Impian Selama Communication and Services Sdn Bhd v Ravindran A/L Rajoo (BA-12B-29-03/2024)

This is an appeal by the Appellant against the decision of the learned Sessions Court Judge (SCJ), who, after a full trial, dismissed the Appellant’s claim against the Respondent with costs.

After hearing the submissions of both parties, perusing the Appeal Record, and considering the written submissions filed, I am satisfied that the SCJ’s reasons for dismissing the Appellant's claim were reasonable and adequately explained. I find that the SCJ correctly appreciated the evidence before her and did not misdirect herself in law.

For the reasons set out below, I find no basis to interfere with the decision of the Sessions Court, and the appeal is accordingly dismissed.

The Appellant is a company engaged in construction, electrical, fibre optic and telecommunication works, including works relating to railway and telecommunication infrastructure. In the course of its business, the Appellant was appointed as a main contractor for projects owned by, among others, Naza, Roots, Thales and U-Mobile.

Somewhere between 2015 and July 2017, the Appellant engaged two companies, namely Sri Arus Elektrik Enterprise and Sasta Gemilang Enterprise, to provide manpower and services for electrical, fibre optic and telecommunication works at various project sites. During the same period, the Respondent was the project personnel and was associated with the said entities.

The works carried out by Sri Arus Elektrik Enterprise and Sasta Gemilang Enterprise formed part of the Appellant’s contractual obligations to the respective project owners. Upon completion of works at the project sites, the said entities issued invoices and payment vouchers to the Appellant. The Appellant subsequently made payments via online banking to the accounts of Sri Arus Elektrik Enterprise and Sasta Gemilang Enterprise.

The Appellant’s evidence was that payments were processed through its internal finance procedures, which involved verification and approval by its project personnel and senior management. At the material time, no objections were raised by the Appellant in respect of the invoices issued or the payments made, and the Appellant received payment from the project owners for the completed works.

In or about 2021, the Appellant issued a letter of demand seeking repayment of RM364,195.00, being the alleged sum S/N 611Icint0GLrx03tJ/x1A previously paid to Sri Arus Elektrik Enterprise and Sasta Gemilang Enterprise between 2015 and 2017.

The Appellant subsequently commenced the present action, alleging that the invoices issued during the material period were fictitious, inflated or unsupported by actual work done, and that the Respondent was responsible for or involved in the issuance of such invoices and the resulting payments.

The Respondent denied the allegations and maintained that the Appellant engaged Sri Arus Elektrik Enterprise and Sasta Gemilang Enterprise as subcontractors to provide manpower for works requested by the Appellant.

The Respondent’s position was that all works were carried out on site, inspected by the Appellant and relevant project owners, and that invoices were issued only after completion of works. The Respondent further denied having personally received any of the sums paid by the Appellant.

From the grounds of judgment, the SCJ had made the following findings:

It was accepted that the Plaintiff had engaged third-party contractors (Sri Arus Elektrik Enterprise and Sasta Gemilang Enterprise) to carry out electrical, fibre optic S/N 611Icint0GLrx03tJ/x1A and telecommunication works at project sites, but found that this fact alone did not prove wrongdoing or liability on the part of the Defendant.

The Plaintiff failed to prove that the Defendant was involved in, authorised, or benefited from the issuance of the disputed invoices, or that the Defendant had misappropriated payments made by the Plaintiff.

The SCJ accepted the Defendant’s submission that payments made by the Plaintiff were made via “online banking” directly into the accounts of the third-party contractors, after approval by the Plaintiff’s own project personnel, and not paid to the Defendant personally.

There was no credible evidence showing that the Defendant had instructed the Plaintiff to make payments, falsified invoices, or conspired with the third-party contractors to defraud the Plaintiff.

The evidence of the Plaintiff’s witnesses was accepted, particularly the finance and project personnel, which showed that internal approvals and verification processes were followed before payments were made.

The Plaintiff’s allegation that invoices were fabricated or inflated was unsupported by forensic evidence, expert S/N 611Icint0GLrx03tJ/x1A testimony, or an independent audit to establish fraud or falsification.

The Plaintiff failed to call material witnesses, including relevant third-party contractors or independent experts, to substantiate allegations of fraud, overcharging, or non-performance of works.

The SCJ referred to section 103 of the Evidence Act 1950 and held that the burden of proving specific allegations of fraud lay squarely on the Plaintiff, which burden was not met.

The Plaintiff’s claim was based on assumptions and afterthoughts, rather than contemporaneous documentary or objective evidence.

The Plaintiff’s conduct in pursuing the claim amounted to an abuse of process, noting that the Plaintiff lacked bona fide grounds and had failed to prove its case despite a full opportunity to do so.

