Ong Yew Teik v Kamal Y.P. Tan (W-02(W)-1694-09/2016)

1 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: W-02(W)-1694-09/2016 BETWEEN ONG YEW TEIK … APPELLANT (NRIC NO. A0289608 / 650719-10-6303) AND KAMAL Y.P. TAN … RESPONDENT (NRIC NO. 520229-71-5071) [DI DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR DALAM WILAYAH PERSEKUTUAN GUAMAN SIVIL NO. S5-22-1333-2007] ANTARA ONG YEW TEIK … PLAINTIF (NO. K/P: A0289608 / 650719-10-6303) DAN KAMAL Y.P. TAN … DEFENDAN (NO. K/P: 520229-71-5071) CORAM: Hamid Sultan bin Abu Backer, JCA Badariah binti Sahamid, JCA Mary Lim Thiam Suan, JCA Hamid Sultan Bin Abu Backer, JCA (Delivering the Minority Judgment of The Court) 2 GROUNDS OF JUDGMENT [1] The appellant/plaintiff appeals against the decision of the learned trial judge who has refused to enter judgment based on an acknowledgment of debt by way of letter dated 6-11-2006 for the sum of RM8,018,225.00 and allowed the respondent/defendant’s counterclaim for the sum of RM3,584,211.42 with interest and costs. Jurisprudence related to cause of action - Acknowledgment of Debt [2] As a general rule, a plaintiff who just pleads ‘acknowledgment of debt’ to recover money cannot succeed in law if he does not set out the story which led to the acknowledgment. The story must provide a cause of action in contract, tort, etc. For example, a cause of action in contract cannot succeed as a cause of action for the tort of deceit, etc. notwithstanding the evidence adduce may prima facie attract a tortious claim. In addition, the relief in contract and tort inclusive of quantum is also distinguishable. [3] Acknowledgment of debt and claim thereof is not per se a cause of action. Court may recognize acknowledgment of debt in cases where the cause of action is pleaded and is satisfied that there was indeed a breach. Acknowledgment of debt gives probative force to the cause of action of the plaintiff and the relief. In essence, ‘acknowledgment’ has to do with evidence and not a cause of action. This jurisprudence must be appreciated in the proper perspective to appreciate my decision pursuant to section 69 of CJA

1964. [See Page 194 of Janab’s Key to ‘The Law of Evidence, Advocacy and 3 Professional Ethics, 5th edition (2018) revised by Dato’ Mah Weng Kwai and Others]. [4] To appreciate the plaintiff’s case and to explain why the plaintiff could not have succeeded in his claim based on law, I have taken the liberty to set out the short statement of claim which reads as follows: “3. On or about 6.11.2006, the Defendant, in a letter signed by him, made an acknowledgment of a debt ("the Acknowledgment") in the sum of RM8,018,225.00 ("the Debt") claimed herein to the Plaintiff.

4. It was an express term of the Acknowledgment that the Defendant would pay the Debt owed to the Plaintiff by 31.3.2007 (“the Due Date”).

5. However, in breach of the term of the Acknowledgment, no payment has been made by the Due Date or at all. Accordingly, the Plaintiff is entitled to and claims the sum of RM8,018,225.00.

6. Further, the Plaintiff is entitled to and claims interest on the sum of RM8,018,225.00 at such rate and for such period as the Court thinks fit and assessed pursuant to section 11 of the Civil Law Act 1956. And the Plaintiff claims:-

(1) At my request, you, ONG YEW TEIK (NRIC No. 650719-10- 6301/A0289608) of No. 47, Persiaran Bruas, Damansara Heights, 50490 Kuala Lumpur have agreed to lend to me and have lent to me, a sum of Ringgit Malaysia Eight Million Eighteen Thousand Two Hundred and Twenty Five (RM8,018,225)("the Debt") and I hereby acknowledge unconditionally and unequivocally as at the date of this Acknowledgement of Debt that the Debt has been received by me and is owing by me to you.

(2) At my request, you have agreed to allow me to repay the Debt, free of interest, by the 31st day of March 2007 ("the Due Date").

(3) I hereby undertake to repay and shall repay the Debt to you no later than the Due Date without any prior demand or notice given by you.

(4) I hereby declare that I understand fully the contents, nature and effect of this Acknowledgement of Debt and that I have voluntarily executed this instrument. 5

(5) This Acknowledgement of Debt shall be binding upon my heirs, estates and personal representatives and shall ensure to the benefit and shall be enforceable by you and your heirs, estates, Personal representatives, assigns and nominees." [6] The reply to the defence and counterclaim is also interesting. It does not contradict the defendant’s version of how he came to sign the acknowledgment and the fact that no money was actually paid by the appellant to the respondent. In fact, it was the respondent who had lent the money. It is also the respondent’s position that the appellant at all material time did not have the money to pay him, to substantiate that there was indeed no debt save for the acknowledgment, which was for a particular purpose. [7] The said reply and defence to the counterclaim read as follows:

1. “REPLY The Plaintiff joins issue with the Defendant on the Defence and Counterclaim dated 13.02.2008 (Defence and Counterclaim") save insofar as the same contains admissions on the part of the Defendant.

