Maybank Islamic Berhad v Aldwich Enviro-Management Sdn Bhd (MT5-22-782-2010)

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CHAN KIN MENG ... DEFENDANTS 2 GROUNDS OF JUDGMENT (After full trial) A. BACKGROUND FACTS [1] The present case begs for no extremity of lengths to discuss and determine its issues. As a prelude, this Court highlights that the factum of a fraud is undisputed in the present case. There is a mutual consensus between every person and parties involved in this case that indeed there was a fraud. What is left to be determined is merely, the measure of damages entitled to the victim of the fraud, and the persons liable and complicit to the fraud. The fraud dealt with in this case is but a recycling of Islamic Accepted Bills (“IABs”), which is similar to the mechanisms of a Banker’s Acceptance of which the drawdowns from the IABs were procured on the basis of a sham transaction, and the proceeds from the drawdowns were utilised to pay matured IABs which are due for payments. This recycling of IABs is undisputed and even admitted by the alleged fraudsters, the Defendants. [2] Now, what has been laid upon this Court is the Plaintiff’s air-tight case, which has left no stone left unturned. The Plaintiff’s case generally covers the Defendants’ liabilities either through complicity to the fraud or sheer recklessness and negligence which 3 had led to the Plaintiff’s injuries. The Defendants however, have very little to no defence to exonerate themselves from liability and complicity in the fraud. Their defences mainly pertain to demarcating themselves from any participation in the fraud, and apportioning the blame to other persons but not themselves. Nevertheless, the undisputed fact remains, the fraud had occurred and the proceeds from the fraud indeed had benefited the Defendants. What irks this Court the most is the Defendants’ defence that it is the Bank’s negligence that had led to the occurrence of fraud, in which a fraud which the Defendants themselves benefitted from. Preliminarily, this Court must stress that this Court shall never be an instrument of fraud and would never legitimize any act of deceit or fraud and lift the liability off of the fraudster or tortfeasor merely because the victim of the fraud was ‘negligent’ enough to be fooled by the façade set up by the fraudster or tortfeasor. A fraud is a fraud and any measure of negligence is never a defence for the fraudster to plea. [3] Preliminarily as well, this Court does not hesitate to disagree with the destitute contention by the Defendants that this Court ought to disregard the Plaintiff’s Statement of Claim (allegedly pleading only on breach of contract) as the Plaintiff has abandoned the 4 Statement of Claim and settle for a cause of action purely in tort (in their counter-claim). Against this fallible contention, this Court reminds the parties that it is already well settled that a claimant can plea a concurrent action in contract and in tort. It is verily common that breaches to a contract arose from the negligence of a partisan which in turn led to the non-performance and breach of the contract’s terms. Negligence in performance and breach in performance are not mutually exclusive and there is no confusion at all that a tortious act may as well be a breach of contract. (see Henderson v Merrett Syndicates [1995] 2 AC 145; Bank Utama (M) Bhd v Insan Budi Sdn Bhd [2009] 1 MLJ 148 (CA), page 62) [4] The Plaintiff {Maybank Islamic Berhad (“Maybank”)} is a financial institution, a bank, licensed under the Islamic Financial Services Act 2013. [5] The 1st Defendant {Aldwich Enviro-Management Sdn Bhd (“AEM”)} is a private company incorporated in Malaysia while the 2nd Defendant {Aldwich Berhad (“AB”)} is a wholly owned subsidiary of AEM. Both companies generally deal with waste management business and trades in oil and gas. Relevant to the 5 present case, AEM and AB deals with the recycling of used catalysts (“spent catalysts”) used in the manufacturing process of precious metals (in this case, platinum) in which AEM and AB will process the spent catalysts to salvage residual precious metals from the spent catalysts. [6] The 3rd Defendant {Kamalul Arifin bin Yusof (“Kamalul”)} is the founder of AEM and at all material times a director and shareholder of AEM and AB. He is also one of the authorised signatories to the banking facilities and all documents pertaining to the IAB granted by the Plaintiff. [7] The 4th Defendant {Mohan Kumar A/L Kathiramalai (“Mohan”)} was the Group Chief Financial Officer and Company Secretary of the Aldwich Group of Companies (inclusive of AEM and AB). Mohan is also one of the authorised signatories similar to Kamalul. [8] The 5th Defendant, { Chan Kin Meng (“Chan”)} was AEM’s and AB’s Technical Director until he was promoted as the Chief Technical Officer of the Aldwich Group of Companies. Chan is also 6 one of the authorised signatories together with Kamalul and Mohan. [9] Anas Nasrun (“Anas”) is the supposed scapegoat who all the Defendants sought to attribute the fraud to. Anas was the Chief Financial Officer of AB and was responsible for the preparation and submission of AEM/AB’s IAB applications for drawdowns to Maybank. Anas, perplexingly was not called by the Defendants to prove their defence. This omission or failure to call Anas as witness by the Defendants shall be dealt with later in this judgment. [10] Vide a Letter of Offer and a Supplemental letter of Offer dated 26.9.2005, Maybank has granted banking facilities to AEM (inclusive of the IAB facilities relevant in the present case). The IAB mechanism is similar that of a Banker’s Acceptance but conceptually different in the sense that a Banker’s Acceptance is a form of an advanced payment by the Bank, in which becomes due with interests upon a maturity period, while an IAB (based on the Islamic finance principle of bai’ al-dayn) is a sale and purchase of a debt in which the bank purchases the debt (out of a transaction of sale or services) and sells it to the customer in a form of a 7 deferred payment in which the sale price of the debt is agreed upon by the bank and customer. The same IAB facilities were extended for the use of AB and had since been utilised by both AEM and AB for their respective businesses. The IAB facility could be utilised to the aggregate limit of RM83,000,000.00. AEM and AB’s mandate and internal procedure in applying for IAB drawdowns [11] In the context of a genuine business transaction, there are five (5) documents which form the IAB application in which includes the Draft IAB, Contract Note and supporting documents (Invoice, Bill of Lading, and Consignment Note). This has been admitted by the Defendants. [12] In authorising and signing these documents, the admitted internal procedure of AEM and AB is that each document must be signed by two authorised one (1) authorised signatory from Group A level of management and also one (1) other signatory from Group B level of management. Simply put, all documents must be authorised and signed by a combination of Group A and B signatories. 8 [13] Kamalul and his wife, Selena forms Group A level of management while Chan and Mohan forms Group B level of management. [14] With respect of certifying copies of original documents (“CTC”) the Companies’ mandate is that any copies of original documents shall be certified as true by Mohan. [15] It was undisputed that the fraudulent Contract Notes and IAB drafts were authorised and signed by a combination of Kamalul and Chan/Mohan while all of the fraudulent invoices were signed by Mohan, and all of the Bills of Lading and Consignment Notes were certified as true documents by Mohan. All of which have been accurately tabulated by the Plaintiff in Exhibits P11A and P11B (which remains unchallenged). [16] This Court must highlight that these documents do not exist in isolation. All of these documents cross-refer to one another and form IAB drawdown applications which are later sent to the Plaintiff. 