Ng Ze Xuan v Kalysta Sdn. Bhd. (WA-12BNCvC-150-10/2022)

The appellant appealed against the entire decision of the learned Sessions Court judge delivered on 17-10-2022.

Thus, a key issue before me is when should an Appellate Court intervene on the findings of fact by a court of first instance.

The appellant was the plaintiff in the Sessions Court while the respondent was the defendant.

In the Sessions Court, the appellant claimed for unpaid commission, bonuses and incentives for sales which she said she had achieved in the respondent company.

The claim totalled RM130,094.24, which consists of: i. Basic Sales Commission, Further Commission and Bonus earned by the appellant amounting to RM113,806.24; and ii. Incentives achieved by the appellant amounting to the value of RM16,288.00.

The respondent counterclaimed for RM65,054.00.

On 17-10-2022, the learned Sessions Court judge dismissed the appellant’s claim with costs of RM12,000 and allowed the respondent’s counterclaim for RM65,054.00 with costs of RM11,000. The appellant appealed to me.

For the appeal, the appellant’s counsel informed me at the hearing on 27-03-2023 that the appellant was dropping her prayers set out in paragraphs 33.2 and 33.3 of her Statement of Claim and will proceed only with paragraphs 33.1 and 33.4 to 33.8 of her Statement of Claim.

I allowed the appeal on 05-05-2023 after hearing counsel on 27-03- 2023 and 06-04-2023.

In essence, I allowed judgment for RM 113,806.24 and RM 15,900; and set aside the judgment for the counterclaim. For costs, since the respondent was awarded costs of RM23,000 at the Sessions Court, I awarded the same quantum to the appellant for the costs for the Sessions Court trial. For the appeal before me I awarded RM 10,000 costs.

The respondent has filed for leave to appeal to the Court of Appeal on 30-05-2023. These are my Grounds of Judgment.

The respondent manufactures and sells slimming products (“Products”). The promotion and sale of the Products are primarily done through the respondent’s sales representatives.

The appellant joined the respondent as a sales representative on or around April 2019. At all material times, the appellant held the rank of a “general agent”, the highest rank in the respondent company.

The appellant executed an Independent Contractor Agreement (“Independent Contractor Agreement”) with the respondent. [Enclosure 4 Record of Appeal (Part B and C) (Volume 2), pages 413 – 420].

On 26-06-2021, the appellant was terminated as a sales representative of the respondent on the ground that there was a breach of the policy of the company.

Following the appellant’s termination, the respondent refused to pay the Claimant her commission, bonuses, and incentives earned from sales performed prior to the termination.

This led to the filing of the suit in the Sessions Court.

In view that the appellant is a general agent, receiving the commissions and bonuses from the respondent’s company, the appellant is required to observe and comply with the terms in the Independent Contractor Agreement and/or the policy implemented by the respondent’s company.

At all material times, it is within the knowledge of the appellant that as a general agent, the appellant is not entitled to involve in other business without prior approval from the respondent’s management.

On or about April 2021, the respondent’s management received a complaint that the appellant was involved in other business known as ‘Everyday’. Upon investigation carried out by the respondent’s management the respondent terminated the appellant as a general agent in the respondent’s company.

Simultaneous with the termination as a general agent, the respondent’s management has exercised its rights under the Independent Contractor Agreement and the policy imposed to forfeit the commissions and bonuses due to the appellant.

The respondent has counterclaimed a sum of RM65,054.00 from the appellant. The said sum of RM65,054.00 comprises as follows: - (i) RM52,262.00 - collected by the appellant without authorisation from the respondent; (ii) RM12,792.00 – the value of the stocks supplied by the respondent on behalf of the appellant.

These are the relevant issues - i. Issue 1 - Has the appellant proven the Basic Sales Commission, Further Commission and Bonus earned by the appellant amounting to RM 113,806.24? 7 ii. Issue 2 - Has the appellant proven her incentive claim of photography of RM 1288, incentive trip to Korea [5 days 4 nights] of RM 4,000 and to Tokyo [5 days 4 nights] of RM 11,000? iii. Issue 3 - [Assuming the appellant had breached the Independent Contractor Agreement], can the respondent forfeit the Basic Sales Commission, Further Commission and Bonus earned by the appellant and forfeit the proven incentive claims earned by the appellant? iv. Issue 4 - Is the respondent entitled to counterclaim for RM 65,054.00?

