Lee Brian Jeffrey v Airasia Berhad (JA-12BNCvC-31-12/2024)

This is an appeal by the Defendant (“Appellant”) against the decision of the Sessions Court delivered on 16.12.2024, after a full trial, allowing the Plaintiff’s (“Respondent’s”) claim for RM111,806.45 with interest at 5% from the date of judgment until full settlement and costs of RM5,000.00 and dismissing the Defendant’s counterclaim with cost of RM5,000.00.

The appeal is against the entirety of that decision.

For convenience, this Court will refer to the parties as they were at the trial Court.

The material facts are largely undisputed.

The plaintiff operates an airline and runs a cadet pilot training scheme. The defendant applied for and was selected to undergo the programme. A Conditional Letter of Offer dated 18.4.2011 and an Agreement for Cadet Pilot Training dated 11.5.2011 were executed between the parties.

Under these arrangements, the plaintiff would arrange and bear the cost of the cadet training and subsequently provide Type Rating Training to enable the defendant to operate the plaintiff’s Airbus A320 aircraft. In return, the defendant agreed, inter alia, to –

accept employment as co-pilot with the plaintiff upon successful completion of training; and

be bonded to serve the plaintiff for a period of ten years, failing which he would pay a bonded sum of RM100,000.00.

The Defendant successfully completed the cadet training at his own expenses and was issued with a Multi-Crew Pilot Licence (MPL) in by Transport Canada on 13 July 2012. He was then offered and accepted employment as a co-pilot with effect from 31.7.2012.

The evidence shows that upon joining the plaintiff, the defendant underwent further simulator and flight checks in Malaysia. These trainings were organised and paid for by the Plaintiff. The Type Rating Training was provided through Asian Aviation Centre of Excellence Sdn Bhd ("AACE") at a cost of RM99,821.88, as evidenced by Exhibit P-11.

Further, on 7.11.2012 the Department of Civil Aviation Malaysia (DCA) officially endorsed the A320 type rating on the Defendant's pilot licence (No. 0024), confirming that he had passed the relevant checks and was qualified to operate the A320 aircraft.

On 8.9.2015, while still within the bonded period, the Defendant tendered his resignation via email, stating his last day of service as 8.10.2015. The plaintiff accepted the resignation but demanded –

RM11,806.45 being salary in lieu of the full three-month notice; and

the bonded sum of RM100,000.00.

The Defendant did not pay and after a demand letter dated 28.7.2017, the plaintiff commenced the Sessions Court action in 2021 to recover the said sums. The defendant counterclaimed, alleging, among others, failure of consideration, misrepresentation and breach of contract by the plaintiff.

The learned SCJ found, in essence, that –

the Plaintiff had fulfilled its obligations under the training agreement, including providing the necessary training and type rating;

the Defendant had resigned during the bonded period and without giving three months’ notice;

the bond clause and bonded sum of RM100,000.00 constituted an enforceable genuine pre-estimate of loss under Section 75 of the Contracts Act 1950 [Act 136]; and

the Defendant’s counterclaim was time-barred under the Limitation Act 1953 [Act 254] and in any event not made out on the evidence.

The learned Judge accordingly allowed the plaintiff’s claim in full and dismissed the counterclaim.

This being an appeal from a decision after a full trial, the well-established principle is that an appellate court will be slow to interfere with the trial court’s findings of fact, particularly those based on the credibility of witnesses, unless such findings are shown to be plainly wrong, made on a misapprehension of the evidence, or unsupported by the evidence as a whole (see : UEM Group Bhd v Genisys Integrated Engineers Pte Ltd & Anor [2010] MLJU 2225); Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1).

In this appeal, the Defendant advances several grounds which, in substance, alleged that the learned SCJ erred –

in finding that the Respondent had provided cadet pilot training to the Appellant when the evidence showed otherwise;

in failing to consider that the Respondent had breached Clause 1.2(2) of the Agreement for Cadet Pilot Training by failing to provide the Appellant with a "frozen ATPL" as promised;

in disregarding the document marked IDD-17 which contained a 6-year bond period instead of the 10-year bond in Exhibit P-4;

in finding that the bonded sum of RM100,000.00 was a genuine pre-estimate of loss;

in allowing the claim for RM11,806.45 as payment in lieu of notice when the Respondent had waived its right to the same;

in failing to draw an adverse inference under Section 114(g) of the Evidence Act 1950 [Act 56] for the Respondent's failure to call Captain R. Dharmaraj Niker as a witness;

in dismissing the Appellant's counterclaim on grounds of limitation; and

in failing to consider the Respondent's alleged failure to cross-examine SD-1 on material issues.