9 Discovery of Fraudulent IAB Applications [17] Circa June 2006, Maybank has submitted 24 different Bills of Lading (which form proof of shipping and trade for 24 different IAB applications submitted by AEM/AB to Maybank) to the International Maritime Bureau for verification. All of which were reported to be false and fraudulent. The state of falsity of these 24 fraudulent bills is readily acknowledged and admitted by the Defendants in paragraph 20 of AEM’s Defence and paragraph 4 of all of the Defendants’ counter-claims. Thus, the occurrence of fraud and the state of falsehood of these documents are not an issue in the present case. Meeting with Kamalul and Anas [18] Entailing the discovery of the fraud, Maybank held a meeting on 10.7.2009 with Kamalul and Anas of which, the minutes of the meeting records Kamalul apologising for the fraudulent applications and his agreement that the incident should not recur. This minute of the meeting is affirmed by the Defendants vide their own witness (DW2- Kamalul). (see also Minutes dated 10.7.2009 at page 133 of CBD B1) 10 Suspension and Recall of all the facilities by Maybank [19] Naturally, Maybank suspended and recalled all of the facilities against AEM/AB pursuant to clause 16.2 of the Letter of Offer. [20] AEM and AB in turn had the audacity to retort against the suspension and recall on the perplexing basis that the companies have never defaulted their payments of the IABs (which were paid from the proceeds of the fraud) and also on a vague supposition that Maybank and some unknown persons in the companies have conspired to defraud the Bank and the companies. Causes of Action [21] Following the Defendants’ refusal to pay the recalled facilities, Maybank has filed the present action against the Defendants on the following causes of action: a. All of the Defendants were complicit in the commission of a tort of deceit to defraud the Plaintiff; 11 b. Kamalul, Chan, Mohan and Anas are complicit in the commission of the tort of deceit knowingly or alternatively recklessly and carelessly; c. Kamalul, Chan, Mohan and Anas are liable for negligent misrepresentation or misstatement causing injuries to the Plaintiff; d. AEM and AB are equally liable to the tortious deceit as well as negligence of Kamalul, Chan, Mohan and Anas vide the Principle of Attribution; e. AEM and AB are vicariously liable to the tortious deceit as well as negligence of Kamalul, Chan, Mohan and Anas as employers; f. AEM and AB are equally liable for the tortious deceit as well as negligence of Kamalul, Chan, Mohan and Anas vide the Identification Doctrine; g. Kamalul is personally liable for AEM and AB’s tortious deceit as well as negligence as a Director of AEM and AB; 12 h. AEM and AB have breached their duty of care owed to Maybank; and i. AEM and AB have been unjustly enriched from the proceeds of the fraudulent IAB applications [22] The Defendants’ defences against the sound contentions above are at best, a desperate attempt to contend a resoundingly untenable defence: a. Kamalul and Chan were not complicit in the tort of deceit as the Contract Notes and Draft IABs were pre-signed and thus, cannot be held to misrepresent anything; b. It is the Plaintiff’s own negligence that brought the fraud upon its own detriment; c. Mohan should not be held liable for deceit and negligence merely for certifying fraudulent bills of lading as true; and 13 d. The Defendants have no knowledge on the state of falsity of the IAB documents and applications B. KAMALUL, CHAN AND MOHAN ARE LIABLE FOR THE COMMISSION OF THE TORT OF DECEIT EITHER IN FULL KNOWLEDGE OR THEIR RECKLESSNESS AND CARELESSNESS [23] At this juncture, it is opportune for this Court to highlight that the conduct and the state of mind of Kamalul, Chan and Mohan (“Employees”) shall be largely discussed in this section of the judgment. Their conduct and state of mind is also verily relevant in the discussion of other causes of action of the Plaintiff. Thus, this Court shall make cross-references to this section of the judgment so as to avoid redundancy to reproduce the discussions of the employees’ conduct. [24] The requisite elements in proving the tort of deceit have been succinctly particularised by David Steel J in the case of Uzinterimpex JSC v Standard Bank PLC [2007] 2 Lloyd’s Rep 187 at page 106 and shall be categorically discussed and determined in the following paragraphs of this section: 14 i. The Defendant must have made a representation of fact which was false [25] Now, it is here where the Defendants attempt to negate the act of false representation on the ground that the Contract Notes and the IAB Drafts were pre-signed and filled by someone else. On this basis, the Defendants contend that signing a blank document could not amount a representation of anything. [26] However, even before this Court deals with the folly of the contention above based on established and trite principles of law, this Court must stress that the representation relevant in this element is not at all referring to the representation that the representing party intends or perceives to represent, but instead what is relevant is the representation which was received and perceived by the party receiving the representation of false facts. [27] And it is not at all disputed that the fraudulent IAB applications (its documents) all bear the signature and authorisation of Kamalul, Mohan and Chan as well as certifications by Mohan. 15 [28] Thus, it is only just, logical and reasonable to infer that the Plaintiff bank has received (upon the finding of the employees’ authorisations in the documents) a representation by the employees and none else. [29] This Court cannot simply condone a party’s brazen ignorance or plain abject management of a company’s representations which led to the damage of another and lift liability on the same ground especially when the representations involve massive amount of monies. The repercussion if ever this Court were to condone such ignorance and poor management would be unconscionable in that it would always allow fraudsters to be absolved of liabilities so long as the fraud or deceit was conducted vide the banner of unsuspecting, ignorant and/or incompetent authorised signatories of a company. [30] Furthermore, this Court believes that the contention of pre-signing empty documents is merely a ruse or façade set up by the employees to save their own backs. There is an utter absence of any evidence of besides the Employees’ bare assertions to prove such an ignorant and irresponsible system. The learned counsel for the Defendants has not submitted a single spec of evidence to 16 corroborate this contention. There is absolutely no reason, be it logical or legal, for this Court to pay any credence over this contention by the Employees. [31] Regarding the legal implication of pre-signing blank draft IABs, the law is verily settled in that whatever was filled up in the pre-signed blank bills of exchange by other persons, shall become the signatory’s own representation as the person filling in the pre-signed blank document shall be assumed to have a prima facie authority to do so. (see Section 20(1) of the Bills of Exchange Act 1949) [32] And the same section above has been applied by this Court in the case of MBF Factors Sdn Bhd v Tay Hing Ju [2002] 5 MLJ 536 (HC) in which it was held that a signatory of a blank cheque cannot be absolved of its obligation to pay the cheque merely on the grounds that another person filled in the particulars of the cheque: “For if it was true that there was a usual diabolical