Prudential Assurance Malaysia Berhad v 1. ) Mariana Binti Muhammad (WA-12BNCC-20-07/2023)

MARIANA BINTI MUHAMMAD

MOHAMMAD SELIM BIN MAKBUL AHAMAD

MUHAMMAD ARHAM MIKHAIL (A MINOR CLAIMING THROUGH HIS MOTHER, MARIANA BINTI MUHAMMAD) [In the matter of the Sessions Court in Kuala Lumpur In the Federal Territory of Kuala Lumpur, Malaysia

Mariana Binti Muhammad (NRIC No.: 871027-23-6106)

Mohammad Selim Bin Makbul Ahamad (Passport No.: BT0301738)

Muhammad Arham Mikhail (A minor claiming through his mother, Mariana Binti Muhammad) And Prudential Assurance Malaysia Berhad (Company No.: 107655-U) Decided by Sessions Court Judge Puan Zawiyah binti Saad in the Sessions Court of Kuala Lumpur on 5 July 2023] GROUNDS OF JUDGMENT A. Introduction [1] For convenience, the parties shall be referred to as they are in the Sessions Court, namely the respondents as the plaintiffs, and the appellant as the defendant. [2] The plaintiffs filed the action in the Sessions Court primarily to reinstate their insurance policies which had been cancelled. The plaintiffs claimed the cancellation of the policies was the result of forgery committed by an agent of the defendant. claim, and the defendant appealed to this court. [3] For the reasons explained below, the court allowed the appeal and overturned the decision of the learned Sessions Court judge . B. Background Facts [4] The plaintiffs are customers of the defendant, and the holders of the following insurance policies with the defendant: a. PRULink One Medical Card No. 34901809 ; b. PRUMy Child Medical Card No. 34485027 ; c. PRULink One Medical Card No. 34927750 ; d. PRULady No. 20626550 ; and e. PRULife Partner No. 35242392 (collectively, the . [5] An agent named was appointed by the defendant to serve the plaintiffs in respect of the Policies, including to collect premium payments for the Policies. [6] The plaintiffs claimed the Agent had misappropriated monies that the plaintiffs had paid towards the Policies. The plaintiffs also alleged that the conduct of the Agent in misappropriating monies from them, and also in committing the act of forgery, had resulted in the Policies lapsing. [7] The plaintiffs therefore filed complaints with the defendant against the Agent. These complaints were investigated by the defendant, with the investigations revealing that the Agent had misappropriated a sum of e defendant terminated the Agent and offered to return the Misappropriated Sum to the plaintiffs. [8] However, the defendant disagreed that the Policies had lapsed plaintiffs had ceased paying premiums on the Policies, resulting in the Policies lapsing. [9] The plaintiffs filed the action at the Sessions Court to, inter alia, ordered the Policies to be reinstated. The Sessions Court also granted special damages and general damages to the plaintiffs. [10] The defendant appealed to this court. C. Principles of Appellate Intervention [11] The first consideration in my assessment of this appeal is the principle that an appellate court should be slow to disturb findings of fact by a trial judge. The trial judge, having had the advantage of directly observing the demeanour of witnesses and the overall conduct of the trial, is best placed to assess the evidence and the credibility of witnesses. [12] However, the findings of the trial judge may be disturbed where such findings are plainly wrong or unsupported by evidence, or where there is no proper judicial appreciation of the evidence by the trial judge. This was explained by the Court of Appeal in Shak Yong @ Hew Chong v Hew Sak Yong [2014] 1 MLJ 562: [10] To begin with, we are mindful of the principle of law that in respect of an appeal which turns upon a question of fact, an appellate court is generally very reluctant to disturb a finding of fact by the trial judge for the reason that as trier of fact the trial judge has audio-visual advantage which we do not have. Nonetheless, it would be opened to us to interfere with the finding made by a trial judge if such a finding is not supported by evidence or the decision is against the weight of the evidence or there is no proper judicial evaluation of the evidence or there is misdirection in law or the trial court has fundamentally misdirected itself. (emphasis added) [13] Based on the above, an appellate court may interfere with a finding of a trial judge if: a. The finding is not supported by evidence; or b. The decision is against the weight of the evidence; or c. There is no proper judicial evaluation of the evidence; or d. There is a misdirection in law; or e. The trial judge has fundamentally misdirected himself. D. Decision of the Sessions Court [14] In SCJ: a. Accepted the 1st made premium payments towards the Policies for the years 2017 and 2018 by way of cheques, which were applied by the Agent to the benefit of third parties; b. Found that the defendant had failed to challenge the use of the cheques by the Agent; c. Found that the Jameah Othman, a manager of its Customer Servicing Department had confirmed the schedule of premium payments made by the plaintiffs; and d. Found