Pang Yun Tiam v Ooi Eng Leong (P-02(NCVC)(W)-365-02/2018)

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GOH KIANG TENG ... RESPONDEN-RESPONDEN [Dalam Perkara Mengenai Mahkamah Tinggi Malaya Di Pulau Pinang Guaman Sivil No. 22NCVC-125-07/2016 Antara Pang Yun Tiam ... Plaintif Dan

Ooi Eng Leong 2. Goh Kiang Teng ... Defendan-Defendan] 2 CORAM : VERNON ONG LAM KIAT, JCA (Now FCJ) SURAYA OTHMAN, JCA HAS ZANAH MEHAT, JCA JUDGEMENT OF THE COURT INTRODUCTION [1] This is the appellant/plaintiff’s appeal against the decision of the High Court after a full trial in dismissing with costs of RM30,000.00 the plaintiff’s claim for declarations and damages for misrepresentation against the respondents/defendants on the plaintiff entitlement of 25% shares in the company, Bamboo Gate Sdn. Bhd. (“Bamboo Gate”). [2] After perusing the appeal records, considering the submissions both oral and written, we allowed the appeal with costs. We now give our reasons for the same. [3] In this appeal the parties will be referred to as they were in the High Court. 3 THE SALIENT FACTS [4] The plaintiff and the 1st defendant are the shareholders and directors of companies known as Total Systematic Technology Sdn. Bhd. (“Total Systematic”) and CIF Industries (M) Sdn. Bhd. (“CIF Industries”) before the incorporation of Bamboo Gate. Both Total Systematic and CIF Industries carried out the business in electronic equipment and tools and second hand machinery. In 1996 the plaintiff, the 1st defendant and the 2nd defendant incorporated DTS Industries (M) Sdn. Bhd. (“DTS Industries”). It is the contention of the plaintiff that the incorporation of DTS Industries was to take over the business of Total Systematic and CIF Industries. The plaintiff and the defendants are the shareholders and directors of DTS Industries of which the plaintiff holding 166,667 shares, 1st defendant holding 166,666 shares and the 2nd defendant holding 166,667 shares (RR Jilid 2(2) page 207). Total Systematic, CIF Industries and DTS Industries will be referred collectively as “the three companies”. [5] On 19.11.2007, Bamboo Gate was incorporated. Based on the search with the Companies Commission of Malaysia (CCM), both the 1st and 2nd defendants are its directors and shareholders (50% shareholding each). The plaintiff is not a shareholder nor director of Bamboo Gate. 4 THE PLAINTIFF’S CASE [6] The plaintiff’s claim against the defendants is that he is entitled to 25% (percent) of the share equity in Bamboo Gate and to a sum of RM2,500,000.00 being the value of 25% (per cent) of the said shares. The claim is founded on contract and representation arising from an oral agreement between the plaintiff and the defendants following Bamboo Gate’s takeover of the business of DTS Industries. It is an undisputed fact that the plaintiff hold 25% shares and the defendants hold 75% shares in DTS Industries. [7] The agreement that the plaintiff had with the defendants is supported by the testimony of the plaintiff and contemporaneous documents such as the series of emails, text messages by the 1st defendant to the plaintiff and cheques issued by the 2nd defendant in favour of the plaintiff. [8] On the consideration furnished for his shares in Bamboo Gate, the plaintiff contended it was on the basis that: 5

(i) he was instrumental in incorporating the three companies in dealing in electronic equipment and tools and second hand machinery;

(v) Bamboo Gate had in turn taken over the business of DTS Industries following incorporation of Bamboo Gate, and consequentially the three companies are no longer in business (dormant); 6

(i) a declaration that the plaintiff holds 25% of share equity in Bamboo Gate Sdn. Bhd. as represented by the defendants;

(v) damages for misrepresentation and/or fraud. DEFENDANTS’ CASE [10] The defendants denied that the incorporation of Bamboo Gate was to take over the business of DTS industries as alleged by the plaintiff, i.e. the second hand machinery business. The 2nd defendants in evidence denied that DTS Industries was founded to carry on the second hand machinery business but it was founded to invest in landed property. 8 [11] The defendants denied ever making any representation to the plaintiff in respect of the plaintiff’s purported 25% shares in Bamboo Gate and the RM2,500,000.00 to be paid to the plaintiff for the purported value of the shares. The defendants further pleaded that there was no evidence of any oral agreement or representation as alleged by the plaintiff in regards to the plaintiff shares in Bamboo Gate. [12] All emails and text messages were in relation to Nation Gate Technology (M) Sdn. Bhd. (“Nation Gate”) a different company. [13] According to the defendants, the two post-dated cheques of RM500,000.00 each were given by the 2nd defendant to the plaintiff for a personal loan requested by the plaintiff which was later cancelled by the 2nd defendant. The plaintiff had not protested for the cancellation of the two post-dated cheques. [14] The 2nd defendant had also filed a counterclaim against the plaintiff alleging that the plaintiff’s action is defamatory, malicious and with the intention to cause an economic sabotage towards the 2nd defendant. 