The law reports are replete with cases which held that an appellate court should 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.

Typically, counsel for a respondent to an appeal will urge the appellate court to dismiss an appeal without subjecting the evidence to scrutiny on the ground an appellate court should not readily interfere with the findings of fact arrived at by the court of first instance.

But it would be a dereliction of duty if I sitting as an appellate court do not subject the findings of fact arrived at by the court of first instance to strict scrutiny. The reasons have been articulated by many eminent judges.

Firstly, an appellate court proceeds to consider an appeal by way of rehearing. On the rehearing it is equally charged with the task of doing justice between the parties. [See Sivalingam A/L Periasamy v Periasamy & Anor [1995] 3 MLJ 395 CA Gopal Sri Ram and Mahadev Shankar JJCA and The 'Eurymedon' (1942) 73 Lloyd LR 217 House of Lords Lord Atkin at page 220]

In Sivalingam A/L Periasamy v Periasamy & Anor [1995] 3 MLJ 395 CA Gopal Sri Ram and Mahadev Shankar JJCA when reversing findings of fact by the trial judge said at page 398-399 – 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… … Lord Atkin, while recording a vigorous dissent, said (at p 220): My Lords, this is an appeal from the Court of Appeal, who affirmed a decision of Langton J, holding that in a collision between the Eurymedon, belonging to the appellants, and the British Reliance, belonging to the respondents, the Eurymedon was alone to blame. The learned judge, of course, saw the witnesses, and had that initial advantage which, as I have said elsewhere, an appeal tribunal can never recapture. But judges 9 have before this been mistaken in their acceptance of witnesses' stories; and if the appellate tribunal is satisfied that a mistake has been made, I apprehend that it is their duty to say so. [Emphasis added]

Secondly, an appellate court should not readily interfere if the finding of a specific fact by the court of first instance is based purely on a determination of facts, such as whether to believe a plaintiff’s or a defendant’s witness i.e. credibility of witness issue.

However, an appellate court should readily interfere if a finding of fact is based on an interpretation of documents and/or upon inference drawn from other facts. An appellate court is generally in as good a position to evaluate such evidence as the court of first instance.

The two categories of findings of fact and their critical differences were stressed by the Court of Appeal in Wasal Construction Sdn Bhd v Boh Huat Chan Timber Products Sdn Bhd [2014] 4 MLJ 294 CA by Abdul Aziz Abdul Rahim JCA who said when allowing an appeal –

In exercising its judicial discretion to interfere with the finding of fact by a trial court, the appellate court draws the distinction between a case where the finding of a specific fact depends upon the credibility of witnesses and one which depends upon inference drawn from other facts. The appellate court would readily interfere in the latter case and form its own opinion on those facts than in the case of the former — China Airlines Ltd v Maltran Air Corp Sdn Bhd (formerly known as Maltran Air Services Corp Sdn Bhd) and another appeal [1996] 2 MLJ 517. And it was said by House of Lords in Benmax v Austin Motor Co Ltd [1955] 1 All ER 326 at p 329 that ‘where there is no question of the credibility or reliability of any witness, and in cases where the point of dispute is the proper inference to be drawn from proved facts, an appeal court is generally in as good a position to evaluate the evidence as the trial judge, and ought not to shrink from that task, though it ought, of course, give weight to his opinion.’ [Emphasis added]

In the instant case, I begin by pointing out that the findings of fact by the court below were not based on a pure credibility of witness issue, but based on interpretation of documents and/or upon inferences drawn from other facts. Therefore, I as an appellate court is generally in as good a position to evaluate such evidence as the court of first instance. [See Wasal Construction Sdn Bhd v Boh Huat Chan Timber Products Sdn Bhd [2014] 4 MLJ 294 CA by Abdul Aziz Abdul Rahim JCA cited above].

