QUEMAX SEALING (M) SDN BHD v 1. ) Norita Binti Anis (WA-22NCC-480-10/2020)

NORITA BINTI ANIS

ZULKIFLI BIN ISMAIL (NRIC NO: 601109-07-6249) … DEFENDANTS GROUNDS OF JUDGMENT Introduction [1] This judgment deals with a claim by a company against its director and general manager for fraud committed in respect of various non-existing projects. The facts in support of the fraud are overwhelming and the defences raised are found to be entirely without merits. S/N kB2qtgfXyUeti4JMGpm3/g Background Facts [2] The Plaintiff is a company incorporated in Malaysia under the Companies Act 2016 (previously Companies Act 1965) (‘CA 2016’). [3] The First Defendant (‘D1’) is a director of the Plaintiff and also a registered shareholder of the Plaintiff. D1 holds the shares in the Plaintiff as nominee for various individuals which will be elaborated below. [4] The Second Defendant (‘D2’) is a beneficial shareholder of the Plaintiff and also the lawful husband of D1. [5] D2 was actively involved in the incorporation of the Plaintiff and had worked together with the following individuals leading to the incorporation of the Plaintiff: - a) Lim Tick Seng (NRIC No. 780726-01-5595) (‘Lim’); b) Neo Yong Tak @ Liang Yongda (Singapore Passport No. E2735991B) (‘Neo’); c) Ngiam Chian Lee (Singapore Passport No. E2280934J) (‘Ngiam’); d) Chuah Jooi Min (NRIC No. 730507-07-5349) (‘Chuah’); and e) Koh Kim Tiong (Singapore Passport No. E2413760L) (‘Koh’) [6] The Plaintiff was incorporated on 18.1.2012 with a paid-up capital of RM1,000.00 divided into 1,000 shares of RM1.00 per share. The registered shareholders of the Plaintiff as at 18.1.2012 were as S/N kB2qtgfXyUeti4JMGpm3/g follow: - Shareholder Percentage Shareholding D1 60% 600 Lim 10% 100 Neo 15% 150 Ngiam 15% 150 Total 100% 1000 [7] At all material times the parties mentioned in paragraph 5 above together with D1 in addition to forming the Plaintiff also agreed that D2, Chuah and Koh shall become beneficial shareholders of the Plaintiff. Pursuant thereto, Trust Deed No. 1, Trust Deed No. 2, Trust Deed No. 3, Trust Deed No. 4, Trust Deed No. 5, Trust Deed No. 6 and Trust Deed No. 7 (hereinafter collectively referred to as “the said Trust Deeds”) were entered into between the relevant parties. [8] The Plaintiff had on 3.4.2013 allotted additional 999,000 shares (‘Additional Shares’) to the following shareholders: a) 599,400 shares to D1; b) 99,900 to Lim; c) 149,850 to Neo; and d) 149,850 to Ngiam. [9] The registered shareholders of the Plaintiff following the allotment of the Additional Shares therefore were as follows: - Shareholder Percentage Shareholding S/N kB2qtgfXyUeti4JMGpm3/g D1 60% 600,000 Lim 10% 100,000 Neo 15% 150,000 Ngiam 15% 150,000 Total 100% 1,000,000 [10] The actual shareholders both registered and beneficial of the Plaintiff taking into account the initial allotment of shares, the said Trust Deeds and Additional Shares can best be summarized as follows: - Shareholder Registered shareholder for Trustee for/ no. of shares held on trust/ Instrument Actual registered share Actual beneficial share Total % of shares owned