that the plaintiffs had proven their allegation that the 1st and 2nd plaintiffs signatures were forged. [15] With the findings above, the SCJ held that the plaintiffs had proven their case, and were entitled to the reinstatement of the Policies, special damages, and general damages. E. Considerations and Findings [16] Having considered the grounds of judgment of the SCJ, I found there to have been a fundamental error in her decision, in that the SCJ had failed to recognise that the misapplication of the Misappropriated Sum by the Agent is distinct and distinguishable from to ensure the payment of premiums on the Policies. [17] This error is clear from the four findings made by the Sessions Court, which I have considered below. [18] First, the SCJ found that the 1st plaintiff had made premium payments towards the Policies for the years 2017 and 2018 by way of cheques, which were applied by the Agent to the benefit of third parties. [19] It must first be noted that the defendant did not dispute that these payments had been made, and that they were misappropriated by the Agent. After investigations were made, the Agent was terminated, and the defendant had offered to return the Misappropriated Sum to the plaintiffs. [20] However, the real issue that the SCJ appears to have missed is that the plaintiffs did not make premium payments towards the Policies after 2019. This non-payment was admitted by the 1st plaintiff during cross-examination, and it is this failure that led to the Policies lapsing. It is important to note that the Policies only lapsed on the following dates, after complaints on the misappropriation of payments by the Agent were made to the defendant in July 2018: a. Policy 7750 lapsed on 1 September 2018; b. Policy 6550 lapsed on 30 June 2019; c. Policy 2392 lapsed on 1 May 2020; and d. Policy 1809 and Policy 5027 lapsed during the course of the trial in 2022 and 2023. [21] Further, the plaintiffs admitted in their statement of claim that the last cheques for premium payments provided to the defendant were cheques dated 2 November 2018, 10 July 2019 and 18 September 2019. [22] The 1st plaintiff also admitted in her witness statement that the plaintiffs had ceased making premium payments for the Policies after 18 September 2019. [23] Based on the above, it is clear that the Policies had lapsed due to the non-payment of premiums by the plaintiffs, and not as a result of the misapplication of the Misappropriated Sum by the Agent. With the non-payment of premiums by the plaintiffs after 2 first finding, that the 1st plaintiff had made premium payments towards the Policies for the years 2017 and 2018, which were misappropriated by the Agent, does [24] Connected to the first finding of the SCJ is the second finding, that the defendant had failed to challenge the use of the cheques by the Agent. There had been no denial by the defendant that the cheques issued by the plaintiffs were misapplied by the Agent. Further, the defendant agreed for the Misappropriated Sum to be returned to the plaintiffs. It was therefore not necessary for the defendant to challenge the use of the cheques by the Agent. [25] As elaborated in my assessment of the first finding by the SCJ, the issue of the Policies lapsing relates to the non-payment of premiums by the plaintiffs, not the misapplication of the Misappropriated Sum by the defendant. [26] Third, the SCJ found that SD1 had confirmed the schedule of premium payments made by the plaintiffs. This was highlighted at page [42] Perkara yang sama telah disahkan oleh SD1, Puan Jameah ketika disoal balas oleh Peguamcara Plaintif ketika pemeriksaan balas: PP : So, our instruction is, my client, the Plaintiff, regularly makes payment. Then, the payment goes somewhere else. Then, the revived. All by our Pn Maszurah. Do you agree, disagree, I do not know? Jameah : May I explain? PP : No. Because simple question. It keeps happening. We can see it with our own have showed you the table. Jameah : I agree with the transaction written in this statement (emphasis added) [27] The statement which SD1 was being cross-examined on and which she agreed with, is the schedule of payments of premiums made by the plaintiffs, up to September 2019. The schedule of payments was [28] continue with the payment of premiums after complaints were filed against the Agent, and after September 2019, and the failure to make premium premium payments made up to September 2019 is in line with the position taken by the defendant in its defence. [29] The fourth finding made by the SCJ is that the plaintiffs had proven their allegation that the 1st and 2nd ignatures were forged. In paragraphs [61] and SCJ held that the allegation of forgery raised by the plaintiffs had been es gave evidence that the 1st and 2nd [30] It is trite law that he who asserts must prove. This is provided for 1950 The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie (emphasis added) [31] In EON Bank Bhd v Hotel Flamingo [2005] MLJ 712, the allegation raised by the defendant is that a power of attorney relied on by the