With that, I now proceed to decide on the issues set out above. Issue 1 - Has the appellant proven the Basic Sales Commission, Further Commission and Bonus earned by the appellant amounting to RM 113,806.24?

At the hearing on 27-03-2023 I asked counsel why the Independent Contractor Agreement in the Appeal Records is not signed or dated. [Enclosure 4 Record of Appeal (Part B and C) (Volume 2), pages 413 – 420]. Both counsel agreed that it was indeed signed on or around October 2019 but the signed copy could not be found.

The contractual arrangement between the parties is therefore governed by the terms in the Independent Contractor Agreement.

In my view, issue 1 should be answered in the positive. My reasons are below.

Firstly, in support of the appellant’s claim: a. The appellant had in Q&A 6 of the appellant’s Witness Statement (“PWS2”) laid out the commission and bonus system in the Respondent company; [Record of Appeal (Part A) (Volume 1), pages 156 – 195 at page 158]. b. The appellant had from Q&A 13 to Q&A 23 of PWS2, computed her entitlement to the commissions, bonuses and incentives as claimed in her Statement of Claim; [Record of Appeal (Part A) (Volume 1), at page 167-190; and c. The Appellant had exhibited supporting documents evidencing her entitlement to, and the computation of, the commissions, bonuses 12 and incentives. [Record of Appeal (Part B and C) (Volumes 3 and 4),

Secondly, SD1/Chord Tan Sin How who is a director of the respondent admitted under cross examination that the appellant had set out the structure and calculations correctly. [See Enclosure 6 Record of Appeal (Part D) (Volume 4) Notes of Proceedings at page 1352 line 30 (on structure and calculations) - HJY Ok. So, struktur komisen dengan struktur bonus itu tak dipertikaikan, ya? TAN Itu peratusan itu komisen dan itu bonus memang betul. Dia tulis dengan betul.

At page 1355 lines 26-30 (on quantum) SD1/Chord Tan Sin How also admitted that he does not dispute the sales by the downlines but say that the appellant was not entitled to the commissions as she had breached the Independent Contractor Agreement - HJY Ok, so sebenarnya apa yang En Tan kata ialah bahawa jualan oleh downline itu ada buat tapi Plaintif tak boleh dapat sebab dia sudah langgar kontrak dengan sistem. Betul? TAN Betul.

It is significant there was no re-examination by the respondent on these two admissions by its own key witness.

Thirdly, SD1/Chord Tan Sin How’s Witness Statement never said the Appellant’s calculations of her claim are wrong. When I put this question to the respondent’s counsel during oral submissions he candidly and to his credit so admitted.

Fourthly, Enclosure 3 Statement of Claim at paragraphs 18-24 set out the appellant’s claim on quantum. In the Defence at paragraph 13 the respondent never denied the calculations are wrong. The respondent only asserted that they can forfeit on the ground she had breached the Independent Contractor Agreement.

Fifthly, the Appellant/SP2’s testimony was not challenged by the Respondent, either by way of adducing opposing evidence, or during the cross examination of the Appellant/SP2. [See Enclosure 11 Plaintiff’s Written Submission paragraphs 25-26]. When I put this question to the respondent’s counsel during oral submissions he candidly and to his credit so admitted. Failure to cross examine a witness on a crucial part of the case will amount to an acceptance of the witness’ testimony

Sixthly, the law is clear that a failure to cross examine a witness on a crucial part of the case will amount to an acceptance of the witness’ testimony. The following authority says so.

In Ayoromi Helen v PP [2005] 1 CLJ 1 (Court of Appeal), Augustine Paul JCA said - Held [1] The learned judge did not accept the explanation of the accused as it was not supported by other evidence. However, he failed to consider the fact that the material part of the defence of the accused was not subjected to any cross-examination. Failure to cross-examine a witness on a crucial part of the case will amount to an acceptance of the witness’ testimony. [Emphasis added]

It is significant that the the learned Sessions Court judge, with respect, fell into the error pointed out in Ayoromi Helen v PP [2005] 1 CLJ 1 (Court of Appeal). The Sessions Court judge dismissed the appellant’s claim on this issue 1 purely because there was no corroboration evidence. He also failed to consider the six points I have set out above. This is what he said in his GOJ -