D1 600,000 unit shares

Trust Deed No. 1 Neo/150,000/

Trust Deed No. 2 Ngiam/150,000/ Trust Deed No. 3; and

Chuah/125,000/ Trust Deed No. 4 0.00 0.00 0.00 Lim 100,000 unit shares

Chuah/100,000/ Trust Deed No. 7 0.00 0.00 0.00 Neo 150,000 unit shares

Koh/100,000/Tru st Deed No. 5 50,000 150,000 20.00 Ngiam 150,000 unit shares

Koh/100,000/Tru st Deed No. 6 50,000 150,000 20.00 Chuah 225,000 22.50 Koh 200,000 20.00 D2 175,000 17.50 Total 1,000,000 unit shares 100,000 900,000 100.00 [11] The Plaintiff from the date of its incorporation on 18.1.2012 has four directors namely D1, Lim, Ngiam and Neo. This is not disputed. S/N kB2qtgfXyUeti4JMGpm3/g [12] Lim is based in Johor while Ngiam and Neo are Singaporeans who are based in Singapore. As such, the day-to-day operations of the Plaintiff’’s office in Kuala Lumpur were left to the Defendants. [13] The Plaintiff has one bank account with CIMB Bank Berhad bearing account no. 1482-0002663-05-3 (‘Plaintiff’s Account’) where D1 together with Koh are the authorized co-signatories. [14] The present action involves a claim by the Plaintiff against the Defendants for breach of their fiduciary duties and for fraudulent misrepresentation. The facts giving rise to the claims relate to 3 purported projects which will now be narrated. [15] The Defendants at all material time had represented the followings to the Plaintiff: -

a company known as BB Tech Services Sdn Bhd (Co. No. 238452-T) (‘BB Tech’) was purportedly appointed as a contractor by Petronas Dagangan Berhad (Co. No. 101472- H) (‘PDB’) to provide labor, materials, equipment, services and facilities for pipeline inspection work at SC23-SC95 Kertih Regional (‘Project 1’) and that BB Tech purportedly sub-contracted Project 1 to the Plaintiff;

BB Tech was purportedly also appointed as a contractor by Petronas Gas Berhad (Co. No. 101671-H) (‘PGB’) to provide labor, materials, equipment, services and facilities for pigging work at Kertih Regional (‘Project 2’) and BB Tech had S/N kB2qtgfXyUeti4JMGpm3/g purportedly sub-contracted Project 2 to the Plaintiff; and

A company known as Tri-Dias Engineering (M) Sdn Bhd (Co. No. 236533-T) (‘TriDias’) was purportedly appointed as a contractor by Petronas Carigali Berhad (Co. No. 105331-M) (‘PCB’) to provide labor, materials, equipment, services, installed and facilities for fabrication parts for offshore platform (DY1) (‘Project 3’) and TriDias had purportedly sub-contracted Project 3 to the Plaintiff. [16] Pursuant to the above representations and in reliance on the following documents given to the Plaintiff by the Defendants, the Plaintiff had agreed to participate in Project 1, Project 2 and Project 3: For Project 1

Purchase Order No. 1130033543 from PDB (‘PO1’);

(ii) Letter of Award dated 18/12/2012 from BB Tech for the sum of RM531,295.00 for Project 1 (‘LA1’); For Project 2

(iii) Purchase Order No. 330067447 (changed to 330067477) (from PGB (‘PO2’);

(iv) Letter of Award dated 19/12/2012 from BB Tech for the sum of RM623,130.00 for Project 2 (‘LA2’); For Project 3

Purchase Order No. 1130054653 from PCB (‘PO3’); and S/N kB2qtgfXyUeti4JMGpm3/g

(vi) Letter of Award dated 25/07/2013 from TriDias for the sum of RM229,735.00 (‘LA3’). [17] The Defendants subsequently informed the Plaintiff that funds were required for the implementation of Project 1, Project 2 and Project 3 and had asked Koh to pre-sign a certain number of blank cheques drawn from the Plaintiff’s Account purportedly for the ease and convenient of operations of those Projects to which Koh had duly complied. [18] The Plaintiff subsequently realized it was defrauded by the Defendants when it discovered the followings on or about Jun 2015 to January 2016:

BB Tech is a fictitious company that does not exist on the record of Companies Commission of Malaysia (‘SSM’);

TriDias is a fictitious company that does not exist on the record of SSM;

PO1, PO2 and PO3 are fictitious documents;

LA1, LA2 and LA3 are fictitious documents; and

Project 1, Project 2 and Project 3 are fictitious projects. [19] It was also discovered that the cheques from the Plaintiff’s Account were instead used to pay the following parties: No.