9 DECISION OF THE HIGH COURT [15] At the conclusion of the trial, the learned trial Judge found that the plaintiff had failed to prove its case on a balance of probabilities and dismissed the plaintiff’s claim with costs of RM30,000.00 and the 2nd defendant’s counter-claim was also dismissed with costs of RM10,000.00. The trial judge found that there was no direct and contemporaneous evidence to support the plaintiff’s claim that he is entitled to the 25% shares in Bamboo Gate. [16] Dissatisfied with the decision, the plaintiff filed this appeal. There was no appeal by the 2nd defendant on the dismissal of the counter claim. Hence, in this appeal we will only deal with the dismissal of the plaintiff’s claim by the High Court. THE APPEAL [17] The plaintiff listed lengthy grounds of appeal in the memorandum of appeal and the supplementary memorandum of appeal. However, in his oral submission before us, learned counsel for the plaintiff submitted that there was only one issue for this Court to consider: whether there was an 10 oral agreement and representation in relation to the allocation of shares in Bamboo Gate to the plaintiff and its value. The plaintiff contended that there were overwhelming evidence that supported the plaintiff’s contention. PLAINTIFF’S SUBMISSION [18] Learned counsel for the plaintiff submitted that there were overwhelming circumstantial and direct evidence to support the plaintiff’s claim on the existence of the oral agreement and representation. This could be gleaned from various emails and texts messages between the plaintiff and the defendants and also the two post-dated cheques. The trial Judge had failed to examine and given due weight to all the emails, texts messages and the post-dated cheques, and thus had failed to appreciate all evidence before him. Therefore, it warranted appellate interference. DEFENDANTS’ SUBMISSION [19] On the other hand, learned counsel for the defendants submitted that the trial judge had made no error. His Lordship was correct in his 11 findings that there was no evidence to support the plaintiff’s claim in regards to the plaintiff alleged entitlement of 25% shares in Bamboo Gate. [20] Since the incorporation of Bamboo Gate, there was no evidence that the plaintiff had written to the company secretary and to both the defendants inquiring about the shares. More importantly, the plaintiff had not shown that he had paid for the shares. There was no consideration for the shares. All the emails that were relied on by the plaintiff as evidence to support the plaintiff’s claim on the representation by the defendants on his entitlement of the shares, was in fact, in relation to Nation Gate, a different company. Learned counsel submitted that, in cross examination, the plaintiff admitted that there was no mathematical basis for the plaintiff’s claim of RM2,500,000.00 for the alleged 25% equity in Bamboo Gate and the plaintiff had also admitted that he had no valuation to justify his claim. Therefore, the plaintiff’s claim is arbitrary and unfounded. [21] On the cheques, counsel submitted that, the defendants were consistent in their defence that the two cheques were hasty arranged loan by the 1st defendant as the plaintiff was begging for help or otherwise he has to resort for “Ah Long”. The plaintiff even thanked the 1st defendant for arranging a loan and therefore avoided having to borrow from an “Ah 12 Long” as stated in his email to the 1st defendant. The plaintiff was in need of money for his investment in construction was literally sourcing monies from his co-director and shareholders of Nation Gate and finally sold his shares in Nation Gate to the 1st defendant for RM25,000,000.00. When the cheques were countermanded, the plaintiff never protested or demanded nor sent any legal notice. Further, counsel submitted, plaintiff was no longer needed the loan as he had sold his shares in Nation Gate to the 1st defendant for RM25,000,000.00. [22] On the plaintiff assertion that Bamboo Gate had taken over the second hand machinery business of DTS Industries, counsel submitted it was not true because the defendant had ample evidence that at that material time Nation Gate was involved in the second hand machinery business. [23] On the delay, counsel submitted that the plaintiff had not made for eight years any proactive role to inquire or partake in the so called 25% share entitlement, thus the inactivity to claim amount to latches. [24] On the claims against the 2nd defendant, counsel submitted that the 2nd defendant never met the plaintiff on the deal of 25% shares. The 2nd 13 defendant testified that he was merely giving a friendly loan by way of the two post-dated cheques at the request of the first defendant to help the plaintiff. ANALYSIS AND DECISION [25] The trial judge found that there was no such oral agreement or representation. The reason being that there was no sufficient and direct evidence for the court to draw appropriate inference to support the set of facts put forth by the plaintiff. There was also no positives act on the part of either the plaintiff or the defendants to support that there was an oral agreement between the plaintiff and the defendants in respect of the plaintiff’s