Sarens (Malaysia) Sdn Bhd v Causeway Iron Works Sdn Bhd (WA-22NCC-637-12/2020)

CAUSEWAY IRON WORKS SDN BHD (Company No.: 200201034012 /

LIM CHING SENG (NRIC No.: 820605-14-6031)

JEGATHISVARAN A/L MATHEVAN (NRIC No.: 870614-43-5279) ... DEFENDANTS [IN THE ORIGINAL ACTION] BETWEEN CAUSEWAY IRON WORKS SDN BHD (Company No.: 200201034012 / 601677-D) … PLAINTIFF

SARENS (MALAYSIA) SDN BHD (Company No.: 200901040157 /

2.

HAIKAL QARDAWI WAN ABD

JEGATHISVARAN A/L MATHEVAN (NRIC No.: 870614-43-5279) ... DEFENDANTS [IN THE COUNTERCLAIM] GROUNDS OF JUDGMENT INTRODUCTION [1] Before the court is a commercial dispute concerning crane rental services allegedly provided by the plaintiff to the first defendant in connection with a construction project. The plaintiff claims substantial sums for crane hire based on work orders purportedly issued by the first defendant through its former employee. The first and second defendants, the second defendant being a director of the first defendant, deny liability, asserting that the work orders in question were forgeries created without the first defendant's knowledge or authority, and that the first defendant never engaged the plaintiff’ services nor received any benefit from the alleged crane rental. The first defendant filed a counterclaim seeking declarations that the work orders are void and of no effect, along with damages for conspiracy and negligence allegedly committed by the plaintiff in reliance upon documents the the first and second defendants contend were known or ought to have been known to be suspicious. [2] The central issues for determination revolve around the authenticity of the disputed work orders, whether the first defendant's former employee possessed actual or apparent authority to bind the first defendant to such contracts, the application of principles governing document authentication and the burden of proof in allegations of forgery, and the extent to which the first defendant may be held liable for unauthorised acts allegedly committed by its employee. The court must also consider questions of quantum, including whether the plaintiff has adequately proved its claimed losses, and whether the evidence supports the plaintiff’ claim for payment and allegations of fraudulent trading and conspiracy against the second defendant, or alternatively the first defendant’s counterclaim allegations of negligence against the plaintiff. These grounds of judgment address each of these issues in turn, examining the evidence adduced at trial, the credibility of witnesses, and the applicable legal principles. BACKGROUND FACTS [3] The Plaintiff, Sarens (Malaysia) Sdn Bhd (“Sarens”), is a company involved in the business of heavy lifting and crane rental services. It is part of an international group with over 60 years of experience in the heavy lifting industry. [4] The 1st Defendant, Causeway Iron Works Sdn Bhd (“Causeway”), is a company specialising in steel fabrication and structural works. The 2nd Defendant, Lim Ching Seng, also known as “Benny Lim” (“Benny Lim”), is a director of Causeway. The 3rd Defendant, Jegathisvaran a/l Mathevan, also known as “Joshua” or “Jegan” (“Jegan”), was employed by Causeway from 1.4.2017 as an engineer. The Project [5] In or around July 2019, Samsung C&T (KL) Sdn Bhd (“Samsung”) was awarded a contract by Arah Moden Sdn Bhd (“Arah Modern”), a wholly-owned subsidiary of KLCC (Holdings) Sdn Bhd, for a project described as “The Proposed Construction and Completion of Substructure, Retail Podium, Gallery and Associated Work for Mixed Development on Lot 166 (Lot L), Lot 165 (Lot L1) and Lot 164 (Lot M), Kuala Lumpur City Centre, for Arah Moden Sdn Bhd (Contract No: VMT00952019)” (“the Project”). The contract sum awarded to Samsung was approximately RM742,000,000.00. (Note: Sarens defines the Project as “the KLCC Podium Project” while Causeway defines the Project as “the KLLCC Project” with differences in the scope involved. I shall refer to the project under the contract between Samsung and Arah Modern as “the Project” and issues with regards the different understanding of the scope will be dealt with appropriately as part of the court’s analysis.) [6] On 15.8.2019, Samsung entered into a subcontract agreement with Causeway for ground floor steel structural works. The subcontract sum was RM3,761,663.30. This subcontract represented a relatively small scope of works within the larger scope of the Project. [7] It is undisputed that Causeway had earlier assisted both Samsung and IJM Corporation Bhd in their tendering exercises for steel structural works for the Project. Causeway had initially tendered for a much larger scope of work valued at approximately RM150,000,000.00, but was ultimately only awarded the ground floor steel structural works valued at RM3,761,663.30. The Alleged Work Orders [8] Sarens’ entire claim is premised on five Work Orders which it alleges were issued to it by Causeway. These five Work Orders are: a) L/LA01/012356 dated 9.9.2019 for 1 Terex Demag CC6800 Crawler Crane; b) L/LA02/037632 dated 26.11.2019 for 1 Hitachi Sumitomo SCX2500 Crawler Crane or equivalent; c) L/LA02/097633 dated 26.11.2019 for 1 Terex Demag CC2800 Crawler Crane; d) L/LA01/027158 dated 6.1.2020 for multiple cranes; and e) L/LA01/027159 dated 6.1.2020 for 2 units of 250 Ton Crawler Crane and 4 units of 100 Ton Crawler Crane. (referred to as “Work Orders”) [9] The Work Orders collectively covered the rental of 27 units of cranes for the Project, with a minimum value stated at RM52,140,000.00. Each of the Work Orders appeared on Causeway's letterhead and bore what purported to be the signature of Benny Lim, together with Causeway's company stamp. [10] The Work Orders were delivered to Dharmendra Kumar Varshney (“Dharmendra”), Sarens’ General Manager, by Jegan. Dharmendra dealt exclusively with Jegan throughout and had no direct dealings with Benny Lim or any other representative of Causeway concerning these Work Orders. Events Leading to Discovery of the Alleged Fraud [11] On 2.3.2020, Sarens issued a letter claiming RM2,553,150.00 for rental and storage costs allegedly arising from a postponement of the mobilisation date from 1.3.2020 to 16.3.2020. This letter was sent by Dharmendra to Jegan on 25.3.2020. [12] On 16.4.2020, Jegan sent an email stating that Causeway agreed to the rental and storage claim and requested Sarens to issue invoices for this amount. Sarens subsequently issued proforma invoices dated 4.5.2020 (later changed to 13.5.2020 in some documents), which were sent to Jegan on 5.5.2020. [13] On 1.7.2020, Benny Lim received an email from Rise Engineering Sdn Bhd (“Rise Engineering”), another crane rental company, forwarding a work order purportedly issued by Causeway. This work order bore what appeared to be Benny Lim's signature. Benny Lim immediately recognised that he had not signed this document, as he had never engaged Rise Engineering. [14] Upon further investigation on 2.7.2020, Benny Lim claimed that he discovered documents in Jegan's room at Causeway's premises, including six additional work orders addressed to Sarens and other companies, all bearing what appeared to be allegedly forged signatures of Benny Lim. Causeway's employees attempted to contact Jegan but were unable to reach him. [15] On 7.7.2020, Benny Lim lodged a police report at the Pondok Tanjung Karang Police Station regarding the discovery of the alleged forgeries. On 9.7.2020, Causeway issued an immediate dismissal letter to Jegan and sent notification letters to all implicated companies, including Sarens, informing them of the alleged forgery and fraud. [16] A