the Plaintiff’s consignment and control of their vehicle when transporting the consignment to its destination. [26] In my opinion, the LSJ has seriously misdirected himself on the onus of proof. [27] The facts reveal that Dtrans had appointed the Defendant (“City Zone”) to transport the Plaintiff’s consignment. [28] Hence, Defendant becomes a sub-bailee of the Plaintiff’s consignment. [29] The law on the contract of bailment is set out in Sections 104 and 105 of the Contracts Act 1950. Both these sections read: - “104 Care to be taken by bailee In all cases of bailment the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality, and value as the goods bailed. 105 Bailee when not liable for loss, etc., of thing bailed S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 7 The bailee, in the absence of any special contract, is not responsible for the loss, destruction, or deterioration of the thing bailed, if he has taken the amount of care of it described in section 104.” [30] In Khoo Than Sui v Chan Chiau Hee [1974] CLJU 64, Seah J (as he then was) set out the law on the contract of bailment for reward as follows: - “According to Halsbury’s Laws of England, 3rd Edn., Vol. 2 para. reads: A custodian for reward is bound to use due care and diligence in keeping and preserving the article entrusted to him on behalf of the bailor. The standard of care and diligence imposed on him is higher than that required of a gratuitous depositary and must be that care and diligence which a careful and vigilant man would exercise in the custody of his own chattels of a similar description and character in similar circumstances. He is therefore bound to take reasonable care to see that the place in which the chattel is kept including the tackle used in connection with it, is fit and proper for the purpose, to see that the chattel is in proper custody, to protect it against unexpected danger should that arise... and if it is injured through his negligence, he will not be excused on the ground that it has been subsequently destroyed by inevitable mischance. The custodian may limit or relieve himself from his common law liability by special conditions in the contract; but they will be strictly construed and will be held not to exempt the bailee from responsibility for losses due to his negligence unless the words used are clear and adequate for the purpose or there is no other liability to which they can apply. Further, the custodian must show that the bailor knew of and assented to the conditions; the mere fact that they are his usual terms will be sufficient... The S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 8 obligation to take due care exists independently of contract and an action based on breach of the obligation is an action founded on tort. The bailee is not, and from special contract, an insurer, and, therefore, in the absence of negligence on his part he is not liable for the loss or damage to the chattel due to some accident, fire, the acts of third parties or the unauthorised acts of his servant acting outside the scope of their employment. As regards the onus of proof, para. 227 reads: When a chattel entrusted to a custodian is lost injured or destroyed, the onus of proof is on the custodian to show that the injury did not happen in consequence of his neglect to use such care and diligence as a prudent or careful man would exercise in relation to his own property. If he succeeds in showing this, he is not bound to show how or when the loss or damage occurred. If a custodian declines either to produce the chattel entrusted to him when required to do so by the owner, or to explain how it has disappeared, the refusal amounts prima facie to evidence of breach of duty on his part and throws on him the onus of showing that he exercised due care in the custody of the chattel and in the selection of the servants employed by him in the warehousing. If the goods are lost or damaged, whilst they are in his possession, the bailee is liable unless he can show - and the burden is on him to show - that the loss or damages occurred without any negligence or default or misconduct of himself or of any of the servants to whom he had delegated his duty (see Morris v. CW Martin & Sons [1965] 2 All ER 725 at p. 731). The question is whether the defendant has discharged this onus? S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 9 [emphasis added]” [31] In TW WU & Co (M) Sdn Bhd v Sanko Asia line Ltd and The Port Swettenham Authority [1975] 1 MLJ 15 Abdul Hamid J (as he then was) said this concerning the burden of proof in respect of a bailee: - “In the final analysis it is apparent that a bailee for reward is under a liability, in the performance of his duties and responsibilities, to exercise due care and diligence of the goods entrusted into his custody as a prudent man would of his own goods according to all circumstances of the case. Where a claim is made for the return of the goods in his possession and on proof of failure to deliver on demand the burden shifts and the onus thereby lies upon him to establish that the loss or disappearance was not due to his fault or misconduct or lack of care or the fault or misconduct or lack of care of his officers or servants.” [32] In Sime Darby Ltd vs Port Swettenham Authority [1966] CLJU 179, Ong J (as he then was) spoke about the burden of proof on the bailee in cases concerning non-delivery as follows: - “A bailor, by pleading and presenting his case properly, can always put the burden of