entitlement of the shares in Bamboo Gate and its value. There was also no affirmative evidence from PW2 to confirm anything transpired during the meeting on 4.7.2011. PW2 did not even confirm whether any cheque were given by the first defendant to the plaintiff or the cheques were part payment of the shares. The learned judge concluded that the evidence on the cheques when viewed against the whole case did not lead to the probable conclusion that the cheques were in fact made for the purpose claimed by the plaintiff. The learned trial Judge also viewed that the contemporaneous documents produced by the plaintiff has not 14 established the plaintiff’s claim. The learned Judge also opined that the claim of the share value of RM2,500,000.00 was not supported or based on any calculations or justifications, therefore his Lordship was unable to conclude that the plaintiff was entitled to the amount. The trial Judge also criticized the plaintiff for his delay in taking action against the defendants. [26] The trial Judge reasoning that were under attack could be gleaned from the following paragraphs [25], [26] and [28] of the judgment: [26] In the present case, I find that there is no direct evidence to support the plaintiff’s case in respect of the alleged representation made by the defendants to the plaintiff and this court has to draw appropriate inferences from the set of facts put forth by the plaintiff. In drawing any particular inference, this court must be satisfied that any inference so drawn must be capable of being sustained, on the balance of probabilities, based on the evidence adduced. [27] I am of the considered view that it is not sufficient to find an oral agreement in respect of the plaintiff’s entitlement to 25% shares in Bamboo Gate having been proved by the mere fact that the plaintiff had left matters in the hands of the 1st defendant when Bamboo Gate was incorporated. There must be some positive acts, as distinguished from passive acts, on the part of the plaintiff or the defendants which can show or point to the conclusion that such an arrangement was in fact, agreed between the 15 parties when Bamboo Gate was incorporate. In the present case, the facts which are capable of constituting the positive acts in favour of the supposition that an oral agreement in that respect do exist, either on the part of the plaintiff or the defendants, are wanting. This Court could not draw inferences based on a void. [28] There was also no affirmative evidence from PW2 to confirm anything that transpired during the meeting on 04.07.2011. PW2 said that her knowledge about the plaintiff’s shares in Bamboo Gate is based on what the plaintiff told her. I do not find any reasons to place particular emphasis on PW2’s evidence. PW2 did not even confirm whether any cheques were given by the 1st defendant to the plaintiff or whether the cheques were part payment for the plaintiff's 25% shares in Bamboo Gate. [emphasis added] [27] We are mindful of the limited role of the appellate court in relations to the findings of fact by the court of the first instance. It is a settled principle of law that in an appeal, where facts have to be reviewed, it is undesirable that the factual findings of the court below be disturbed by the appellate court unless it appears that those findings are plainly wrong. An appeal Court is generally in as good a position to review and evaluate the evidence as the trial Judge where the point in dispute is the proper inference to be drawn from proved facts. There are myriad of authorities 16 expounding such a principle. [Tindok Besar Estate Sdn. Bhd. v. Tinjar Co [1979] 1 LNS 119; [1979] 2 MLJ 229, Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4 CLJ 309, UEM Group Bhd. v. Genisys Integrated Engineers Pte. Ltd. & Anor [2010] 9 CLJ 785; [2010] 2 MLRA 668, Thomas v. Thomas [1947] AC 484 Yuill v. Yuill [1945] P 15; China Airlines Ltd. v. Maltran Air Corp. Sdn. Bhd. & Another Appeal [1996] 3 CLJ 163; [1996] 2 AMR 2233]. [28] The House of Lords had the occasion to consider on the same issue in Watt (or Thomas) v. Thomas (supra), namely, when was it appropriate for an appellate court to set aside the judgment of the court on findings of fact at first instance, and it held that: When a question of fact has been tried by a judge without a jury, and it is not suggested that he has misdirected himself in law, an appellate court in reviewing the record of the evidence should attach the greatest weight to his opinion, because he saw and heard the witness, and should not disturb his judgment unless it is plainly unsound. The appellate court is however free to reverse his conclusion if the grounds given by him therefore are unsatisfactory by reason of the material inconsistencies or inaccuracies or if it appears unmistakably from the evidence in reaching them he has not taken proper advantage of having 17 seen and heard the witnesses or has failed to appreciate the weight and bearing of circumstances admitted or proved. [emphasis added] [29] Mohamed Dzaiddin Abdullah FCJ in China Airlines (supra), AMR at page 2248 said: “...., there is a clear authority also from the House of Lords and followed by the Privy Council, which says that a