The plaintiff has tabulated the purported calculation on the claim for commission/bonus. [35] The Court has considered the table prepared by the plaintiff. [36] The Court is satisfied that the tables are self-serving statement which carries no weight in the evidentiary value and it was merely prepared for the interest of the plaintiff. [37] More critically important, it is clear that the tables are not supported by any reliable documents. [38] To further weaken the plaintiff’s claim, none of the plaintiff’s downline was called by the plaintiff to verify on the quantity of stocks purchased.

It is the considered opinion of this Court that without documentary proof and/or the evidence from the plaintiff's downline on the actual quantity of stocks purchased, the calculation by the plaintiff on the commission/bonus is without basis as it is not corroborated with some other credible evidence.

The same principle in Ayoromi Helen v PP [2005] 1 CLJ 1 (Court of Appeal) was also reiterated in Paramill Sdn Bhd & Anor v Datuk Joseph Pairin Kitingan [2007] 7 MLJ 289, by Tengku Baharudin Shah JCA -

Cross-examination of witnesses is classified as one of the fundamental rules of procedural fairness. In, p 795 (CA) it is stated Aik Ming (M) Sdn Bhd v Chang Ching Chuen [1995] 2 MLJ 770 thus: It is essential that a party's case be expressly put to his opponent's material witnesses when they are under cross-examination. A failure in this respect may be treated as an abandonment of the pleaded case and if a party, in the absence of valid reasons, refrains from doing so, then he may be barred from raising it in argument. It is quite wrong to think that this rule is confined to the trial of criminal cases. It applies with equal force in the trial of civil cases. As PW1's and PW2's testimonies regarding the above-mentioned matters were not challenged by cross-examination they must be taken to have been accepted by the respondent. [emphasis added]

In conclusion, for the reasons set out above I answer issue 1 in favour of the appellant. Issue 2 - Has the appellant proven her incentive claim of photography of RM 1288, incentive trip to Korea [5 days 4 nights] of RM 4,000 and to Tokyo [5 days 4 nights] of RM 11,000?

Issue 2 concerns quantum only. During oral submissions on 27-03- 2023 it was conceded by counsel that the dispute is on quantum only.

In my view, issue 2 should be answered in the positive although the sum allowed by me for the photography claim is RM 900 and not RM

My reasons are below. [51] In the appellant’s Q and A 21 [Enclosure 3 page 189] the appellant asserts for a non-member the photography session is worth RM 1288 and for a member is worth RM 900. The appellant claims RM 1288 on the ground she is a non-member. The appellant relies on a WeChat conversation [Enclosure 5 page 1089] which shows Chord Tan [A director of the respondent] admitting the photography session is worth RM 900. The respondent never adduced any evidence to rebut the quantum. Therefore, the appellant has proven an admitted sum of RM