meeting was subsequently held at Causeway's office on 13.8.2020 attended by representatives of Sarens. During this meeting, Causeway informed Sarens that the Work Orders were forged and that Causeway had never appointed Sarens as a subcontractor. [17] Despite being informed of the alleged forgery, Sarens maintained its position that the Work Orders were genuine and commenced the present action on 30.12.2020, claiming against Causeway, Benny Lim and Jegan jointly and severally as defendants in this suit. [18] Causeway also filed a separate suit against Jegan for conspiracy and obtained judgment in default of appearance on 30.8.2021. Jegan was subsequently declared bankrupt. Jegan did not enter appearance in the present proceedings and did not testify at the trial. RESPECTIVE PARTIES' PLEADED CASE AND RELIEFS SOUGHT Sarens’ Case in the Original Action [19] Sarens’ case is founded on an alleged contractual relationship for the rental and operation of heavy cranes for a construction project said to be the “KLCC Podium Project”. Sarens pleads that Causeway, acting through Jegan, approached it in 2019 to obtain quotations for crane rental and operation. In response, Sarens issued several quotations covering different types of cranes, durations, and rental sums. These quotations are pleaded to contain standard terms, including a cancellation clause providing for substantial liquidated damages in the event of cancellation prior to or during execution. [20] According to Sarens, Causeway accepted those quotations and issued the Work Orders corresponding to them. Sarens pleads that the Work Orders constituted binding contracts, incorporating Sarens’ quotation terms where matters were not expressly addressed. Acting in reliance on the Work Orders, Sarens asserts that it imported specific crane models into Malaysia and incurred significant costs, including shipping, transport, storage, and related expenses, all of which were known to the Defendants. [21] Sarens further pleads that although it was instructed to mobilise the cranes to site, the mobilisation dates were repeatedly postponed by Causeway through Jegan. These postponements, first in March 2020 and subsequently extending into July 2020, allegedly caused Sarens to suffer rental losses and ongoing storage costs. Sarens claims that Causeway expressly agreed to pay for the initial rental and storage losses arising from the postponements and requested invoices, which Sarens duly issued. Despite this, payment was not made, and no effective mobilisation instructions followed. [22] Sarens’ pleaded case culminates in an alleged unilateral termination of the Work Orders by Causeway via correspondence in July 2020, on the asserted ground that the Work Orders were forged by Jegan. Sarens denies this allegation and pleads that the termination was wrongful. It asserts that Jegan acted as Causeway’s agent with actual or ostensible authority, and that Causeway is therefore bound by his acts. As a result of the termination, Sarens primarily seeks the following reliefs: a) A declaration that Benny Lim and/or Jegan carried on the business of Causeway with intent to defraud creditors, including Sarens, or for a fraudulent purpose within the meaning of section 540 of the Companies Act 2016, such that they are personally liable for all debts owed by Causeway to Sarens. b) Judgment for RM2,553,150.00, being Sarens’ claim for rental losses and storage costs arising from the postponement of crane mobilisation. c) Judgment for RM26,070,000.00, claimed pursuant to the cancellation clause in Sarens’ quotations as liquidated damages (“LAD”) arising from the alleged wrongful termination of the Work Orders. d) Interest at 5% per annum on the aggregate sum of RM28,623,150.00 (being the rental and storage claim plus LAD) from the date of the writ until full and final settlement. e) An award of exemplary damages, to be assessed by the court. f) Interest at 5% per annum on all damages awarded by the court until full and final settlement. Causeway and Benny Lim’s Case in the Original Action [23] Causeway and Benny Lim’s primary defence is that no valid or binding contract ever existed between Sarens and Causeway. They deny that Sarens was ever invited to tender, submit quotations, or be appointed as a crane contractor for the project relied upon by Sarens. They contend that Sarens was never part of Causeway’s contractor selection process and that the alleged quotations and Work Orders were never received, issued, or authorised by Causeway. [24] Central to the Defendants’ case is the assertion that Jegan had no authority, actual or ostensible, to bind Causeway in contractual dealings of this nature. The Defendants deny that Jegan was ever appointed as Project Manager and plead that his role was limited to technical coordination and quality assurance functions. They further assert that responsibility for contractor appointment, procurement of machinery, and contractual commitments lay elsewhere within the company structure. [25] The Defendants also dispute Sarens’ characterisation of the underlying project. They plead that Causeway was not the main contractor for the Project as alleged, but merely a subcontractor for a limited scope of steel works under a separate contract of comparatively modest value. On this footing, the Defendants contend that the scale, duration, and cost of the cranes purportedly contracted by Sarens were commercially irrational, unnecessary, and wholly inconsistent with the actual scope of works undertaken by Causeway. [26] The Defence pleads that the Work Orders relied upon by Sarens form part of a series of forged documents created without the knowledge or approval of Causeway, bearing falsified signatures of its directors. The Defendants assert that these forgeries came to light only in mid-2020, following internal discovery of irregular documents and complaints from other third parties. Upon discovery, Causeway pleads that it terminated Jegan’s employment, lodged a police report, and notified affected parties, including Sarens, that the documents were invalid. On this basis, the Defendants deny any liability for Sarens’ alleged losses. Causeway and Benny Lim’s Case in the Counterclaim [27] In its Counterclaim, Causeway as the sole plaintiff, named Sarens, Dharmendra, Haikal Qardawi Wan Abd Halim (“Haikal”), Former Sales Executive for Sarens, and Jegan as defendants. It advances a positive case that Jegan engaged in a deliberate and unauthorised scheme to fabricate work orders and related documents, purporting to bind Causeway to multiple crane suppliers, including Sarens. The Counterclaim pleads that this conduct was carried out without authority, outside the scope of employment, and in breach of Jegan’s duties. [28] Causeway further pleads that Sarens, through its representatives, dealt exclusively with Jegan and failed to verify his authority or seek confirmation from the company’s directors or authorised officers. It is alleged that Sarens’ representatives acknowledged, upon confrontation, that they had never communicated with Causeway’s management and had relied solely on Jegan’s representations. [29] On this footing, Causeway pleads that any losses suffered by Sarens were not caused by Causeway but arose from Sarens’ own failure to exercise due diligence and its dealings with an unauthorised individual. The Counterclaim seeks relief against Jegan and, where relevant, against Sarens, on the basis that the forged documents exposed Causeway to reputational harm, disruption, and potential third-party claims, all of which necessitated remedial action, including investigations