There was only testimony from DW1 that an internal investigation had been carried out, that a report had been prepared. Yet, both the report and its contents were not made known. [78] We are convinced that there was ample evidence before the trial judge to allow the appellant’s claim. The appellant had clearly led cogent evidence to prove its case; its burden of proof had been discharged and the onus had shifted to the respondent. The person who would have shed light on all the failures and delays was Badrul, the respondent’s employee who was fully and personally familiar with the transactions at the material time and whose existence was never in issue. Yet again, Badrul was not called. [79] With the existence of the respondent’s own computer print-out, DW1’s inconsistent answers, we can only surmise that Badrul must have had only crucial and positive evidence for the appellant but which the respondent had chosen not to produce as it would have defeated its defence. DW1 had no personal knowledge of the transactions, and was 33 not even the person in the exchange of email communications between the parties. Her evidence had also turned out to be inconsistent. Consequently, this was an apt case for the imputation of adverse inference against the respondent under sections 106 of the Evidence Act 1950 read with section 114(g) of the same. [80] This material and relevant piece of evidence was also not considered by the learned Judge. This was evidence that would have had a material effect on the outcome of the decision, had it been evaluated and evaluated properly by the learned Judge. [81] We agree with the submissions of the appellant that it is inherent in the nature of the banker-customer relationship of the parties, the respondent owes a duty of care to the appellant to take reasonable care and exercise reasonable skill when acting in accordance with the appellant’s instructions. The Federal Court in Abdul Rahim Abdul Hamid & Ors v Perdana Merchant Bankers Bhd & Ors [2006] 5 MLJ 1 took the view that: “[28] To our minds, if a bank executes an order knowing it to be dishonestly given, or shuts its eyes to an obvious fact of dishonesty, or acted recklessly in failing to disclose material facts, the bank will be plainly liable. In our judgment, it is an implied term of the contract between the bank and the customer that the bank will observe reasonable skill and care in and about executing customer’s orders (see Barclays Bank plc v Quincare Ltd [1992] 4 All ER 363.” 34 [82] In the Court of Appeal’s decision of CIMB Islamic Bank Bhd v Mohd Saufi Taib & Ors [2015] 6 CLJ 897, similar views were expressed: “[16] We entirely agree with the learned Judge’s conclusion that the failure on the part of the defendant to credit the payment of the EON Bank cheques within three working days was a clear act of negligence and breach of duty. The defendant owed a duty of care to manage the account of the plaintiffs reasonably and diligently. We have difficulty in comprehending why so simple transaction should take 22 days to do so. The defendant has failed to offer a satisfactory explanation for the delay for the clearance of the CIMB Islamic cheque. [17] The defendant’s duty to exercise reasonable care and skill in regard to its customer’s affair is well established. The law is states thus: A bank has a duty under its contract with its customer to exercise reasonable care and skill in carrying out its part with regard to operations within its contracts with its customers. The duty to exercise reasonable care and skill extends over the whole range of banking business within the contract with the customer. Thus the duty applies to interpreting, ascertaining and acting in accordance with instructions of the customer. (See Cress well et all: Encyclopedia of Banking Law C. 21, Selangor United Rubber Estate Ltd v Cradock (No. 3) [1968] 2 All ER 1073).” [83] Again, in Bekalan Sains P&C Sdn Bhd v Bank Bumiputra Malaysia Bhd [2011] 5 MLJ 1, the Court of Appeal also expressed the view that “it is the duty of a banker to exercise care in carrying out a customer’s instruction.” Banks, including the respondent, have rights 35 and obligations under the banker-customer relationship. The respondent has the right to charge or impose commission for work or services rendered, such services would include processing the instant remittance applications. Such rights entail a certain expected level of competence and skill exercised responsibly and with care. [84] From the evidence adduced by the appellant, it is plain that the appellant, as would any other ordinary customer, completed the remittance application form giving all information as are requested. Yet, its instructions were not followed, contrary to the respondent’s claim. In the case of the first remittance, there is clear uncontroverted evidence that it was the respondent itself that failed to provide the IBAN No. that the appellant had already given in the remittance form. In the second application, there was simply no information or reason forthcoming. [85] We agree with the appellant, that for such normal, simple and routine transactions would not have failed or taken the time that the respondent took had the appellant’s instructions really been complied with in accordance with the normally expected care and reasonable skill in a banker-customer relationship. There was no error committed by the appellant in filling up the two remittance