proof on the bailee. In the case of non-delivery, for instance, all he need plead is the contract and the failure to deliver on demand. That puts on the bailee the burden of proving either lose without his fault (which would be a complete answer at common law) or, if the loss was due to his fault, that it was a fault from which he is excluded by the exempting clause.” [33] Back to the facts in the present case, the Defendant from their pleading and evidence does not dispute that their vehicle laden with S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 10 the Plaintiff’s consignment had met with an accident and the Plaintiff’s consignment was damaged. [34] It is not in dispute that the consignment was not delivered by the Defendant (“City Zone”) to the consignee. [35] Hence, this puts the Defendant as sub-bailee the burden of proving either the loss was without their fault or if the loss was due to their fault, it was a fault from which they are excluded by the exemption clause in the contract. [36] In KMA Abdul Rahim & anor v Owners of “Lexa Maersk” & Ors [1973] 2 MLJ 121, it was held by Choor Singh J that a sub-bailee is liable to the first bailor as follows: - “As the second defendants were sub-bailees for reward of the plaintiffs “Jens” cargo, they were both on principle and authority liable for the damage caused to the plaintiffs’ goods. The principal modern authority as to the liability of a sub-bailee to the first bailor is Morris v. CW Martin & Sons [1966] 1 QB 716 where a mink stole sent by the plaintiff to a furrier to be cleaned was, with the consent of the plaintiff, sent on to the defendants as cleaning specialists for them to clean it under a contract between them and the furrier. The mink stole was stolen by a servant of the defendants whose duty it was to clean it. It was held that the defendants had a non-contractual liability to the plaintiffs. Lord Denning MR after citing a passage from Pollock and Wrighton Possession, said at p. 729: By which I take it that if the subbailment is for reward, the sub-bailee owes to the owner all the duties of a bailee for reward: and the owner can sue the sub-bailee direct for loss or damage to the goods; and the sub-bailee (unless he is protected by any S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 11 exempting conditions) is liable unless can prove that the loss or damage occurred without his fault or that of his servants. Diplock LJ said at p. 731: Duties at common law are owed by one person to another only if there exists a relationship between them which the common law recognises as giving rise to such duty. One of such recognised relationships is created by the voluntary taking into custody of goods which are the property of another. By voluntarily accepting from Beder the custody of a fur which they knew to be the property of a customer of his, they brought into existence between the plaintiff and themselves the relationship of bailor and bailee by subbailment. The legal relationship of bailor and bailee of a chattel can exist independently of any contract... Salmon LJ said at p. 737: When the defendants received the plaintiff’s mink stole from the furrier, Beder, for cleaning, they knew that this stole did not belong to him but to one of the customers. They did not know the customer's name. Nevertheless by taking the fur into their possession in these circumstances they became bailees to the plaintiff for reward.” [37] Therefore the Defendant (“City Zone”) as sub-bailees can be held liable to the Plaintiff as the first bailor for damages to the consignment. [38] Hence with due respect to the LSJ, by placing the burden to prove negligence on the Plaintiff, he had approached this matter akin to a claim for negligence in a running down action or motor accident. S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 12 [39] This can be seen from his grounds and the authorities referred to by him in his judgement as follows: - “[28] Mahkamah juga mendapati tiada sebarang keterangan dan/atau saksi telah dikemukakan bagi menentukan isu liabiliti terhadap pihak Defendan atau terhadap pemandu Defendan. Oleh itu bagaimana kemalangan dalam kes ini telah terjadi tidak dijelaskan kepada mahkamah. Saksi-saksi plaintif juga tidak tahu berkenaan dengan kemalangan dan bagaimana ia berlaku. [29] Seterusnya, pernyataan kecuaian Defendan atau pemandu Defendan yang diplidkan oleh pihak Plaintif di perenggan 8, 9, 10 di Pernyataan Tuntutan Plaintif di Ikatan Pliding tidak dibuktikan langsung dalam kes ini. [30] Mahkamah mendapati pihak Plaintif gagal membuktikan pihak Defendan telah cuai dan menjadi prinsip perundangan yang mantap bahwa pihak Plaintif yang perlu membuktikan tuntutan mereka. Ini merujuk kepada kes Wong Thin Yit v Mohamad Ali [1971] 2 MLJ 175 dimana dalam kes ini mahkamah Persekutuan menyatakan seperti berikut: - “In a negligence action the onus of proof rests wholly on the plaintiff whether or not the defendant gives evidence. The Plaintiff cannot succeed without proof of the defendant’s negligence.” [34] Merujuk kepada kes Payremalu Veerapan vs Dr. Amarjeet Kaur & Anor [2001] 4 CLJ 380 Hakim VT Singham menyatakan seperti berikut: - “It is settled law that it is not for the defendants to disprove the allegations as contained under the particulars of negligence in the statement of claim as the legal burden of proof still rests on the plaintiff” S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 13 [35] HMS mendapati bahawa pihak Plaintif hanya merujuk kepada