practice…that the defendant would lend his blank cheques to Gan…then the defendant, by his delivery of his signed cheques to Gan, had given his prima facie authority to 17 Gan or other person in possession of it to fill up the omission in any way he thinks fit (see Section 20(1) of the Bills of Exchange Act 1949)” [33] It is well settled that based on the Bank Negara Guidelines on Accepted Bills-i that an IAB is a form of a Bill of Exchange and thus shall fall within the ambit of the operation of the Bill of Exchange Act 1949. Therefore, the same principle above shall apply. [34] Assuming for a moment, even if it is true that the IAB drafts were pre-signed, this Court opines that the Employees cannot be allowed to distance or vitiate themselves from the representations made under the banner of their signatures especially considering the serious nature of the companies’ business and the high level of management of the Employees. Mah Weng Kwai JC (as he then was) in the case of PB Securities Sdn Bhd v Raja Abd Rahman [2010] 8 MLJ 770 in deciding that a defendant cannot be absolved of an indemnity he signed merely on the grounds that the letter he signed was a blank letter, has referred to the case of Ming Lian Corporation Sdn Bhd v Haji Noordin [1974] 1 MLJ 52: 18 “…the defendant who is an educated person and a retired government official of many years’ standing, conversant with court procedure, knew what he was signing for and he was fully aware of the particulars which should have been inserted in the spaces left blank at the time of signing. I cannot imagine that a person of the class of the defendant would have been irresponsible to the extent of signing a blank form without having known the terms and conditions of the agreement” [35] The above excerpt encapsulates this Court’s sentiment succinctly. The Employees are no mere pencil pushers. They are experienced senior officers of the companies and there is no doubt at all that they would have full awareness, knowledge, as well as obvious understanding that the documents they have signed were draft IABs and the IAB application must be accompanied by legitimate supporting documents that require verifications. (see also Hong Leong Bank Berhad v Bennes Machinery [2009] LNS 1382 (HC)) 19 [36] Thus, upon the above discussion, this Court does not hesitate to find that indeed there is no doubt that the Defendants have misrepresented false facts to the Plaintiff and that the 1st element of the tort of deceit has undoubtedly been proven. ii. The false representation was made dishonestly [37] Now, there is really no reason for this Court to discuss this element at length. It is reiterated that there is an absolute absence of evidence from the Defendants to prove that they had no knowledge of the false representation in that they have only signed blank IAB drafts and Contract Notes. Just the mere fact that the Defendants have thoroughly failed to prove this contention, equates to the undeniable and overwhelming conclusion that the Employees are well aware of the false representations in the fraudulent documents and ultimately that the Defendants were dishonest. [38] Nevertheless, in order to further solidify this Court’s finding, this Court shall still allude to this element, albeit briefly. 20 [39] It is well settled that there are three instances in which an inference of a dishonest state of mind can be drawn. This rule has been propounded in the landmark case of Derry v Peek (1889) LR 14 App Cas 337 which has already been adopted in our local chapter by the Federal Court in the case of Loi Hieng Chiong v Kon Tek Shin [1983] 1 MLJ 31. Lord Herschel in Derry v Peek has held the following: “In an action of deceit…Fraud is proved when it is shewn that a false representation has been made knowingly, or without belief in its truth, or recklessly, without caring whether it be true or false.” [40] It was similarly held in Reese Silver Mining Co Ltd v Smith

LR 4 HL by Lord Cairns: “…if persons take upon themselves to make assertions as to which they are ignorant whether they are true or untrue, they must, in a civil point of view, be held as responsible as if they had asserted that which they know to be untrue” 21 [41] Bearing the above ratios in mind, this present case can go either in two extremes. It is either that the companies are thoroughly ill-managed by incomprehensibly reckless, careless, clueless, utterly irresponsible, and downright incompetent Employees (particularly Kamalul, Chan and Mohan) OR that indeed all the Defendants in this present case had knowingly set up and participated in the fraudulent scheme to recycle the Plaintiff’s IAB facility. [42] Either way, both circumstances are not any feasible defences for Defendants in the present case to exonerate itself from their participation, collusion, in the deceit against the Plaintiff Bank. i. The Defendants are dishonest in that the false representation is made recklessly, without caring whether it be true or false [43] Even if for a microsecond that this Court were to accept that the Employees did pre-sign blank IABs and Contract Notes, this Court is of the considered view that such act or pre-signing blank bills are without a single iota of doubt a reckless, careless act without any care in the truthfulness of the IAB applications. This Court shall now categorically deal with the Employees’ reckless acts: 22 a. Kamalul’s reckless act [44] Kamalul in his testimony has tenuously contended that he had pre-signed the IAB drafts and Contract Notes although without any proof of any substance. However, what was more alarming is Kamalul’s admission that he did not even bother to request for the Contract Note’s and draft IAB’s (proof of trade) in pre-signing the IAB drafts and Contract Notes. This is proof of sheer ignorance and recklessness as the Contract Note and the IAB Draft are documents which are drawn in correspondence of a trade which is in turn, proven by supporting documents such as the Bill of Lading, invoice and consignment note. The mere fact that the IAB Drafts and Contract Notes were signed without any precursor reference to any of these trade documents is a clear indication of total disinterest of the truth of these documents. “PC Ok. What other documents for the transaction would accompany the contract note and the draft? None. 23 So you were provided with the invoice bill of lading and consignment note? No. Did you asked for it? No.” b. Chan’s reckless act [45] Similarly, Chan as another authorised signatory has also admitted that he did not even bother to request for supporting documents before signing the Contract Notes and IAB Drafts. Ok, so when you sign these documents in blank with no supporting documents, did you at any stage ask anyone for any explanation? Chan No. … 24 YA …Does it mean to say whatever documents that the Finance Department put on your table, you just sign it? Chan Yes, My Lady.” [46] Chan has the utter audacity to admit such recklessness and ignorance directly to this Court. c. Mohan’s reckless act [47] Mohan’s reckless acts even go beyond his act of blindly signing the Contact Notes and IAB Drafts. Mohan has even admitted that in certifying copied documents as true, especially the Bills of Lading and Consignment Notes, Mohan did not even bother to countercheck the copies with original documents (if any). Clearly, Mohan in certifying these documents have no interest at all in ascertaining the authenticity of the representation they carry: “MOHAN What was presented to me by my officer and said that’s the original. 