Puncak Niaga Construction Sdn Bhd v Abraham A/L P. Joseph (BA-12BNCvC-59-09/2024)

This is the Appellant/Plaintiff’s appeal against the decision of the learned Sessions Court Judge (SCJ) delivered on 3 September 2024, which dismissed the Appellant/Plaintiff’s claim and allowed the Respondent/Defendant’s counterclaim.

For ease of reference, parties will be referred to as they were in the court below.

The appeal relates to the Plaintiff’s claim that the Defendant fraudulently misrepresented his academic qualifications, thereby inducing the Plaintiff to enter into an employment contract, which the Plaintiff argued should be rescinded.

The Defendant’s counterclaim is for three months’ salary in lieu of notice, following the Plaintiff’s acceptance of his resignation.

The Plaintiff, a construction company, employed the Defendant as its Project Director through a letter of appointment dated 30 March 2018. The Defendant began duties on 2 May 2018 and was assigned to oversee a large-scale government project, “Pakej D44 Project”, valued at RM393 million.

On 20 September 2019, the Plaintiff suspended the Defendant following a MACC arrest notice and allegations of misconduct. During the two-week suspension period (from 23 September 2029 to 6 October 2019), on 26 September 2019, the Defendant tendered his resignation with a three-month notice.

The Plaintiff accepted the resignation but rejected the three-month notice period, setting 7 October 2019 as the last day of employment. The Plaintiff then filed a suit to recover RM869,859.00 in wages paid to the Defendant (from 2 May 2018 to 7 October 2019), claiming the employment contract was void due to fraudulent misrepresentation. The Defendant counterclaimed RM110,967.74 for unpaid salary in lieu of notice.

The learned Sessions Court Judge dismissed the Plaintiff’s claim and allowed the Defendant’s counterclaim.

In essence, the Plaintiff appealed on the following main grounds:

The Plaintiff argued that it was induced to hire the Defendant based on his representation that he held a 1995 Bachelor of Engineering degree from Generale Polytechnic Institute, Vancouver, Canada, which the Plaintiff alleged was invalid or unrecognised.

The Plaintiff alleged that the degree was invalid because Generale Polytechnic was never authorised under Canadian law to award degrees. The Plaintiff presented email evidence from Canadian authorities and the Malaysian Qualifications Agency (MQA) to show that the degree lacked recognition and legitimacy.

The Plaintiff contended that this representation amounted to fraudulent misrepresentation under sections 17 to 19 of the Contracts Act 1950, thereby rendering the contract voidable. The Plaintiff argued that it lawfully rescinded the contract upon accepting the Defendant’s resignation and fixing his last working day. The Plaintiff relied on the case of Abdul Razak Bin Datuk Abu Samah v Shah Alam

500.

The Plaintiff argued that section 10 of the Contracts Act 1950 requires free consent for the formation of a valid contract. Section 14 states that consent is not free if caused by fraud or misrepresentation. Sections 17 to 19 provide that fraudulent misrepresentation renders the contract voidable at the option of the innocent party.

The Plaintiff referred to the Federal Court case of Lai Fee & Anor v Wong Yu Vee & Ors [2023] 3 MLJ 503, which affirmed that once fraudulent misrepresentation is established, the innocent party may elect to rescind the contract.

Therefore, the Plaintiff was entitled to rescind the contract and recover all salaries and payments made to the Defendant during the period of his employment, as the contract was either void ab initio or lawfully terminated for misrepresentation.

The Sessions Court erred in its assessment of the documentary and oral evidence, particularly by favouring the Defendant’s oral testimony over documentary evidence, including email correspondence relating to the Generale Polytechnic degree.

The Sessions Court failed to draw proper inferences from the Defendant’s conduct and the documentary evidence, which the Plaintiff stated supported the conclusion that misrepresentation had occurred.

The Sessions Court erred in allowing the Defendant’s counterclaim for three months’ salary in lieu of notice. The Plaintiff further argued that the Defendant’s counterclaim was without merit, as the contract had been rescinded due to fraud, thereby preventing any claim based on its terms.

The Defendant contended that the Sessions Court had correctly applied the legal principles and made findings of fact that were based on the evidence.

The Defendant argued:

The Defendant denied any fraudulent misrepresentation and argued that the degree in question was legitimately conferred in 1995 through Vista Technology Malaysia, prior to regulatory changes in Canada and Malaysia.

The Defendant argued that the Plaintiff carried out a thorough recruitment process and never stated that qualifications had to be recognised by MQA or any accreditation body.