Accordingly, the SCJ dismissed the Plaintiff’s claim in its entirety with costs. S/N 611Icint0GLrx03tJ/x1A The Law on Appellate Intervention

An appellate court should be slow in disturbing the findings of facts arrived by the trial court, which had the advantage of seeing and hearing the witnesses (audio-visual advantage) unless there are substantial and compelling reasons for disagreeing with the finding or such finding is clearly against the weight of evidence (see Che Omar Mohd Akhir v. Public Prosecutor [2007] 3 CLJ 281 and PP v. Mohd Radzi bin Abu Bakar (2006) 1 CLJ 457).

Further, the appellate Court will also not interfere unless the trial court is shown to be plainly wrong in arriving at its decision. The Federal Court in Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441, in the judgment written by Azahar Mohamed FCJ (later CJM), reaffirmed the principle to be followed by an appellate court when reversing findings of fact by a trial court: “[60] It is now established that the principle on which an appellate court could interfere with findings of fact by the trial court is ‘the plainly wrong test’ principle; see the Federal Court in Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1 (at p 10) per Steve Shim CJ (Sabah & Sarawak). More recently, this principle of appellate intervention was affirmed by the Federal Court in UEM Group Bhd v S/N 611Icint0GLrx03tJ/x1A Genisys Intergrated Engineers Pte Ltd & Anor [2010] 9 CLJ 785 where it was held at p 800: It is well settled law that an appellate court will not generally speaking, intervene with the decision of a trial court unless the trial court is shown to be plainly wrong in arriving at its decision. A plainly wrong decision happens when the trial court is guilty of no or insufficient judicial appreciation of evidence (see Chow Yee Wah & Anor v Choo Ah Pat [1978] 1 LNS 32; Watt v Thomas [1947] AC 484; and Gan Yook Chin & Anor v Lee Ing Chin & Ors [2004] 4 CLJ 309)”.

In addition, the Court of Appeal in the case of SIVALINGAM PERIASAMY v. PERIASAMY &ANOR [1996] 4 CLJ 545 held as follows: “It is trite law that this Court will not readily interfere with the findings of fact arrived at by the Court of first instance to which the law entrusts the primary task of evaluation of the evidence. But we are under a duty to intervene in a case, where, as here, the trial court has so fundamentally misdirected itself, that one may safely say that no reasonable court which had properly directed itself and asked the correct questions would have arrived at the same conclusion”.

Firstly, I appreciate both counsel’s detailed submissions advanced for the purposes of the appeal, which canvassed a wide range of factual and legal arguments. Notwithstanding the breadth of those submissions, the appeal, when properly analysed, I find that this appeal turns on a single core issue, namely, whether the learned SCJ erred in rejecting the Appellant’s factual case by misapplying the burden of proof and by declining to draw adverse inferences from the alleged absence of corroborative evidence on the part of the Respondent.

For completeness, I will address the relevant concerns by framing the issues in this appeal as follows:

Whether the SCJ correctly applied the burden of proof in a claim founded on fraud.

Whether the Appellant proved, on a balance of probabilities, that the invoices were fake or unsupported by work done.

Whether the evidential burden shifted to the Respondent, such that an adverse inference should have been drawn. S/N 611Icint0GLrx03tJ/x1A

Whether the SCJ’s findings were plainly wrong or warranted appellate interference. Burden of proof in an allegation of fraud

The central issue in this appeal concerns the burden of proof. The Appellant alleged fraud, collusion, and the issuance of fake invoices involving its former employees and the Respondent. In law, such allegations must be proven by the party making them. Under section 102 of the Evidence Act 1950, the legal burden rests at all times on the Appellant as Plaintiff.

I agree with the SCJ that while the evidential burden may shift during a trial, the legal burden does not. The Appellant must first adduce credible evidence showing that the invoices were fictitious or that no work was done. Only then would the evidential burden shift to the Respondent. This principle is well established in International Times & Ors v Leong Ho Yuen [1980] 2 MLJ 86.

On the facts, the Appellant did not dispute that the invoices were issued and paid. More importantly, the Appellant did not prove that the works reflected in the invoices were not carried out. This was a critical factual gap in the Appellant’s case. In the absence of such proof, the SCJ correctly held that the Appellant failed to discharge its legal burden.

In this regard, I also note that there was no dispute by the Appellant as to the quality or extent of the works carried out under the invoices issued, nor was it disputed that payment had in fact been made. More significantly, no evidence was adduced to show any collusion between the Respondent and the Appellant’s former employees in the award of works or in expediting the issuance or payment of the invoices.

The distinction between the legal burden and the evidential burden is material. The legal burden, being the burden of establishing the case, rests throughout on the Appellant as the party alleging fraud and collusion, pursuant to section 102 of the Evidence Act 1950. While the evidential burden may shift in the course of a trial, such a shift only arises once the party bearing the legal burden has first adduced sufficient evidence to support its allegations. As explained by the Federal Court in International Times, the evidential burden arises only after the legal burden has been discharged.