25 YA Again? What you said? How can you know? My Lady, it was, I mean based on what was presented by my officer or the CFO, that it was the original So in other words, you, yourself are not sure. You maintain today it’s an original because you were told it was an original? Because my officer said it’s the original. Yes, so you maintain it’s an original, because you were told it’s an original? Yes, My Lady.” [48] It does not matter if the Defendants did not know or was not aware of the falsity. A reckless act shall be the same as a dishonest misrepresentation since the repercussion from the reliance of that misrepresentation remains the same notwithstanding the awareness of its falsity. 26 ii. The Defendants are dishonest in that the false representation is made knowingly [49] It is reiterated that this Court has no doubt of the Employees’ dishonest state of mind as they had ultimately failed to prove their innocence from supposedly pre-signing blank documents. [50] Adding salt to the wound, this Court in fact is persuaded that there are numerous evidences and in fact admissions by the Employees which denotes an overwhelming conclusion that the Employees indeed have full knowledge of their dishonesty and the fact that their representation was a false representation. Kamalul was well aware that there was not enough business during the time of the 24 fraudulent Bills of Lading to justify the 24 IAB applications [51] Kamalul during cross-examination admits that he knew that there were not much stock of spent catalyst coming through between December 2008 and June 2009 (the same period of time of the utilisation of the 24 fraudulent IAB applications) 27 [52] Kamalul adds that he admits that it should follow that since there was a bump in the stock in the year ended 30.6.2008, there would be a reduction of stock during the period of time of the 24 fraudulent applications. This was admitted after Kamalul was cross-examined on the massive reduction of stock from the year ended 30.6.2008 and the period of the utilisation of the fraudulent IAB applications: It was, I believe, a bumper year and there were– Meaning? Meaning there were several catalysts coming in all at the same time, I mean precious metal, yes. … What were the words you used earlier to describe the level of stock coming through between December, 2008, to June, 2009? There may not have been anything within that period. 28 [53] Kamalul admits he should have known that there would not be much business during the time of the fraudulent IAB applications were used: Yes. Now we come to the period from December 2008 to June 2009. You said there’s not much stock coming through and you also said that you wouldn’t expect to see any shipments as a result. Well, there shouldn’t be much shipment as a result, yes. [54] Kamalul continues to admit that people in the business would know whether there would be enough intermediate products generated to form the basis of export shipments for processing. “PC That’s why you don’t know, you know, but what I’m saying is the people in the company will know whether or not there’s enough stock coming in, enough intermediate product 29 being generated to form the basis of export shipments for processing. Yes.” [55] Not only that Kamalul admits that he was well aware that there were no business to justify all of the IAB applications, Kamalul even admits that the proceeds from the fraudulent IAB applications were paid directly to the companies’ current account, was used to pay matured IABs and has successfully albeit fraudulently kept the companies out of the water. [56] Now, the fact that Kamalul is aware of the cash flow difficulties the companies were facing because of the lack of business adds further credence to the probability that the Defendants were well aware of false representation. [57] Thus, in light of the mass of admissions above, this Court finds that the Defendants have indeed dishonestly made false representations against the Plaintiff. iii. The false representation was intended to be relied upon 30 [58] The sheer fact that the IAB applications were forwarded to Maybank for approval and drawdowns is sufficient proof that the Defendants intended for the false representation to be relied upon. iv. The false representation was in deed relied upon [59] It is not disputed that the Plaintiff has granted the drawdowns to the Defendants upon their fraudulent IAB applications. [60] Thus, upon the resounding satisfaction of all the elements of the tort of deceit, this Court finds on the balance of probability that Kamalul, Chan and Mohan are undeniably liable for the tort of deceit to defraud Maybank (Plaintiff). (see Sinnaiyah & Sons v Damai Setia [2015] 5 MLJ 1) C. KAMALUL, CHAN AND MOHAN ARE PERSONALLY LIABLE FOR NEGLIGENT MISSTATEMENT / MISREPRESENTATION i. Existence of a Special Relationship [61] With regard to this 1st element to prove negligent misstatement, this Court refers to the classic and well-received decision of the 31 House of Lords in the case of Caparo Industries PLC v Dickman and others [1990] 1 ALL ER 568. The House of Lords has affirmed Richmond P’s observation in the case of Scott Group Ltd v McFarlane [1978] 1 NZLR 553: “All the speeches in Hedley Byrne seem to me to recognise the need for a “special” relationship: a relationship which can properly be treated as giving rise to a special duty to use care in statement. The question in any given case is whether the nature of the relationship is such that one party can fairly be held to have assumed a responsibility to the other as regards the reliability of the advice or information. I do not think that such a relationship should be found to exist unless, at least, the maker of the statement was, or ought to have been, aware that his advice or information would in fact be made available to and be relied on by a particular person or class of persons for the purposes of a particular transaction or type of transaction.” [62] There is no doubt at all that in the present case, that the Employees, being mandated as the authorized signatories on behalf of AEM and AB in the companies’ IAB applications, would 32 be fully aware that their authorization and signing of the documents of the IAB applications and the applications itself when submitted to the Plaintiff, the Plaintiff Bank would rely on their authorization on the authentication of the IAB applications for a particular transaction (being the IAB drawdowns). [63] Thus, the Employees indeed owe a duty of care against the Plaintiff Bank and have a special relationship with the Plaintiff Bank. And it has already been discussed at length the sheer magnitude of the Employees’ incompetence, ignorance and dishonesty and thus, there is no doubt that the Employees have fallen well below the standard of care owed to Maybank (Plaintiff). ii. The Employees have voluntary assumed responsibility for what was represented to the Plaintiff in the fraudulent IAB applications [64] There is no doubt here, that the mere fact that it is the internal mandate of the companies that the Employees shall be their authorized signatories, and the Employees without any reservation or disclaimer accepts and have even performed the mandate, proves that the Employees have voluntarily assumed responsibility 33 to the authenticity and correctness of the IAB applications presented to the Plaintiff. iii. It was reasonable for Maybank (Plaintiff) to rely on the Employees’ representation from the fraudulent IAB applications [65] It is reasonable for the Plaintiff, being aware that the Employees are the authorized signatories of the companies, to rely on the Employees’ authorization of the IAB applications’ authenticity as the IAB applications, prima facie seems to be in check. It has already been decided in the case of Lipkin Gorman (a firm) v Karpnale Ltd [1992] 4 All ER 331 that a bank is entitled to treat the customer’s mandate at its face value save in extreme cases. iv. Maybank (Plaintiff) indeed has relied upon the Employees’ representation and has suffered a foreseeable detriment [66] Indeed it is undisputed that the Plaintiff has granted the drawdowns upon the fraudulent IAB applications and the Plaintiff would not have granted these drawdowns but for (if not for) the Employees’ fraudulent IAB applications. 