There was no requirement at the time of hiring for the Generale Polytechnic degree to be locally accredited or recognised.

His appointment was based on his overall experience, professional background, and interview performance, not solely on the Generale Polytechnic degree.

The Plaintiff had sought validation and approval from Jabatan Perkhidmatan Pembetungan (JPP) regarding the Defendant’s qualifications, and this had been granted.

The email correspondence relied upon by the Plaintiff should be treated with caution, as the makers were not called to testify and the documents were tendered as identification (ID) documents.

The testimony of a subpoenaed witness (SD1), the owner of Vista Technology, confirmed the existence of the programme. The witness's testimony was not challenged or rebutted by the Plaintiff.

The Sessions Court was entitled to place greater weight to the oral testimony of SD1 over the disputed email documents, especially since the Plaintiff did not call material witnesses.

It was noted that the Plaintiff raised the issue of the degree’s validity only eight months after the Defendant had left employment, which showed an affirmation of the contract rather than an immediate rescission.

The Plaintiff was not entitled to recover wages already paid for services rendered, as there was no authority for such recovery in the circumstances pleaded.

On the counterclaim, the Defendant had complied with the contractual requirement of giving three months’ notice, and the Plaintiff’s decision to cut short the notice period did not negate the obligation to pay salary in lieu.

The Defendant argued that the Plaintiff’s unilateral waiver of the notice period without compensation constituted a breach of contract. ISSUES FOR DETERMINATION

The main issues to be addressed in this appeal are:

Whether the Defendant fraudulently misrepresented his qualifications, thereby inducing the Plaintiff to enter into the employment contract.

Whether the Plaintiff has lawfully rescinded the contract.

Whether the Defendant is entitled to claim three months’ salary in lieu of notice. THE LAW ON APPELLATE INTERVENTION

I am reminded that an appellate court should be slow in interfering with a finding of fact by a trial court (see: Sornaratnam & Anor v Ramalingam [1981] 1 MLJ 24; Privy Council case of Tan Chow Soo v Ratna Ammal [1969] 2 MLJ 49; 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; Herchun Singh & Ors v Public Prosecutor [1969] 2 MLJ 209 at 211.

The principles governing the appellate court’s interference with the trial court’s findings, as enunciated in Sivalingam a/l Periasamy v Periasamy & Anor [1995] 3 MLJ 395, are particularly useful here. The Court of Appeal held: “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. In a case such as this where the task of the court is to determine where the probable truth of the case lies, one can do no better than to recall to mind the words of Viscount Simon (who was in the majority) in The ‘Eurymedon’

73 Lloyd LR 217: The appellants, therefore, start in this House under the considerable handicap that there are concurrent findings of fact against them. [Which, we hasten to add, is not the case here.] I am far from saying that in these circumstances the House has no jurisdiction to allow the appeal, but it would need very clear and convincing reasoning to justify us in overthrowing what has already been decided. If it could be shown that the course of events affirmed by the learned judge could not have occurred, that would be an excellent reason for reversing his view – in these mundane happenings there is no more conclusive argument than non est credendum quia impossibile. If the impeached decision were shown to be an unwarranted deduction based on faulty judicial reasoning from admitted or established facts, that might lead to its reversal. If there were so overwhelming a body of valid testimony for the view that has been rejected that a reasonable man would feel bound to accept it, the appeal would succeed.” [emphasis added]