Against this backdrop, this is the Court’s analysis and findings.

Alleged failure to provide ATPL and Type Rating

The Defendant argues that under the training agreement he was to obtain a frozen ATPL, but he was only given an MPL and that he never attended a type rating course conducted by the Plaintiff. On this basis he pleads failure of consideration.

Having examined the documents and evidence, this Court is unable to accept this complaint.

First, the evidence clearly shows that the Defendant successfully completed the cadet training, obtained the MPL licence in July 2012, and thereafter underwent a series of simulator and flight checks on the Airbus A320 after joining the Plaintiff. These culminated in a final line check, after which he operated the Plaintiff’s aircraft as co-pilot. This is confirmed by the training records and by the Defendant’s own answers under cross-examination.

Secondly, the training and endorsement activities carried out in Malaysia after his employment are precisely the type rating and line training contemplated under the agreement. It is immaterial whether they were conducted at an external training centre or in-house. What matters is that the training was provided at the Plaintiff’s expense and that the Defendant was in fact qualified and authorised to operate the A320 thereafter.

Thirdly, as to the complaint that he received an MPL and not a frozen ATPL, this Court notes that from the evidence of SP-1, Captain Shahrizan Mohamad Razali, he explained that the MPL programme incorporates the theoretical components of what is colloquially referred to as "frozen ATPL" classes. The term "frozen ATPL" is industry parlance and does not refer to a separate licence. More importantly, the issuance of an actual Air Transport Pilot Licence (ATPL) requires the accumulation of 1,500 flight hours under the Civil Aviation Authority of Malaysia (CAAM) regulations. This is a regulatory requirement beyond the Plaintiff's control.

Significantly, the Defendant himself obtained his ATPL on 3.7.2015 after accumulating the requisite flight hours while employed by the Plaintiff. This demonstrates that the training provided by the Plaintiff enabled him to progress towards and ultimately obtain the ATPL.

The Defendant accepted the MPL, accepted employment, flew as the Plaintiff's pilot and enjoyed the benefits of the arrangement for over three years without contemporaneous protest. On the facts, the MPL cannot be regarded as a fundamental departure amounting to non-performance of the contract.

The test for total failure of consideration was articulated by the Federal Court in Berjaya Times Square Sdn Bhd v. M-Concept Sdn Bhd [2010] 1 CLJ 269. The Federal Court held that there is a total failure of consideration only where the party claiming such failure has received no part of the benefit bargained for under the contract. The test is whether the promisor has performed any part of the contractual duties he has undertaken.

In the present case, the Appellant received substantial benefits under the training arrangements as follows –

he was selected for and completed the cadet pilot training programme;

he obtained a Multi-Crew Pilot Licence (MPL) recognised by the aviation authorities;

he received Type Rating training at the Respondent's expense through AACE, as evidenced by Exhibit P-11 showing training costs of RM99,821.88;

he underwent simulator checks, endorsement flights, and a final line check using the Respondent's aircraft and resources;

he was employed as a co-pilot with the Respondent from 31.7.2012; and

he flew commercial aircraft as a qualified Airbus A320 co-pilot for over three years, receiving salary and benefits throughout.

Therefore, the Defendant cannot plausibly claim that he received "nothing" from the contract. There was therefore no failure of consideration, total or otherwise.

In the circumstances, this Court agrees with the learned SCJ that the plaintiff has substantially performed its obligations under the training agreement and that there is no failure of consideration.

Enforceability of the bonded sum & “two offer letters”

The defendant next relies on an alleged contradiction between –

the Offer Letter dated 30.7.2012 (Exhibit P-4), referring to a ten-year bond for RM100,000.00; and

another document, also dated 30.7.2012 (marked IDD-17), which refers to a six-year bond and links the RM100,000.00 to the cost of type rating.

It is trite that a document merely marked for identification and never converted into an exhibit does not form part of the evidence and has no evidential value. See : Joseph Thambirajah v Bank Buruh (M) Bhd (now known as BSN Commercial Bank (M) Bhd) [2008] 2 MLJ 773 and SS Legend Nautilus (M) Sdn Bhd v Hamzah bin Mohd Ghauth & Ors [2013] MLJU 153).

IDD-17 remained an identification document and was never admitted as an exhibit. The SCJ was therefore correct not to rely on its contents. Once IDD-17 is excluded, there is no documentary contradiction before the court. The governing terms on bond and bonded period are found in –

the Cadet Pilot Training Agreement, including its schedules; and

the Offer Letter P-4.