[52] The appellant claims an incentive trip to Korea [5 days 4 nights] of RM 4,000. The appellant called PW3 a director of Giacomo Travel and Tour Sdn Bhd and relies on a quotation from Giacomo Travel and Tour Sdn Bhd of RM 4373. [Enclosure 4 page 504]. The respondent never adduced any evidence to present their own quantum or rebut the quantum, Therefore the appellant had proven a sum of RM 4,000, which I note is below the quotation of RM 4373. [53] The appellant claims an incentive trip to Tokyo [5 days 4 nights] of RM 11,000. Plaintiff called PW3 a director of Giacomo Travel and Tour Sdn Bhd and relies on a quotation from Giacomo Travel and Tour Sdn Bhd of RM 12,773. [Enclosure 4 page 478]. The respondent never adduced any evidence to present their own quantum or rebut the quantum. Therefore, the appellant had proven a sum of RM 11,000, which I note is below the quotation of RM 12,773. [54] The Sessions Court had dismissed this claim of the Appellant solely on the ground the monetary value of the incentives was not proven. [See GOJ para 40-49]. The court below refused to accept the evidence produced by the appellant despite zero contrary evidence from the respondent. This is thus a suitable case for appellate intervention. [55] I hold the appellant has proven her incentive claim of photography of RM 900, incentive trip to Korea [5 days 4 nights] of RM 4,000 and to Tokyo [5 days 4 nights] of RM 11,000. [56] The total claim allowed is RM 15,900. Issue 3- [Assuming the appellant had breached the Independent Contractor Agreement], can the respondent forfeit the Basic Sales Commission, Further Commission and Bonus earned by the appellant and forfeit the proven incentive claims earned by the appellant? Has the respondent proven the appellant had breached the Independent Contractor Agreement? [57] My view is that the respondent had not proven the appellant had breached the Independent Contractor Agreement. [58] The respondent terminated the appellant on the ground that the appellant was not entitled to involve herself in another business without the prior approval from the respondent’s management. [59] But there is no such clause in the Independent Contractor Agreement prohibiting the appellant from getting involved in another business without the prior approval from the respondent’s management. [Enclosure 4 Record of Appeal (Part B and C) (Volume 2), pages 413 – 420]. [60] We must bear in mind this is not an employee-employer contract. The appellant is an independent contractor. The respondent chose such a relationship to avoid paying EPF, SOCSO, vacation pay, sick leave, retirement benefits, retrenchment benefits etc. The Independent Contractor Agreement in clauses 3 and 9 clearly said the appellant is not entitled to all such benefits. [Enclosure 4 Record of Appeal (Part B and C) (Volume 2), pages 413 – 420]. [61] The respondent cannot have his cake and eat it too. An independent contractor is entitled in law to do other business and have business dealings with other parties. [62] The Sessions Court judge held there was such a restriction based solely on the testimonies by two current serving general agents, DW2 and DW3 who confirmed the existence and implementation on the said policy. This is what he said in his GOJ - [27] As to the policy on the prohibition imposed on general agent, i.e. not to involve in other business without prior approval of the defendant's management, the defendant during trial, called two current serving general agents, DW2 and DW3 to testified and confirm on the existence and implementation on the said policy. [63] The Sessions Court judge was, with respect, in error when he allowed oral testimony to override a written contract. This is in breach of the parol evidence rule. See Sections 91 and 92 of the Evidence Act 1950 which read - Exclusion of oral by documentary evidence Evidence of terms of contracts, grants and other dispositions of property reduced to form of document

When the terms of a contract or of a grant or of any other disposition of property have been reduced by or by consent of the parties to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of the contract, grant or other disposition of property or of the matter except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained… Exclusion of evidence of oral agreement

