Davie Seeniappan Vive-Kananda v Sargunam A/L P.Seeniappan (BA-12BNCC-13-09/2022)

The Appellant had assigned an insurance policy to the Respondent in 2009. Some ten years later, the Appellant demanded that the Respondent reassign the policy back to him. Is this a case of buruk siku or is there more to this than meets the eye?

Needless to say, the Respondent has refused to give in to the demand of the Appellant, arguing that the assignment was absolute. The Appellant has contended instead that the assignment was one that was conditional. This contestation between the parties has seen the matter tried before the Sessions Court and heard on appeal by this Court.

The overriding issue for consideration is whether the assignment of the insurance policy by the Appellant to the Respondent was conditional in nature.

A corresponding issue is whether the Appellant was induced by the Respondent to make the assignment. Put differently, the issue is whether the Appellant had acted under undue influence.

The Appellant, who was the Plaintiff in the Sessions Court, is one Davie Seeniappan Vive-Kananda.

The Respondent, who was the Defendant in the Sessions Court, is one Sargunam a/l P Seeniappan.

The Appellant and Respondent are brothers, the former being almost exactly two years older than the latter.

From the facts and evidence before the court, it can be presumed that the brothers had enjoyed a close and loving relationship. Regrettably, differences between the brothers later arose, leading to cracks in the relationship and culminating in the Appellant filing a suit in the Sessions Court against the Respondent.

The background facts leading up the present dispute and appeal must be fully understood.

The Appellant had purchased an Insurance Policy – ING Income Plan-14 – on 12 November, 2002. This was a life insurance plan with investment and protection. The Appellant had purchased this policy based on the presentation made by the Respondent in his capacity as an agent of ING Insurance Bhd (now known as AIA Bhd).

It was not disputed that payments of the insurance premium were made by the Appellant. The Appellant had made a total payment of RM58,200 from 2002 to 2015. However, Interim Cash Payments under this policy were paid into a joint account held under the names of the Appellant and Respondent.

A number of key and significant events which have a bearing on this appeal had then taken place. The first was on 10 February, 2009, some six years and three months after the purchase of the said Insurance Policy. The Appellant had purchased a property in Klang (“the Klang Property”) with a loan from CIMB Bank Bhd. The said Insurance Policy was pledged as a collateral for the CIMB loan. Once again, the Respondent was “involved” in this matter. The loan application was attended by the Respondent via a Power of Attorney granted by the Appellant in favour of the Respondent.

Herein lies the overriding issue, as noted in paragraph [3] above, for determination by this Court in this appeal. Not only had the Appellant given a Power of Attorney to the Respondent, the Appellant had also assigned absolutely the said Insurance Policy to the Respondent on 29 July, 2009. The said assignment, according to the Appellant, was a result of an inducement by the Respondent. The Appellant had also averred that the said assignment was necessary so as to facilitate the CIMB loan process.

The following six or so years went by uneventfully. Despite the Insurance Policy having been assigned absolutely to the Respondent, the Appellant continued to pay the annual premium.

The final payment of the annual insurance premium was made on 12 November, 2015.

In August and November of 2016, two other crucial events in the overall scheme of this dispute had occurred. In August of that year, the Respondent had obtained a loan of RM400,000 for himself using that Insurance Policy as collateral. By November 2016, the CIMB loan taken by the Appellant for the purchase of the Klang Property had been fully repaid.

Meanwhile, Interim Cash Payments from this Insurance Policy for year 2016 and year 2017 were credited into the Joint Account. The money paid into this account had been utilized by the Respondent. The Appellants also did not receive the Interim Cash Payments amounting to RM120,000 for year 2018 and year 2019.

The above events led to the filing of a Suit in the Sessions Court by the Appellant against the Respondent whereby the Appellant sought, inter alia, that the Respondent reassign the Insurance Policy back to him and that the Interim Cash Payments received and utilized by the Respondent be returned to him.

On the question of whether the Appellant had assigned the Insurance Policy to the Respondent with free will and without any condition attached, the learned Sessions Court Judge answered in the affirmative. The learned Sessions Court Judge dealt extensively with this question at paragraphs [39] to [70] of her grounds of judgment and concluded as follows:

Plaintif telah menyerahkan dan menandatangani Penyerahan Mutlak polisi insuran hayat ING-14 kepada defendan dalam bulan Julai 2009 atas dasar kasih sayang sebagai adik kepada abang kerana hubungan yang rapat diantara mereka pada ketika itu. Oleh itu Mahkamah berpendapat plaintif tidak berniat dan tidak mengenakan 6 sebarang syarat semasa menurunkan tandatangannya di dalam borang Penyerahan Mutlak tersebut. Ini juga kerana tiada perjanjian lain ditandatangani secara berasingan oleh plaintif dengan defendan untuk menunjukkan bahawa pemberian tersebut adalah bersyarat.