Under these instruments, the Defendant unmistakably agreed –

to be bonded to the plaintiff for ten years commencing from completion of the final line check; and

to pay RM100,000.00 if he left during the bonded period.

The Defendant contends that the bonded sum of RM100,000.00 is a penalty and therefore unenforceable. The Plaintiff contends that it is a genuine pre-estimate of loss.

The applicable legal framework is Section 75 of the Contracts Act 1950 [Act 136], which provides that when a contract has been breached and a sum is named as the amount to be paid in case of such breach, the party complaining of the breach is entitled to receive reasonable compensation not exceeding the amount so named.

The Federal Court in Selva Kumar a/l Murugiah v Thiagarajah a/l Retnasamy [1995] 1 MLJ 817 explained that Section 75 of Act 136 encompasses two classes of cases –

The first class comprises cases where damages are difficult to assess and there is no known measure of damages. In such cases, even if there is no evidence of actual damage or loss, the court ought nevertheless to award "substantial damages not exceeding the sum named in the contract" being "a sum which is reasonable and fair according to the court's good sense and fair play"; and

The second class comprises cases where there is actual loss and there are settled rules or principles of assessment. In such cases, the aggrieved party must prove its actual loss and the sum named in the contract operates as a ceiling on recovery.

The Court in Sakinas Sdn Bhd v. Siew Yik Hau & Anor [2002] 3 CLJ 275 explained that in the first class of cases, even if there is no evidence of actual damage or loss, the court ought nevertheless to award substantial damages not exceeding the sum so named in the contract, being a sum which is reasonable and fair.

The present case falls squarely within the first class. Pilot training involves substantial investment in selection, ground school, simulator training, flight training, type rating and in-house operational training. When a trained pilot leaves during the bonded period, the employer suffers losses that are inherently difficult to quantify precisely, including –

the direct costs of training already incurred;

administrative costs for recruitment and HR management;

replacement costs to train another pilot;

loss of knowledge, skills and competencies;

lower productivity during the vacancy period; and

the time-sensitive nature of training batches, where a dropped-out pilot cannot simply be replaced mid-batch.

This analysis is supported by the directly analogous High Court decision in Malaysian Airline System Bhd v. Yong Chong Hee & Anor [2011] 7 CLJ 360. In that case, which also involved a pilot training bond, the court upheld the liquidated damages provision as enforceable. The court observed that the nature of the training is one where damages are incapable of being specifically ascertained and there is simply no way of assessing or proving actual damages.

In this regards, this Court finds that the Defendant's reliance on Sathiyaselan a/l Krishnan & Ors v Flyfirefly Sdn Bhd [2015] MLJU 1895 is misplaced. That case concerned a summary judgment application where the issues of proof had not been fully ventilated at trial. Here, after a full trial, the evidence clearly establishes that –

the AACE training costs alone amounted to RM99,821.88 (Exhibit P-11);

additional in-house training was provided using the Plaintiff's aircraft and facilities;

the bonded sum of RM100,000.00 is not an arbitrary figure but closely approximates the actual expenditure; and

the Appellant has adduced no evidence to suggest the sum is extravagant or unconscionable.

Further, the Plaintiff’s witness explained how the bonded sum reflected a genuine pre-estimate of loss, having regard to the costs of training, recruitment, replacement, and operational disruption. The Defendant offered no evidence to show the sum was extravagant or unconscionable.

In the absence of failure of consideration and given the Plaintiff’s performance of the training obligations, this Court sees no reason to disturb the Sessions Court’s finding that the bonded sum of RM100,000.00 is valid and enforceable.

Payment in lieu of notice - RM11,806.45

Clause 7 of the Offer Letter requires the Defendant to give three months’ written notice or pay salary in lieu should he wish to terminate his employment.

The Defendant tendered his resignation on 8.9.2015 and stated 8.10.2015 as his last working day. The plaintiff’s calculation of salary in lieu for the balance period (9.10.2015 to 7.12.2015) amounted to RM11,806.45, based on the Defendant’s monthly salary of RM6,000.00. This calculation is not disputed.

The Defendant contends that because the Plaintiff accepted his resignation and allowed him to leave on 8.10.2015, it waived its right to claim payment in lieu. This Court is unable to agree.

The law on waiver is well-settled. In Perusahaan Sinar Jaya Sdn Bhd v Etiqa Insurance Bhd [2013] 8 MLJ 317, the Court explained that waiver requires clear and unequivocal words or conduct indicating an intention to forgo a contractual right. The mere acceptance of a resignation does not, without more, constitute a waiver of the contractual entitlement to either notice or payment in lieu thereof.