2. For purposes of convenience, all abbreviations and phrases used in the Statement of Claim shall be adopted herein, unless stated otherwise.

3. The Plaintiff denies that he made any representation to the Defendant or that there was any Conditions Precedent or escrow arrangement as alleged in the Defence or at all. Accordingly, paragraphs 5, 6 and 7 of the Defence are denied.

4. If it is held that the Plaintiff made the representation alleged in paragraph 4 of the Defence, which is denied, the Plaintiff denies that the same induced the Defendant to sign the Acknowledgment or that the same was false or at all. 6

5. Save that the Defendant signed the Acknowledgment, paragraphs 3 and 8 of the Defence are denied. The Plaintiff will contend as follows:-

5.1 that the Acknowledgment is supported by a presumption of consideration;

5.2 that, in any event, the Acknowledgment is supported by consideration;

5.3 further or in the alternative, the Acknowledgment was entered into by the Defendant pursuant to the terms of the letter dated 26.10.2006 for the consideration therein set out;

5.4 further, that past consideration is good consideration in respect of the Acknowledgment; and

5.5 that accordingly, the Defendant is indebted to the Plaintiff for the Debt pursuant to the Acknowledgment.

6. Paragraph 13 of the Defence is denied and the Plaintiff contends that the Defendant is not entitled to claim the alleged right of set-off or at all.

7. DEFENCE TO COUNTERCLAIM By reason of the matters stated above and the Statement of Claim, paragraphs 16 and 17 of the Counterclaim are denied and the Plaintiff will contend that the Defendant is not entitled to the relief sought.

8. Further or in the alternative, the Defendant's Counterclaim if at all has been compromised on 06.11.2006 and accordingly the Defendant has no cause of action. 7