and reports to the authorities. The primary reliefs sought by Causeway are as follows: a) A declaration that the purported Work Orders and related documents relied upon by Sarens were forged, unauthorised, and never validly issued by Causeway, and therefore do not give rise to any contractual liability on the part of Causeway. b) A declaration that Jegan had no actual, implied, or ostensible authority to issue work orders, enter into contracts, or otherwise bind Causeway in respect of crane rental or similar arrangements. c) Consequential declaratory relief that Causeway is not liable for any claims, losses, invoices, liquidated damages, or alleged contractual obligations asserted by Sarens arising from the forged Work Orders. d) Relief that Jegan be held liable to indemnify Causeway for all losses, exposure, costs, liabilities, or claims arising from his alleged unauthorised acts, forgery, and misconduct, including claims brought by Sarens and other third parties. Sarens’ Case in the Counterclaim [30] In its defence to the Counterclaim, Sarens maintains its pleaded position that Jegan acted with the apparent authority of Causeway and that it was reasonable, in the circumstances, for Sarens to rely on that authority. Sarens denies that it acted negligently or failed to undertake reasonable verification, pointing to Jegan’s role, title, and conduct in prior dealings as pleaded indicators of authority. [31] Sarens further denies any knowledge of forgery or fabrication and pleads that it acted in good faith throughout the transaction. It disputes Causeway and Benny Lim’s narrative that the Work Orders were commercially absurd or inconsistent with the Project, asserting instead that the Defendants’ internal arrangements, project scope, or subsequent disputes cannot negate contracts that were validly formed. [32] In response to the allegation that it dealt exclusively with Jegan at its own risk, Sarens reiterates its case that the law of agency binds the principal where an agent is held out as having authority. Sarens therefore denies liability in the Counterclaim and maintains that responsibility for any internal misconduct by Jegan lies with Causeway and its management, not with an external contractor who relied on representations made in the ordinary course of business. Status of the Defendants in the Counterclaim [33] Dharmendra and Haikal are no longer parties to the suit. The High Court struck out the Counterclaim against them on 20.10.2021, a decision upheld by the Court of Appeal on 12.10.2022. [34] Jegan had a Judgment in Default entered against him on the Counterclaim on 8.3.2024. WITNESSES [35] Four witnesses appeared for Sarens as follows: a) PW1 is Haikal Qardawi Bin Wan Abd Halim (Haikal), who is a former Sales Executive for Sarens, having worked there for seven years until September 2021. His evidence primarily relates to the history of communications with Jegan regarding potential crane rentals for multiple projects (Malacca, Datum Jelatek, CSC), and the specific negotiations, quotation preparations, and site visits for the disputed Project. He testified that he had dealt with Jegan as Causeway’s representative since 2017 using the same email address (joshuajegathisvaran14@gmail.com) for all projects; that he prepared and emailed the disputed quotations to Causeway based on instructions from his Country Manager (Dharmendra); that he attended a Site Induction Meeting at the KLCC site on 13.3.2020 where he met Causeway’s Site Manager, Jonathan J. Visuvasam (“Jonathan”); that he attempted to meet Benny Lim on 18.5.2020 to collect an advance deposit but was intercepted by Jegan, who claimed Benny Lim had an emergency; and that he eventually met Benny Lim on 13.8.2020 after Causeway claimed the Work Orders were forgeries, which led him to file a police report on 19.8.2020, as he found it unbelievable that Jegan could have acted without authority given their extensive prior dealings. His Witness Statement is marked as WS-PW1. b) PW2 is Jonathan J. Visuvasam (Jonathan), who is a former Site Manager for Causeway, employed from 13.9.2019 until December 2020. His evidence primarily relates to confirming the Jegan’s role as the Project Manager and his interactions with Sarens regarding Site Induction Meetings at the Project site. He testified that Jegan was his direct superior and the designated Project Manager for the Project to whom he reported; that he was instructed by Jegan to coordinate between Sarens and the main contractor (Samsung) for site inductions, leading him to meet Chandra Segaran, Sarens’ Safety, Health, Environment and Quality Manager on 13.3.2020; and that he communicated with Sarens regarding site closures during the Movement Control Order and Health Declaration Forms, noting that he never verified Jegan’s instructions with other directors as Jegan was his boss. His Witness Statement is marked as WS-PW2. c) PW3 is Ganeshwaran a/l Kanashagaran (“Ganesh”), who is the Finance Manager for Sarens, having worked there for three years. His evidence primarily relates to the quantification of Sarens’ claim for LAD, loss of rental, and out-of-pocket expenses, as well as the history of invoicing and financial records related to the Project. He testified that Sarens is claiming RM26,070,000.00 in LAD based on cancellation clauses within the quotations; that Sarens incurred RM1,415,190.21 in actual out-of-pocket costs paid to its service provider, Bayuvest (M) Sdn Bhd (“Bayuvest”), for shipping and customs duties; that Causeway had previously agreed to pay RM2,553,150.00 for loss of rental and issued a Payment Certificate for RM1,000,000.00, although no money was ultimately received; that Sarens owes its parent company (Sarens NV) €478,638.30 for transporting cranes from Egypt and Belgium; and that the Defendants refused an invitation to inspect the imported cranes to verify their existence. His Witness Statement are marked as WS-PW3A (Main) and WS-PW3B (Supplementary). d) PW4 is Dharmendra Kumar Varshney (Dharmendra), who is the former Country Manager for Sarens, having served in that role until 31.5.2021 and worked for the company for nearly ten years. His evidence primarily relates to the negotiation and execution of the disputed Work Orders, Sarens’ internal due diligence and approval processes with Sarens HQ, and the operational history regarding mobilisation attempts and site inductions for the Project. He testified that he dealt with Jegan believing him to be Causeway’s Project Manager; that he obtained legal and commercial clearance from Sarens HQ to accept five Work Orders with a total minimum value of RM52,140,000.00; that he conducted credit checks using a letter of support dated 5.8.2019 addressed to Samsung which confirmed that Causeway held an existing credit facility of RM38 million and stated the bank's willingness to consider an additional RM50 million facility for the Project (“OCBC Facility Letter”) and audited accounts provided by Jegan; that Sarens attended site induction meetings where he met Causeway’s Site Manager, Jonathan; that Sarens incurred actual costs importing cranes and funding Jegan’s inspection trip to Europe; and that he denied allegations of conspiracy or negligence, stating that he only met Benny Lim in August 2020 after the fraud was alleged. His Witness Statement is marked as WS-PW4. [36] Seven witnesses appeared for Causeway as follows: a) DW1 is Haslinda Binti Shapie, who is a Forensic Document Examiner for the Department of Chemistry Malaysia. Her evidence primarily relates to the forensic examination of documents, specifically the comparison of the disputed