distinction can be drawn between finding of a specific fact which depends upon the credibility of witnesses and a finding of fact which depends upon inferences drawn from other facts. In the latter case, an appellate court will more readily interfere with the trial judge's findings of fact and form an independent opinion than in the case of the former." [30] The United Kingdom Supreme Court in Henderson v. Foxworth Investments Ltd. and Another [2014] 1 WLR 2600, held that in the absence of some other identifiable error, such as a material error of law or the making of a critical factual finding which had no basis in the evidence, an appellate court should not interfere with the factual findings of a trial judge unless it was satisfied that the decision of the trial judge was ‘plainly wrong’ in the sense that it could not reasonably be explained or justified and so was one which no reasonable judge could have reached; and that if the appellate court 18 was not satisfied that the decision came within that category it was irrelevant that, with whatever degree of certainty, it considered that it would have reached a different conclusion from the trial judge. [31] In Thomas v. Thomas (supra) and Henderson (supra) Lord Reed qualified that the “plainly wrong” test only comes into play in the absence of the following:

(i) material error of law;

It is true that the Lord Ordinary [Lord Glennie] did not refer expressly to a passage during Mr Liu's cross-examination, quoted by Lady Paton, in which he gave what appears to have been a rather emotional answer to the effect that 19 the reason he had not told Mr. Gardner that the debt had been assumed was because the deeds had already been prepared by then, and he felt that he would look like a fool if he asked for them to be corrected at that stage. There is however no reason to suppose that this passage in the evidence was overlooked, merely because it was not expressly mentioned. An appellate court is bound, unless there is compelling reason to the contrary, to assume that the trial judge has taken the whole of the evidence into his consideration : Thomas v. Thomas 1947 SC (HL) 45, 61; [1947] AC 484, 492, per Lord Simonds; see also Housen v. Nikolaisen [2002] 2 SCR 235, para 72. ...

I would add that, in any event, the validity of the findings of fact made by a trial judge is not aptly tested by considering whether the judgment presents a balanced account of the evidence. The trial judge must of course consider all the material evidence (although, as I have explained, it need not all be discussed in his judgment). The weight which he gives to it is however pre-eminently a matter for him, subject only to the requirement, as I shall shortly explain, that his findings be such as might reasonably be made. An appellate court could therefore set aside a judgment on the basis that the judge failed to give the evidence a balanced consideration only if the judge's conclusion was rationally insupportable. (emphasis added) 20 [33] Lord Reed then went on to explain what the “plainly wrong” criterion entailed:

62.... The adverb “plainly” does not refer to the degree of confidence felt by the appellate court that it would not have reached the same conclusion as the trial judge. It does not matter, with whatever degree of certainty, that the appellate court considers that it would have reached a different conclusion. What matters is whether the decision under appeal is one that no reasonable judge could have reached. ...

It follows that, in the absence of some other identifiable error, such as (without attempting an exhaustive account) a material error of law, or the making of a critical finding of fact which has no basis in the evidence, or a demonstrable misunderstanding of relevant evidence, or a demonstrable failure to consider relevant evidence, an appellate court will interfere with the findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified. (emphasis added) [34] In Gan Yook Chin & Anor (supra) where the Federal Court held that the test of “insufficient judicial appreciation of evidence” adopted by the Court of Appeal was in relation to the process of determining whether or not the trial court had arrived at its decision or findings correctly on the 21 basis of the relevant law and the established evidence. In affirming the decision of this Court, the Federal Court held as regards appellate intervention, as follows: In our view, the Court of Appeal in citing these cases had clearly borne in mind the central feature of appellate intervention i.e., to determine whether or not the trial court had arrived at its decision or finding correctly on the basis of the relevant law and/or the established evidence. In so doing, the Court of Appeal was perfectly entitled to examine the process of evaluation of the evidence by the trial court. Clearly, the phrase “insufficient judicial appreciation of evidence” merely related to such a process. This is reflected in the Court of Appeal's restatement that a judge who was 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. The Court of Appeal further reiterated the principle central to appellate intervention i.e., that a decision arrived at by a trial court without