Furthermore, the Federal Court case of Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67 clearly demonstrated the circumstances in which an appellate court should intervene: “THE LAW IN APPELLATE INTERVENTION [33] ‘It was a long settled principle, stated and restated in domestic and wider common law jurisprudence, that an appellate court should not interfere with the trial judge’s conclusions on primary facts unless satisfied that he was plainly wrong’ (the Supreme Court of United Kingdom in McGraddie v McGraddie and another [2013] 1 WLR 2477). [34] The ‘plainly wrong’ test operates on the principle that the trial court has had the advantage of seeing and hearing the witnesses on their evidence as opposed to the appellate court that acts on the printed records. The test was pioneered by the House of Lords in Clarke v Edinburgh and District Tramways Co 1919 SC (HL) 35, when it adjudicated on the ability of an appellate court to reconsider the facts of a particular case, when there is already findings of fact by the lower court. In this regard, Lord Shaw’s judgment is pertinent when His Lordship said: ‘When a judge hears and sees witnesses and makes a conclusion or inference with regard to what is the weight on balance of their evidence, that judgment is entitled to great respect, and that quite irrespective of whether the Judge makes any observation with regard to credibility or not. I can of course quite understand a Court of Appeal that says that it will not interfere in a case in which the Judge has announced as part of his judgment that he believes one set of witnesses, having seen them and heard them, and does not believe another. But that is not the ordinary case of a cause in a Court of justice. In Courts of justice in the ordinary case things are much more evenly divided; witnesses without any conscious bias towards a conclusion may have in their demeanour, in their manner, in their hesitation, in the nuance of their expressions, in even the turns of the eyelid, left an impression upon the man who saw and heard them which can never be reproduced in the printed page. What in such circumstances, thus psychologically put, is the duty of an appellate Court? In my opinion, the duty of an appellate Court in those circumstances is for each Judge of it to put to himself, as I now do in this case, the question, Am I-who sit here without those advantages, sometimes broad and sometimes subtle, which are the privilege of the Judge who heard and tried the case – in a position, not having those privileges, to come to clear conclusion that the Judge who had them was plainly wrong? If I cannot be satisfied in my own mind that the Judge with those privileges was plainly wrong, then it appears to me to be my duty to defer to his judgment. [35] Lord Shaw’s judgment was adopted by Viscount Sankey LC in Powell v Streatham Manor Nursing Home [1935] AC 243 when His Lordship made the following observation at p 250: ‘What then should be the attitude of the Court of Appeal towards the judgment arrived at in the Court below under such circumstances as the present? It is perfectly true that an appeal is by way of rehearing, but it must not be forgotten that the Court of Appeal does not hear the witnesses. It only reads the evidence and rehears the counsel. Neither is it a reseeing Court … On an appeal against a judgment of a judge sitting alone, the Court of Appeal will not set aside the judgment unless the appellant satisfies the Court that the judge was wrong and that his decision ought to have been the other way. Where there has been a conflict of evidence the Court of Appeal will have special regard to the fact that the judge saw the witnesses.’ … [37] In much later years, the House of Lords had the occasion to consider on the same issue in Watt (or Thomas) v Thomas [1947] AC 484, 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 seen and heard the witnesses or has failed to appreciate the weight and bearing of circumstances admitted or proved.’ … [60] The aforesaid cases illustrate the highly deferential attitude adopted by appellate courts in the United Kingdom towards reviewing findings of fact by the trial court. The test is not whether the higher court feels that it would have reached a different conclusion on the same facts as the trial court, but whether or not the decision by the lower court on findings of fact was reasonable. In other words, if the trial judge’s decision can be reasonably explained and justified, then appellate courts should refrain from intervention. … [151] It is not sufficient for the Court of Appeal to reverse the findings on fact merely because on a particular point of evidence, it disagreed with the conclusion made by the trial court on whether one party or the other is to be believed on the evidence that they gave in court. Although there may be inconsistencies in the evidence which could mean that another judge would have been persuaded to reach a different conclusion, this is not relevant when considering if a trial judge’s findings of fact could be overturned. The task of the trial judge is hard enough, without having to deal with every single piece of evidence which may emerge in the course of the trial. If such a requirement was to be imposed on a trial judge then their task in hearing a case would be very tedious and the time taken to produce judgments would increase…” [emphasis added]

As discussed above, it is trite law that appellate intervention is warranted if the trial judge failed to evaluate the evidence and issues before him in its entirety and made bare findings of fact with no justifiable reason to substantiate them (MMC Oil & Gas Engineering Sdn. Bhd. v Tan Bock Kwee & Sons Sdn. Bhd. [2016] 2 MLJ 428). Upon perusal of the Records of Appeal and having considered the written and oral submissions by the parties, I find that an appellate intervention is not warranted. My reasons are stated below.

After thoroughly reviewing the learned SCJ’s written Grounds of Judgment and the evidence in its entirety, I find that the learned SCJ made relevant factual findings, correctly applied the law, and there was no misdirection in her assessment of the evidence.

To succeed in a claim for fraudulent misrepresentation, the elements set out in Yeohata Machineries Sdn Bhd & Anor v Coil Master Sdn Bhd & Ors [2015] 6 MLJ 810 must be satisfied, including proof that the representation was knowingly or recklessly false and that it induced the Plaintiff to act to its detriment. The Court of Appeal held: “[23] In order to sustain an action for fraudulent misrepresentation, the plaintiffs must establish five essential facts. First, there must be a representation of fact by words or by conduct and mere silence is not enough. Second, the representation must be made with the knowledge that it is false, ie it must be willfully false or at least made in the absence of any genuine belief that it is true or recklessly (ie without caring whether his representation is true or false (Derry v Peek

14 App Cas 337). Third, the representation must be made with the intention that it should be acted upon by the claimant, or by a class of persons which will include the claimant, in the manner which resulted in damage to him. Fourth, it must be proved that the claimant acted upon the false statements. Lastly, it must be proved that the claimant has sustained damage by so doing (see Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at p 211, per Viscount Maugham).” [emphasis added] Alleged Fraudulent Misrepresentation

The Sessions Court’s finding was that the Plaintiff had not proved the elements of fraudulent misrepresentation. After reviewing the entire record and the written submissions on appeal, I am satisfied that this finding was justified and disclosed no error of law or fact.

