Dinding Poultry Development Centre Sdn Bhd v Tan Ka Buan (AA-22NCvC-3-01/2020)

conduct himself professionally with total regard to the Plaintiff's reputation, integrity and honourable relationships which it had built over the years with its trade associates and customers;

(ii) devote the whole of his energy and business time to the business of the group of companies to which the Plaintiff belongs, or to the company to which he had been posted;

(iii) not disclose to any firm or company, any information as to the practice, business dealings, trade secrets, manufacturing processes or affairs of the Group; and

(iv) to avoid conflict of interest and prevent bribery and corruption. [5] The Defendant further owed fiduciary duties to the Plaintiff Company which includes a duty of trust and confidence, a duty to act honestly and in good faith, a duty not to place himself in any position of conflict between his personal interests and the interests of the Plaintiff, a duty not to act in any way that would bring any benefit or advantage to himself to the detriment of the Plaintiff and a duty not to exercise any of his powers for any collateral purpose. [6] It was brought to the attention of the Plaintiff's HR General Manager, Carol Chan, by a person named Chong Man Leong that the Defendant had been in conflict with the interests of the Plaintiff. The Plaintiff's General Manager was informed that the Defendant had procured the registration of a business, Yong Hock SP Hardware Sdn Bhd which enables him to conceal his interest in a business undertaking to perform the service of packing chicken dung and supplying labour, for such packing and transport, to the Plaintiff and thereafter, charging the Plaintiff for those services. [7] The Plaintiff's General Manager, Carol Chan, was further informed that a person named Lim Chee Kwang (SP-2) would have more information pertaining to the Defendant's conflict of interest action. The HR General Manager, Carol Chan, and the Supply Chain General Manager, Wong Kok Wai (SP-3), being the Plaintiff's representatives proceeded to investigate the truth of the information that was received and arranged for a meeting with Lim Chee Kwang (SP-2). During the meeting, Lim Chee Kwang (SP-2) informed the Plaintiff's representatives that in 2017, the Defendant had asked him a favour to help him find someone to register a company that would enable the Defendant to conduct his personal business operation and transactions and in return, he would pay a fee to the said person. Lim Chee Kwang (SP-2) sought help from Ng Swee Heng (SP-1) to use his name to register Yong Hock SP Hardware Sdn Bhd as a sole proprietorship to enable the Defendant to conduct his personal business operation and transactions. [8] The Plaintiff's representatives then arranged for another meeting on 18.7.2019, with Lim Chee Kwang (SP-2) and Ng Swee Heng (SP-1) to investigate further. During this meeting, Ng Swee Heng (SP-1) admitted to having agreed to procure the registration of the Yong Hock SP Hardware Sdn Bhd on behalf of the Defendant and also opened a bank account with RHB Bank in exchange for a fee. Ng Swee Heng then passed the signed cheque book, ATM card and other documents of Yong Hock SP Hardware Sdn Bhd to the Defendant. Ng Swee Heng (SP-1) also provided the Plaintiff's representatives with the entire certified true copy of the bank statements from March 2017 to June 2019. Both Ng Swee Heng (SP-1) and Lim Chee Kwang (SP-2) emphasized to the Plaintiff's representatives that the extent of their involvement in Yong Hock SP Hardware Sdn Bhd was to assist the Defendant in the initial stage of setting up the Yong Hock SP Hardware Sdn Bhd and no further involvement. [9] During the same meeting on 18.7.2019, Lim Chee Kwang (SP-2) further admitted to Plaintiff's representatives that he had given a 5% commission to the Defendant for awarding the Plaintiff's projects to Jing Way Group of Companies to ensure its contracts were maintained with the Plaintiff. Lim Chee Kwang (SP-2) provided a signed handwritten statement in Mandarin to the Plaintiff's representatives confirming all the statements that he had made during the 1st and 2nd meeting. [10] Based on the information received thus far, Manivannan (SP-5) and Fong Yee Ling, Elaine (SP-4) were assigned to investigate this matter further by liaising directly with the Defendant. On 10.9.2019, Manivannan (SP-5) and Fong Yee Ling, Elaine (SP-4) convened a meeting with the Defendant to determine his response to the allegation of conflict of interest made against the Defendant. During the meeting, the Defendant had voluntarily admitted the allegations to be true and admitted to having taken commission from Jing Way Electrical, Yong Hock SP Hardware Sdn Bhd and Han Kau Trading amounting to RM 570,000.00. The Defendant provided a thumb drive containing an excel file with details of the transaction between Yong Hock SP Hardware Sdn Bhd and other companies including the Plaintiff. [11] At the end of the meeting, the Defendant confirms his voluntary admission in writing. Manivannan (SP-5) and Fong Yee Ling, Elaine (SP- 4) requested the Defendant to provide comprehensive detail of the transactions the next day to which the Defendant agreed for the commission that he took. The Defendant promised to pay the Plaintiff the sum of RM 570,000.00. After the meeting on 10.9.2019, the Defendant sent Manivannan (SP-5) several WhatsApp messages where he expressed his remorse and admitting his conduct was wrong. [12] On 11.9.2019, the Defendant met with Manivannan (SP-5) again and provided a comprehensive detail of the transactions. The Defendant confessed that he earned RM 934, 083.35 and that after paying RM 260,

