Chan Kim Hu v Safz Auto Sdn. Bhd. (WA-22NCC-418-08/2022)

The plaintiff claimed that the defendant had wrongfully withheld 30 re-conditioned vehicles (“Re-Conditioned Vehicles”) owned by him. He also claimed that the defendant received RM1,063,700 (“Proceeds”), following the sale of some of the Re-Conditioned Vehicles. He sought, inter alia, a declaration that he is the rightful owner of the Re-Conditioned Vehicles. He also sought to recover the Proceeds from the defendant.

After a full trial, the court dismissed the plaintiff’s claim. The reasons for this decision are set out below. S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 2

The plaintiff claimed that he had entered into an investment arrangement with V Mont Automotive Sdn Bhd (“V Mont”), in relation to the purchase of re-conditioned vehicles from Japan (“Investment Arrangement”). He claimed that pursuant to the Investment Arrangement, he made payments for identified re-conditioned vehicles to be imported into Malaysia. The vehicles were imported into Malaysia using approval permits from the defendant. They were then sold in Malaysia, and the proceeds from the sale were deposited into the defendant’s account. The defendant would then pay V Mont from the proceeds, and V Mont would return the investment amount, together with profits, to the plaintiff.

The plaintiff claimed that pursuant to the Investment Arrangement, he had paid for the Re-Conditioned Vehicles. He further claimed that six of the Re-Conditioned Vehicles had been sold, and that the Proceeds, comprising the sale proceeds of these vehicles, remained in the defendant's possession.

It is the plaintiff’s case that he is the owner of the Re-Conditioned Vehicles. As such, the Re-Conditioned Vehicles and the Proceeds have been wrongfully withheld by the defendant. In this regard, the plaintiff claimed that the defendant: a. Failed to carry out its duty as a bailee under the Contracts Act 1950 (“CA 1950”); b. Committed the tort of detinue; and S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 c. Committed the tort of conversion.

In its defence, the defendant maintained that it was not involved in the Investment Arrangement. In transactions involving the Re-Conditioned Vehicles, the defendant claimed that it had only dealt with World Windows Corporation (“WWC”), the entity that supplied the Re-Conditioned Vehicles, and with V Mont. These transactions do not involve the plaintiff.

The defendant also referred to Kuala Lumpur High Court Suit No. WA-22NCC-445-09/2020 (“Suit 445”), which is a claim filed by WWC against V Mont, its director and the defendant, for amounts due for the supply of the Re-Conditioned Vehicles by WWC. The parties in Suit 445 subsequently reached a settlement, recorded in a consent judgment dated 29 August 2024 (“Consent Judgment”). In the Consent Judgment, it was acknowledged that WWC was the rightful owner of the Re-Conditioned Vehicles. C. Issues

The facts of this case give rise to the following issues: a. Whether the defendant failed to carry out its duty as a bailee under the CA 1950; b. Whether the defendant committed the tort of detinue; c. Whether the defendant committed the tort of conversion; S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 4 d. Whether the plaintiff is entitled to the Proceeds; and e. Whether the plaintiff ought to have intervened in Suit 445. D. Considerations and Findings

Before the issues set out above can be assessed, it is important to consider the status of the relationship between the plaintiff and the defendant. This relationship must be assessed in light of the transactions involving the Re-Conditioned Vehicles, and the Investment Arrangement which the plaintiff claimed he had entered into with V Mont.

The evidence before the court shows that the Investment Arrangement was carried out in the following manner: a. V Mont identifies the re-conditioned vehicles that the plaintiff would be investing in; b. The plaintiff pays for the vehicles identified; c. The vehicles are supplied by WWC, and imported into Malaysia using approval permits obtained by the defendant; d. Proceeds from the sale of the vehicles in Malaysia are paid into the defendant’s account; S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 5 e. Upon receipt of the proceeds, the defendant pays V Mont; and f. V Mont then returns the investment capital and profits to the plaintiff, after the appropriate deductions.

From the above, it is clear that the Investment Arrangement gives rise to a contractual relationship between the plaintiff and V Mont. However, there are no contractual obligations arising between the plaintiff and the defendant under the Investment Arrangement or the transactions involving the Re-Conditioned Vehicles. Instead, in respect of the transactions involving the Re-Conditioned Vehicles, contractual relationships arise between WWC, V Mont and the defendant. It is this contractual nexus that was the subject matter of Suit 445.