The Plaintiff’s case rested heavily on the argument that the Defendant’s Generale Polytechnic degree was invalid or unrecognised, claiming that Generale Polytechnic was never authorised to award degrees. Consequently, this constituted a false misrepresentation that led the Plaintiff to enter into the employment contract.

The Plaintiff argued that this was evidenced by various emails and correspondence included in Part C of the Plaintiff’s bundle of documents.

However, the Plaintiff failed to call the makers of those emails, and the learned trial judge rightly excluded them as inadmissible hearsay.

The Part C documents were not proven by their makers. The witnesses who could testify to their contents were not called. The Defendant had objected to their admissibility at trial. The trial judge admitted them as ID1 (the email on 25 September 2019 from MQA) and ID2 (the email on 1 July 2020 from Vicki Summons, Senior Policy Analyst, Corporate Planning, International and Quality Assurance Branch of British Columbia Ministry of Advanced Education, Skills and Training (IQAB)) for identification purposes only. This procedural ruling was consistent with the Evidence Act 1950, which requires proof of documents by primary evidence or by calling the maker unless a statutory exception applies.

The legal consequence of admitting documents solely for identification (ID) purposes is that their contents are not proven to be true regarding the matters stated. The trial judge was therefore entitled to treat them with caution or to give them no weight when evaluating whether the Plaintiff had met the burden of proving misrepresentation. I find no error in this approach.

Furthermore, the trial judge accepted that an adverse inference could properly be drawn under section 114(g) of the Evidence Act 1950 against the Plaintiff for failing to call material witnesses, specifically, those who could authenticate and explain the Part C documents (ID1 and ID2).

The Defendant, on the other hand, presented oral evidence from SD1 confirming that the degree was awarded through a programme conducted in Malaysia before the Canadian Degree Authorisation Act 2002 came into force in Canada. The Defendant obtained his degree in 1995.

The learned Sessions Court Judge found that the testimony of SD1 was unshaken and accepted his explanation. The Plaintiff did not rebut this testimony with any documentary evidence or call relevant witnesses to discredit SD1’s evidence.

This preference was based on the trial judge’s advantage of observing the witness during cross-examination. It is well-established law that an appellate court will not interfere with such credibility findings unless they are plainly wrong or not supported by the evidence; a threshold not met in this case.

Furthermore, the Defendant’s stance, accepted by the Sessions Court, was that at the time of hiring, there was never a requirement for the Generale Polytechnic degree to be locally accredited or recognised. The Plaintiff had not pleaded or proved any term in the contract or pre-employment discussions that made such accreditation a condition precedent to the contract.

In the case of Maritime Intelligence Sdn Bhd v Tan Ah Gek [2021] 6 MLRA 15, it was held that an employer cannot retrospectively impose conditions not stipulated at the outset of employment and then treat the employee’s position as void when those conditions are later found wanting. The Court of Appeal held: - “…(3) Failure on the part of the President and CEO, on the facts, to verify the claimant’s qualification was a matter that would only be relevant if it was a condition of employment communicated to the claimant that her postgraduate degree must be from an accredited university, whether in the United States of America or from the Malaysian Qualifications Agency (“MQA”) in Malaysia. That had not been pleaded, much less the allegation of misconducts in that the claimant had defrauded, misrepresented or concealed this information of her unaccredited postgraduate degree from the Company. Granted where evidence had been adduced though not specifically pleaded and that no injustice had been occasioned, the Industrial Court, just like the Civil Courts, might dispense with the strict rules of pleadings. However, this issue of a purported misconduct in not possessing a postgraduate degree from an accredited university in the United States of America or by the MQA was both veiled and vague and raised in such a manner for the first time in the Statement of Reply. Hence, there was no hesitation in rejecting this ground of appeal as the Company had not pleaded it as a misconduct but as more a complaint against its President and CEO in the form of narration of events. (paras 79-83)” “(4) The burden of proof was always on the Company where the allegation of misconduct was concerned as he who alleged must prove. The Company had not investigated and verified if the postgraduate degree was accredited when it had every opportunity to do so if indeed it was an essential prerequisite for the post. Estoppel would apply and it would be too late in the day for the Company to raise it for the first time before the Industrial Court after dismissing the claimant on other grounds unrelated to qualifications but rather to the conduct of the claimant and after having employed the claimant for more than a year with no issue on her postgraduate degree. Even this ground of dismissing the claimant had not been proved by the Company, assuming that it was a relevant ground properly pleaded and raised. Therefore, there was no good reason to disturb the Award of the Industrial Court as the end result even after considering the evidence adduced by the Company for this additional ground, which was the sole ground of challenge to the Award, was the same in that it did not alter the position that the claimant had been dismissed without just cause and excuse. (paras 109 & 113-115)”