952.00 for labour cost and RM 21, 045.00 for plastic bags, he had taken RM 652,086.00 as commission. The Defendant also confessed that he had taken between RM 20,000.00 to RM30,000.00 as commission from Jing Way Electrical. At the end of the meeting, the Defendant confirms his voluntary admission in writing. [13] On 12.9.2019, the Defendant and his father came to the Plaintiff's premises to inform Manivannan (SP-5) that he no longer agreed to pay the sum that he admitted to have taken as commission. The Defendant and his father then proceeded to the Managing Director of the Plaintiffs office, Mr Teh Wee Chye to plead for leniency in any action taken by the Plaintiff. The Managing Directoradvised the Defendant that the matter would be handled by Manivannan (SP-5) as per Plaintiff's policy. [14] After the Defendant and his father left the Plaintiff's premises, the Defendant sent WhatsApp messages to Manivannan (SP-5) where he apologized for the events that transpired during the meeting and again confirmed that he will pay the Plaintiff for the sum that he had taken as commission. [15] On 13.9.2019, in contrast to what had transpired during the previous meetings and the WhatsApp messages, the Defendant wrote to the Plaintiff requesting that the written admissions and documents he had supplied on 10.9.2019 and 11.9.2019 be returned. The Defendant alleged that he had been 'forced under duress and while 'unconscious' to write and sign the letters of admission. [16] Given the Defendant's clear and unequivocal admission of being involved in acts that can be defined as criminal in nature, the Plaintiff's management decided to issue dismissal letter dated 13.9.2021 to the Defendant. Thereafter a final meeting on 18.7.2019 was held with Lim Chee Kwang (SP-2) and Ng Swee Heng (SP-1). Ng Swee Heng (SP-1) provided us with a handwritten statement that confirms the information that he had provided during the meeting on 18.7.2019. [17] During the meeting, Lim Chee Kwang (SP-2) informed the Plaintiff representatives about the phone call he had received from the Defendant on 12.9.2019 wherein the Defendant asked him Ng Swee Heng's (SP-1) contact details. The Defendant told Lim Chee Kwang (SP-2) that he wanted to approach Ng Swee Heng (SP-1) and make him write a letter stating that Yong Hock SP Hardware Sdn Bhd belonged to Ng Swee Heng (SP-1) and that all transactions carried out by Yong Hock SP Hardware Sdn Bhd were done by Ng Swee Heng (SP-1) so that he could clear his name. The Defendant had also ordered Lim Chee Kwang (SP-2) and Ng Swee Heng (SP-1) to cooperate with him and further threatened that if the Plaintiff took action on him, he will not let them live in peace. Lim Chee Kwang (SP-2) then provided the Plaintiff's representatives with a statement confirming the information that he had just provided regarding the call with the Defendant on 12.9.2019. [18] Following that, the management of the Plaintiff was of the view that it was prudent to lodge a complaint against the Defendant to set the record straight and protect the safety and interests of the Plaintiff and its witnesses. As such, Wong Kok Wai (SP-3) being the Plaintiff's representatives lodged a police report on behalf of the Plaintiff on 20.9.2019. [19] As a result of the Defendant's breach of fiduciary duties, the Plaintiff is claiming for RM 934,083.35 which is equivalent to the amount the Defendant had admitted to have received from suppliers through Yong Hock SP Hardware Sdn Bhd and RM 500,000.00 being an estimate of the loss of reputation and integrity built over the years with trade associates and customers. ISSUES TO BE DETERMINED [20] In view of the parties’ pleadings as well as their submissions, I am of the view that matters which arose for the determination of this court are as follows:-

Whether the admissions were voluntarily made (“Issue of Voluntariness”);

(ii) Whether the Defendant had breached his fiduciary duties (“Breach of Fiduciary Duties”);