signatures attributed to Benny Lim against sample signatures. She testified that she holds a Master’s degree in Forensic Science and that, upon examination, the questioned signatures (specifically Q1A through Q7A and Q10A) had a “different structure” from the sample signatures provided, which meant she could not carry out comparisons, indicating a fundamental mismatch between the signatures. Her Affidavit pursuant to Order 40A Rule 3 Rules of Court 2012 was filed as Enclosure 153. b) DW2 is Norashikin Binti Nasharuddin (“Norashikin”), who is a Quantity Surveyor employed by Causeway. Her evidence primarily relates to the discovery of fraudulent documents and communications attributed to Jegan, and the confirmation of Causeway’s actual sub-contracting arrangements. She testified that she was contacted by third parties regarding fake work orders and emails linked to Jegan, which revealed the use of a bogus email address (causewayironworks_sb@yahoo.com) and resulted in her lodging a police report with Benny Lim on 26.4.2021. She further testified that she had no dealings with Sarens and confirmed that Hiap Tong Crane and Transport Sdn Bhd (“Hiap Tong”) was the actual crane supplier appointed for the Project, for whom she prepared payment certificates. His/her Witness Statement is marked as WS-DW2. c) DW3 is Si Chin Chuan, also known as “Elvin Si” (“Elvin”), who is the Contract Manager for Causeway, having joined the company in August 2019. His evidence primarily relates to the commercial management of Causeway’s projects, the internal procedures for tender exercises and sub-contractor appointments, and the specific details regarding the appointment of Hiap Tong for the Project. He testified that he oversees the contract and quantity surveyor teams responsible for reviewing quotations and finalising terms with directors; that he witnessed the signing of the sub-contract between Causeway and Samsung; that Causeway officially appointed Hiap Tong as the crane supplier after a price comparison with other vendors (excluding Sarens); that the Jegan was part of the project team dealing with technical aspects rather than commercial contracts; and that he had never heard of or dealt with Sarens until July 2020, when he was informed of the fake work orders. His Witness Statement is marked as WS-DW3. d) DW4 is Boo Kwee Teng (“KT Boo”), who is the Chief Operating Officer (COO) of Causeway, responsible for leading the project team and overseeing technical aspects of operations since

His evidence primarily relates to the technical scope of the Project, the role of Jegan within the company, and the technical impossibility of Sarens’ alleged Work Orders. He testified that Jegan was merely a project team member assigned to Quality Assurance/Quality Control (QA/QC) and technical documentation without authority over commercial appointments; that Causeway actually appointed Hiap Tong for crane supply; that Sarens’ claim involving 27 units of cranes was impossible as the site could only fit a 650-ton crawler crane and a 160-ton mobile crane; and that the “site induction” attended by Sarens was merely a safety briefing by the main contractor (Samsung), not an indication of appointment. His Witness Statement is marked as WS-DW4. e) DW5 is Lim Ching Seng (Benny Lim), who is the 2nd Defendant and a Director of Causeway, having joined the company in 2003. His evidence primarily relates to the denial of any contractual relationship with Sarens, the allegation that the Work Orders were forged, and the technical and commercial impossibility of Sarens’ claim. He testified that he never signed the disputed Work Orders and that the signatures attributed to him were forgeries; that Causeway officially appointed Hiap Tong, not Sarens, for the Project; that Sarens’ claim involving 27 units of cranes was physically impossible as the site could only fit one 650-ton crawler crane; that the alleged contract value of RM52 million was illogical given Causeway’s actual sub-contract value of approximately RM3.76 million; and that Sarens was negligent for dealing solely with Jegan, a junior employee without authority, while failing to verify details with the company directors. His Witness Statement is marked as WS-DW5. f) DW6 is Chiang Fook Lung, also known as “Ah Lung” (“Chiang”), who is an ID Contractor and the Construction Manager for Causeway. His evidence primarily relates to the technical coordination with legitimate crane suppliers, Hiap Tong and Public Crane Heavy Equipment Sdn Bhd (“Public Crane”), the discovery of Jegan’s fraudulent activities, and the internal hierarchy of Causeway. He testified that he engaged in detailed technical discussions with crane suppliers such as Hiap Tong and Public Crane, providing them with layout drawings and steel material weights to assess site suitability, which contrasted with the lack of such technical exchange with Sarens; that he attempted to arrange meetings regarding Jegan’s matter; and that he reported directly to Benny Lim and KT Boo (DW4), asserting that Jegan, as QA/QC Manager, was of equal rank and not his superior. He gave evidence orally (viva voce) without a witness statement. g) DW7 is Tai Kian Mon, also known as “Vincent” (“Vincent”), who is a former Sales and Marketing representative for Total Lift Crane Sdn Bhd (“Total Lift”). His evidence primarily relates to a similar fraud scheme perpetrated by Jegan against Total Lift in relation to the same project, demonstrating Jegan’s modus operandi. He testified that he was approached by Jegan in 2019 regarding the supply of cranes for the Project; that Jegan provided fake details and work orders while actively preventing him from contacting Benny Lim; that Total Lift paid RM95,000.00 to Jegan, including for alleged “PE Endorsements” (certifications purportedly required for cranes to be used in the Project, which Jegan claimed he could facilitate for a fee); and that he eventually discovered the fraud after visiting Causeway’s factory and meeting Benny Lim, which led him to file a police report on 13.7.2020. His Witness Statement is marked as WS-DW7. ISSUES TO BE TRIED [37] The parties filed a Statement of Agreed Statement of Issues to be Tried dated 2.6.2022, which identified the following issues for determination in this suit: Main Claim [38] The Issues to be Tried in the Main Action are as follows: a) Issue 1: Whether Jegan had the express or implied authority to enter into contracts with Sarens for and on behalf of Causeway. b) Issue 2: Whether Causeway has appointed Sarens as a sub-contractor. c) Issue 3: Whether the five Work Orders between Sarens and Causeway are valid and binding on Causeway. d) Issue 4: Whether the five Work Orders were products of forgery, and if so, whether such forgery affects the validity of the five Work Orders as against Sarens. e) Issue 5: Whether Causeway had wrongfully terminated its five Work Orders to Sarens, or whether the five Work Orders were in fact and/or in law void ab initio. f) Issue 6: Whether Sarens may resort to the protection of the Indoor Management Rule (the Turquand Rule), or whether the surrounding circumstances imposed a duty of inquiry on Sarens and/or its employees. g) Issue 7: Whether Sarens has suffered loss and damage, and if so, whether such loss and damage were caused by Causeway and/or contributed to by Sarens. h) Issue 8: Whether Causeway is liable to pay

8.1 liquidated ascertained damages of RM26,070,000.00 as stated in the five Work Orders and/or Sarens’ Quotations; and/or