judicial appreciation of the evidence might be set aside on appeal. This is consistent with the established plainly wrong test. [35] In considering this appeal, we have the foregoing principles in mind. 22 Oral Agreement and Representation [36] The plaintiff’s testimony is as follows. He had an association with the 1st defendant since 1995, where they were both shareholders and directors of the three companies and Nation Gate. The plaintiff had disposed of his 4,900,000 and 300,000 shares respectively in Nation Gate to the 1st defendant in accordance with the agreement dated 19.10.2011 (“share sale agreement”) for the amount of RM25,000,000.00 and since then ceased to be its director and shareholder (RR Jilid 2(2) pages 216- 238). In relation to the 2nd defendant, their association started in 1996, when DTS Industries was incorporated and they were both the shareholders and directors together with the 1st defendant. According to the plaintiff, DTS Industries was dealing with the electronic equipment and second hand machinery. [37] The plaintiff testified that sometime in 2007, at the office of Nation Gate, he had discussion with the defendants on the second hand machinery business. It was the 1st defendant’s idea that Bamboo Gate was incorporated to take over the business of DTS Industries and to invest in landed properties. Following the take over of DTS Industries’s business by Bamboo Gate, he and the defendants then agreed that he would be 23 entitled for 25% shares in the newly incorporated company, Bamboo Gate to reflect his shareholding in DTS Industries. He had left the paper work for the incorporation and shareholding of Bamboo Gate to both the defendants. He admitted that the defendants did not give him any papers or documents pertaining to the incorporation or shareholding of Bamboo Gate. He trusted his partner and his duty was to put in money when necessary for all the companies (RR Jilid 2(1) at page 117). On the question why there was no email or correspondence on the takeover of DTS Industries by Bamboo Gate, the plaintiff said he trusted his partner (Mr. Ooi, the 1st defendant) and 1st defendant will do everything for him. He knew the business of Bamboo Gate run by the defendants. He trusted the 1st defendant when the first defendant told him that DTS Industries was making a lot of money and buying some properties. The 1st defendant also told him that the three companies were very profitable. He was told that the companies were worth RM10 million. He never ask his partner (the 1st defendant) on the liabilities of the companies as he had left everything to him to run the business. The 1st defendant told him that as the total asset is worth RM10 million, so the portion of 25% is RM2,500,000.00. He admitted that he did not ask the company secretary about his shareholding in Bamboo Gate as he trusted the 1st defendant to run the whole business. 24 [38] About three (3) years later, on 30.7.2010, the plaintiff met and had discussion with the 1st defendant about his shares in Bamboo Gate and he was informed by the 1st defendant that his entitlement in respect of his 25% share was RM2,500,000.00. The plaintiff had confirmed the said discussion on 30.7.2010 via his email (ytpang@chiptronics.com.my) to the 1st defendant’s email address, elooi@nationgate.com.my on 19.8.2010 at 9.29 am (exhibit P1(1), RR Jilid 2(2) page 248). Subsequent to exhibit P1(1), the 1st defendant replied via series of emails and hand phone short messaging services (“text messages”) to the plaintiff’s hand phone number 012400100. [39] The plaintiff was also informed by the 1st defendant that the payment of the plaintiff’s entitlement would be effected by way of cheques and had requested for a meeting to hand over the cheques. The plaintiff instructed PW2 to arrange for the meeting. At the meeting, the 1st defendant handed two (2) post dated cheques dated 10.8.2011 and 10.9.2011 of RM500,000.00 each issued by the 2nd defendant in favour of the plaintiff. The plaintiff accepted the two cheques as part payment of RM2,500,000.00 as the plaintiff was told that the balance of RM1,500,000.00 will be paid later. 25 [40] However, upon presentation for payment, the bank informed the plaintiff that the two cheques had been countermanded. The defendants did not inform the plaintiff the reason for the countermand of the said cheques, but the defendants promised that they will make new arrangement for the payment. Nevertheless, there was no payment had ever been made. [41] On the question why he did not take action in 2011 when he received the two countermanded cheques (in August and September), the plaintiff explained that for a few months he “had a big negotiation” for the disposal of his shares in Nation Gate to his partner (the 1st defendant). It is a fact that the 1st defendant only managed to settle the acquisition of the plaintiff’s shares in Nation Gate after one and half years. The last payment was made in July 2013. After the settlement of the share sale agreement and the discharged of his personal guarantee with the bank which took him about four years, only then he instructed his solicitor to take action on his share entitlement in Bamboo Gate. Thus, explained the