Plaintif juga langsung tidak membuat sebarang permintaan kepada defendan untuk menyerahkan semula Polisi tersebut kepada plaintif selepas pembayaran pinjaman CIMB Bank diselesaikan sepenuhnya pada 14.11.2016. Hanya selepas hubungan plaintif dengan defendan retak sepenuhnya dalam bulan Disember 2019 barulah permintaan dibuat kepada defendan dengan alasan bahawa pemberian tersebut adalah bersyarat.

Mahkamah berpendapat sekiranya plaintif memberikannya dengan syarat (with conditions attached) maka adalah tidak munasabah untuk plaintif berdiam diri serta langsung tidak mengambil tindakan dan tidak membuat sebarang permintaan dalam tempoh 4 tahun tersebut (dari tahun 2016 selepas pembiayaan bank diselesaikan sepenuhnya) sedangkan plaintif mempunyai banyak peluang untuk berbuat demikian. Ini kerana plaintif sentiasa balik ke Malaysia pada setiap tahun, namun tiada permintaan dibuat kepada defendan. Mahkamah berpendapat perkara berkenaan pemberian mutlak secara bersyarat hanya ditimbulkan selepas hubungan plaintif dan defendan retak. Di atas alasan tersebut, Mahkamah berpendapat pada masa plaintif menandatangani Penyerahan Mutlak dalam tahun 2009, plaintif telah menyerahkan hak secara mutlak Polisi tersebut kepada defendan tanpa sebarang syarat dikenakan.

On the remaining questions of whether the Respondent was entitled to claim the Interim Cash Payment of RM120,000 that he had received from that Insurance Policy for year 2018 and year 2019 and another RM400,000 that the Respondent had withdrawn from that Insurance Policy, the learned Sessions Court Judge reasoned as follows: Isu Kedua Samada plaintif berhak menuntut RM 120,000.00 (iaitu RM 60,000.00 untuk tahun 2018 dan 2019 masing-masing) berkaitan ICP yang diterima oleh defendan?

Berdasarkan kesedaran penuh plaintif dalam memberikan hak mutlak Polisi tersebut kepada defendan dan dimana dokumen Absolute Assignment tersebut juga telah dikategorikan di dalam Bahagian A Ikatan Dokumen Bersama yang mana kandungannya tidak dipertikaikan, maka plaintif tidak berhak untuk menuntut jumlah RM120,000.00 untuk ICP bagi tahun 2018 dan 2019 dan ICP untuk tahun-tahun berikutnya. Isu Ketiga Samada defendan mengeluarkan dan menggunakan wang pinjaman berjumlah RM400,000.00 daripada Polisi Pinjaman tersebut berdasarkan kepada permintaan plaintif dan sekiranya gagal, samada jumlah RM400,000.00 perlu dibayar kepada plaintif?

Plaintif mendakwa pinjaman sebanyak RM 400,000.00 telah diambil oleh defendan daripada Polisi insuran tersebut. Mahkamah berpendapat apa-apa jumlah yang telah digunakan oleh defendan tidak sepatutnya dipertikaikan lagi oleh plaintif di atas alasan bahawa plaintif telah menyerahhak secara mutlak Polisi tersebut tanpa syarat kepada defendan dimana defendan kini adalah pemilik Polisi tersebut. Oleh itu defendan boleh menggunakan wang tersebut mengikut kehendaknya. Proceedings before the High Court [21] The Appellant appealed against the above decision of the learned Sessions Court Judge after full trial on 19 August, 2022. [22] This appeal was filed on 30 August, 2022 and I heard this appeal on 17 May, 2023. On 24 August, 2023, I affirmed the decision of the Sessions Court and dismissed the appeal. As the Respondent was neither represented nor had appeared in this appeal, I made no order as to costs. [23] The following are the full grounds of my decision in affirming the decision of the Sessions Court and in dismissing this appeal. The Applicable Law and Principles [24] A relevant provision of the Contracts Act 1950 is section 26(a). It provides as follows:

An agreement made without consideration is void, unless— it is in writing and registered

it is expressed in writing and registered under the law (if any) for the time being in force for the registration of such documents, and is made on account of natural love and affection between parties standing in a near relation to each other [25] Recognition of the principle that natural love and affection is good and valid consideration in law can be traced to a number of decided cases. In Tang Meng Hock v Tang Ming Seng [2010] 1 AMR 540; [2010] 1 MLJ 33; [2010] 1 CLJ 208; [2009] 2 MLRA 745, Low Hop Bing JCA at paragraph [20] said that “it is an established principle that natural love and affection is good and valid consideration in law”. [26] On the legal effect of an absolute assignment, the recent decision of the High Court in Wong Mei Ling v Sek Hin Kuim [2022] MLJU 883, reiterated this point in clear terms, amongst others that “it operates to pass and transfer the legal rights … to the … assignee”. The assignee is then empowered to validly deal with, as in our present case, the rights and entitlements attached to the Insurance Policy. [27] Reference may also be made to another recent decision of the High Court, namely, Progressive Insurance Bhd v Ministry of Defence Malaysia & Ors [2021] AMEJ 1884; [2021] MLJU 2497; [2021] 1 LNS 2072; [2021] MLRHU 2741, where it was pointed out that the Supreme Court of India in Economic Transport Organization v Charan Spinning Mills (P) Ltd [2010] 3 MLJ (Madras Law Journal) 1347 (SC) had reiterated this basic but fundamental principle. Application of the Law and Principles to the Present Appeal [28] In his evidence at the Court below, the Appellant had admitted during cross-examination that he was not “forced” into signing the Absolute Assignment Form to the Respondent (see para [43] of the learned Sessions Court Judge’s grounds of judgment). [29] On the “Important Disclaimer” whereby the phrase “You are advised to seek professional legal advice before proceeding to execute this form” appears on the said Form, the Appellant again admitted that he did seek professional advice before signing the Form (see para [43] of the learned Sessions Court Judge’s grounds of judgment). [30] The conclusion to be drawn from the Appellant’s own testimony is that he was fully aware of the legal consequences when he signed the Absolute Assignment Form and he did not do so under any form or coercion or duress. [31] Be that as it may, the Appellant vehemently argued that the assignment of the Insurance Policy was one that was conditional, the condition being that the Respondent shall reassign the Insurance Policy to him once the CIMB loan that he had taken for the Klang Property has been settled. When queried on the clear terms in the Absolute Assignment Form that expressly contain the following, namely, “In consideration of – Love and Affection” and “The assignor hereby assigns absolutely to the Assignee the Insurance Policy…”, the reply from the Appellant was that: “That is the original intention of the Policy”. [32] Three factors support the Respondent’s contention that the Assignment of the Insurance Policy was absolute and not conditional in nature. The first is the fact that the Appellant did not demand for a reassignment of the Insurance Policy even though the CIMB loan had been settled four years prior to the filing of this present Writ. Second, the evidence adduced supports the Respondent’s contention that the Insurance Policy has no connection whatsoever with the loan agreement for the purchase of the Klang Property. The CIMB Bank had not imposed a pre-condition that the Insurance Policy be made a security for the loan. Third, the Appellant is highly educated and a successful entrepreneur/businessman/investor. The suggestion that he was coaxed or had acted out of duress is farfetched. [33] The Appellant referred this Court to three authorities. The first is Tenaga Nasional Berhad v Evergrowth Aquaculture Sdn Bhd and Other Appeals [2021] 7 AMR 857; [2021] 9 CLJ 179; [2021] 5 MLJ 937. The principle enunciated in this case is that when the evidence and facts are such that inferences and logical conclusions can be drawn, the court ought to do so (see para [70]). This Court is not only in agreement with but is bound by the ruling of the Federal Court in the above case. However, this Court does not see how this case is of any assistance to the Appellant in the present appeal. [34] Reference was also made to the case of Lee Chee Keong v Fadason Holdings Sdn Bhd & Other Appeals [2017] AMEJ 0378; [2017] 7 CLJ 295; [2017] 3 MLJ 728; [2017] 4 MLRA 224. The Appellant relied on a passage of the judgment of the Court of Appeal which reads as follows: [32] Consequently, it is paramount and crucial that we remind ourselves that, as the appellate court, we do not intervene on findings of fact as that is the primary function of the trial judge who is best placed and equipped to assess that decision. The trial judge would have had an opportunity to evaluate the demeanour of the witness in order to draw some conclusions on the credibility of that witness. However, that evaluation of issues, claims, defences as well as counterclaims, must be conducted properly, holistically and not compartmentalised, looking at all the circumstances and in accordance with the applicable legal principles and the law of evidence. There must also be consistency in conclusions reached. Where that evaluation is not full or adequate and where it has not been considered or tested against the weight of all other evidence properly placed before the court, particularly contemporaneous documentary evidence, such finding can no longer be said to be safe or one which a reasonable judge could have reached. In such a situation where the trial court is plainly wrong in its apprehension of the law and the facts, where there has been no or insufficient judicial appreciation of the evidence, or where the acceptance or rejection of the evidence is not founded on good reasons, the appellate court must intervene lest a miscarriage of justice is occasioned. This was reminded by the Federal Court in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229: Nevertheless the learned trial judge expressed himself to be completely satisfied with the veracity of the respondent’s witnesses and their evidence. He purported to come to certain findings of fact on the oral evidence but did not notice or consider that the respondent’s oral evidence openly clashed with its contemporaneous documentary evidence. For myself, I would with respect feel somewhat safer to refer to and rely on the acts and deeds of a witness which are contemporaneous with the event and to draw the reasonable inferences from them than to believe his subsequent recollection or version of it, particularly if he is a witness with a purpose of his own to serve and if it did not account for the statements in his documents and writings. Judicial reception of evidence requires that the oral evidence be critically tested against the whole of the other evidence and the circumstances of the case. Plausibility should never be mistaken for veracity … [35] Once again, this Court does not see how this judgment is able to advance the Appellant’s cause in this appeal. [36] Finally, in Ng Hoo Kui & Anor v Wendy Tan Lee Peng, Pentadbir Kepada Harta Pusaka Tan Ewe Kwang, Simati & Ors [2020] 8 AMR 227; ]2020] 12 MLJ 67; [2020] 10 CLJ 1; [2020] 6 MLRA 193, Zabariah Mohd Yusoff FCJ outlined the test to be applied by an appellate court. At para [54], her Ladyship explained: [54] Premised on Thomas v Thomas (supra) and Henderson (supra) Lord Reed qualified that the “plainly wrong” test only comes into play in the absence of the following:

material error of law;

critical factual finding which had no basis in evidence;

demonstrable misunderstanding of relevant evidence; and

demonstrable failure to consider relevant evidence. In the presence of any of the above, the appellate court is entitled to set aside the judgment of the trial court without having to consider the “plainly wrong” test. Lord Reed reiterates that these 4 identifiable errors are however not exhaustive. It appears that the other examples which could be added to this non-exhaustive list, are as listed in Thomas v Thomas (supra) namely:

There is misdirection by the judge;

There is no evidence to support a particular conclusion;

There is material inconsistencies or inaccuracies;

The trial Judge fails to appreciate the weight and bearing of circumstances admitted or proved. [37] The above passages of the Federal Court are no doubt instructive but for the same reasons advanced above, this Court is of the considered view that it does not support the Appellant’s case. The Decision of This Court [38] Based on the totality of evidence adduced and the after a careful consideration of the Record of Appeal and the submission by the Appellant, on the issue of whether the Absolute Assignment of the Insurance Policy was Conditional, the answer is in the negative. [39] On the corresponding issue of whether the Appellant was coerced or induced by the Respondent to make the assignment, the answer is also in the negative. [40] In view of these findings, the decision of the learned Sessions Court Judge in rejecting the claims by the Appellant for the Interim Cash Payments for year 2018 and 2019 together with the decision that the Respondent is entitled to withdraw the loan sum of RM400,000 following the assignment of the Insurance Policy is affirmed. Concluding Remarks [41] We will never know what the original intention of the Appellant was when he signed the Absolute Assignment Form in July of 2009. What we do know is that he now wants the Insurance Policy be reassigned back to him. If the Appellant had intended the assignment of the said Insurance Policy to be conditional, he has failed to protect his interest in making that intention known. [42] This Court is duty-bound to adhere to well-established legal principles and render a decision on this appeal based on evidence presented before it. Anything short of this standard would be deemed both unacceptable and erroneous. Dated: 10 October 2023 sgd [CHOONG YEOW CHOY] Judicial Commissioner High Court of Malaya Shah Alam Counsel: Sandosh Anandan for the Appellant (Messrs. Sandosh Anandan) For the Respondent – not represented