In the present case, the Appellant relied primarily on assertions of a familial relationship between its former employees and the Respondent, as well as on the absence of proof by the Respondent of work done. I am of the view that such assertions, without more, do not amount to evidence of fraud or collusion.

As the party bringing the claim, it was incumbent on the Appellant to prove that the works were not done, that there was no consideration for the payments made, and to particularise S/N 611Icint0GLrx03tJ/x1A how the alleged fraud or collusion was facilitated, as required under sections 102 and 103 of the Evidence Act 1950. This accords with section 103 of the Evidence Act 1950, as explained by the Court of Appeal in Juahir Sadikon v Perbadanan Kemajuan Ekonomi Negeri Johor [1996] 3 MLJ 627, where it was held that the burden of proving a particular fact lies on the party who asserts it.

Only upon such proof would the evidential burden shift to the Respondent. Where that burden has not been discharged, there is no obligation on the opposing party to disprove the allegation. This principle was recognised in Eastern Enterprise Ltd v Ong Choo Kim [1969] 1 MLJ 236, where the Court held that a party is not required to disprove an allegation unless a prima facie case has first been established against him. Proof of fraud, fake invoices or collusion

Fraud is a serious allegation. Although fraud is to be proven on a balance of probabilities, it nonetheless requires clear and cogent evidence, as emphasised by the Federal Court in Sinnaiah & Sons Sdn Bhd v Damai Setia Sdn Bhd [2015] 7 CLJ 584. Therefore, I am of the opinion that mere suspicion, assumption or inference is insufficient.

The Appellant relied heavily on allegations of irregularities and on the existence of a familial relationship between its former employee and the Respondent. However, no evidence was S/N 611Icint0GLrx03tJ/x1A adduced to show how that relationship translated into fraudulent conduct or collusion to defraud the Appellant.

There was also no independent evidence to show that the invoices were fake, that the works were not done, or that the payments were made without consideration. The Appellant did not call independent witnesses, did not produce a forensic audit, and did not adduce contemporaneous documents showing non-performance of work. In these circumstances, I agree that the SCJ was entitled to find that fraud was not proven. Failure to draw an adverse inference against the Respondent

The Appellant argued that the SCJ should have drawn an adverse inference against the Respondent for failing to produce further documents or witnesses.

This argument is misconceived. An adverse inference can only arise once the party bearing the legal burden has established a prima facie case.

While reliance was placed on Teh Swee Lip v Jademall Holdings Sdn Bhd [2014] 8 CLJ 451, the principle therein presupposes that a prima facie case has first been established. As the Appellant failed to discharge its legal burden at the threshold, there was no basis to shift the evidential burden to the Respondent. Hence, no adverse inference could properly S/N 611Icint0GLrx03tJ/x1A arise against the Respondent. The SCJ therefore did not err in declining to draw any adverse inference. Reliance on the Appellant’s internal approval and payment process

The SCJ noted that the invoices underwent the Appellant’s internal verification and approval process before payment was made. This was a relevant and material fact.

The Appellant is a corporate entity with internal controls. Payments were not made casually or secretly. The absence of any objection or query at the material time undermines the later allegation that the invoices were fictitious. In this regard, I am of the view that the SCJ was entitled to rely on this evidence. Whether the claim was an “afterthought”

The evidence showed that the payments were made between 2015 and 2017. No complaint was raised until several years later. No audit or investigation was shown to have been conducted at the material time.

In these circumstances, the SCJ was entitled to characterise the claim as an afterthought. This was a permissible inference drawn from the evidence and does not disclose any error of law or fact on the part of the SCJ. S/N 611Icint0GLrx03tJ/x1A Appellate intervention

This was a case decided after a full trial. The SCJ saw and heard the witnesses and assessed their credibility. The findings were supported by evidence on record and were neither perverse nor against the weight of evidence.

The Appellant has not shown any misdirection in law or misapprehension of material evidence. There is therefore no basis for appellate intervention.

Consequently, having considered the submissions of both learned counsel and all the materials placed before the Court, I find that the SCJ did not misdirect herself in law or fact and had sufficiently evaluated the evidence. The SCJ correctly held that the legal burden remained on the Appellant throughout the trial, that no evidence was adduced to show that the works were not carried out, and that no prima facie case of fraud was established. The SCJ was therefore entitled to decline drawing any adverse inference and to rely on the Appellant’s own approval and payment process. Accordingly, the decision of the Sessions Court is upheld and affirmed.

This appeal is hereby dismissed with a cost of RM5000 to the Respondent, subject to allocator fees. Dated this: 24th December 2025 ~signed~ (NOOR HAYATI BINTI HAJI MAT) JUDGE HIGH COURT OF MALAYA SHAH ALAM, SELANGOR For the Plaintiff: R Kengadharan Messrs R. Kengadharan & Co.