(iii) Whether the Plaintiffs had suffered damages as a result of the Defendant’s breach (“Damages”). COURT’S FINDINGS [21] The essence of this case before the court is whether the Defendant had breached his fiduciary duties and had obtained financial benefits thereof. The Plaintiff alleged that the Defendant had breached his fiduciary duties in concealing his personal interest in Yong Hock SP Hardware Sdn Bhd as well as in taking bribes/commissions from multiple companies in order to maintain their contract with the Plaintiff. [22] The Defendant had initially admitted to the breach as alleged via Letters of Admission dated 10.9.2019 and 11.9.2019. The Defendant had however retracted his admission via letter dated 13.9.2019. The Defendant claimed that the letters of admission were not voluntarily given, that he was pressured and induced to write the said Letters of Admission. ISSUE OF VOLUNTARINESS [23] Having critically analysed all evidence adduced before this court, I find a total lack of evidence adduced to support the Defendant’s contention that he was indeed forced to write the Letters of Admissions dated 10.9.2019 and 11.9.2019. [24] In fact, the Defendant went to meet SP4 and SP5 on 10.9.2019 fully equipped with a laptop and thumb drive and had allowed SP4 and SP5 access to his laptop as well as thumb drive containing all transactions of Yong Hock. There was no evidence to show that the Defendant was instructed or forced to bring his laptop and thumb drive moreover to show the content thereof. [25] The Defendant had further, through a WhatsApp conversation with SP5, expressed his regret and promised to pay the Plaintiff the sum that he had taken as commission. Q : What happened after the meeting on 10.9.2019? A : After 7.53 pm on 10.9.2019, I received WhatsApp messages from the Defendant where he was expressing his regret for his wrongdoing and admitted that his conduct was wrong. He mentioned that he was cooperative where he did not defend himself to us earlier and requested for another chance. The Defendant also promised to pay the Plaintiff the sum that he had taken. (Please refer to pages 254 and 255 of the Common Bundle of Documents) Q : What happened after the events that transpired on 12.9.2019 at the Plaintiff's office premise? A : I received a WhatsApp message from the Defendant at 4.40 pm where he apologized for the events that transpired during the meeting in the morning and stated that his father was under pressure. He also wanted to meet the next day i.e. on 13.9.2019. I agreed to meet him on 13.9.2019 at 11.00 am and told him not to bring anyone else to the Plaintiff's premise. However, at 5.13 pm on 12.9.2019, he again sent WhatsApp messages stating that he will pay the money to the Plaintiff but he can't meet on 13.9.2019 as he needs to borrow money and wanted to meet on Monday (16.9.2019). He also asked for the total sum that he has to pay. I informed him to still come to the office the next day to finalize the amount which the Defendant agreed voluntarily to pay the Plaintiff. We agreed to meet at 9.30 am on 13.9.2019. However, on 13.9.2019 at 9.10 am, he messaged me stating that he had to postpone the meeting to Monday (16.9.2019) because he had to bring his father to the hospital and again confirming that he will pay the Plaintiff. I tried contacting him to reschedule the meeting but he was not answering my calls. As such, I informed him to meet me the next day, 14.9.2019 at 10.00 am to finalize matters. I informed him that if he does not come to the meeting on 14.9.2019 to finalize matters internally then Plaintiff will have to proceed to handle the matter as per the usual procedure which is to make a police report regarding the Defendant's actions. (Please refer to page 254 and 255 of the Common Bundle of Documents) On 13.9.2021 the Defendant met me and passed a letter dated 13.9.2021 (Please refer to page 247 of the Common Bundle of Documents) where in the letter he asked for the confession letter dated 10.9.2019 and 11.9.2019 and falsely claimed that he was unconscious and forced to write and sign those statements. I informed the Defendant that his confession letters had been passed to Human Resources Department and requested him to liaise the matter to Human Resources Department. I informed this to Elaine and passed her the letter to her. In view of the Defendant's clear and unequivocal admission of being involved in acts that can be defined as criminal in nature, the management of the Plaintiff decided to issue dismissal letter dated 14.9.2021 to the Defendant (Please refer to pages 249 of the Common Bundle of Document). [26] The Defendant had admitted to sending the above Whatsapp messages to SP5 acknowledging his wrongdoings after he had left the meeting room. The Defendant had however claimed that he had sent those messages in a state of confusion and overwhelmed. [27] Having critically analysed all evidence as adduced before this court, I find a total lack of evidence adduced by the Defendant to support the Defendant’s contention that