When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to section 91, no evidence of any oral agreement or statement shall be admitted as between the parties to any such instrument or their representatives in interest for the purpose of contradicting, varying, adding to, or subtracting from its terms: … [Emphasis added] [64] In the case of Tan Chin Kwee v Jova International Sdn Bhd (in liquidation) & Ors [2021] MLJU 1203 Evrol Mariette Peters JC the High Court held as follows: - “In construing a written contract, the professed object of the court was to discover the mutual intention of the parties. The intention of the parties must be ascertained from the document itself. Thus, the parties themselves cannot give direct evidence to show that their intentions were at variance with the provisions of the contract document. The task of the court is quite simple namely, to construe the contractual term without any pre- conception as to what the parties intended. When the minds of the parties are expressed in an unambiguous manner, the principle of construction which are at best only a guide in the search for the intention of the parties cannot be relied upon to override the declared intention of the parties unequivocally expressed in the contract document.” [14] It is important, therefore, to bear in mind that where the contract is in writing, the intention of the parties are confined within the four walls of the contract. The alleged oral agreement that the repayments were actually payment of interest had flatly contradicted the Document dated 5 June 2017, and did not, therefore, fall within the purview of any exception to the parol evidence rule, as found in section 92 of the Evidence Act…” [Emphasis added] [65] Further, there is no evidence the employment contracts of these general agents, DW2 and DW3 are the same as the appellants. Both said their contracts are the same as a blank independent contractor agreement shown to them [Rekod Rayuan Jilid 2 page 413-420] but they and the respondent didn’t produce their own contracts to substantiate their averments. [66] Under cross – examination SD2 also admitted her testimony is partial to the respondent as she was dependent on the respondent for her employment - Extracted from the Record of Appeal (Part D) (Volume 4), page 1440 – 1441 HJY Baik. Saya akan mencadangkan disebabkan oleh itu, kesemuanya keterangan kamu sudah tentu akan memihak kepada Kalysta. Betul? LEE Sebenarnya, sebagai seorang general agent syarikat, saya perlu mengambil pendirian dari sudut syarikat. [67] Under cross-examination SD3, when she was caught contradicting her own previous statement, also admitted to lying on oath - Extracted from the Record of Appeal (Part D) (Volume 4), page 1453) SAN Sebenarnya saya belum membuat bayaran. HJY Ok. Maknanya apa yang Cik Lee katakan dalam mesej ini merupakan satu pembohongan. Betul, tak? SAN Ya, saya setuju. [68] In Lee Ing Chin @ Lee Teck Seng & Ors v Gan Yook Chin & Anor [2003] 2 MLJ 9721 Gopal Sri Ram JCA said that the presence of a motive which a witness may have in giving evidence ought to be taken into account – A judge who is required to adjudicate upon a dispute must arrive at his decision on an issue of fact by assessing, weighing and, for good reasons, either accepting or rejecting the whole or any part of the evidence placed before him. He must, when deciding whether to accept or to reject the evidence of a witness, test it against relevant criteria. Thus, he must take into account the presence or absence of any motive that a witness may have in giving his evidence. If there are contemporary documents, then he must test the oral evidence of a witness against these. He must also test the evidence of a particular witness against the probabilities of the case. A trier of fact who makes findings based purely upon the demeanour of a witness without undertaking a critical analysis of that witness' evidence runs the risk of having his findings corrected on appeal. It does not matter whether the issue for decision is one that arises in a civil or criminal case: the approach to judicial appreciation of evidence is the same. There are a number of important and leading cases in which the point has been considered. [Emphasis ours] [69] In Coghlan v Cumberland [1898] 1 Ch. 70422 Lindley MR held that the appellate court may look at other circumstances to determine on appeal the credibility of a statement provided by a witness - When, as often happens, much turns on the relative credibility of witnesses who have been examined and cross-examined before the judge, the Court is sensible of the great advantage he has had in seeing and hearing them. It is often very difficult to estimate correctly the relative credibility of witnesses from written depositions; and when the question arises which witness is to be believed rather than another, and that question turns on manner and demeanour, the Court of Appeal always is, and must be, guided by the impression made on the judge who saw the witnesses. But there may obviously be other circumstances, quite apart from manner and demeanour, which may shew whether a statement is credible or not; and these circumstances may warrant the Court in differing from the judge, even on a question of fact turning on the credibility of witnesses whom the Court has not seen. … [Emphasis ours] [70] In conclusion, my view is that the respondent had not proven the appellant had breached the Independent Contractor Agreement and so there is no valid reason to forfeit the commissions, bonus and incentives earned by the appellant. Can the respondent forfeit? [71] In any event, even if the respondent had proven the appellant had breached the Independent Contractor Agreement, there is no valid reason to forfeit the commissions, bonus and incentives earned by the appellant. Both are in law separate and unrelated legal rights. [72] The respondent relied on two clauses from the Independent Contractor Agreement to forfeit – being Clause 8.1 and Clause 10.4. [73] Clause 8.1 of the Independent Contractor Agreement is a general clause on termination. There is no right given to the respondent to forfeit any earnings of the appellant even if she is found to have breached the agreement by operating another business. [74] Clause 10.4 of the Independent Contractor Agreement allows the respondent to demand damages, losses and to forfeit the deposit only if a “contractor” had influenced other “contractors” to terminate their contract with the respondent. [75] Thus, it is clear both Clauses 8.1 and Clause 10.4 do not entitle the respondent to forfeit any earnings of the appellant even if she is found to have breached the Independent Contractor Agreement by operating another business (which is in any case not proven). The respondent’s counsel did not adduce any cases to support such right to forfeit. [76] By way of analogy, say a lawyer is terminated for breach of his firm’s rule of employment. Can his firm forfeit his earned salary and allowances? Surely, the answer is no. [77] The Sessions Court judge had clearly erred when he relied on clauses 8.1 and clause 10.4 to justify a right of forfeiture. [See GOJ paragraph 33]. [78] In conclusion, the respondent has no right to forfeit earned commissions and bonus. There is no such contractual right in the Independent Contractor Agreement. No such right in common law. [79] Issue 3 is answered in the negative. Issue 4- Is the respondent entitled to counterclaim for RM 65,054.00? [80] The respondent counterclaimed for RM 65,054.00, which it alleged is made up of the following :-