delay in taking legal action to assert his right to the shares. [42] The plaintiff stressed that the share sale agreement had nothing to do with his shares entitlement in Bamboo Gate. 26 [43] On the question why he did not take the valuation of Bamboo Gate, he said he trusted his partner, the 1st defendant. He had appointed the 1st defendant to take care of the business and not that he couldn’t careless of the companies’ business. His contributions to the business of the three companies and Bamboo Gate was by giving his partner the money when required. He has no knowledge of the current activities of Bamboo Gate as he had left the business entirely to the 1st defendant to run. Emails and text messages [44] On the evidence, it has been established that there were correspondence between the plaintiff and the 1st defendant by way of emails and text messages in reference to the plaintiff’s entitlement of the shares and its value. The plaintiff had produced the original print out of the emails and the screen shot of the text messages that he had saved in his computer and had printed them out. All the said documents were objected to by the defendants’ counsel upon its production on the ground of its authenticity. However, the learned trial Judge had ruled in the plaintiff’s favour and admitted the documents as exhibits. Nevertheless on perusing the judgment, we find that the learned Judge did not touch or assessed these documents in his findings. His Lordship merely said at 27 para “[26] I find that there is no direct evidence to support the plaintiff’s case in respect of the alleged representation”. His lordship further stated in paragraph [27] that there was no positive acts on either the plaintiff or the defendant………and this court could not draw inferences based on a void”. [45] The 1st email, exhibit P1(1) from the plaintiff to the 1st defendant to confirm the discussion on 30.7.2010, stated: ‘As per our discussion on 30/7/2010 that you had mentioned our Business in secondhand machine, my portion managed to get RM2.5 mil. Possible to cash out? If not, partly also will help my investment in construction. Tq.’ [46] The plaintiff explained in his re-examination that “my portion” refers to his total 25% shareholding in Bamboo Gate. Based on the said email, the discussion about ‘our business in secondhand machine’ and the plaintiff’s proposal to ‘cash out’ ‘my portion’ for ‘RM2.5 mil.’ are in relation to the business and the plaintiff’s shares in Bamboo Gate, and are not in respect of any request for a friendly loan as alleged by the defendants. We find that based on the email P1 (1), there was nothing mentioned about the friendly loan. 28 [47] In reply to the plaintiff’s email, the 1st defendant’s in his email [exhibit P1(2)] dated on the same day (19.8.2010 at10.05am) [RR. Jilid 2(2), page 249] stated: ‘Don’t worry, can be cash out soonest, may be from next month onward, hopefully, every month will be $500k+’ [48] In our view the 1st defendant’s response ‘can be cash out soonest’ is the 1st defendant’s agreeing to the plaintiff’s proposal to ‘cash out’ his ‘portion’ of shares in Bamboo Gate for ‘RM2.5 mil.’, and ‘ hopefully by monthly payment of ‘$500k’, is the mode of payment of the said RM2,500,000.00 and is not in respect of any a friendly loan. [49] The email [exhibit P1(3)] dated 20.8.2010 (1.40 pm), the reply from the plaintiff to the 1st defendant [ROA. Jil 2(2), pg 250], the plaintiff stated: ‘OK, thank you. At least I no need to look for “Ah Long”’ [50] The defendant contended that this text message supported their contention that the plaintiff had requested for loan. In our view that the plaintiff’s acknowledgement of thanks is clearly in response to the 1st defendant’s agreeing to the plaintiff’s proposal to ‘cash out’ his ‘portion’ of 29 shares in Bamboo Gate for ‘RM2.5 mil.’ and nothing else. We also opined that part of the plaintiff's email which stated, ‘At least I no need to look for “Ah Long” is not in respect of any request for a friendly loan, but is apparently in the context of the plaintiff’s email of 19.8.2010 on cashing out which ‘will help my investment in construction’. [51] Our view above is further fortified by the email [exhibit P1(4)] dated 20.8.2010 (18.20pm) [RR, Jilid 2(2), page 251] from the 1st defendant to the plaintiff: ‘Brother, friendly, I have discuss with Ah Goh, Bamboogate have loan 2.8 mil to Nationgate, this 2.8 mil when Nationgate pay back will direct to pay you for settlement your portion. I believe we can settle this outstanding soonest …’ [52] In our view, the 1st defendant’s discussion with ‘Ah Goh’ , the 2nd defendant, is clearly about the plaintiff’s proposal to cash out his ‘portion’ of shares in Bamboo Gate for ‘RM2.5 mil.’, and hence the defendants agreeing to make payment to the plaintiff ‘for settlement your ‘portion’, upon Nation Gate settling the loan of RM2.8 million from Bamboo Gate. [53] Again, the defendants’ discussion is clearly not in respect of any request for a friendly loan by the plaintiff as alleged, nor it is about the 30 settlement of the plaintiff’s shares in Nation Gate as contended. From the evidence, the 2nd defendant was not a director nor a shareholder of Nation