8.2 Sarens’ rental and storage claim of RM2,553,150.00. k) Issue 9: Whether Causeway and/or Benny Lim owed Sarens a duty of care in respect of the actions of Jegan in this matter. l) Issue 10: If Issue 9 is answered in the affirmative, whether Causeway and/or Benny Lim failed to exercise reasonable care in this matter, and if so, whether Causeway and/or Benny Lim were negligent and/or reckless in failing to do so. m) Issue 11: Whether Benny Lim carried on Causeway’s business with the intent to defraud Sarens. n) Issue 12: If Issue 11 is answered in the affirmative, whether Benny Lim is jointly and severally liable with Causeway for Sarens’ claim of RM26,070,000.00 and/or RM2,553,150.00, or such amount as adjudicated by this court. Counterclaim [39] The Issues to be Tried in the Counterclaim are as follows: a) Issue 13: Whether Sarens (1st Defendant in the Counterclaim) owed any duty of care to Causeway (Plaintiff in the Counterclaim) in this matter. b) Issue 14: If Issue 13 is answered in the affirmative, whether Sarens (1st Defendant in the Counterclaim) failed to exercise reasonable care in this matter, and if so, whether Sarens (1st Defendant in the Counterclaim) was negligent and/or reckless in failing to do so. c) Issue 15: Whether the six work orders addressed to Sarens referred to in paragraph 9.20 of the Re-Amended Defence and Re-Amended Counterclaim dated 1.6.2020 were products of forgery. d) Issue 16: If Issue 15 is answered in the affirmative, whether the said six work orders are in fact and/or in law void ab initio. e) Issue 17: Whether there was any complot and/or conspiracy between Jagen (4th Defendant in the Counterclaim) and employees of Sarens (1st Defendant in the Counterclaim), namely Dharmendra and/or Haikal. f) Issue 18: Whether Causeway (Plaintiff in the Counterclaim) is entitled to the declaratory reliefs prayed for in paragraphs 40.1 and 40.2 of the Re-Amended Defence and Re-Amended Counterclaim dated 1.6.2021 (Enclosure 24). g) Issue 19: Whether Sarens (1st Defendant in the Counterclaim) is liable to pay Causeway (Plainitff in the Counterclaim) general damages, exemplary damages and/or aggravated damages. [40] Notwithstanding the above issues, from the facts of the case, defences relied on by Causeway and Sarens in the Original Action and Counterclaim respectively, and the submissions of parties, the court frames the following main issues for deliberation which this court considers pivotal to the resolution of this case: a) Whether Sarens has proved, on the balance of probabilities, that the five Work Orders were genuine and contractually effective documents bearing Benny Lim’s authentic signatures (and, if not, whether they were forgeries and thus void ab initio). b) Whether Jegan had any actual (express or implied) or apparent authority to issue the Work Orders and thereby bind Causeway in commercial contracts for crane rental of the nature and magnitude alleged by Sarens. c) Whether Sarens is entitled to rely on the indoor management rule (the Turquand rule) to bind Causeway on the basis of the five Work Orders. d) Whether Sarens has proved that Benny Lim knowingly carried on the business of Causeway with intent to defraud creditors so as to attract personal liability for fraudulent trading under section 540 of the Companies Act 2016. e) Whether, in the event of a finding that the Work Orders were genuine, Sarens has proved its entitlement to damages, including liquidated ascertained damages and rental and storage losses, as pleaded. f) Whether Causeway is entitled to declaratory relief that no contractual relationship existed between the parties and that the five Work Orders relied upon by Sarens, together with the six additional work orders discovered in Jegan’s possession, are forged documents that are null, invalid and void ab initio. g) Whether Sarens owed Causeway a duty of care in tort to verify the authenticity of the Work Orders and Jegan’s authority, and if so, whether Sarens breached that duty so as to be liable in negligence for the losses alleged by Causeway. [41] The court’s analysis will be structured on the framed issues above. The Issues to be Tried as filed will be revisited for determination upon the court’s findings being made on the issues above framed by this court. ANALYSIS AND FINDINGS OF THE COURT Burden and Standard of Proof [42] The burden of proof in civil cases is governed by Sections 101 to 104 of the Evidence Act 1950. Section 101 provides that whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist. The burden of proof lies on the party who would fail if no evidence at all were given on either side. [43] In the present case, Sarens asserts that valid work orders were issued by Causeway. The burden of proving the authenticity and validity of these Work Orders rests throughout on Sarens. Causeway and Benny Lim have raised forgery as a defence, but this does not shift the initial burden from Sarens to prove the genuineness of the documents upon which it relies. [44] This principle was clearly affirmed by the Federal Court in Teoh Kiang Hong v Theow Say Kow @ Teoh Kiang Seng, Henry & Ors [2025] 1 MLJ 81, where the court stated: “[88] First and foremost, we must clarify that Sinnaiyah has settled the law on the standard of proof required to prove fraud in a civil claim, and that standard is one, on the balance of probabilities, and not beyond reasonable doubt.” [45] The Federal Court further held in the same case: “[97] …If what he claims is not proved, it does not matter whether or not the other party succeeded in rebutting or otherwise proving its defence…” [46] In the case of Letchumanan Chettiar Alagappan (As Executor to SL Alameloo Achi (Deceased)) & Anor v Secure Plantation Sdn Bhd [2017] 5 CLJ 418, the Federal Court emphasised that the burden is on the party relying on a document to prove its genuineness. The court stated at pages 458B-459G: “[60] It would pan out that the respondent, who was the plaintiff, had both the 'burden of proof' to make out a prima facie case as well as the initial onus of proof to adduce evidence to prove the claim. The onus of proof would only shift to the appellants if the respondent had made out a prima facie case. That remained so even though forgery was pleaded. 'Now, there is a great distinction between a civil and criminal case, where a question of forgery arises. In a civil case, the onus of proving the genuineness of a deed is cast upon the party who produces it and asserts its validity. If there be conflicting evidence as to the genuineness, either by reason of alleged forgery or otherwise, the party asserting the deed must satisfy the jury that it is genuine'.” [47] Accordingly, Sarens must prove on a balance of probabilities that the five Work Orders upon which its entire claim is founded are genuine documents validly issued by authorised representatives of Causeway. If Sarens fails to discharge this burden, its claim must fail, regardless of whether Causeway and Benny Lim succeed in proving forgery. The Authenticity of the Five Work Orders Methods of Proving Authenticity of Signatures [48] Section 67 of the Evidence Act 1950 provides that if a document is alleged to be signed or to have been written wholly or in part by any person, the signature or the handwriting of so much of the document as is alleged to be in that person's handwriting shall be proved to be in his handwriting. Section 68 of the Evidence Act 1950 further provides that if a document is required by law to be attested, it shall not be used as evidence until one attesting witness at least has been called for the purpose of proving its execution, if there is an attesting witness alive and subject to the process of the court and capable of giving