The plaintiff’s claim and the issues raised must therefore be considered with due regard to the absence of a contractual relationship between the plaintiff and the defendant. Issue 1: Did the defendant fail to carry out its duties as a bailee?

The plaintiff claimed that the relationship between the plaintiff and the defendant is that of a bailor and a bailee, and that the defendant failed to carry out its duties as a bailee in accordance with the following sections of the CA 1950: a. Section 113, which imposes a duty on the bailee to return, or deliver according to the bailor’s directions, the goods S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 6 bailed as soon as the time for which the goods were bailed has expired, or the purpose for which they were bailed has been accomplished; and b. Section 116, which imposes a duty on the bailee to deliver to the bailor any increase or profit which may have accrued from the goods bailed.

Part IX of the CA 1950 deals with bailment. Under section 101 of the CA 1950, the terms “bailment”, “bailor” and “bailee” are defined in the following manner: “A “bailment” is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the “bailor”. The person to whom they are delivered is called the “bailee”. (emphasis added)

From the above provision, the relationship between the plaintiff and the defendant would qualify as a bailor-bailee relationship if goods were delivered by the plaintiff as a bailor to the defendant as a bailee, for a purpose that arises pursuant to a contract, and once that purpose has been accomplished, the bailee is required to return the goods to the bailor. S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 7

In Isito Electronics Sdn Bhd v Teh Ah Kiam [2004] 7 MLJ 513, the High Court rejected the argument that the receiver and manager of a company is a bailee responsible to deliver the goods belonging to the company to the plaintiff. Referring to section 101 of the CA 1950, the court held that bailment cannot exist in the absence of a contract of bailment.

In the present case, based on the Investment Arrangement, I am of the view that there is no contractual relationship between the plaintiff and the defendant, that would give rise to a bailor-bailee relationship.

Instead, the Investment Arrangement gives rise to a contractual relationship between the plaintiff as an investor in the Re-Conditioned Vehicles and V Mont, who sourced the vehicles to be brought into Malaysia. From the Investment Arrangement, the goods in question (namely, the Re-Conditioned Vehicles) were not delivered by the plaintiff to the defendant, but were instead consigned by WWC to the defendant. The consignment arises from the commercial arrangements between WWC and V Mont, and V Mont and the defendant.

As such, from the facts of the present case, the defendant does not qualify as a bailee, and section 101 does not apply. Consequently, the plaintiff’s argument that the defendant had failed to carry out its duties as a bailee must necessarily fail. S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 8 Issue 2: Did the defendant commit the tort of detinue?

The second issue raised by the plaintiff is that the defendant had committed the tort of detinue, in wrongfully detaining the Re-Conditioned Vehicles.

The tort of detinue is committed where the possession of goods by a person becomes unlawful due to the withdrawal of consent by the owner of the goods, who may have initially consented to the person having possession of the goods (see MBF Finance Bhd v Teoh Soon Kok [2007] 10 CLJ 346 and Mohd Adzlan Hj Zainal lwn Majlis Agama Islam Selangor [2015] 3 CLJ 375).

To establish the tort of detinue, the plaintiff must prove that: a. The plaintiff has a right to immediate possession of the goods; b. The defendant is in possession of the goods; and c. The defendant refuses to return the goods upon demand, without lawful justification.

In the present case, the plaintiff’s rights over the Re-Conditioned Vehicles have not been established. This conclusion is reinforced by the Consent Judgment in Suit 445, which has been admitted as evidence in these proceedings, and which provides at paragraph (b) that: S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 9 “… it is acknowledged that the Plaintiff are the rightful owners and sellers of the 30 cars and pursuant to the sale of the 30 cars, there are monies due and owing to the Plaintiff.” (emphasis added)

In light of the acknowledgment in the Consent Judgment that WWC is the rightful owner of the Re-Conditioned Vehicles, it would follow that the plaintiff has not established any right to immediate possession of the Re-Conditioned Vehicles.

The plaintiff’s claim that the defendant had committed the tort of detinue is therefore unsustainable. Issue 3: Did the defendant commit the tort of conversion?

For the same reasons, I find that the plaintiff has failed to prove that the defendant committed the tort of conversion.