Gate [see RR Jilid 2(1), pages 150-151] but a director and shareholder of Bamboo Gate, and could only be discussing with the 1st defendant about the plaintiff request to cash out his shares in Bamboo Gate. [54] In the email [exhibit P1(6)] dated 30.9.2010, ‘subject: follow up items as per discuss’, the composite email between the plaintiff and the 1st defendant, [RR. Jilid 2(2), page 252-253], it can be seen that besides the discussion on the proposal to dispose of the plaintiff’s shares in Nation Gate to the 1st defendant, it was also raised by the plaintiff’s the issue on the plaintiff’s entitlement of 25% shares in “second hand machine business transaction” at page 253. For clarity, we will quote the plaintiff’s email to the 1st defendant (in italic) and from the 1st defendant to the plaintiff (underline). It bears the following from the plaintiff: ‘Separately, you told me firmly on 30/7/2010 (before you attending Batu Ferringhi seminar) that I would be entitled to my share of RM2.5 Million on the second hand machine business transaction. I would appreciate if you can arrange for the cash payment to me latest by Nov 2010’ and the following response from the 1st defendant: ‘yes, agree, try in this year’ 31 [55] From the series of emails, we concluded that the response from the 1st defendant on the plaintiff’s above email, again, on his entitlement of RM2,500,000.00, ‘yes, agree’ are clearly about the plaintiff’s entitlement of ‘RM2.5 million’ in respect of the plaintiff’s shares in Bamboo Gate, and not about any request for a friendly loan by the plaintiff as alleged by the defendants. [56] On the defendants contention that RM2.5 million in ‘the separate note’ is about the plaintiff’s shares in Nation Gate, cannot be supported, given the 1st defendant’s earlier response [at page 252] to the plaintiff’s offer of his “55% stake for RM50 Million’ in ‘Nationgate Technology (M) Sdn. Bhd.”, i.e.: ‘why not you buy over me? I offer you 30mil for my 45% of share? Brother, I never say I willing to buy over your share, please clarify. I have only make the planning proposes how we going to move forward growth our company with right position, refer below message.’ [57] On 4.7.2011 (7.56 am) [RR, Jilid 2(2), page 254] the 1st defendant sent a text message to the plaintiff which read: ‘I have free for next week, can meet for the discussion ....’ 32 The second text message [exhibit P2(2)] on the same date (4.7.2011) [RR, Jilid 2(2), page 255] from the 1st defendant to the plaintiff: ‘Can meet for the discussion? I busy only after 2pm and the third text message also on the same day [Exhibit P2(3), RR, Jilid 2(2), page 256] from the 1st defendant stated: ‘I have prepare chq n proposes ... Let talk in chiptronic this morning ok ?’ [58] In cross examination, the 1st defendant tried to play ignorant on the text messages. At page 160, RR Jilid 2 (1), the 1st defendant said: I do not know what these sms are. I don’t keep these sms. [59] Even though learned counsel raised his objection on the authenticity of the text messages but he did not pursue with the plaintiff in cross examination of the plaintiff. Therefore, the text messages were correctly admitted by the learned Judge. However, the learned Judge did not give due weight to it. From the series of emails and the text messages, it was about the 1st defendant’s intention to ‘meet for discussion’, and ‘the cheques had been prepared’, the learned Judge should have concluded 33 that the text messages refer to the plaintiff request to cash out his shares as mentioned in the emails. Cheques [60] When the plaintiff met the 1st defendant on 4.7.2011 as a result of the above text messages, at G-Hotel, Gurney Drive, Penang (the meeting was confirmed by PW2, who had also attended the meeting), the 1st defendant had given him two post-dated cheques of RM500,000.00 each dated 10.8.2011 and 10.9.2011 respectively. However, the two cheques were later countermanded [RR, Jilid 2(2), page 239] and [RR, Jilid 2(2), pg 240]. [61] The defendants contended that the cheques were issued because the plaintiff had asked for a friendly loan. The 2nd defendant (DW1) in cross examination said he had discussed with the 1st defendant on the request for a friendly loan by the plaintiff but not on the plaintiff’s shares entitlement in Bamboo Gate. However, on further cross examination at page 151 RR Jilid 2 (1), the 2nd defendant admitted that the plaintiff had never asked him personally for a friendly loan for the amount that he had written on the cheques. The 2nd defendant further stated that the reason for the 34 cancellation was because there was no collateral furnished by the plaintiff. To support the averment on the plaintiff request for the loan, the 2nd defendant said he had given loan to the plaintiff before. However, he was unable to produce any proof of the earlier loan. [62] When the 1st defendant (DW2) took the stand, his reason for the cancellation was different. The 1st defendant said the plaintiff no longer needed the money as he had already paid the plaintiff RM25,000,000.00 for the plaintiff’s Nation Gate shares. [63] Based on the conflicting evidence as shown above, the explanation that the cheques were for friendly