34 D. THE EMPLOYEES’ LIABILITY FOR THE TORT OF DECEIT AND NEGLIGENCE IS ATTRIBUTABLE TO AEM AND AB [67] This Court is mindful that the effect of incorporation is the establishment of a separate entity disparate from the individuals in that corporation. However, this Court is equally mindful that the existence of this fictional persona is separate from the individuals maneuvering the company only to a limited extent. It cannot be denied that this entity is devoid of any tangible form, and mind. It is merely a conceptual existence. It cannot be denied that to an extent, the will, the decision and the entity’s representation is shouldered by select natural persons who might as well steer the entity’s representation into a deceitful representation or a negligent representation. Hence, in this circumstance, the law permits that the corporate entity to be attributed to the individuals managing the corporation. It was held in the case of Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 3 ALL ER 918 that: “Not every act on behalf of the company could be expected to be the subject of a resolution of the board or 35 a unanimous decision of the shareholders. The company therefore builds upon the primary rules of attribution by using general rules of attribution which are equally available to natural persons, namely, the principles of agency. It will appoint servants and agents whose acts, by a combination of the general principles of agency and the company's primary rules of attribution, count as the acts of the company. And having done so, it will also make itself subject to the general rules by which liability for the acts of others can be attributed to natural persons, such as estoppel or ostensible authority in contract and vicarious liability in tort.” [68] It was similarly held by our Court of Appeal in the case of CGU Insurance Bhd v Asean Security Paper Mills Sdn Bhd [2006] 3 MLJ 1 that: “As a general rule, the acts and omissions of a servant or agent of a natural person are attributed to that person when those acts are done in the course of employment. When operating in the sphere of the law of contract this is called the doctrine of agency and when operating in the 36 sphere of tort law it is known as the doctrine of vicarious liability” [69] Thus, a natural person(s) liability (in the present case the Employees’ liability) is attributable to AEM and AB: i. under the law of contract, under the doctrine of agency; and ii. under the law of tort, under the principle of vicarious liability i. Attribution vide the doctrine of agency [70] Succinctly in the present case, AEM and AB (as principals) have authorised the Employees (the agents) to act on their behalf (as authorised signatories) for IAB applications. [71] The Employees’ authority as agents may either be actual authority (express or implied) or ostensible authority. [72] An express authority is simply an authority bestowed by the principal to its agent by oral or written means while an implied authority is simply an authority implied to the agent inferred from 37 circumstances of the case. (see Sections 139 and 140 of the Contracts Act 1950) [73] An ostensible/apparent authority is an authority derived from representations made from the principal with regards to its agent. (see Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB) The Employees are agents with Express Actual Authority [74] It has already been admitted that the Employees were expressly mandated by AEM to be authorised signatories regarding the documents for IAB applications. The same actual authority of this mandate has been admitted by the Employees vide their testimonies and have been discussed at length earlier in this judgment. The Employees have acted within the scope of Agency [75] Albeit fraudulent, the act of the Employees in signing, authorising and certifying the documents forming the IAB applications were exactly the mandate which was expressly bestowed by AEM. 38 Thus, the Employees have indeed acted within the scope of their agency. [76] Therefore, in light of the above, it is this Court’s judgment that the Employees’ liability for the tort of deceit, negligence and breach of contract is attributable to both AEM and AB. ii. Attribution vide vicarious liability [77] The recent case of Zulkiply bin Taib & Anor v Parabakarar a/l Bala Krishna & Ors and other appeals [2015] 2 MLJ 607 has affirmed the trite elements to prove vicarious liability. Each of these elements shall be categorically addressed and determined by this Court in the following paragraphs in this section. There exists an Employer and Employee Relationship between AEM and AB and the Employees [78] It is reiterated here that it has already been admitted by all of the Employees that all of them are employees of the companies, Kamalul being AEM and AB’s director, Chan being the Chief Technical Officer of the Aldwich Group (inclusive of AEM and AB) 39 and Mohan being the Group Chief Financial Officer as well as company secretary of the Aldwich Group. There exists a commission of wrong by the Employees [79] This Court reiterates that as per the lengthy discourse above, the Employees indeed have committed wrongs in that they are liable to the tort of deceit, fraud, and also negligence (negligent misstatement). The Commission of Wrong was indeed in the Employee’s Course of Employment [80] In the same case of Zulkiply Taib the court has held that a wrongful act can be deemed to be in the course of employment if the wrongful conduct either was: i. Authorised by the employer; ii. An unauthorised mode of doing something authorised by the employer; or 40 iii. So closely connected with his employment that it would be fair and just to hold the employer vicariously liable [81] It was opined by the Court of Appeal in Zulkiply Taib’s case that: “We respectfully agree with the decisions of the above cases. In our opinion, if a close connection between the deviated actions of an employee and the purpose or nature of his employment is established by certain factual evidence, an employee may be found to be acting within the scope of his employment” (see also Lister v Hesley Hall Ltd [2002] 1 AC 215) [82] In the present case, similarly as decided above, there is no doubt that the Employees have committed the wrong in the course of their employment as they have done exactly what was mandated to them by AEM. And on the basis of the above principle of close connection, it is patently clear that even if the Employees’ act of forming fraudulent IAB applications might be seen as a deviation from their course of employment, it is undeniable that their conduct in authorising, signing, and certifying the IAB applications are 41 inextricably woven with the mandate given by AEM to the Employees. Thus, this Court finds that the wrong committed by the Employees indeed was committed within the course of their employment with AEM and AB. [83] Herein, upon the satisfaction of all the elements of vicarious liability, this Court finds that both AEM and AB are vicariously liable for the deceit and also negligence of its Employees. AEM and AB is attributable to the Employees deceit and negligence vide the Identification Doctrine [84] The Identification Doctrine was propounded on a similar sentiment in that the Court acknowledges that albeit a corporation is a separate entity in itself, this entity remains to be under the will and steer of its agent or alter ego. [85] There’s no denying that the alter ego of a company must be its management personnel and the law acknowledges that there are personnel that forms and directs the mind and will of a company. 