plaintiff was forged. The plaintiff argued that under section 101 of the EA 1950, the burden lies on the defendant as the party raising the allegation of forgery, to prove this allegation. The defendant , however, is that the burden of proof lies on the plaintiff, since it alleged a positive fact i.e. that the power of attorney was genuine. [32] The High Court held that the burden of establishing a case lies on the party who asserts the affirmative. As the defendant alleged forgery, it bears the burden to prove forgery, and must produce evidence to discharge the burden of proof. [33] In the present case, the SCJ found that the allegation of forgery by the plaintiffs was made out as the defendant had not provided evidence that the 1st and 2nd s were not forged. I am of the view that in finding so, the SCJ had misdirected herself on the law relating to the burden of proof. Pursuant to section 103 of the EA 1950, the burden lies on the plaintiffs as the party alleging forgery, to prove the allegation of forgery. [34] The SCJ failed to consider that save for the testimony of the 1st plaintiff, no evidence was led by the plaintiffs to prove that the 1st and 2nd could not be said to have been proven. [35] Further, st and 2nd the application and renewal forms for the Policies. Notwithstanding the position taken by the plaintiffs that the signatures on the application and renewal forms for the Policies were forged, the plaintiffs have sought reliefs at the Sessions Court to allow them to continue with the Policies. The plaintiffs had also made premium payments for the Policies, before the commencement of the action at the Sessions Court. Their conduct is inconsistent with the stand taken that the Policies were obtained and renewed by way of forged signatures. [36] Having assessed the findings of the SCJ, I am of the considered view that the SCJ erred in failing to consider all the facts and evidence in this case and to judicially appreciate the evidence put forth by the parties. I find that ultimately, the SCJ had failed to consider that although the misappropriation by the Agent had resulted in missing premium payments payments for the Policies after complaints were made to the defendant, had resulted in the Policies lapsing. [37] In Shak Yong (supra), in explaining what constitutes judicial appreciation of evidence, the Court of Appeal adopted the words of Gopal Sri Ram JCA (as His Lordship then was) in Lee Ing Chin @ Lee Teck Seng v Gan Yook Chin [2003] 2 MLJ 97: 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 cr 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 s (emphasis added) [38] Thus, a trial court must assess and weigh the evidence before it, by testing it against various considerations such as the motive of a witness in giving evidence, available contemporary documents, and the probabilities of the case. [39] In the present case, my findings on the following have led me to conclude that there was insufficient judicial appreciation of the evidence before the Sessions Court: a. The SCJ failed to consider that evidence on premium payments by cheques made by the plaintiffs which were misapplied by the Agent, and the non-challenge by the defendant on the misapplication of the cheques by the Agent are related directly to the Misappropriated Sum, which the defendant did not dispute. The defendant in fact agreed for the Misappropriated Sum to be returned to the plaintiffs. b. The SCJ failed to consider that the schedule of premium payments made by the plaintiffs not dispute the schedule of payments. T defence is that the plaintiffs did not continue with the payment of premiums after complaints were filed against the Agent, and after September 2019, and the failure to make premium payments had resulted in the Policies lapsing. c. The SCJ had misdirected herself in the law relating to the burden of proof, in finding that the allegation of forgery was made out as the defendant did not disprove forgery. Save for the testimony of the 1st plaintiff that the signatures were forged which is a self-serving testimony there was no evidence put forth by the plaintiffs on the forgery. Further, the conduct of the plaintiffs in making premium payments for the Policies before the commencement of the action at the Sessions Court, is inconsistent with the stand taken that the Policies were obtained and renewed by way of forged signatures.

[40] With the above considerations, the court finds that there was insufficient judicial appreciation of evidence and a misdirection by the SCJ on the law. As such, appellate intervention is justified in this case. The appeal is therefore allowed, with costs. [41] The judgment of the Sessions Court dated 5 July 2023 is set aside, and replaced by an order for the payment of the Misappropriated Sum of RM5,667.69 by the defendant to the plaintiffs. Dated 10 October 2025 ADLIN ABDUL MAJID Judge High Court of Malaya Kuala Lumpur Counsel: Appellant : SY Liew (together with Denise Choo) of Messrs. Shearn Delamore & Co Respondents : Mahendren Naidu of Messrs. Dennis Mahen. R & Aida