Further, the legal nature of resignation was clarified by the High Court in Rozainah Awang v. Mahkamah Perusahaan Malaysia & Anor [2022] CLJU 905 and Chong Kok Kean v. Citibank Berhad & Anor [2022] CLJU 973. In those cases, the court held that resignation is a unilateral act which takes effect upon submission. There is no legal requirement for the employer to "accept" the resignation for it to be effective and the mere acknowledgment of a resignation does not constitute a waiver of any contractual rights.

In the present case, the evidence shows that when the Defendant submitted his resignation on 8.9.2015, Captain R. Dharmaraj Niker replied on the same day to state that the resignation was "noted". This to this Court’s mind was a mere acknowledgment, not a formal acceptance and certainly not a waiver of the Plaintiff's contractual right to payment in lieu of notice.

Critically, the Plaintiff subsequently sent a demand letter dated 28.7.2017 expressly claiming both the bonded sum of RM100,000.00 and the payment in lieu of notice of RM11,806.45. This contemporaneous demand is inconsistent with any alleged waiver. An employer who expressly demands a sum cannot be said to have impliedly waived its right to the same.

There is no evidence of any express or implied agreement by the plaintiff to forgo the sum of RM11,806.45. The learned SCJ was therefore correct in holding the defendant liable for this amount.

Adverse Inference under Section 114(g) Evidence Act 1950 [Act 56]

The Appellant contends that an adverse inference should be drawn under Section 114(g) of the Evidence Act 1950 [Act 56] for the Plaintiff's failure to call Captain R. Dharmaraj Niker as a witness.

Section 114(g) of Act 56 provides that the court may presume that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it. However, this presumption does not arise in every case where a potential witness is not called.

In Munusamy v PP [1987] 1 MLJ 492, the Supreme Court explained that there is no rule requiring a party to call every person mentioned in the evidence. The question is whether the witness not called could have given material evidence on a matter in issue. Where the evidence of that witness would merely be corroborative or where the facts can be established through other witnesses or documents, no adverse inference arises.

In the present case, this Court found that Captain Dharmaraj's role was limited to acknowledging the Defendant's resignation. The resignation itself is not in dispute. The material issues was the terms of the training agreement, the bonded period, the bonded sum and the notice requirement which were all addressed through SP1's testimony and the documentary evidence. Hence, Captain Dharmaraj could not have added anything material to these issues.

Furthermore, as stated above, resignation is a unilateral act. Whether Captain Dharmaraj "accepted" the resignation is legally irrelevant because no acceptance was required. The Defendant resigned, gave one month's notice instead of three and is contractually liable for the shortfall. No adverse inference arises from the failure to call Captain Dharmaraj.

Failure to Cross-Examine

The Defendant raises a further argument that the Plaintiff's alleged failure to cross-examine SD1 (the Appellant himself) on various matters should be treated as fatal to the Plaintiff's case, relying on the rule in Browne v Dunn (1829) 57 ER 909 as applied in Wong Swee Chin v PP [1981] 1 MLJ 212, Aik Ming (M) Sdn Bhd & Ors v Chang Ching Chuen & Ors and another appeal [1995] 2 MLJ 770, and Small Medium Enterprise Development Bank Malaysia (formerly known as Bank Perusahaan Kecil dan Sederhana Malaysia Bhd) v Lim Woon Katt [2016] 5 MLJ 220.

In this Court’s opinion, this submission is without merit for several reasons.

First, the rule in Browne v Dunn applies to situations where a party intends to impeach the credibility of a witness or challenge material facts that go to the heart of the opposing case. It does not require a party to cross-examine on every point raised in evidence-in-chief. As held in Aik Ming, the failure to cross-examine becomes significant only where the unchallenged evidence would, if accepted, be determinative of the issue in question.

Second, the Notes of Proceeding shows that the Plaintiff did in fact cross-examine SD1 on the material issues, including –

the Conditional Letter of Offer (D-20);

the Agreement for Cadet Pilot Training (P-2);

the resignation during the bonded period (P-13);

the ATPL examination;

the employment relationship;

the Final Line Check; and

the flying licence, type-rating and trainings.

Hence, this argument is misconceived.

Third, and most importantly, the material facts in this case are largely established by documentary evidence, i.e the training agreements, the offer letters, the training records, the invoices and the resignation correspondence. The Plaintiff's case does not depend solely on oral testimony but on the contemporaneous documents which speak for themselves.