183267 Nuri Bistari 400,758.08

183270 Nuri Bistari 250,767.22

183290 D1 18,000.00 4. 183277 D1 12,824.77 S/N kB2qtgfXyUeti4JMGpm3/g [20] The Plaintiff contended that D1 and or D2 had fraudulently represented to the Plaintiff and or led the Plaintiff into erroneous and/or mistaken belief that:

BB Tech is a company that is legally incorporated when it was in fact a fictitious company that does not exist;

TriDias is a company that was legally incorporated when it was in fact a fictitious company that does not exist;

PDB, PGB and PCB had issued PO1, PO2 and PO3 but in fact all the purchase orders are fictitious;

the blank cheques which were pre-signed by Koh were meant for the payments needed for implementation of Project 1, 2 5. 183292 D2 16,640.50 6. 183294 Muhammad Azizul Bin Saharudin 115,744.14 7. 183263 Alia Sarah Binti Zainal Abidin 7,651.50 8. 252016 D2 10.500.00 9. 183274 Muhammad Azizul Saharudin 70,000.00 10. 183295 Muhammad Azizul Saharudin 66,269.55 11. 183266 Alia Sarah Binti Zainal Abidin 12,451.00 12. 183278 Bunga Mas Engineering Sdn Bhd 150,599.00 13. 252004 Bunga Mas Engineering Sdn Bhd 36,000.00 Total 1,168,205.76 S/N kB2qtgfXyUeti4JMGpm3/g and 3 when in fact they were utilized to withdraw monies from the Plaintiff’s Account to pay among other thing D1, D2 and Nuri Bistari Sdsn Bhd, a company in which D1 is a majority shareholder and director; and

Project 1, 2 and 3 existed when in fact they were fictitious projects. [21] The Plaintiff also contended that the Defendants had conspired to defraud the Plaintiff among other thing by fraudulently supplying the Plaintiff with fictitious and or fraudulent information and documents on Project 1, 2 and 3. [22] The Plaintiff further contended that D1 had breached her fiduciary duties as the Plaintiff’s director and or had acted in breach of trust. The Plaintiff also contended that D2 had breached his duty of fidelity as an employee of the Plaintiff. [23] In addition to the above, it is also the Plaintiff’s case that D1 on behalf of herself and also as the trustee and or agent of D2 had on or about 30.9.2016 through various Whatsapp messages and emails acknowledged the debt and or claim and or liability to the Plaintiff. [24] Premised on the above the Plaintiff contended that it had suffered the loss in the sum of RM 1,168,205.76 and RM 57,073.04. S/N kB2qtgfXyUeti4JMGpm3/g Court’s Deliberation [25] Although the Plaintiff’s cause of action is based on fraudulent misrepresentation, there is not much difficulty in the Court concluding that fraud has been established on a balance of probabilities. This is because the evidential burden of proving the existence of the sub-contracts from BB Tech in respect of Project 1 and Project 2 and the sub-contract from TriDias in respect of Project 3 would shift to the Defendants once it is proved to the satisfaction of this Court that neither BB Tech nor TriDias as a legal entity in fact existed. [26] In this regard, the Plaintiff has through PW4 adduced evidence that BB Tech does not exist on the record of SSM. This was what PW4 said:

Please tell the Court what did you found out from your investigation about BB Tech? I found out that BB Tech does not exist on the record of SSM. It is a fictitious company

Can you please explain to the Court how did you found out that BB Tech is a fictitious company? A I went to SSM myself and run a check on BB Tech using company no. 238452-T. I have obtained this company number of 238452-T from Letter of Award No. 1 on page 231 Part C CBD1 and Letter Award No. 2 on page 232 Part C CBD1. The result was there is no company that exists under company number 238452-T However, I found out that there is a company with the name of “BB Tech Services Sdn Bhd” (“Real BB S/N kB2qtgfXyUeti4JMGpm3/g Tech”) that exists but Real BB Tech have a different company number and address with BB Tech. The Company No. for Real BB Tech is 368065-H having its registered and business address at PT 19221, Kawasan Perindustrian Paka, Paka, 23100 Dungun, Terengganu. The corporate information of Real BB Tech can be seen in page 13-20 Part A CBD1. [27] Similarly, PW4 also testified that TriDias does not exist on the record of SSM. PW3 testified name search made on SSM website using few combinations of TriDias also did not yield any results to show TriDias exists on the record of SSM but there was a company named Lean Seng Chang Commercial Development Sdn Bhd that exists under the company number of 236533-T [28] Significantly, PW3 and PW4’s evidence was not rebutted by the Defendants. No evidence was led by the Defendants to show that TriDias with the company number of 236533-T is a company that actually exists on the record of SSM. More specifically, PW4 said:

Please tell the Court what did you found out from your investigation about TriDias? I found out that TriDias does not exist on the record of SSM. It is a fictitious company

Can you please explain to the Court how did you found out that TriDias is a fictitious company? A I went to SSM and found out that (t)here is no company that exists under the name of Tri-Dias Engineering (M) Sdn Bhd or under the company number 236533-T which was stated on Letter of Award No. 3 on page 233-234 Part C CBD1 S/N kB2qtgfXyUeti4JMGpm3/g [29] Neither D1 nor D2 was able to adduce any evidence to rebut the non-existence of BB Tech and TriDias. No attempts were made to call anyone from BB Tech or TriDias to contradict the Plaintiff’s evidence that the 2 said companies were fictitious and non-existence. [30] It was alleged by the Plaintiff that the Defendants had represented to the Plaintiff that BB Tech was appointed by PDB as contractor for Project 1 and BB Tech in turn had sub-contracted Project 1 to the Plaintiff. [31] The Plaintiff claimed that the Defendants had represented that BB Tech was appointed by PDB and PGB as contractor for Project 1 and Project 2 respectively and that BB Tech in turn had sub-contracted Project 1 and Project 2 to the Plaintiff. [32] The representations were made when PO1 and LA1 were given to the Plaintiff in respect of Project 1 and PO2 and LA2 were given to the Plaintiff in respect of Project 2. [33] PO1 was purportedly issued by PDB with the company number of 101472-H but evidence given by PW4 has shown that there is actually no PDB with the company number of 101472-H. In particular, PW4 gave evidence as follows on this issue in Q58 WS-PW4:

Please tell the Court what did you found out from your investigation on Purchase Order No. 1? I found out that the genuine/authentic Petronas Dagangan Berhad have the company number of 88222-D. This can be seen in the corporate S/N kB2qtgfXyUeti4JMGpm3/g information provided by SSM on page 21-28 Part A CBD1. The company number for PDB in Purchase Order No. 1 was stated as 101472-H. this can be seen in page 23 C CBD2. This means PDB with company number 101472-H itself is a fictitious company and therefore Purchase Order No. 1 purported issued by PDB is also fictitious. The genuine/authentic Petronas Dagangan Berhad with company number 88222-D did not issue Purchase Order No. 1 [34] Accordingly, PO1 was issued by a non-existing company. This was not rebutted by the Defendants who did not procure anyone from PDB to testify on the PO1. [35] As regards PO2, although there is a PGB with the company number of 101671-H, it is curious to say the least that PGB would issue a document to a non existing company. No one from PGB was called to testify on this point. [36] As regards PO3, the same was purportedly issued by PCB but evidence given by PW4 has shown that there is no company named PCB with the company number 105331-M actually exists on the record of SSM. What is in existence is only Petronas Carigali Sdn Bhd with the company number 39275-U. In this regard, PW4 gave evidence as follows on this issue in Q60 WS-PW4:

Please tell the Court what did you found out from your investigation on Purchase Order No. 3? I found out that PCB is also a fictitious entity because S/N kB2qtgfXyUeti4JMGpm3/g is no company/entity known as Petronas Carigali Berhad on SSM record. Purchase Order No. 3 purportedly issued by PCB is therefore fictitious. What is in existence on SSM’s record is Petronas Carigali Sdn Bhd and Petronas Carigali Sdn Bhd did not issue Purchase Order No. 3 [37] Again, the Defendants failed to call anyone from PCB to rebut the evidence that PO3 is a fictitious document. [38] Further, given that BB Tech and TriDias are both fictitious companies, it must follow that the purported letter of awards, namely LA 1 and LA2 for Project 1 and Project 2 and LA3 for Project 3 issued to the Plaintiff are also fictitious documents. [39] In fact, not a single shred of documentary evidence has been adduced by the Defendants to show the existence of Project 1, Project 2 and Project 3. No documents were tendered to show that D1, D2 and or Nuri Bistari Sdn Bhd (‘Nuri Bistari’), a company in which D1 is a majority shareholder and director had performed any works connected to the said Project1, Project 2 and Project 3. [40] Neither D1 nor D2 was able to provide satisfactory explanation as to why payments were made from the Plaintiff’s Account to the various third parties and to themselves. The testimonies that these payments were connected to the Project 1, Project 2 and Project 3 were wholly unsupported and lacking any causal link or for that matter even references to any of the Projects. S/N kB2qtgfXyUeti4JMGpm3/g [41] The Plaintiff’s claim is founded on deceit and/or fraudulent misrepresentation. The test of fraudulent misrepresentation is enunciated by the Federal Court in ALW Car Workshop Sdn Bhd v. AXA Affin General Insurance Bhd [2019] 7 CLJ 667 [FC] as follows: ‘[46] On this point, we agree with the Court of Appeal in its findings, as stated in para. [33] of its judgment, that: Whether any particular claim is tainted with fraudulent intent is a question of fact to be inferred from the surrounding circumstances. Making a false statement in the belief that it is true constitutes misrepresentation. However, making a false statement with the knowledge that it is false or not believing it to be true and the intentions to deceive amounts to fraudulent misrepresentation. The test of fraudulent misrepresentation as enunciated by the Privy Council in Baron Akerheilm v. Rolf De Marc [1959] AC 789 PC is as follows: The question was not whether the defendant in any given case honestly believed the representation to be true in the sense assigned to it by the court on an objective consideration of its truth or falsity, but whether he honestly believed the representation to be true in the sense which he understood it albeit erroneously, when it was made.’ [42] This Court in Asia Cosmetics Enterprise Company Limited v. Mississippi Global Sdn Bhd [2022] 1 LNS 503 also opined thus: ‘[18] The relevant elements for fraudulent misrepresentation are stated in Top Glove Corporation Bhd and Anor v. Low Chin Guan & Ors and Another Case (No. 2) 2018 1 LNS 1652, paragraph 71 at page 87: S/N kB2qtgfXyUeti4JMGpm3/g “[71] it is not in dispute that the necessary elements of an action in deceit which is the same as the tort of fraudulent misrepresentation, the following facts must be pleaded and proved, namely: i. There must be a representation of fact made by words or by conduct and mere silence is not enough; ii. The representation must be made with the knowledge that it is false i.e. it must be willfully false or at least made in the absence of any genuine belief that it is true or recklessly i.e. without caring whether his representation is true or false (Derry v. Peek [1889] 14 APP Cas 337); iii. 