42 [86] Different from the Doctrine of Attribution, the Identification doctrine is not based on the principle of agency or vicarious liability. The Identification doctrine is simply the principle that in the circumstance that the law requires personal apportionment of fault as a requisite of proving liability in tort, the fault of the managing personnel of the company shall be the personal fault of the company so long that the managing personnel directs the mind and will of the company for the purposes of an impugned transaction. (see El Ajou v Dollar Land Holdings PLC [1994] 2 All ER 685) [87] Lord Denning has approved this principle in His Lordship’s decision H L Bolton (Engineering) Co. Ltd v T J Graham & Sons Ltd 3 All ER 624: “A company may in many ways be likened to a human body. They have a brain and a nerve centre which controls what they do. They also have hands which hold the tools and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and 43 managers who represent the directing mind and will of the company, and control what they do. The state of mind of these managers is the state of mind of the company and is treated by the law as such. So you will find that in cases where the law requires personal fault as a condition of liability in tort, the fault of the manager will be the personal fault of the company. That is made clear in Lord Haldane's speech in Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd ([1915] AC 705 at pp 713, 714).” [88] There is not a single shade of doubt that in the present case, the Employees are actively directing the will and mind of the Companies particularly in the submission of the 24 fraudulent IAB applications which were authenticated by their signature and authorisation. Thus, the Employees’ dishonest state of mind in the deceit and negligence should be attributed to both AEM and AB on the basis of the Doctrine of Identification. [89] Herein, on the foregoing discussions, this Court hesitates nothing to find that the Employees’ liability in the tort of deceit and negligence shall be attributed to both AEM and AB. 44 E. KAMALUL’S PERSONAL LIABILITY AS DIRECTOR OF AEM AND AB [90] It is also settled law, and remains undisputed by the Defendants that a tortious act committed under the banner of a company shall be the personal liability of the company’s director if it can be proven that the director has authorized, directed and procured the commission of the tortious act. This principle was propounded in the case of C Evans & Sons Ltd v Spritebrand Ltd & Anor [1985] 2 All ER 415 and was the same principle was echoed in our local chapter by the Court of Appeal in the case of Victor Cham & Anor v Loh Bee Tuan [2006] 5 MLJ 359 in which the Court of Appeal has relied upon the same case relied upon by the English Court of Appeal in C Evans’ case, the case of Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd [1924] 1 KB 1: “THE LAW [8] In C Evans & Sons Ltd v Spritebrand Ltd & Anor, Slade LJ relying on the case of Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd [1924] 1 KB 1 stated the legal position in the following words: 45 The mere fact that a person is a director of a limited company does not by itself render him liable for torts committed by the company during the period of his directorship: see, for example, Rainham Chemical Works Ltd (in liq) v Belvedere Fish Guano Co Ltd [1924] 2 AC 465 at 488,…. Nevertheless, judicial dicta of high authority are to be found in English decisions which suggest that a director is liable for those tortious acts of his company which he has ordered or procured to be done.” [91] Relevant to the present case, it remains admitted and undisputed that all of the 24 fraudulent IAB applications all bear the authorisation and signature of Kamalul as AEM’s and AB’s director. [92] Now, the only retort that was afforded by the Kamalul is by virtue of his supposed ‘innocent’ act of pre-signing blank Contract Notes and IAB Drafts, Kamalul has not directed, authorized and procured the commission of the deceit. However, this Court must sternly 46 reiterate that there is a dire absence of evidence for this Court to pay a single heed to this bare assertion. It was merely Kamalul’s self-serving unsubstantiated oral testimony. It is a set rule of law that Contemporaneous documentary evidence trumps over, and has greater probative value against self-serving oral evidences. It was recently decided by the Court of Appeal in Leisure Dotcom Sdn Bhd v Globesource Sdn Bhd [2015] 5 MLJ 789 that: “The attempt by the witnesses called by the vendor to contradict those express words in contemporaneous documents by way of oral testimony before the court should have been treated with circumspect, if not rejected outright, as self-serving and an attempt to salvage what was otherwise an untenable position asserted by the vendor based on the train of factual events and developments in the matter.” [93] Thus, in absence of any contradicting evidence of the contemporaneous documents in the present case, it is only judicially appropriate that this Court rejects this contention by the Defendants and accept that the contemporaneous documents (being the IAB applications and its documents) have sufficiently 47 proven that indeed Kamalul as the director of AEM and AB has directed, authorised and procured the commission of the tort of deceit. Thereto, this Court finds that Kamalul is personally liable for the companies’ liability to the tort of deceit and negligent misstatement or misrepresentation. F. AEM AND AB’S NEGLIGENCE AGAINST THE BANK [94] At this juncture, since it has already been established in the preceding sections of this Judgment that the tortious act of the Employees is equally attributable to the companies, it naturally entails that AEM and AB have breached its duty of care owed against the Plaintiff Bank. AEM and AB owes a duty of care against Maybank (Plaintiff) [95] In the simplest enunciation, Lord Atkin in the classic case of Donoghue v Stevenson has stated that the law would suppose a duty of care if a claimant suffering damage, is a “neighbour” to the alleged tortfeasor. A neighbour in turn, is a person who is within the reasonable and fair proximity that he would be adversely affected by the act of the tortfeasor. 48 (see also Caparo’s case) [96] Upon the principle above, this Court has no doubt in finding that Maybank (Plaintiff) indeed was within the proximity of being adversely affected by the companies’ act (particularly the Employees’ act). Any sound and reasonable person would infer in plain common sense that the acts of the Companies’ employees in its representations to the Plaintiff regarding the IAB applications would adversely affect the Plaintiff (in that Maybank (Plaintiff) would be unlawfully deprived of its monies if it draws down monies in reliance of the companies’ fraudulent IAB applications). AEM and AB have breached their standard of duty of care [97] Now, the standard of care owed by AEM and AB is derivative from the purpose in which the IAB facilities were granted to AEM and AB. The purpose of which is for the financing of the Companies’ genuine business and trade. Thus, the Companies owe a standard of duty of care to ensure that all their trade, trade documents, shipping documents, and applications to the bank are properly verified to be authentic and genuine. And this Court has extensively discussed and found earlier that the Companies have 49 utterly fallen well below this exact standard of care. None of the Companies’ Employees even bother to make a single act of verifying of the authenticity and truthfulness of the basis of the fraudulent IAB applications. They have