evidence. [49] The Work Orders in this case are not documents required by law to be attested. Various methods may therefore be employed to prove the authenticity of the signatures. In RHB Bank Bhd v Dominance Timber Industries Sdn Bhd & Ors And Another Case [2009] 7 CLJ 654, the High Court comprehensively set out six methods for proving the authenticity of a signature at pages 659H-660B: “The handwriting of a person may be proved in the following ways: (a) by the evidence of the writer himself (see s. and s. 67); (b) by the evidence of another person who has seen him writing the document (see s. 60 and s. 68); (c) by the evidence of a person who is acquainted with the handwriting of a person by whom the writing in question is supposed to have been written and signed (s. 47); (d) by the evidence of handwriting expert (s. 45); (e) comparison by the court, of the writing or signature in question with any others proved to the satisfaction of the court to be genuine (see s. 73); (f) the court may direct the person who is alleged to have written the document to write any word or figure to enable the court to compare.” [50] I shall address each method in turn to determine whether Sarens has discharged its burden of proving the authenticity of the signatures on the five Work Orders. First Method: Evidence from Benny Lim [51] Benny Lim's evidence on the critical issue of the signatures was clear, direct, and unequivocal: he vehemently and consistently denied signing any of the five Work Orders. He stated categorically that the signatures purporting to be his on the Work Orders were not signed by him. This denial was specific and extended to each of the five Work Orders individually. [52] Benny Lim's testimony remained firm and consistent throughout the trial. He maintained his denial when examined-in-chief, when subjected to rigorous and extensive cross-examination by Sarens’ counsel over several days from 24.9.2024 to 1.10.2024, and when re-examined by his own counsel. There was no contradiction, wavering, or inconsistency in his evidence on this crucial point. Benny Lim did not equivocate or express uncertainty. His position was absolute: he did not sign the Work Orders. [53] The principle established in Wong Swee Chin v PP [1980] 1 LNS 138; [1981] 1 MLJ 212, a decision of the Federal Court, is that evidence which is not challenged in cross-examination is deemed to be admitted. Although Sarens’ counsel cross-examined Benny Lim at length, no effective challenge was mounted to shake his fundamental denial that he signed the Work Orders. The cross-examination did not produce any admission, contradiction, or evidence that would cast doubt on Benny Lim's denial. His testimony on this central issue remained unshaken. [54] Significantly, Sarens has not provided any evidence to contradict Benny Lim's denial. Sarens’ witnesses never testified that they saw Benny Lim sign the Work Orders. Dharmendra, who was the principal witness for Sarens and who allegedly received the Work Orders from Jegan, was specifically questioned during cross-examination on 15.7.2024 about whether he witnessed Benny Lim's signature. His answer was an unequivocal “No” for each of the five Work Orders. There is no evidence from any source suggesting that Benny Lim admitted to signing these documents, whether before or after the dispute arose. The absence of any contradictory evidence from Sarens is a significant gap in Sarens’ case. Second Method: Evidence from Witnesses to the Signing [55] The second method of proving the authenticity of a signature is through the evidence of another person who has actually seen the writer signing the document. This method traditionally refers to a witness to the signature at the time it was made. The High Court in RHB Bank Bhd v Dominance Timber Industries Sdn Bhd identified this as one of six recognised methods for proving handwriting, stating that authenticity may be proved “by the evidence of another person who has seen him writing the document (see s. 60 and s. 68)”. In the present case, Sarens bears the burden of adducing evidence that Benny Lim signed the Work Orders, or at minimum, that a witness saw him do so. [56] Sarens called four witnesses: Haikal (PW1), Jonathan (PW2), Ganesh (PW3) and Dharmendra (PW4). Not one of these witnesses testified that they witnessed Benny Lim sign any of the five Work Orders. During cross-examination, each of Sarens’ witnesses confirmed they did not witness Benny Lim's signature on any of the documents. None of Sarens’ witnesses ever saw Benny Lim sign any of the five Work Orders. This unanimous absence of direct witness testimony is a significant deficiency in Sarens’ case on authenticity. [57] Dharmendra, who was Sarens’ principal witness and the person who allegedly received the Work Orders from Jegan, was specifically and systematically questioned during cross-examination on 15.7.2024 about whether he witnessed Benny Lim's signature on each of the five Work Orders. The exchanges were as follows: [58] For the first work order (Bundle B4, pages 761-764): Back to the work order at B4 page 761. Look at the signing page which is at page 764. …… Did you eyewitness Benny Lim Ching Seng signature? [59] For the second work order (Bundle B4, pages 765-766): Page 766, signature part. Did you eyewitness the signature of Benny Lim Ching Seng? [60] Third work order (Bundle B4, pages 767–768): Look at page 768, signature part. Did you eyewitness the signature of Benny Lim Ching Seng? [61] Fourth work order (Bundle B4, pages 769–771): Next page, look at page 770. At the signature part, did you eyewitness the signature of Benny Lim Ching Seng? [62] Fifth work order (Bundle B4, pages 772–774): Look at page 773, signature part. Did you eyewitness the signature of Benny Lim Ching Seng? [63] This systematic denial was repeated for each and every work order upon which Sarens’ entire claim is founded. [64] The absence of any witness who saw Benny Lim sign the Work Orders represents a critical gap in Sarens’ evidence. In Chen Jin Quan v Tenaga Nasional Berhad [2025] CLJU 112, the High Court described the failure to prove authenticity via any of the six recognised methods as a “critical deficient in Sarens’ efforts to discharge its evidential burden.” Sarens’ failure to employ this second method is particularly significant given that Dharmendra was allegedly the recipient of the Work Orders and had allegedly been dealing with Jegan over several years. Despite this, Dharmendra never witnessed any signature, never verified any signature, and simply accepted the documents at face value from Jegan. Sarens has thus failed to adduce evidence from any witness who saw Benny Lim affix his signature to any of the five Work Orders, leaving this method of proof entirely unsubstantiated. Third Method: Evidence from Persons Acquainted with Benny Lim's Handwriting [65] The third method of proving the authenticity of a signature is through the evidence of a person who is acquainted with the handwriting or signature of the alleged signatory and who can give opinion evidence as to whether the questioned signature is genuine. This method is provided for under Section 47 of the Evidence Act 1950. In RHB Bank Bhd v Dominance Timber Industries Sdn Bhd & Ors, the High Court recognised, as one of the accepted modes of proving authenticity, the testimony of a person who is familiar with the handwriting of the individual alleged to have written and signed the document, in accordance with section 47 of the Evidence Act. [66] Sarens did not call any witness who was acquainted with Benny Lim's handwriting or signature to give