In Mohd Adzlan Hj Zainal (supra), the court referred to Lam Teik Kai v Hallam Nominees Ltd [1970] CLJU 55, where it was held that: “To constitute conversion there must be a positive wrongful act of dealing with the goods in a manner inconsistent with the owner's rights, and an intention in so doing to deny the owner's rights or to assert a right inconsistent with them." (Halsbury's, vol. 38, 3rd Edn., p. 775/6).” S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 10 (emphasis added)

In this regard, the tort of conversion would arise if there is a deliberate act by the defendant to deal with the goods of the plaintiff in a manner inconsistent with the plaintiff’s rights as the owner of the goods. It has been established that the Re-Condition Vehicles ultimately belong to WWC, and as such, the plaintiff’s claim that the defendant committed the tort of conversion (which must necessarily be premised on the plaintiff’s ownership of the Re-Conditioned Vehicles) cannot stand.

Essentially, the plaintiff’s position is that of an investor who financed the purchase of vehicles identified and sourced by V Mont. The plaintiff did not take delivery of the Re-Conditioned Vehicles, nor did he exercise any control over them. The vehicles were supplied by WWC and imported into Malaysia through arrangements involving V Mont and the defendant. In these circumstances, any rights which the plaintiff may have in respect of the sums invested lie, at most, in contract against V Mont. These rights do not translate into proprietary or possessory rights in the Re-Conditioned Vehicles.

In the absence of any proprietary or possessory right in the Re-Conditioned Vehicles, the plaintiff’s claims in bailment, detinue and conversion are fundamentally misconceived and must fail. S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 11 Issue 4: Is the plaintiff entitled to the Proceeds?

The plaintiff also claimed the Proceeds, which are said to represent the sale proceeds of six of the Re-Conditioned Vehicles, and which he alleged are being wrongfully held by the defendant.

This claim must be analysed separately from the plaintiff’s claims in bailment, detinue and conversion. Even if the Re-Conditioned Vehicles have been sold, the question remains whether the plaintiff has established any legal basis to claim sale proceeds of the vehicles against the defendant.

It is in evidence that the Proceeds were received by the defendant pursuant to the commercial arrangements between WWC, V Mont, and the defendant. As earlier found, the plaintiff is not a party to these arrangements, and there is no contractual relationship between the plaintiff and the defendant governing the receipt or disbursement of these monies.

In the absence of privity of contract, the plaintiff must establish some other legal basis to claim the Proceeds, such as a proprietary interest in the monies, or that the defendant holds the monies on trust for the plaintiff. However, no such basis has been established.

The mere fact that the plaintiff provided funds to V Mont for investment does not, without more, give rise to a proprietary interest in the proceeds of the sale of the Re-Conditioned Vehicles, especially where S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 12 those proceeds arise from separate contractual arrangements to which the plaintiff is not a party.

In the circumstances, I find that the plaintiff has failed to establish any basis upon which the Proceeds may be claimed from the defendant. This aspect of the plaintiff’s claim must therefore also fail. Issue 5: Should the plaintiff have intervened in Suit 445?

It is also significant that the plaintiff did not take any steps to intervene in Suit 445, notwithstanding that the subject matter of that action included the ownership of the Re-Conditioned Vehicles.

If, as the plaintiff now contends, he had a proprietary interest in the Re-Conditioned Vehicles, Suit 445 presented the appropriate forum in which such interest could and ought to have been asserted. The issues in Suit 445 directly concerned the entitlement to and ownership of the vehicles, and amounts due from the sale of the vehicles.

While the plaintiff is not strictly bound by the Consent Judgment, not being a party to Suit 445, his failure to intervene or otherwise assert his alleged interest in those proceedings undermines the credibility and weight of his present claim. A party who asserts a proprietary interest in specific goods would ordinarily be expected to take timely steps to protect that interest when it is the subject of ongoing litigation.

In the circumstances, the plaintiff’s omission to intervene in Suit 445 further supports the conclusion that he has not established any S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 13 proprietary or possessory right in the Re-Conditioned Vehicles. It also reinforces the court’s finding that the plaintiff’s rights, if any, lie against V Mont and not against the defendant. E. Decision [41] For the reasons set out above, the court finds that the plaintiff has failed to prove his claim against the defendant. [42] The plaintiff’s claim is dismissed, with costs. Dated 26 March 2026 ADLIN ABDUL MAJID Judge High Court of Malaya Kuala Lumpur S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal 14 Counsel: Plaintiff : Lee Teong Ghee of Messrs. TG Lee & Associates Defendant : Sukhdev Singh Randhawa (together with Aneil Singh Randhawa) of Messrs. Azlan Shah Sukhdev & Co S/N 7BcMwhn5t0m/OldwrEC2sw **Note : Serial number will be used to verify the originality of this document via eFILING portal