laporan polis yang dibuat oleh pemandu Defendan sepanjang kes Plaintif. Makamah mendapati bahawa laporan polis tersebut hanya mengambarkan satu kemalangan telah berlaku dan tidak langsung mengambarkan kecuaian pemandu defendan seperti yang dipilidkan oleh Plaintif.” [40] This was a clear misdirection by the LSJ. [41] To my mind, the Plaintiff by pleading and adducing evidence that their consignment in the custody of the Defendant never reached its destination is prima facie evidence against the Defendant and this being a case of res ipsa loquitur. [42] In this respect, I refer to the decision in Sharikat Lee Heng Sdn Bhd v Port Swettenham Authority [1971] CLJU 133, where it was held by the Federal Court as follows: - “Having thus averred negligence against the respondent, they succeeded in proving the loss of one case while it was in the respondent’s custody. In the case of non-delivery all that the bailor need plead is the contract and a failure to deliver on demand. That puts on the bailee the burden of proving either loss without his fault (which would be a complete answer at common law) or, if the loss was due to his fault, that it was a fault from which he is excluded by the exemption clause: see Denning LJ in J Spurting v. Bradshaw. [1956] 2 All ER 121, 125. Mere non-delivery, therefore, is prima facie evidence of negligence-this being a case of res ipsa loquitur. And “once negligence on the part of the defendants had been established and this negligence could have caused the loss, it was eminently reasonable to ask them to prove that in fact it did not”: see Hunt & Winterbotham Ltd v. BRS (Parcels) Ltd [1962] 1 QB 617, 634 per Donovan LJ, who went on to say: - S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 14 Similarly, in Brook’s Wharf and Bull Wharf Ltd v. Goodman Bros. [1937] 1 KB 534 (another case of a claim in negligence) it was held that the circumstances of the loss of goods by a bailee may justify the inference of negligence as the cause of the loss, which inference it would be for the bailee to displace.” [43] The Defendant through their sole witness, DW1 the company’s General Manager explained in his evidence that the driver of their trailer was not negligent and the police report lodged by the driver proves this fact. Furthermore, according to DW1, the driver of the third-party vehicle which caused the accident was summoned by the police. [44] In my judgment, DW1’s evidence of what was said by the driver in her police report as to how the accident happened is hearsay. [45] The Defendant failed to call the driver of the trailer and the police investigating officer of the accident to testify how the accident happened. In addition, the summons issued to the 3rd party driver concerning the accident was also not produced. [46] In Lembaga Pelabohan Swettenham v Syarikat Hiap Bee [1975] CLJU 85, it was held by the Federal Court as follows: - “The contention of the appellants that the onus was on the bailors to show that appellants as bailees were negligent found no favour with the learned Judge. This submission was, also made in the case of Port Swettenham Authority v. T W Wu & Co. (M) Sdn. Bhd. [1975] 2 MLJ 73 where we held that the learned Judge was right on the question of onus. In our view, where a bailor and bailee relationship exists then the position is the same as the common law, that is, the onus is on the S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 15 bailee for reward to show that the loss of the goods was not due to his negligence. In this case the Traffic Manager (DW1) gave evidence of system and security. The Chief Clerk (DW2) of the yardstore also gave evidence. But, both of them had no knowledge of the particular consignment. They could not, therefore, give evidence about the missing goods which might be of assistance to the Court. Suffice to say that the learned Judge was right on the evidence in this case to hold that the appellants had failed to show that the loss occurred otherwise than through their negligence. There is no reason for the Court to interfere with his finding of facts. [Emphasis added]” [47] Likewise, in the present case, Defendant has failed to show the damage to the Plaintiff’s consignment occurred otherwise than through their negligence. [48] Hence, it is my finding that the Defendant has failed to discharge the burden that they had exercised due care as a man of ordinary prudence would under similar circumstances. [49] The LSJ therefore erred in failing to consider that Plaintiff had succeeded in raising res ipsa loquitur against the Defendant by adducing prima facie evidence of negligence and instead arrived at the wrong finding that Plaintiff failed to prove negligence against the Defendant. [50] In Achi Jaya Plantations Sdn Bhd v Tuah Guard (M) Sdn Bhd (2014) 3 CLJ 520, it was held by Lau Bee Lan J (as she then was): - “(2) Defendan merupakan baili kepada plaintif berpandukan ss. 101, 102 dan 104 Akta Kontrak 1950. Ini adalah kerana wang plaintif S/N x2Cx5djLMUuSlYxQspMsrw September 12, 2024 16 telah diberi kepada defendan dan oleh itu, berada di bawah jagaan defendan sehingga ia dihantar ke destinasi yang ditetapkan. Defendan telah gagal dan cuai dalam memastikan keselamatan wang tersebut apabila (i) SD4 keluar dari van dan merupakan pengawal yang bersenjata pada hari itu; (ii) SD2 telah melakukan tugas lain yang tidak berkaitan, iaitu berbincang mengenai pengambilan wang dari MaybankBatu Pahat ke Maybank Labis dengan penolong pengurus Maybank Labis; dan