opinion evidence about whether the signatures on the Work Orders appeared genuine or consistent with Benny Lim's usual signature. This failure is particularly significant in light of the evidence concerning Sarens’ dealings with Causeway. According to Sarens’ own case, Dharmendra had been dealing with Jegan since at least 2017 on queries regarding crane rental for various projects. Dharmendra testified that he had received numerous documents purporting to be from Causeway over the course of these dealings. These included letters, emails with attachments, and other correspondence that allegedly originated from Causeway. [67] During cross-examination on 15.7.2024, Dharmendra was shown various documents bearing signatures purporting to be those of Benny Lim and was asked to compare the signature patterns. In relation to a letter at page 425 of Bundle B2, counsel for Causeway and Benny Lim asked Dharmendra: Look at the signature of this letter at page 425. You agree with me that the pattern of this signature is different from the five work orders in question?.... Agree.” [68] When shown another document at pages 565–566 of Bundle B3, Dharmendra was again asked to compare the signature pattern with those on the Work Orders: Now, look at the signature pattern at page 566 and compare it with the signature patterns found on the work orders in question. The first is at page 764 of Bundle B4. The second is at page 766. The third is at page 768. The fourth is at pages 770 and 771, and the fifth is at pages 773 and 774. Look at these and compare them with the signature at page 566. You agree with me that the pattern of the signature looks fundamentally different? Yeah, agree.” [69] Despite these admissions that he could observe differences in signature patterns, Dharmendra was never asked to, and did not, give evidence that he was familiar with Benny Lim's genuine signature or that the signatures on the Work Orders appeared consistent with any previous documents he had received bearing Benny Lim's signature. [70] The failure to call any witness acquainted with Benny Lim's handwriting to give opinion evidence pursuant to Section 47 of the Evidence Act 1950 represents a critical omission in Sarens’ case. Given that Dharmendra allegedly had been dealing with documents from Causeway over several years, Sarens could have elicited evidence from him regarding his familiarity with Benny Lim's signature and whether, in his opinion based on such familiarity, the signatures on the Work Orders appeared genuine. The fact that Sarens did not adduce such evidence, despite having the opportunity to do so, further undermines Sarens’ ability to prove the authenticity of the signatures on the five Work Orders. In the case of Chen Jin Quan v Tenaga Nasional Berhad, the High Court described the failure to utilise any of the recognised methods for proving handwriting as a “critical deficient” in discharging the evidential burden of proving authenticity. The same observation applies with equal force in the present case. Fourth Method: Expert Evidence [71] Causeway and Benny Lim called DW1, Haslinda Binti Shapie, as their expert witness. DW1 is a Forensic Document Examiner from the Document Examination Division, Forensic Science Analysis Centre, Department of Chemistry Malaysia. She is a gazetted government officer who was appointed as a Forensic Document Examiner on 1.6.2015 and has held that position for at least seven years. DW1 has been a Science Officer in the Document Examination Division since 7.4.2014. She holds a Master of Science in Forensic Science from Universiti Teknologi Malaysia, which she obtained in

Prior to testifying in this case, DW1 had given expert evidence in 28 cases in court. Her qualifications and experience establish her as a qualified expert in handwriting and signature identification within the meaning of Section 45 of the Evidence Act 1950. [72] DW1 conducted a comprehensive forensic examination comparing the questioned signatures on the Work Orders with specimen signatures of Benny Lim. The forensic examination was conducted under laboratory references 22-FR-B-08453, 22-FR-B-09957, and 22-FR-B-11301. The questioned signatures were marked as Q1A to Q7A (on documents Q1 to Q7) and were placed in Envelope W. For comparison purposes, DW1 examined fifty specimen signatures of Benny Lim obtained from commercial documents dated between 2018 and 2022. These specimen signatures, marked as Specimens S1 to S34 (contained in Envelopes Y and Z), were obtained from banking documents, company documents, and other official records known to bear Benny Lim's genuine signature. The examination was thorough and methodical, comparing the questioned signatures against a substantial volume of specimen signatures spanning a period of four years. DW1 prepared a detailed forensic report dated 14.6.2022, which was exhibited as Exhibit HBS-2 in her expert affidavit filed pursuant to Order 40A Rule 3 of the Rules of Court 2012. [73] DW1's expert report and oral testimony revealed two critical findings. First, the signatures on the five disputed Work Orders (marked Q1A to Q5A) were structurally different from the specimen signatures of Benny Lim. In Paragraph (i) of her report, DW1 stated that these questioned signatures “were different in structure from the specimen signatures... and therefore could not carry out comparisons”. The structural differences were so significant that no suitable comparison could be made to ascertain authorship. Second, regarding other disputed documents submitted for analysis (specifically Q11A, Q17A-Q24A, Q35A, and Q36A), DW1 was able to reach a conclusive opinion. In paragraph (iii) of her report, she stated that these specific signatures “showed sufficient significant differences in handwriting characteristics... Hence, I am of the opinion that these questioned signatures were not written by the writer of the specimens”. This was a definitive opinion that those specific documents (distinct from the five Work Orders) were not signed by Benny Lim. [74] The principle established by the Court of Appeal in Pujaan Pertama Sdn Bhd v Yap Lee Chuan & Ors [2023] 2 CLJ 442 is directly applicable to the present case. In that case, the Court of Appeal addressed a situation where certain signatures in question could not be conclusively verified due to structural differences from the specimen signatures. The court held that such inconclusiveness did not preclude a finding of forgery. At pages 451F to 451H, the Court of Appeal stated: “[25] Secondly - and this was an important point missed by learned counsel - even though the handwriting expert could not exclude the possibility that the signatures purporting to be those of the first and third plaintiffs had not been authored by them, the reason that he had come to this conclusion was that the structures of each disputed signature were so different from those of the undisputed specimen signatures, that no suitable comparison could be made between them. This was the reason why Mr Teo could not give a conclusive opinion to exclude the possibility that the signatures had been authored by the first and third plaintiffs. [26] But the fact remains that the signatures were different. Why would the first and third plaintiffs sign their names differently on the Form 14A from their usual signatures? There would be, in our considered opinion, no reason to do so. The only available conclusion must necessarily be that the signatures were forgeries too, like the signature purporting to be that of the second plaintiff.” [75] This reasoning applies with full force to the present case. Where