admitted to gross disregard to the truth and genuineness of the IAB applications. In fact, it is reiterated that this Court finds that the Employees have defrauded the Plaintiff in full knowledge of their dishonesty. [98] As was stated earlier, the Defendants in this case may either be incomprehensibly reckless, careless, clueless, utterly irresponsible, and downright incompetent Employees (particularly Kamalul, Chan and Mohan) OR that indeed all the Defendants in this present case had knowingly set up and participated in the fraudulent scheme to recycle the Plaintiff’s IAB facility. Either way, both circumstances go well below the standard of care owed by the Companies. Thus, indeed the Companies have breached their duty of care owed against Maybank (Plaintiff). Causal link between the breach and injury suffered by Maybank (Plaintiff) 50 [99] It remains undisputed that the Plaintiff had only disbursed monies to the Companies’ current accounts upon the Companies’ fraudulent IAB applications. Thus, Maybank (Plaintiff) would not have been defrauded of its monies but-for (if not for) the Companies’ 24 fraudulent IAB applications. (see Chua Seng Realty Sdn Bhd v Say Chong Sdn Bhd & Ors and other appeals [2013] 2 MLJ 29) Foreseeability of Plaintiff’s losses (Remoteness) [100] It is only natural that it is vividly foreseeable that Maybank (Plaintiff) would have suffered losses from the fraud and negligence of the Companies. Upon the representation of the authenticity of the IAB applications, it is reasonably foreseeable that Maybank (Plaintiff) would disburse its monies upon the IAB applications. Any reasonable and sound person would have foreseen the same. [101] In light of the satisfaction of all the elements of negligence, this Court finds that both AEM and AB are personally and equally liable for negligence against Maybank (Plaintiff). 51 F. NEGLIGENCE OF THE PLAINTIFF IS NO DEFENCE TO THE DEFENDANTS’ TORT OF DECEIT [102] It has already been preliminarily stated that this Court shall never be an instrument of fraud. It is utterly improper for this Court to go at lengths contemplating whether or not the Plaintiff has been negligent in being the victim of the fraud, when the fact of the matter is that the party pleading the negligence of the Plaintiff is the exact same party who has methodically perpetrated, orchestrated and admits to have benefitted from their own deceitful act. [103] No fraudster shall ever be exonerated off of liability merely by contending that the victim of the fraud was ‘gullible’ enough to be fooled by the fraud. [104] This Court draws valuable guidance from the decision in the case of Bumiputra Commerce Bank Bhd v Siti Fatimah Mohd Zain [2011] 2 CLJ 545. The Court has held that: “With the evidence that was presented and even allowing for all the possible inferences to be made in her favour, it was 52 my assessment that, at the very least, she knew of the mistake by the bank in making available the overdraft facility. Of course at the worst, she was complicit to the illicit plan to defraud the bank. In either case, she was certainly not acting in good faith. In fact, the evidence, as I have alluded to thus far, shows that, if not dishonesty, there was certainly an element of bad faith on her part. Her claims of fault on the part of the bank must be seen in this light. In any event, a consideration of fault or even negligence or carelessness on the part of the plaintiff bank, as the law suggests, is irrelevant. It was beyond doubt that the defendant had been enriched at the expense of the plaintiff bank. In the circumstances, it would be unconscionable and inequitable and therefore unjust to deny restitution to the plaintiff bank.” [105] As succinctly put by the Court in the above case, it would be unconscionable and inequitable as well as unjust to allow the enrichment of the Defendants from this fraud merely because the Plaintiff’s alleged negligence. 53 [106] The esteemed authors of Clerk & Lindsell on Torts (20th ed) at 18-37 have expressed a similar sentiment: “it does not lie in the mouth of the defendant to argue that the plaintiff was foolish to take him at his word. As stated in Peekay Intermark Ltd v Australia v New Zealand Banking [2006] 2 Lloyd’s Rep 511 at [40], “it is not enough to show that the claimant could later have discovered the truth, but that he did not discover it.” [107] This principle has been encapsulated in the latin maxim, ex turpi causa non oritur actio, which means an action does not arise from a dishonourable cause. The same maxim has been adopted by Lord Mansfeild in the case of Holman v Johnson (1775) 98 ER 1120; (1775) 1 Cowp 341: “no court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act” [108] The same principles above has been adopted in the local chapter in the case of Nazori bin Teh & Anor v Tay Lye Seng & Anor 54 [1995] MLJU 154 and also Sukatno v Lee Seng Kee & Anor [2009] 4 CLJ 171. [109] Just for the sake of completeness, the Defendants have contended that the Plaintiff should have known that the fraudulent IAB applications were a sham as there were indication of purchases of precious metals with HSBC, a bank (which the Defendants allege does not deal with the trade of precious metal) [110] Against this contention, this Court has three (3) brief retorts. Firstly, the Defendants cannot be allowed to approbate and reprobate as and when it is beneficial to their stance. (see Verschures Creameries, Limited v Hull and Netherlands Steamship Company, Limited [1919 V. 171; Bato Bagi v Kerajaan Sarawak [2011] 6 MLJ; Sheperd v Harrison (1871) LR 5 HL). The Defendants cannot be allowed to first, initially represent that the IAB applications were genuine applications, and when it is convenient to their exoneration of liability, turn back on their own words and contend that Maybank should have known that the IAB applications were a sham. 55 [111] Secondly, the Defendants should be estopped from contending against their own conduct and representation on the genuineness of the IAB applications. That was the status quo represented by the Defendants and the Defendants cannot now contend otherwise. (see Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Bhd [1995] 3 MLJ 331) [112] Thirdly, it was already admitted by Kamalul himself in his testimony that the Companies have habitually dealt with HSBC in its business. G. THE DEFENDANTS HAVE BEEN UNJUSTLY ENRICHED FROM THE FRAUD AND/OR NEGLIGENCE [113] It is reiterated here that Kamalul has readily admitted that the drawdowns from the fraudulent IAB applications were paid to the Companies’ current accounts. It was even admitted that the Companies have used the same monies to pay mature and overdue IABs. [114] The law on unjust enrichment is not a mere vague stranger to the local chapter. The Federal Court in the case of Dream Property 56 Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441 has recently held: “Nearer home, there is now no longer any question that unjust enrichment law is a new developing area of law which is recognised by our courts…In our view, the time has for this court to recognise the law of unjust enrichment by which justice is done in a range of factual circumstances, and that the restitutionary remedy is at all times so applied to attain justice” [115] The Federal Court has laid down the elements to prove Unjust Enrichment in the same case and this Court shall categorically determine each of the elements in the following paragraphs: The Defendant must have been enriched by the retention of a benefit [116] Clearly, as reiterated above, the Defendants have all readily admitted that the Companies were kept afloat by virtue of the proceeds from the fraud and negligence. 