application forms; even if there were, they were errors that any reasonably skilled banker would have easily overcome as the relevant account and IBAN numbers were given and could be readily distinguished and read off to the agent or receiving bank. [86] We can only conclude that the two transactions failed/delayed because of the respondent’s breach of duty of care, both in tort and in 36 contract. The learned Judge was consequently in error for failing to evaluate the evidence properly and in totality. iii. Premature claim and the question of damage [87] The learned Judge found the claim to be premature because at the time when the writ was filed, the Principal had yet to terminate the Distributor Agreement, taking the view that for so long as that Agreement was valid and not terminated, the appellant “cannot succeed in proving that as a consequence of the defendant’s alleged negligence and breach of implied contract, the plaintiff has suffered damage since such damage has yet to be concretized.” [88] With respect, that is a serious misapprehension of the facts and a confusion between the extent of damage and the existence of loss and damage. The law only requires that there is loss or damage sustained by reason of the alleged breach for the action to be actionable. The quantum of damage awarded depends on the type or nature of the loss and the extent of such loss or damage. [89] In our view, this was more than sufficient evidence for the purpose of filing the claim, that it was not premature, nor was there no damage sustained as held by the learned Judge. This is further apparent from the oral and documentary evidence led by the appellant. [90] The appellant called four witnesses, three of whom attested to the consequences of both remittances. 37 [91] But, first there was PW3, the Chief Operating Officer of the appellant. She explained about the product that the appellant was distributing, that it was: “…a orthodontic apparatus…manufactures in Dubai by Clearpath Trading and Manufacturing and Co….to treat malocclusion, a condition where the teeth are not aligned properly…Essentially, the plaintiff distributes a series of clear plastic aligners that help to guide or correct the malaligned teeth into a new position until fully treated (“Clearpath aligners”). This is an alternative treatment for malaligned teeth without the use of metal brackets and wires; a conventional method often employed by dental practitioners before the launch of (sic) these product.” [92] PW3 also testified that the product had the benefit of being very discreet, comfortable to use, and it was removable. The product was said to use “revolutionary technology which uses clear aligners fitted directly to the teeth to correct malocclusion. As such, Clearpath Aligners are renowned in the market for being ‘snuggly fit’ as each aligner is created based on individual teeth’s measurement, bite registration and impression.” PW3’s evidence gave the claim clearer context, the relationship of the parties and the products, and how the payments affected through the telegraphic transfers done using the respondent’s facilities and services were then material to the whole arrangement. [93] On the matter of loss and damage, PW4, one of the appellant’s directors and shareholders testified that at the material time of filing, 38 there was evidence that the appellant had already suffered loss and damage by reason of the respondent’s actions in relation to the two remittances. At that time, the appellant’s sole and exclusive rights to distribute the products under the Distributor Agreement had already been suspended, and there was also a loss of goodwill and reputation amongst its clients. Under the Distribution Agreement, the appellant had sole distributorship’s rights to market and distribute the Principal’s product in Malaysia, Singapore and Indonesia. [94] The appellant’s claim of loss of mutual trust and confidence between itself and the Principal as a result of the two late payments was real, as seen from the ultimate termination of the agreement. In fact, the Principal saw the mistake of the respondent in not entering the correct account details as “purely negligent on their side and a blatant disregard to professionalism and integrity of the bank.” [95] PW4 had also testified that not only did the appellant cease to be the sole distributor of the Principal’s products, the appellant was required to deposit a security sum of USD2 million to ensure uninterrupted supply and delivery of the products, and to bear courier charges for orders from its customers registered prior to 30.12.2015 – see pages 470 of CBD Vol. 2. Further, instead of paying for the products after delivery, the appellant was thence required to pay in advance; and even then, the Principal will only start to process the appellant’s orders upon confirmation that the payments have been cleared and received by the Principal – see page 471 of CBD Vol. 2. In short, there was loss and damage sustained by reason of the respondent’s acts in relation to the two remittances. 