In Lee Ing Chin @ Lee Teck Seng & Ors v Gan Yook Chin & Anor [2003] 2 MLJ 97, the Court of Appeal observed that where the facts are established by documentary evidence, the rule in Browne v Dunn has limited application. The court noted that the rule is primarily concerned with fairness to the witness, i.e. giving the witness an opportunity to explain or deny an allegation before it is relied upon against him. Where the facts are documented, this rationale has less force.

This Court therefore rejects the submission that any alleged failure to cross-examine was "fatal" to the Plaintiff's case.

Limitation

The Defendant also raised issue of limitation. The cause of action arose when he left the plaintiff’s employment on 8.10.2015. The demand letter was sent in July 2017 and the suit filed in 2021, within six years from the accrual of the cause of action. The Limitation Act 1953 [Act 254] does not assist the Defendant and this Court affirms the finding that the claim is not time-barred.

Counterclaim

The counterclaim is premised on alleged failure of consideration, misrepresentation, breach of contract and wrongful imposition of the bond.

As a preliminary issue, the Plaintiff contends that the counterclaim is time-barred under Section 6(1)(a) of Act 254. This Court agrees.

The evidence shows that the Defendant completed his training and obtained his MPL on 13.7.2012. At that point, the Defendant knew that he had received an MPL and not an ATPL. Indeed, the Defendant admitted under cross-examination that he was aware he had obtained an MPL since 13.7.2012. If the Defendant believed that the Plaintiff had breached its contractual obligations or made misrepresentations regarding the ATPL, his cause of action accrued on 13.7.2012 at the latest.

The applicable limitation period under Section 6(1)(a) of Act 254 is six years. The Defendant's counterclaim should therefore have been filed by 13.7.2018 at the latest. The counterclaim was only filed on 16.11.2021, more than 9 years after the cause of action accrued.

The Defendant seeks to rely on Section 31 of Act 254, which provides– "For the purposes of this Act, any claim by way of set-off or counterclaim shall be deemed to be a separate action and to have been commenced on the same date as the action in which the set-off or counterclaim is pleaded".

The Defendant argues that because the counterclaim is deemed to have been commenced on the date of the Plaintiff's writ (6.9.2021), it is within time. This argument is misconceived.

Section 31 of Act 254 does not revive a cause of action that has already become time-barred before the commencement of the original suit. As the Federal Court held in Nadefinco Ltd v. Kevin Corporation Sdn Bhd [1978] 1 LNS 127, citing Reeves v Butcher [1891] 2 QB 509, the statute runs from the earliest time at which an action could be brought. The Federal Court in Alloy Consolidated Sdn Bhd & Anor v. Dato' Dr Hj Adam Harun [2011] 5 CLJ 705 confirmed that section 31 of Act 254 merely deems the counterclaim to have commenced on the date of the writ for limitation purposes. It does not extend the limitation period or revive an already time-barred claim.

In the present case, the Defendant's cause of action accrued on 13.7.2012. By the time the Plaintiff filed its writ on 6.9.2021, more than 9 years had elapsed and the limitation period had long expired. The counterclaim is therefore time-barred.

Even if this Court were to consider the counterclaim on its merits, it would fail. For reasons already given, this Court finds –

the plaintiff substantially performed its obligations under the training agreement;

the type rating and related trainings were provided;

the MPL licence and subsequent endorsement enabled the defendant to work as an A320 co-pilot; and

the bond clause is valid and enforceable.

In the light of these findings, the counterclaim cannot be sustained. This Court finds no error in the learned SCJ’s dismissal of the counterclaim.

Based to the above, this Court is satisfied that the learned SCJ made no appealable error of fact or law. The findings that –

the Plaintiff performed its contractual obligations under the training agreement;

the Defendant breached the bond and notice provisions by resigning during the bonded period and giving insufficient notice;

the bonded sum of RM100,000.00 is a genuine pre-estimate of loss and is valid and enforceable;

the Plaintiff’s claim for RM111,806.45 together with interest is made out; and

the Defendant's counterclaim is time-barred and in any event without merit. are all supported by the evidence and correct in law.

Accordingly, the Court makes the following orders –

the appeal is dismissed;

the decision of the Sessions Court dated 16.12.2024 is affirmed in full; and

Costs of RM7,000.00 subject to allocator. Dated : 8 December 2025 -sgd-Dr Noradura Binti Hamzah Judicial Commissioner High Court Civil 2 Johor Bahru Solicitors for the Appellant : : Lee Teong Hooi Messrs. Lee Tan & Associates Solicitors for the Respondent : : Wong Jia Ee Messrs. V Chong W Lam