Since there was no evidence that accreditation was part of the employment requirements, the Part C documents were of doubtful value, and the trial judge had accepted the oral evidence, I find that the Plaintiff had not proved fraudulent misrepresentation.

Fraud must be proven with cogent evidence. In this case, the Court is not convinced that the Plaintiff has discharged the burden of proving that the Defendant knowingly or recklessly made a false representation. Whether the Contract was Validly Rescinded

Even if misrepresentation were presumed, the Plaintiff’s conduct was inconsistent with an immediate decision to rescind the contract. The Plaintiff continued to pay the salary, accepted the resignation, and set the final date of employment. These actions, in this Court’s view, amounted to an affirmation of the contract.

There was no evidence of any formal notice of rescission. Therefore, the Plaintiff cannot now assert that the contract was rescinded ab initio to avoid liability for the counterclaim. Recovery of salaries

The Plaintiff sought to recover RM869,859.00 in salaries and payments made during the Defendant’s employment. The claim was based on the ground that the contract was void ab initio or lawfully rescinded for misrepresentation, such that the Plaintiff was entitled to restitution.

However, as the Defendant argued, wages paid for services rendered are generally not recoverable simply because of a later dispute over qualifications, especially when the employee has worked in the position for the relevant period. The Defendant relied on the lack of any direct authority to support the Plaintiff’s position.

The Sessions Court recognised that the Defendant had performed his role and that the Plaintiff had benefited from his services. Without evidence of fraudulent misrepresentation, there were no legal grounds to order repayment of wages earned. I agree with this reasoning.

The Plaintiff’s failure to prove misrepresentation meant this issue was dismissed automatically, as the claim for restitution depended on the success of the misrepresentation claim.

The Defendant resigned on 26 September 2019, giving the three months’ notice required under the contract. However, the Plaintiff instructed him to leave on 7 October 2019 and did not pay his salary for the remainder of the notice period.

The Sessions Court concluded that this constituted a breach of the contract. The Defendant had fulfilled his obligation by giving notice. The Plaintiff’s unilateral decision to shorten the notice period did not exempt it from the obligation to pay salary in lieu.

The Defendant’s position was also supported by the contractual documents and the employee handbook, neither of which contained any clause permitting the Plaintiff to shorten the notice period without compensating the employee.

The employment contract specifies a three-month notice period or payment in lieu of notice. The Plaintiff unilaterally waived the notice period but did not make any payment. No contractual provision allows such a waiver without compensation.

The Sessions Court awarded RM110,967.74 as three months’ salary in lieu of notice, along with the mandatory 11% EPF contribution. This was a clear and proper application of the contractual terms, and I see no reason to interfere with that decision.

Having examined the evidence in totality, I find that the learned SCJ’s findings were fully supported by the evidence and based on a correct appreciation of the facts and law. The decision is neither plainly wrong nor legally unsustainable.

Given the trial judge’s advantage of first-hand observation of the witnesses' demeanour, credibility, and overall presentation of evidence, her factual findings should not be disturbed unless there is a clear misdirection. After reviewing the SCJ’s grounds and the evidence, I find no such misdirection in her assessment.

Therefore, I find no merit in the appeal. There are no substantial or compelling reasons for this Court to differ from the learned Sessions Court Judge’s conclusions. Consequently, I hereby order that the appeal be dismissed. The judgment of the Sessions Court is affirmed in its entirety. The Appellant/Plaintiff shall pay costs of RM10,000.00 to the Respondent. Dated 15 August 2025 -sgd-JAMHIRAH ALI JUDGE HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN To the parties’ solicitors: For the Appellant : Dato’ Lim Choon Khim, David Yii Hee Kiet & Nurul Idayu Binti Harun (Messrs CK Lim Law Chambers) For the Respondent: Remi Pereira (Messrs Rajagopal & Co.)