loan was not plausible. We are of the view that the cheques for RM500,000.00 each, were clearly the cheques that was referred to in the text messages by the 1st defendant to the plaintiff. Therefore, there was no doubt that the cheques were given in pursuance to the defendants agreeing to the plaintiff's proposal to cash out for RM2,500,000.00 by way of a monthly payment of RM500,000.00 as indicated in the 1st defendant’s email of 19.8.2010 (10.05 am) which stated, ‘hopefully, every month will be $500k+’ [RR, Jilid 2(2), page 249]. In our view no other conclusion can be drawn accept that both cheques were towards part payment of the plaintiff’s entitlement of 35 RM2,500,000.00 in respect of his shares in Bamboo Gate. The learned trial judge had failed to properly evaluate this evidence. [64] Besides the contention that the payment was for a friendly loan as requested by the plaintiff, the defendants had also contended that the two cheques were in relation to shares in Nation Gate. The defendants had taken two conflicting positions based on the same facts and therefore it could not be true. The contention that it was the payment in relation to Nation Gate shares, also cannot be supported as it has preceded the plaintiff’s sale of his shares in Nation Gate to the 1st defendant by more than 3 months as apparent from the share sale agreement dated 19.10.2011 [ROA, Jilid 2(2), pgs 216- 238]. Further, the cheques were all in relation to the emails which bear the ‘Subject: Secondhand machine business’ as Bamboo Gate had taken over the business of DTS Industries, which included the secondhand machine business as pleaded [RR, Jilid 1, page 47] and testified by the plaintiff [ROA, Jil 2(1), pg 170]. No document had been produced by the defendants to show that the cheques were in relation to the business of Nation Gate or that Nation Gate was involved in the second hand machinery business. 36 [65] Having regard to the whole evidence of facts and circumstances, in our view are amply sufficient to justify a finding that there was an oral agreement between the plaintiff and the defendants as pleaded in paragraph 8 of the statement of claim that the plaintiff would be entitled to 25% shares in Bamboo Gate and further representation that the plaintiff’s entitlement of RM2,500,000.00 in respect of the said 25% shares as pleaded in paragraph 9. It was undisputed fact that Bamboo Gate was incorporated in 2007. It was established by way of circumstancial evidence and contemporaneous documents that in the course of incorporating Bamboo Gate to take over of the earlier business of DTS Industries that the parties had agreed to the share entitlement. The relationship of the parties before the incorporation of Bamboo Gate, the meetings in 2007 and subsequently on 30.7.2010, series of emails, text messages between the plaintiff and the 1st defendant and the two post-dated cheques issued by the 2nd defendant as discussed in the foregoing paragraphs, supported the existence oral agreement and representation. The trial Judge had clearly misdirected himself in not considering these relevant evidence from which the conclusion, that it was more probable that the defendants had agreed to the plaintiff’s entitlement of 25% shares which is equivalent to RM2,500.000.00. The learned Judge had also failed to give sufficient or any consideration to the contemporaneous documents 37 to support the oral agreement, which would have led him to the inescapable inference that the plaintiff is entitled based on the oral agreement to the 25% shares in Bamboo Gate and the 1st defendant had represented to the plaintiff that the 25% shares was worth RM2,500,000.00. [66] On the evidence as a whole, we were satisfied that the plaintiff had discharged the requisite legal and evidential burden of proof on the plaintiff’s claim of RM2,500,000.00 in respect of his 25% share equity in Bamboo Gate. The evidence as a whole could not reasonably be regarded as justifying the conclusions as arrived by the learned trial judge and therefore, findings by the trial judge was plainly wrong. Hence, we as the appellate court is warranted to interfere and reversed the findings of fact of the trial judge. CONCLUSION [67] After careful consideration of the appeal records and submissions both oral and written, we were constrained to agree with the plaintiff's counsel that there was insufficient judicial appreciation of the evidence 38 before him when the learned Judge arrived at his decision, thus warranting appellate intervention. [68] Based on the foregoing reasons we unanimously allowed the appeal with costs of RM30,000.00 here and below to the appellant/plaintiff, subject to the payment of allocator fee. The order of the High Court is set aside. Consequentially, we allowed the plaintiff’s claim as per the prayers in paragraph 20 (i), (ii), (iii), (iv) and (v) of the Statement of Claim. DATED: 11 JANUARY 2021 sgd (HAS ZANAH BINTI MEHAT) Judge Court Of Appeal Malaysia Putrajaya Counsel/Solicitors: For the Appellant: Mr. Wong Chong Wah (together with him M Thayalan, Wong Chun-Keat and Goh Lee Ding) (Messrs. J A YEOH ) For the Respondent: John Khoo (together with Jimmy Geh) (Messrs. Ismail Khoo & Assoc. (Penang)