Allegedly, RM 52,262.00 which the appellant had received from her downlines without authority; and

Allegedly, RM 12,792.00 for products purchased by the appellant from the respondent. [81] The respondent prepared for trial two Excel sheets to support its claim. [See Record of Appeal (Part B and C) (Volume 2), page 835]. [82] There were no supporting documents tendered by the respondent to justify the figures in the Excel tabulations. No witnesses were called. The law is clear that witnesses must be called to prove the entries and the underlying documents or the evidence will be rejected. [See Popular Industries Ltd v Eastern Garment Manufacturing Sdn Bhd [1989] 3 MLJ 360 HC Edgar Joseph Jr.]. [83] Edgar Joseph Jr. said at Held 8,9 and 11 of the MLJ report - [8] As the relevant accounts books of the plaintiffs were never produced, the oral evidence of the accountant and exh P76 were rendered inadmissible.

It is a firmly established rule (to which there are exceptions) requiring that when documentary evidence is tendered, primary evidence of the document, that is to say the production of the documents itself, is essential. The burden of proving the existence of any circumstances bringing the case within any of the exceptions lies upon the party seeking to adduce secondary evidence of the contents of the document. In the present case, the plaintiffs made not the slightest attempt to discharge that burden, with the result that exh P76, which was alleged to be extracted from the books of accounts of the plaintiffs which were never produced, was inadmissible in evidence. Similarly, the oral evidence of the accountant which was based on exh P76 was also inadmissible for the same reason. … [11] Even had the accounts books been in evidence, they could not by themselves have been sufficient to charge the defendants with liability, having regard to the provisions of s 34 of the Evidence Act, so that the entries themselves would have had to be proved by someone having personal knowledge of the transactions reflected in such entries. The accountant was not such a person as he, like any accountant, would of necessity have to rely upon information derived from documentary sources and explanations provided by his clients when preparing the accounts. [Emphasis added] [84] Popular Industries was approved by the Supreme Court in Malaysian Rubber Development Corp Bhd v Glove Seal Sdn Bhd [1994] 3 MLJ 569 SC at page 582E-F Mohamed Dzaiddin SCJ. [85] In cross-examination, SD1 himself confirmed that the respondent relied only on the Excel sheets in support of its counterclaim-Record of Appeal (Part D) (Volume 4), page 1412 HJY Alright. So untuk tuntutan balas En Tan, En Tan hanya merujuk dalam witness statement kepada kedua-dua jadual ini. Betul tak? In your witness statement. TAN Betul. [Emphasis added] [86] The law is clear that self-serving documents produced for the purpose of a trial has no evidential value. [87] In Chuah Kim Chye (suing as the sole proprietor of a business known as Bermuda Engineering) v KY Engineering Sdn Bhd [2022] 1 LNS 421 the court said - [72] With regard to the ‘NCP (Non-Conformance Product) list’ at ‘Bundle B3’, D argues that it should be admitted as “4 witnesses from D were called during the trial and they had made reference to these documents and this document was prepared and written by D”. I think that misses the point. It seems to me that the issue is not so much the admissibility of this document. But rather, the weight to be given to this document. At the end of the day, this is a self-serving document prepared by D themselves in an attempt to prove that P had not carried out the Said Works satisfactorily or in accordance with