the Letters of Admission were not voluntarily made. The Court also finds it difficult to comprehend that the Defendant to have been continuously confused and overwhelmed for a whole period from 10.9.2019 until 13.9.2019. [28] The onus is on the Defendant to prove that he was forced and or pressured by SP4 and SP5 to write the Letters of Admission to which the Defendant had failed to establish on a balance of probabilities. On the totality of evidence, this court found no evidence of duress exerted on the Defendant. The smooth handover of information and the WhatsApp correspondences all points to the voluntary nature of the confession made by the Defendant. [29] The voluntary nature of the Defendant’s confession was further evidenced by the fact that the Defendant had considered the contents of his Letter of Admission dated 10.9.2019 admitting to receiving commission for the total sum of RM934,083.35 and had amended the said sum to RM652,086.00 through his Letter of Admission dated 11.9.2019. It is thus in my conclusive finding that the Letters of Admission were voluntarily made by the Defendant. BREACH OF FIDUCIARY DUTIES [30] As an Assistant Operation Manager, the Defendant owed fiduciary duties, as an employee, to the Plaintiff (see the case of Boustead Rimba Nilai Sdn Bhd v. Mohed Suratman [2011] 1 LNS 1347). Question then arise as to whether the Defendant had breached his fiduciary duties against the Plaintiff. [31] It was the Plaintiff’s submission that the Defendant had breached his fiduciary duties and placed himself in a position of conflict-of-interest between his private interests and the Plaintiff's interests. The Defendant had allegedly breached his fiduciary duties when he procured the registration of Yong Hock SP Hardware Sdn Bhd that enabled him to conceal his interest in a business which undertakes to perform the service of packing chicken dung and supplying the labour, for such packing and transport, to the Plaintiff and thereafter, charging the Plaintiff for those services. The Defendant had further breached his fiduciary duties when he received bribes/commissions from multiple companies to appoint these companies as service vendor of the Plaintiff and ensure that these contracts were maintained with the Plaintiff. [32] The Defendant does not dispute his involvement with Yong Hock. The Defendant had however contended that Yong Hock is owned by Ng Swee Heng (SP1) as evident from the SSM report. It was also the Defendant’s submission that SP1 had profited from Yong Hock when he had some time in the year 2017 encashed 5 cheques for the total sum of RM124,000.00 from the account of Yong Hock. [33] It was however SP1’s evidence at trial that the Defendant had procured the registration of Yong Hock under SP1’s name under the agreement that the Defendant pay SP1 a monthly payment of RM500.00. [34] It was also SP1’s evidence at trial that the encashment of the cheques were instructed by the Defendant as the bank account was under his name and that he was the only person who could encash the cheques and thereafter the cash was passed to the Defendant through Lim Chee Kwang (SP2). [35] It is pertinent to note that the withdrawal of money was done by SP1 in 2017 and the Defendant claimed that he had only discovered the said withdrawal some time in 2021. I find this somewhat peculiar in view of the role played by the Defendant in Yong Hock. The Defendant had admitted that he was at all material time handling the operation and transactions of Yong Hock, it beats logic for the Defendant to claim he had no knowledge of the withdrawal of cash from Yong Hock’s account when he was the person in charge of the company’s accounts. [36] Both SP1 and SP2 had admitted to their involvement with Yong Hock and the extent of their involvement i.e. that the Defendant had asked SP2 for a favour to help him find someone to register a company under the said person’s name which would enable the Defendant to conduct his personal business operations and transactions. SP2 had for this purpose, introduced the SP1 to the Defendant. [37] The Defendant had however contended that he was merely following Ang Pun Heng’s (“APH”), the former executive director, instruction to solve the payment issue on the packaging of chicken dung and it was SP2 who had suggested the registration and the setting up of Yong Hock Hardware Sdn Bhd to solve the shortage of workers and related payment issue. [38] The Defendant had however failed to bring any evidence to show that the Plaintiff was experiencing the shortage of workers and payment issues as claimed. The Defendant did not call APH as witness to prove the defence raised. [39] Where a party to an action provides no reasons as to why material witnesses were not called to give evidence, the court will normally draw an adverse inference. (see Guthrie Sdn Bhd v. Trans-Malaysian Leasing Corp Bhd [1991] 1 CLJ 9; [1991] 1 CLJ (Rep ) 155 and Subry bin Hamid v. Husaini bin Tan Sri Ikhwan [2006] 4 CLJ 50; [2006] 5 AMR 644). Section 114 (g) EA 1950 provides as follows:-