39 [96] PW4’s evidence was corroborated by PW1, a qualified dental surgeon who used the Principal’s aligners supplied by the appellant at her clinic. She had been using the products since 2012. PW1 testified that she was informed by PW4 of the delay in the delivery of the products to her; she was also told the reason why, that it was because the appellant was purportedly at fault for failing to timeously remit payment to the Principal. [97] PW1 testified too that she had received numerous complaints from her patients whose treatment were hampered by the delay in receiving Clearpath products. Although she had treated 26 patients using such products, she produced invoices only for 13 patients. [98] The trial judge was dissatisfied with PW4 and PW1’s testimony finding the evidence led “scanty and unsatisfactory to prove actual damage”. According to the learned Judge, no evidence was adduced to show what are the 3 branches of PW1’s group practice, where the balance 13 patients were treated, and the identity of the dentist providing treatment to these patients and for what period. The learned Judge further found that there was no proof of damage as PW1 had not sued the appellant for compensation to her “and her furious patients”. [99] There was also the evidence of PW2, the Finance Manager of Clearpath Trading and Manufacturing and Co., which was based in Dubai, the Principal. He explained how the two incidents relating to the two remittances “took place in a very short space of time” and it caused the directors of the Principal “to revise the terms of the Distributorship Agreement with immediate effect to ensure that such situation does not 40 arise again.” By reference to its web portal [copies of which were tendered in evidence], PW2 explained how the two incidents affected the relationship between the appellant and the Principal, that it was: “…no longer cordial and the working relationships between the parties were affected. Nonetheless, the Company decided to give the plaintiff a second chance considering that they have been good paymasters in the past. However the delay in the 2nd remittance had caused irreparable breakdown in mutual trust and confidence between the plaintiff and the Company. The Board of Directors of the Company felt that they could no longer trust the plaintiff. This is especially so as these delays happened within a very short period of time. On top of this, the Company had to go through so much hassle in liaising with their local bank as well as the plaintiff in an attempt to trace the funds when none was forthcoming. Whilst it is true that the delay on both occasions may have been caused by the defendant, the inevitable repercussion is that the reputation of our brand that is Clearpath Aligners, which is severely tarnished in the global market. In other words, although the affected customers may be angry and displeased with the plaintiff’s service, it is ultimately our product that they would antagonize and shun away from.” [100] PW2’s evidence in this regard was not properly considered. Instead, the learned Judge accepted the respondent’s submission that PW2’s evidence showed that the Principal did not terminate the Distribution Agreement immediately, and that it was a unilateral termination which according to the respondent, should be challenged. With respect, we are of the firm view that while this may be so, it ignores the simple fact that the appellant’s claim of loss and damage in the terms claimed, is true and is corroborated. The appellant’s customers 41 were mainly orthodontists and dental practitioners who purchase the product on behalf of their patients. [101] We were of the view that contrary to the learned Judge’s findings, there was evidence of damage and loss sustained by reason of the respondent’s breaches. It is obvious that the product is highly specialized product, with a niche market. While PW1 may only have offered invoices for 13 patients and not for the full 26, the invoices in relation to the 13 patients cannot be ignored. PW1 was in the frontline, dealing with the appellant and also the patients. Her testimony is credible with a ring of independent truth, and it ought to have been given proper weightage. Seen together with PW2 and PW4’s evidence, it will be concluded that the appellant’s claim of loss and damage was in fact, proved. The fact that the appellant did not sue the Principal, or PW1 suing the appellant, is immaterial and irrelevant to the question of whether there was loss sustained for the purpose of maintaining the claim. We are fully convinced that there was and the learned Judge was plainly erroneous in deciding otherwise. iv. Applicability of clause 6.3 of the Banking Contract [102] We deal now with the final issue concerning the respondent’s reliance on the exclusion clause found in clause 6.3 of the Terms and Conditions Governing Accounts, otherwise referred to as the “Banking Contract”. That clause reads as follows: 42 “I/We hereby agree that in no event will the Bank be liable for any lost profits, loss of business, loss of use, loss of goodwill, lost savings or other consequential, special, incidental, indirect, exemplary or punitive damages suffered by me/us by reason of any delay in performance or non-performance of any obligations of the Bank whether arising from any negligence, breach of these terms and conditions or howsoever…” [103] The current arrangements which form the basis of the appellant’s claim are to be found in the Remittance Contracts. The respondent seeks to rely on clause 6.3 of the Banking Contract, under which the appellant holds its current account. The learned Judge agreed with the respondent and held that the respondent was entitled to rely on that clause, following the Federal Court decision in CIMB Bank Bhd v Mayban Trustees Bhd & Other