specifications. But as discussed earlier, the totality of the evidence shows otherwise. Thus, I attach little or no weight to this document. [Emphasis added] Estoppel [88] Further, after terminating the appellant the Respondent had told the appellant to pay all outstanding debts owed to the respondent. The appellant had duly paid. All these was documented and produced in court during trial by the Appellant. [Enclosure 3 page 192-194 appellant’s WS Q and A 26 to 28 and Enclosure 5 Rekod Rayuan Jilid 3/4 pages 949-951]. [89] So, the respondent is now estopped from claiming that additional sums are due. [Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 FC]. In any event the respondent’s claim for additional monies is not supported by the evidence tendered in court [90] The Sessions Court had said - [61] Based on the overall evidence, the Court is satisfied that the defendant has proved the followings: (a) The plaintiff had collected a sum of RM52,262-00 from her downlines without authorisation from the defendant; [91] But, as is clear from the evidence I had set out earlier, there is no evidence for the Sessions Court to be so satisfied. Neither was such evidence set out in the grounds of the Sessions Court to show how the satisfaction of the court was achieved. [92] In conclusion, the appeal should be allowed and the Counter Claim of the respondent should be dismissed with costs. [93] I thank both counsel for their candid and useful submissions which have greatly assisted me. Decision [94] The appeal by the appellant is allowed with costs here and below. Judgment of the Sessions Court and RM 23,000 costs awarded to the Respondent by the Session Court for trial of the claim and counterclaim are set aside. [95] The appellant is entitled to judgment for RM 113,806.24 and incentives claim of RM 15,900. Interest at 5% p.a. on RM 113,806.24 and RM 15,900 from date of judgment to full payment. [96] The respondent is to pay the appellant costs of RM 10,000 for the High Court appeal hearing and RM 23,000 costs for the Session Court trial of the claim and counterclaim subject to allocatur. ………(signed)..………. Leong Wai Hong Judicial Commissioner High Court of Malaya Kuala Lumpur (NCVC 10) Dated: 13th July 2023 COUNSEL: 1) Bryan Ho, Siew Kai Hwei, Kimberly Ng and Hermione Leong for appellant. (Ho Partnership (Petaling Jaya)) 2) Pung Jenn Jiang and Chang Yeong Foong respondent. (Y F Chan & Partners (Seremban)) CASES REFERRED TO: 1) Aik Ming (M) Sdn Bhd v Chang Ching Chuen [1995] 2 MLJ 770. 2) Ayoromi Helen v PP [2005] 1 CLJ 1. 3) Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 FC. 4) China Airlines Ltd v Maltran Air Corp Sdn Bhd (formerly known as Maltran Air Services Corp Sdn Bhd) and another appeal [1996] 2 MLJ 517. 5) Chuah Kim Chye (suing as the sole proprietor of a business known as Bermuda Engineering) v KY Engineering Sdn Bhd [2022] 1 LNS 421. 6) Coghlan v Cumberland [1898] 1 Ch. 70422. 7) Sivalingam A/L Periasamy v Periasamy & Anor [1995] 3 MLJ 395 CA. 8) House of Lords in Benmax v Austin Motor Co Ltd [1955] 1 All ER

9) Lee Ing Chin @ Lee Teck Seng & Ors v Gan Yook Chin & Anor [2003] 2 MLJ 9721. 10) Malaysian Rubber Development Corp Bhd v Glove Seal Sdn Bhd [1994] 3 MLJ 569 SC. 11) Paramill Sdn Bhd & Anor v Datuk Joseph Pairin Kitingan [2007] 7 MLJ 289. 12) Popular Industries Ltd v Eastern Garment Manufacturing Sdn Bhd [1989] 3 MLJ 360. 13) Tan Chin Kwee v Jova International Sdn Bhd (in liquidation) & Ors [2021] MLJU 1203. 14) Wasal Construction Sdn Bhd v Boh Huat Chan Timber Products Sdn Bhd [2014] 4 MLJ 294 CA. LEGISLATION REFERRED TO: 1) Sections 34 of the Evidence Act 1950. 2) Sections 91 of the Evidence Act 1950. 3) Sections 92 of the Evidence Act 1950.