“Court may presume existence of certain fact The court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct, and public and private business, in their relation to the facts of the particular case. ILLUSTRATIONS The court may presume:- ...

that evidence which could be and is not produced would if produced be unfavourable to the person who withholds it;” [40] The name Ang Pun Heng was first mentioned by the Defendant in his statement of defence, and the Defendant’s case was mainly built on the instruction given by Ang Pun Heng to the Defendant to solve shortage of workers and payment issues faced by the Plaintiff. It is in my considered view that Ang Pung Heng if called would have shed some light on the alleged shortage of workers and payment issues faced by Plaintiff at the material time. the Defendant had however failed to call Ang Pun Heng to give evidence during trial. [41] I find as a fact that Ang Pun Heng was a material witness in the present case. No evidence had been adduced by the Defendant to show that Ang Pun Heng was not available to give evidence in the present case. Failure by the Defendant to call Ang Pun Heng invites the invocation of section 114(g) of the Evidence Act 1950 against the Defendant. [42] Even if the court was to accept the Defendant’s defence that he was merely assisting the Plaintiff with the shortage of workers and payment issues, this court finds it absurd for the Defendant to conceal this fact from the Plaintiff. The Defendant had clearly acted in breach of his fiduciary duties against the Plaintiff. [43] On the totality of evidence, this court finds that the Defendant’s defence was clearly an afterthought. The involvement of SP1, SP2 and Ang Pun Heng was never brought to the attention the Plaintiff and/or its representatives whether verbally or in writing. These facts was never mentioned by the Defendant in his Letter of Admissions dated 10.9.2019 and 11.9.2019, his Whatsapp messages to SP5 and his police report dated 13.9.2019. DAMAGES [44] As a fiduciary, the Defendant was not entitled to make secret profit at the expense of the Plaintiff. The Defendant admitted that Yong Hock SP Hardware Sdn Bhd received a sum of RM934,083.35 in its account. The Defendant had through his Letter of Admission dated 11.9.2019 admitted to earning a profit for the total sum of RM652,086.35 after deducting cost of RM21,045.00 paid to Ali and for plastics. [45] The Defendant had however come before this court and gave a breakdown of the expenses and outgoings for Yong Hock, summarized below:-

A cash sum of RM261,002.10 paid to Ali between 17.2.2017 and 28.12.2017 being cost for packing chicken dung.

A sum of RM167,787.00 spent for purchase of plastic bags from KP Asli and Su Kok Chin for packing chicken dung at the cost of RM0.45 per bag.

A sum of RM51,800.00 advanced to foreign poultry caretakers on behalf of the Plaintiff which amount was fully reimbursed by the Plaintiff.

RM124,000.00 personally encashed by SP1 in 2017.

A sum of RM103,640.00 injected by Jing Way Electrical into Yong Hock for labor supply in 2017 and 2018 disbursed to foreign poultry caretakers in the Plaintiff’s farmhouse through Yong Hock where invoices were later issued by Jing Way Electrical to the Plaintiff for labor charges. [46] Safe and except for (a) and (c) above, this court finds the Defendant’s deduction wholly unsubstantiated. The Defendant had failed to produce evidence in respect of (b) and (e). In respect of cheque encashed by SP1 as stated in para (d) above, this court finds this to be totally irrelevant to the Plaintiff’s case. If indeed SP1 had encashed cheque for his personal use, it would be a matter between SP1 and the Defendant and not the Plaintiff. [47] This court however finds no basis to award general damages as prayed by the Plaintiff. There was nothing to show that the Plaintiff had suffered a loss of reputation and integrity as a result of the Defendant’s breach. CONCLUSION [48] In coming to a decision, this Court has carefully weighed both the oral and documentary evidence adduced by all parties, scrutinised all the documents tendered and relied upon by the parties and considered the written submissions as well as the authorities filed by them. In considering the evidence as a whole, it is my considered view that the Plaintiff had proved its pleaded case on a balance of probabilities against the Defendant. For the foregoing reasons above, this court hereby order the Defendant to make restitution to the Plaintiff for the sum of RM600,236.25 with costs. Dated: 10.08.2021 -signed- (ABDUL WAHAB BIN MOHAMED) JUDGE HIGH COURT OF MALAYA IPOH, PERAK Peguamcara Tetuan Nga Hock Cheh & Co bagi pihak Perayu Peguambela dan Pegauamcara No. 18, Tingkat 1, Taman Selamat

05.6911620 Faks: 05.6915333 Emel: ngahc.co@gmail.com Ruj: T29/NHC/18288/2020) Peguamcara: Encik Kelvin Ding dan Puan Rachel Lau Shu Qian Tetuan Dharmen Sivalingam & Partners bagi pihak Responden Peguambela dan Peguamcara Level 13A-05 PJX HM Shah Tower No. 16A, Persiaran Barat 46050 Petaling Jaya Selagor

03.79321971 Faks: 03.79321882 Emel: admin@dsplaw.com.my Peguamcara: Puan Leenalochana a/p Malaipan, Encik Dharmendran a/l Sivalingan dan Encik Vishal Gopinathan