Appeals [2014] 3 MLJ 169. [104] With respect, we disagree. [105] First, following the Federal Court in CIMB Bank Bhd v Mayban Trustees Bhd, exclusion clauses must be construed strictly. In that case, the exclusion clause argument arose only at the Court of Appeal; and the exclusion clause was found in the same document under consideration, that is, the Information Memorandum. This is a material difference with the facts in the instant appeal. [106] The exclusion clause or clause limiting the liability of the respondent is not found in any of the remittance documents, especially in the application for remittance forms. These forms are the underlying contracts between the parties before us. The exclusion clause is found 43 in the Banking Contract, dealing with the current account, and not the remittances. [107] Further, there are no references or provisions in the Remittance Contract requiring that it is to be read together with the terms found in the Banking Contract. Consequently, it was erroneous for the learned Judge to import the application of the Banking Contract into the Remittance Contract. The two are distinctly different transactions; and not dependent in the sense suggested by the respondent. [108] We are inclined to adopt and follow the view held by Justice Nallini Pathmanathan [as Her Ladyship then was] in ML Breadworks Sdn Bhd v Malayan Banking Berhad [2013] 1 CLJ 833 where exemption and limitation of liability clauses similar to the present clause 6.3 were relied on by the defendant bank in that case. Her Ladyship opined in no uncertain terms that: “…if it was the intention of the defendant that the plaintiff would be deprived of rights which it would enjoy if not excluded by express agreement, then the burden of the objection and of the sanction imposed ought to be brought home to the defendant. In other words can it be said that it was brought home to the plaintiff when it entered into the relationship of banker and customer that it agreed at that point expressly to take precautions in the general course of carrying on its business to prevent forgeries on the part of its employees? And that it would forgo its right to make claim against the bank for erroneously honouring forged cheques? It is not evident from a perusal of the clauses above that these issues were expressly set out and agreed to by the plaintiff – customer. Put another way, was it made clear to the plaintiff that in the event of an unauthorized debiting of the plaintiff’s account arising from forgery or an unauthorized signature, the existence of cls. 2.7, 6.1 and 6.3 would have the 44 effect of excluding the defendant bank’s liability for breaching its fundamental obligation of debiting the account only when a mandate is validly given? There is no evidence before this Court to suggest that that was indeed the case. For that reason I am not convinced that the provisions in cls. 2.7, 6.1 and 6.3 albeit singly or collectively, can have the effect of excluding or limiting liability to the extent contended by the defendant (see also Chairman, Sarawak Housing Developers’ Association v Malayan Banking Berhad [2010] 10 CLJ 56).” [109] Similar views may be found in Chin Hooi Nan v Comprehensive Auto Restoration Services Sdn Bhd [1995] 2 MLJ 100 and Karsales (Harrow) Ltd v Wallis [1956] 2 All ER 8688. [110] Again, as was the case in CIMB Bank Bhd v Mayban Trustees Bhd, the facts in ML Breadworks Sdn Bhd show that the Court made its pronouncements in the context of a single contract. In our present appeal, that is not even the case. There is actually even less compelling reason to construe and extend the application of the exemption and limitation clause relied on by the respondent found in the Banking Contract into the Remittance Contract. [111] In the present appeal, the failure to transmit and carry out its obligations under the first remittance was plainly due to the respondent’s own fault. It was obviously negligent in not executing the remittance when it itself failed to enter or provide the IBAN No. to the receiving bank. Concealing this information is in fact, abhorrent, to say the least. As for the second remittance, no plausible explanation was offered by the respondent, since the same details were given by the appellant 45 when the remittance form was amended. Even then, it took too long as would normally be expected in transactions of such nature. [112] Consequently, the respondent was not entitled to rely on clause 6.3 of the Banking Contract and the learned Judge fell into error in agreeing with the respondent. Conclusion [113] For all the reasons set out above, we were unanimous in our decision that this appeal must be and is allowed with costs. The appellant had proved its claim that there were contractual breaches by the respondent. The decision of the learned Judge was set aside and the appellant’s claim was allowed with costs. We further ordered that damages be assessed by a High Court Judge on contractual principles with the normal orders on interest to follow. Dated: 28th January 2019 (MARY LIM THIAM SUAN) Judge Court of Appeal Malaysia 46 Counsel/Solicitors For the appellant: David Mathews (Malarvily Perumal with him) Messrs Mathews Hun Lachimanan 10-3, 3rd Mile Square 151, 3rd Mile, Jalan Klang Lama 58100 Kuala Lumpur For the respondent: Vishnu Kumar Messrs J S Pillay & Mohd Haaziq Unit B-1-22, Block B, 8 Avenue Section 8, Jalan Sg. Jernih Petaling Jaya 46050 Selangor