9. Save in so far as hereinbefore expressly admitted, the Plaintiff denies each and every allegation of the Defence and Counterclaim as if the same were set forth herein and traversed seriatim and specifically denied.” [8] In the instant case, the learned trial judge had dealt with both the version of the parties in a 16 page judgment. His Lordship had given his reasons for dismissing the appellant’s claim and allowing the respondent’s counterclaim. I reproduce paragraphs 26 to 38 which in my view sufficiently summarises the appellant’s and respondent’s case. The said paragraphs read as follows: “[26] In summary, it is the Plaintiff submission that the evidence produced by the Plaintiff should be accepted and by those evidence it was proved the Defendant had, by a document acknowledged his debt to the Plaintiff for amount of RM8,018,225.00. The debt arose from the shares dealing. As the result of the shares dealing the Defendant received amount of shares transferred to him by Roger Yue and by virtue of the deal the Defendant should gain some profit. It is the Plaintiff submission that the dealing was a tripartite agreement between the Plaintiff, the Defendant and Roger Yue. By the tripartite agreement, the Defendant asked the Plaintiff to transfer his ETC shares to Roger to pave way for Roger to transfer those shares to the Defendant for negotiated price of RM16,023,150.00. The Plaintiff could have objected to the transfer based on the fact of his claiming interest and benefit over the shares. To avoid such an objection, the Defendant willingly acknowledges his debt to the Plaintiff and consideration for the acknowledgement, the Plaintiff will not object to the shares transferred from Roger Yue to the Defendant. [27] On the contrary the Defendant submitted that his testimony and his witnesses' testimonies should be accepted. In essence the evidence tendered by the Defendant show that the document he had signed was not dated and was delivered 8 to the Plaintiff as part of the arrangement in the share dealing. The document was delivered to the Plaintiff in escrow and to be used only after the several pre-conditions were fulfilled. Amongst the most important pre-conditions are the Plaintiff is the absolute beneficial owner of the shares and those shares could be transferred to the Defendant free from encumbrances and liabilities. These conditions were never fulfilled. Court Finding [28] The Plaintiff's claim was based on the acknowledgement of debt dated 6th November, 2006, said to be signed by the Defendant. The Defendant admitted he had signed a document but denied the document he had signed was dated as such. It is the duty of the Plaintiff to prove that the document was signed on the date stated in the document, as the Plaintiff's claim is depending on that document. [29] Having perused and considered all the evidence produced before me I found that the Plaintiff failed to proof that the acknowledgement of debt dated 6th November 2006 was signed by the Plaintiff as per date stated. Going through testimonies of the Plaintiff's witnesses I found that only the Plaintiff's (PW1) evidence able to relate how the dealing was negotiated and concluded. The other witnesses called by the Plaintiff gave evidence mainly in relation to shares ownership dispute between the Plaintiff and Roger Yue. [30] Having perused his evidence I cannot accept the Plaintiff's evidence that when the document was signed it was already dated and the document was not delivered to him in escrow. The evidence produced before did not prove there was tripartite agreement between the Plaintiff, the Defendant and Roger Yue, in which the Defendant was allowed to receive ETC share from Roger Yue without objection from the Plaintiff. Evidence proved that there were serious dispute between Roger and the Plaintiff on the ownership of the shares. 9 [31] The evidence tendered before me must be consider in totality. The crucial point to be decided was whether the Defendant signed a document dated 6th. November, 2006 as claimed by the Plaintiff or undated document as claimed by the Defendant. [32] The Defendant's evidence that the document was not dated when he signed it was supported by DW2 evidence. Having perused the whole evidence I accepted evidence by the Defendant that the document he signed was not dated. On the totality of the evidence before me, it is my finding that the document was signed in escrow and gave to the Plaintiff earlier than the stated date. [33] The said document was created in relation to the ETC shares dealing as claimed by the Defendant. In the dealing it was agreed that the Plaintiff will transfer the 271,600 ETC shares, said to be his shares, to the Defendant and for the Defendant to sell those shares to third parties. I also accept the evidence that prior to the dealing, the Plaintiff borrowed money from the Defendant and the share dealing was entered to enable Plaintiff to repay his loan to the Defendant, whereby proceeds of the sale of the shares to a third parties will be utilized first to repay the Plaintiff's debt to the Defendant, with estimated surplus. Accordingly surplus from the shares dealing will be paid to the Plaintiff. The acknowledgement of debt document was signed in anticipation of the surplus. The Defendant will be indebted to the Plaintiff if the Defendant eventually acquired the shares to be sold to a third party and there is surplus from the proceeds of the sale, after deducting the money borrowed by the Plaintiff. Therefore, it is clear the share dealing is precondition to the debt of the Defendant. [34] On the evidence before me I found that the pre-condition to the debt stated in the document was not fulfilled. The shares was never transferred by the Plaintiff to the Defendant due to the dispute on beneficial ownership over the shares; between the Plaintiff and Roger Yue. There was no doubt on the dispute of the beneficial ownership. It is my finding that the dispute prevented the Plaintiff from transferring the shares to the Defendant, freely. However it cannot be denied that 10 the Defendant eventually received the shares from Roger Yue. In addition to that the Defendant was allotted additional ETC shares. But the transfer of shares from Roger Yue to the Defendant was not as a result of tripartite arrangement as submitted by the Plaintiff. [35] The share dealing entered between the Plaintiff and the Defendant never materialized. The shares was never been transferred to the Defendant and the shares was not sold to the third party as in the dealing. As such there was no money from the proceeds of the shares dealing owed by the Defendant to the Plaintiff. [36] It is the duty of the Plaintiff to prove his pleaded case. In the circumstances of this case, I found the Plaintiff failed to prove his pleaded case. The Plaintiffs claim is dismiss with cost. Counter Claim [37] For the counterclaim, I accepted the evidence of the Defendant that he lend money to the Plaintiff in several occasion amounting to total of RM3,584,211.42. The evidence by the Defendant on him lend money to the Plaintiff was not really challenged by the Plaintiff. I accepted the evidence by the Defendant that he granted personal loan to the Plaintiff a total sum of RM2,343,992 for the period up to August 2006. The shares dealing was suggested and mooted by the Plaintiff to enable him to repay the personal loan. I also accepted evidence by the Defendant that the Plaintiff further borrowed sum of RM1,240,219.42 after the signing and delivery of the unsigned document. [38] The share dealing fell apart and no money was paid by the Plaintiff to the Defendant to repay amount he borrowed from the Defendant. On the evidence before me I found that the Defendant successfully proved money was personally loaned to the Plaintiff and that money had not been repay by the Plaintiff. Under the circumstances the Defendant's counterclaim is allow with cost.” 11 [9] I have read the appeal record and the able submission of the learned counsel. After having given much consideration to the submission of the appellant, I take the view that the appeal must be dismissed. My reasons inter alia are as follows:

(ii) In addition, any reasonable tribunal appraised with facts of this case as well as the law will not come to the conclusion that the trial judge was plainly wrong. [See s. 17, 23, 31, etc. of EA 1950]. 12

(iii) I also find that the learned judge in the assessment of the case had taken into consideration all materials before the court and dealt with it judiciously. In my view, no reasonable tribunal appraised with the assessment of evidence will say that the decision was perverse, taking into consideration the rules of pleading and the law on cause of action as well as relief.

(iv) It is important to note, the respondent’s version that he had given money to the appellant was not materially challenged. That too will support the respondent’s version that the appellant’s version lacks credibility. [See Browne v Dunn

(1893) 6 R 67; Small Medium Enterprise Development Bank Malaysia v Lim Woon Katt [2016] 5 MLJ 220; Sarjit Singh a/l Kesar Singh v Harjindar Kaur a/p Koondan Singh [2016] 12 MLJ 27; Buncho (M) Sdn Bhd v Q-Stationers Sdn Bhd [2010] 7 CLJ 359].