57 The benefit must be retained at the expense of the Plaintiff [117] Without a doubt, the drawdowns from the fraudulent IAB applications were made by the Plaintiff bank, and the Defendants retained this benefit from the drawdowns at the expense of Maybank (Plaintiff). The retention of benefit must be unjust [118] It obviously entails from the fact that the Defendants have since retained the benefit from their deceit and negligence, that the retention and utilisation of the drawdowns was patently unjust. [119] Thus, this Court finds that indeed the Defendants have been unjustly enriched at the expense of the Plaintiff Bank. H. MISCELLANEOUS The Defendants’ untenable case of Conspiracy to defraud [120] It is verily unnecessary for this Court to go at lengths to discuss this untenable contention of the Defendants. There was absolutely 58 no evidence at all led by the Defendants to prove conspiracy in any shape or form that implicates the Companies’ officers and Maybank’s officers. It is merely a bare assertion. [121] As it stands, the elements to prove conspiracy, as laid down in the case of SCK Group Bhd v Sunny Liew Siew Pang & Anor [2011] 4 MLJ are: i. There must be an agreement between two or more persons; ii. The agreement is to do an unlawful act, or a lawful act by unlawful means; and iii. The unlawful act, or lawful act by unlawful means causes damage to the complainant [122] Now, what agreement that this Court can infer from the facts of the present case is not a conspiracy between the Companies’ officers and Maybank’s officers. It must be minded that it is the Bank that was defrauded here. It is verily more compelling that there is instead an agreement between the Companies Employees to fabricate fraudulent IAB applications to cause damage to the Bank. 59 [123] Furthermore, there is no damage suffered by the Defendants from the drawdowns based on the fraudulent IAB applications. It was Maybank who was injured from the Defendants’ fraud and negligence. [124] It was even admitted that the proceeds from the drawdowns was utilised by the company. Kamalul admitted that the same drawdowns were used to pay the matured trade bills in lieu of any genuine business. It was further admitted by Kamalul that the drawdowns kept the company afloat. [125] Thus, it is this Court’s judgment that the Defendants have no case of a tort of conspiracy against the Plaintiff Bank. The Defendants are estopped from contending on the utilisation of the proper Utilisation Form [126] It is also another fallible contention by the Defendants that the Bank has negligently processed the IAB applications although 60 there were no utilisation of the proper Utilisation Form as prescribed under the Letter of Offer. [127] However, this Court is satisfied that Kamalul in his testimony has sufficiently admitted that the Companies have waived the usage of the Utilisation Form and have always applied for drawdowns since 2005 without the Utilisation Form. Thus, the Defendants should be estopped from contending against its own representation, understanding and conduct in waiving the utility of the Utilisation Form. (see Boustead’s case) Kamalul’s filing of the Police Report regarding the Deceit is not any proof of innocence or honesty [128] Kamalul also contended that the fact that he had filed a police report on the deceit negates any inference of a dishonest state of mind. However, this Court reiterates that the dishonest state of mind of the Employees has been discussed at length and this Court finds that there are overwhelming evidences, inclusive of Kamalul’s own admission that indicate Kamalul’s total lack of innocence and dishonesty. 61 [129] The filing of the police report might as well be a front, or a ruse to further cloak Kamalul’s deceit as Kamalul does contend (although thoroughly unsuccessful) that he had ‘innocently’ pre-signed blank Contract Notes and IAB Drafts of which this Court finds it totally unacceptable. The fact that the Employees were not prosecuted alongside Assari is no proof of their innocence [130] Another contention by the Defendants is that the fact that the Attorney General has not prosecuted the Employees for the investigated fraud is a conclusive evidence of the Employees’ innocence. [131] However, there were no authorities at all forwarded in support of this contention. And it is understandable why such precedent is non-existent as it is not this Court’s place to speculate the underlying reason behind the Attorney General’s decision to not prosecute the Employees. This Court draws an adverse inference against the Defendants for failing to call Anas as a witness 62 [132] It is the Defendants’ staunch contention to make Anas as their scapegoat in that Anas has conspired with some officers of Maybank (Plaintiff) to defraud the Companies. Having such strong contention in mind, it is verily perplexing that the Defendants were reluctant or have failed to call Anas, the supposed mastermind of the whole ‘conspiracy’ as their witness. It is verily clear that Anas would be an essential witness in the Defendants’ case to shed more light on their contentions. Thus, it is only proper that this Court draws an adverse inference against the Defendants’ failure or reluctance to call Anas as witness. (see Section 114 (g) of the Evidence Act 1950; Goon Choy Fook v Lai Poh See [2012] 6 MLJ 627 (CA)) Defendants’ liability under the Letter of Offer [133] As had been preliminary found, the Plaintiff’s action in tort is not mutually exclusive from its action in contract. It is undisputed that it is the fraud and negligence of the Defendants that had led to the non-performance and breach of the Letter of Offer. 63 [134] Thus, as per Clause 16 of the Letter of Offer the Defendants in their tort of deceit and negligence, have breached the letter of offer in that firstly they have defaulted payments of matured IABs, and secondly, in that the Defendants have made false representations in their IAB applications. [135] Consequently, the Plaintiff is at liberty to suspend all of the facilities and further recall the same as per Clause 16.2 and Clause 18.5(a) of the Letter of Offer. I. COURT’S DECISION AND DIRECTIONS [136] In light of all of the above findings, it is this Court’s decision that the Plaintiff has clearly proven its case against all of the Defendants. [137] This Court hereby allows the Plaintiff’s Claim and also Counterclaim. This Court also hereby dismisses all of the Defendants Defence and Counterclaims. 64 [138] This Court hereby finds that all of the Defendants are jointly and severally liable to the tort of deceit, negligent misrepresentation, negligence and also breach of Contract. [139] This Court hereby orders that all of the Defendants are jointly and severally liable to pay to Plaintiff Bank, the outstanding amount of RM 75, 443, 634.11, compensation on the outstanding amount calculated as at 30.4.2010 (as per the letter of demand dated 21.5.2010) until the date of payment at the prevailing Islamic Interbank Money Market Rate. On the issue of costs [140] Having heard the submissions from the learned counsels for the Plaintiff and the Defendants, this Court hereby orders the Defendants to pay the Plaintiff a global sum of RM 200,000.00 in costs. The costs of RM200,000.00 awarded to the Plaintiff is a global costs for the Plaintiff’s Claim and Counterclaim and the Defendants’ Counterclaims considered together. This costs are to be paid to the Plaintiff by the Defendants jointly. 65 ...................................................... (DATUK AZIMAH BINTI OMAR) Judicial Commissioner High Court Shah Alam Selangor Darul Ehsan Dated the 30th November 2015 For the Plaintiff - Tetuan Shearn Delamore & Co Encik Rabindra S Nathan Encik Lucas Lim Cik Mah Sue Ann For the Defendants - Tetuan Netto & Yohendra Dato V. Manokaran Encik Yohendra Tetuan Kumar & Associates Cik Yoshini