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; iv. It must be proved that the claimant acted upon the false statements; and v. 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 E R 205 at 211’ [43] Based on the aforesaid cases, it is the judgment of this Court that the Plaintiff has discharged its legal burden to establish its causes of action against the D1 and D2 for fraudulent misrepresentation and or deceit in respect of the alleged Project 1, Project 2 and Project 3. [44] In particulars, by the PO1, PO2 and PO3 and by LA1, LA2 and LA3, the representations to the Plaintiff was that BB Tech was appointed by PDB and PGB as contractor for Project 1 and 2 and they did this by providing the Plaintiff with PO1 and PO2 with the corresponding S/N kB2qtgfXyUeti4JMGpm3/g LA1 and LA2 and the representation that TriDias was appointed by PCB as contractor for Project 3 was made by providing the Plaintiff with PO3 and LA3. Both the Defendants, knowing that the aforesaid representations were false, made the same with the intention that the Plaintiff would act on them which the Plaintiff did in fact act to its detriment. [45] The standard of proof for fraudulent misrepresentation or deceit remains the same in cases involving civil fraud as held by the Federal Court in Sinnaiyah & Sons Sdn. Bhd. v. Damai Setia Sdn. Bhd. [2015] 7 CLJ 584 [FC]: ‘[49] With respect, we are inclined to agree with learned counsel for the plaintiff that the correct principle to apply is as explained in In Re B (Children) (supra). It is this: that at law there are only two standards of proof, namely beyond reasonable doubt for criminal cases while it is on the balance of probabilities for civil cases. As such even if fraud is the subject in a civil claim the standard of proof is on the balance of probabilities. There is no third standard. And “Neither the seriousness of the allegation nor the seriousness of the consequences should make any difference to the standard of proof to be applied in determining the facts’. [46] The Defendants have not adduced any evidence to disprove any of the misrepresentation and or that the Plaintiff had not in fact relied on the same to its detriment. Despite attempts to explain that the payments from the Plaintiff to Nuri Bistari and another company, Bunga Mas were for works connected to the Project1, Project 2 and Project 3, no credible evidence was presented to show that actual works were in fact done. This was not possible simply because the S/N kB2qtgfXyUeti4JMGpm3/g Project 1, Project 2 and Project 3 were non-existence. Thus, fraud has been proven by the Plaintiff on the balance of probabilities. [47] As regards the Plaintiff’s cause of action based on breach of statutory and fiduciary duties and the duty of fidelity, it is my judgment that the Plaintiff has also amply proven the same based on the facts above. [48] D1 as a director of the Plaintiff was entrusted with the operations of the Plaintiff’s office. She owed both fiduciary duties and a duty of fidelity to the Plaintiff. Similarly, as the General Manager, D2 also owed fiduciary duties and a duty of fidelity to the Plaintiff. Neither D1 nor D2 had exercised their duties and or powers for proper purpose and in good faith and in the best interest of the Plaintiff when they:

made the false representations mentioned to the Plaintiff with the fictitious documents;

caused the Plaintiff to participate in Project 1, 2 and 3 with the believe that Project 1, 2 and 3 existed when in fact they are fictitious projects;

caused payments from the Plaintiff’s Account for the fictitious Project 1, Project 2 and Project 3;

caused payments to D1, D2 and Alia; and

acted in collusion in the fraud. [49] Further, despite D1 having direct interest in the subcontracts awarded by the Plaintiff to Nuri Bistari by virtue of D1 being a majority S/N kB2qtgfXyUeti4JMGpm3/g shareholder and director in Nuri Bistari, her interest was never declared to the Plaintiff on both occasions and thereby she has breached section 221(1) Companies Act 2016. [50] The value of Project 1 which was sub-contracted to Nuri Bistari was RM415,035.00 based on letter of award to Nuri Bistari dated 29.12.2012 and the value of Project 2 which was sub-contracted to Nuri Bistari was RM488,504.00 based on letter of award to Nuri Bistari dated 28.12.2012. These were not insignificant sums. [51] In the Defendants’ written submissions, it was contended that the Plaintiff has no locus standi to commence this action because there was no board resolution or shareholders’ resolution adduced that authorized the Plaintiff to bring the action. [52] However, the issue of the Plaintiff’s locus standi to sue is not expressly pleaded in their Defence. It is also not one of the agreed issues filed for the trial. It is not fair to raise this as an issue at the trial as the Plaintiff would be deprived of the opportunity to secure the necessary directors’ resolution to be admitted as evidence if the issue had been brought to their attention before the trial. [53] In any case, there is also no merits in the contention as the Plaintiff had procured 3 of the 4 directors of the company to testify in support of the Plaintiff’s present action against the Defendants. The remaining director is of course D1 herself who would be an interested party. Applying the Duomatic principle, which is a principle of English company law relating to informal approval of actions by a company’s S/N kB2qtgfXyUeti4JMGpm3/g shareholders, it can be said that the present action does in fact have the consent and approval of the Plaintiff’s Board of Directors. That the Duomatic principle extends to the decision of the company’s board of directors was established in Runciman v. Walter Runciman plc [1992] BCLC 1084 at 1092 and Base Metal Trading v Shamurin [2004] EWCA 1316 where it was held that informal and unanimous consent of the board of directors is also effective as a resolution pass at a duly convened meeting. [54] Attempts were made by D1 to plead ignorance of the fraud, that she was at all times merely acting in accordance with the instructions and information given to her by her husband, D2. More specifically, it was contended that D1 had acted in full reliance on the information, documents or data that was presented to her by D2, who is also her husband, beneficial shareholder and the General Manager in the Plaintiff. [55] With respect, it is disingenuous for D1 to deny any knowledge of the fraud. As a director of the Plaintiff, she had a duty to make independent assessment on what was presented to her by D2 notwithstanding the fact that D2 was her husband. Not only was she the highest-ranking officer and a cheque signatory of the Plaintiff in the Plaintiff’s office at the material time, D1 was also a director of Nuri Bistari. She has not been able to show any documentary evidence that Nuri Bistari had performed any works in respect of the Project 1, Project 2 and Project 3 at all. The allusion to one Ghazali who is said to have performed the sub-contract was not supported at all. The said Ghazali was not called to substantiate the Defendants’ story. S/N kB2qtgfXyUeti4JMGpm3/g [56] Another feeble defence raised was that the other directors of the Plaintiff had an equal duty and responsibility to ensure that payments from the Plaintiff’s Account were properly made for legitimate transactions. It is said that D1 had only made the payments after obtaining the approvals from the other co-signatory to the cheques. [57] With respect, this contention belies the fact that the other co-signatory of the Plaintiff’s cheques had signed and approved the payments in reliance on the fraudulent representation by the Defendants as to the existence of the Project 1, Project 2 and Project 3 and that the Plaintiff was awarded the sub-contract by BB Tech and TriDias to perform the same and had in fact performed the works. [58] Finally, the Defendants claimed that the Plaintiff’s action is time bar since the misrepresentations were all made in 2012 and the payments were made in 2013 and early 2014. The Writ in this action was only filed on 30.9.2020, more than 6 years after the last payments. [59] Section 6 Limitation Act 1953 provides that the limitation period for tort is 6 years. However, in an action based on fraud, Section 29(1) Limitation Act 1953 provides for postponement of limitation period until the time the plaintiff has discovered the fraud. The Section reads as follows: - ‘Section 29

Where, in the case of any action for which a period of limitation is prescribed by this Act, either – S/N kB2qtgfXyUeti4JMGpm3/g a) the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent; or b) the right of action is concealed by the fraud or any such person as aforesaid; or c) the action is for relief from the consequences of a mistake, the period of limitation shall not begin to run until the Plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it….’ [60] Thus, as the Plaintiff’s cause of action here is under the tort of deceit, the limitation period of 6 years prescribed under Section 6 Limitation Act 1953 shall not run until the fraud was discovered or could be discovered with reasonable diligence. [61] PW4 in his evidence in chief gave evidence that the Plaintiff only started to become suspicious on 13.1.2015. This is supported by documentary evidence in the form of an email from D2 dated 13.1.2015 asking for more money. [62] Following from this suspicion, enquiry was made by the Plaintiff beginning with an email to the auditor of the Plaintiff on 10.3.2015. In his evidence in chief, PW5 in Q52 of WS-PW5 stated thus:

Please tell the Court what was the Plaintiff’s action when the Plaintiff suspect something was not right? The Plaintiff then start to make enquiry on its own. The first enquiry the Plaintiff made was by contacting the auditor of the Plaintiff to ask for the status on its financial health. S/N kB2qtgfXyUeti4JMGpm3/g This can be seen in page 189 Part B CBD1 where I have wrote an email dated 10/03/2015 to the auditor of the Plaintiff: “Dear JI team, I am Ronnie from Quemax, one of the Director. I am writing this email to find out some of the issues pertaining to our company. Kindly advice who I can contact with and kindly reply only to my email. Thank you. Ronnie Ngiam” I have specifically asked the auditor to reply only to my email because my intention was not to alert the Defendants with my enquiry. To my absolute surprised we were informed by the auditor that they were unable to contact D2 and in fact the Plaintiff still owes them audit fees and no audit was done. Following this Neo was tasked by the Plaintiff around March 2015 to commence an investigation into the said Projects to check the authenticity of: a) BB Tech; b) Purchase Order No. 1 c) Letter Award No. 1; d) Project No. 1 e) Purchase Order No. 2 f) Letter Award No. 2 g) Project No. 2 h) TriDias; i) Purchase Order No. 3; j) Letter Award No. 3; and k) Project No. 3 S/N kB2qtgfXyUeti4JMGpm3/g [63] It was PW4, tasked to investigate, who then discovered on or about June 2015 that BB Tech and TriDias are fictitious companies. Consistent with the discovery of the fraud, the Police Report was lodged by PW4 on 7.1.2016. The Defendants have not shown any evidence to suggest that the Plaintiff had reasons to conduct its investigation at any time prior to June 2015. [64] Accordingly, since the fraud was only discovered by the Plaintiff in June 2015, applying Section 29(1) Limitation Act 1953, the limitation period of 6 years would only start to run from June 2015 and would only expire on 31.5.2021. The Plaintiff therefore is well within time when the Writ of Summons was filed on 30.9.2020. [65] In any case, there is also an acknowledgment of the debt by D1 and D2 to the Plaintiff made via D1’s WhatsApp messages and the drafts settlement agreement that were forwarded by D1 to the Plaintiff for their meeting on 6.8.2016. Such acknowledgment of debt has been held to be sufficient by our Federal Court in Yum Kong Seng & Anor v. Yee Weng Kai [2014] 4 MLJ 478. [66] I am unable to agree with learned counsel for D1 that these acknowledgments of debt were made on a without prejudice basis. There was no indication that the parties had agreed to treat these as ‘without prejudice’ documents and D1 herself never took that stand when testifying. [67] As a result of the Defendant’s fraud and/or conspiracy and/or the Defendants breach of statutory duties and/or fiduciary duties and/or duty of fidelity, the Plaintiff had suffered losses of RM1,168,205.76. S/N kB2qtgfXyUeti4JMGpm3/g [68] The Plaintiff also claimed the loss of RM 57,073.04 being a sum of money that were missing and/or unaccounted for from the Plaintiff’s Account as a result of the fraud and/or conspiracy to defraud and/or breach of duties perpetrated by the Defendants. However, no documentary evidence was adduced in support of the said sum. Conclusion [69] Accordingly, it is my judgment that the Defendants are to pay the Plaintiff the said sums of RM 1,168,205.76 on a joint and several basis. Interests at 5% per annum over the said sums to run from 30.9.2020 until full realization. [70] The Defendants are jointly and severally to pay costs fixed at RM 75,000.00 to the Plaintiff subject to allocator. Dated on the 22nd day of December 2022 ONG CHEE KWAN J Judge of the High Court of Malaya High Court of Kuala Lumpur, NCC2 S/N kB2qtgfXyUeti4JMGpm3/g

Mr. Christopher Vun Shu Tong together with Mr Valantino Vinodh and

Mr. Ahmad Syiimir Suffan together with Mr. Mohd Shahrysham Kamran and Mr. Muhammad Danish Abdul Rasid for 1st Defendant

Mr Hairulallias Shaari together with Mr. Surya Putra bin Mohamed Taulan for 2nd Defendant Messrs. Putra Taulan & Faiq Azizan (Kuala Lumpur)

ALW Car Workshop Sdn Bhd v. AXA Affin General Insurance Bhd [2019] 7 CLJ 667 [FC]

Asia Cosmetics Enterprise Company Limited v. Mississippi Global

Sdn Bhd [2022] 1 LNS 503 Sinnaiyah & Sons Sdn. Bhd. v. Damai Setia Sdn. Bhd. [2015] 7 CLJ 584 [FC]

Runciman v. Walter Runciman plc [1992] BCLC 1084

Base Metal Trading v Shamurin [2004] EWCA 1316

Yum Kong Seng & Anor v. Yee Weng Kai [2014] 4 MLJ 478

Section 221(1) of Companies Act 2016 (‘CA 2016’)

Sections 6 and 29(1) of Limitation Act 1953 S/N kB2qtgfXyUeti4JMGpm3/g