structural differences are so significant that proper comparison cannot be made, the logical and necessary conclusion is that the signatures are forgeries. [76] Sarens did not call any expert witness to challenge DW1's findings or to provide a contrary opinion. The principle is well-established that expert opinion must be challenged by another expert. In Ong Hooi Beng & Ors v PP [2015] 1 LNS 63, the Court of Appeal held at page 5: “[8] This part of SP6's evidence was not challenged at all in cross examination and is therefore deemed to be admitted: Wong Swee Chin v. PP [1980] 1 LNS 138; [1981] 1 MLJ 212 F.C. In any event expert opinion must be challenged by another expert. The challenge in cross examination if at all of an expert witness is merely to lay the groundwork for the evidence of another expert, if called.” [77] Sarens’ failure to adduce expert evidence in rebuttal is fatal to any suggestion that DW1's opinion should not be accepted. Where expert evidence stands unchallenged by counter-expert testimony, the court is entitled to place significant weight upon it, particularly when the expert is as qualified and experienced as DW1. [78] DW1's evidence was subjected to cross-examination by Sarens’ counsel. During cross-examination, counsel suggested that an individual might have more than one signature, and that signatures might have different structures for personal documents versus business documents. DW1 agreed with this proposition as a general matter. Counsel also noted that the Department of Chemistry's guidelines state that original documents should be submitted for examination, and that some of the questioned signatures were photocopied signatures. DW1 acknowledged that her findings had limitations because the examination of certain questioned signatures was based on photocopied signatures rather than originals. However, these points did not constitute an effective challenge to DW1's methodology or her fundamental conclusions. Sarens did not suggest any alternative interpretation of the structural differences that DW1 had identified. Sarens did not call its own expert to provide a different opinion on the nature or significance of the structural differences. The matters raised in cross-examination went to the completeness of the expert's ability to give definitive opinions on all signatures, but they did not undermine her core finding that the questioned signatures on the Work Orders (Q1-Q5) showed structural differences preventing comparison, and that other questioned signatures (such as Q11 and Q17) were definitively not written by Benny Lim. [79] The fact that DW1 is a gazetted government officer employed by the Department of Chemistry Malaysia significantly enhances the weight to be given to her evidence. She is not a private expert witness hired by one party to support their case. She has no vested interest in the outcome of this litigation and has no connection whatsoever to either party. She can be regarded as a completely independent and impartial expert whose duty is to assist the court rather than to advocate for any party. Her position as a gazetted officer with the Department of Chemistry Malaysia, a government institution with established forensic protocols and procedures, provides further assurance of the reliability and objectivity of her examination and conclusions. In the absence of any credible challenge to her methodology or findings, and given the comprehensive nature of her examination comparing fifty specimen signatures against the questioned signatures, her expert opinion carries significant probative value and forms a solid foundation for a finding that the signatures on the five Work Orders were not signed by Benny Lim. Fifth Method: Comparison by the Court [80] Section 73(1) of the Evidence Act 1950 provides: “In order to ascertain whether a signature, writing or seal is that of the person by whom it purports to have been written or made, any signature, writing or seal, admitted or proved to the satisfaction of the court to have been written or made by that person, may be compared by a witness or by the court with the one which is to be proved, although that signature, writing or seal has not been produced or proved for any other purpose.” [81] This provision empowers the court to undertake its own independent comparison of signatures to determine authenticity. It is well-established that a court can independently embark on such comparison and reach conclusions as to the genuineness or otherwise of disputed signatures. In the High Court decision of Arumugam Sinayah v Guan Joo Seng Company Sdn Bhd & Ors [2013] 1 LNS 153, the court held: “It was trite that a court could independently and on its own embark on comparison of this nature and reach such a conclusion as to genuineness or otherwise of disputed signatures. (see s. 73 Evidence Act 1950).” [82] Causeway and Benny Lim invited this court to undertake a comparative examination of the signatures pursuant to Section 73(1) of the Evidence Act 1950. The forensic evidence submitted to the court comprised specimen signatures marked as Envelopes Y and Z in the expert affidavit, and the questioned signatures marked as Q1A to Q5A in Envelope W. These materials were examined by DW1 under reference number NQ-0153, which is the laboratory reference number for this forensic examination. Envelope Y contained ten documents marked S1 to S10, whilst Envelope Z contained twenty documents marked S15 to S34. These fifty specimen signatures were obtained from commercial documents dated between 2018 and 2022, including Causeway's company resolutions, letters, memos, and letters of payroll instruction - all contemporary documents bearing Benny Lim's authentic signature. The questioned signatures Q1A to Q5A refer to the signatures appearing on the five Work Orders dated 9.9.2019, 26.11.2019 (two orders), and 6.1.2020 (two orders). [83] I have carefully examined and compared the specimen signatures contained in Envelopes Y and Z with the questioned signatures in Envelope W. The methodology employed in this comparison involved examining the formation, flow, and structural characteristics of the signatures. The fifty specimen signatures spanning a period of four years from 2018 to 2022 demonstrate remarkable internal consistency with one another. These genuine signatures exhibit consistent characteristics in terms of letter formation, connecting strokes, overall structural arrangement, and the distinctive features that mark them as emanating from the same hand. Such consistency across numerous documents over several years provides a reliable basis for comparison. [84] Some examples are show here: Document Signature Letter of Appointment for Ms. Kuen Mun Yin (from Envelope Y) Causeway Directors' Circular Resolution dated 8.2.2022 (from Envelope Z) Causeway Memo dated 24.12.2019 (from Envelope Z) Work Order No. LOT L/LA01/012356 dated 9.9.2019 (from Envelope W) Work Order No. LOT L/LA02/037632 dated 26.11.2019 (from Envelope W) [85] The differences between the specimen signatures and the questioned signatures are readily apparent even to the untrained eye. The questioned signatures on the Work Orders show marked structural differences that are fundamentally inconsistent with the specimen signatures. The structural disparities are not matters of subtle variation or stylistic modification, but rather represent fundamental differences in the basic architecture and construction of the signatures themselves. This finding is consistent with the principle established by Gopal Sri Ram JCA (as His Lordship then was) in the Court of Appeal decision of Siaw Kim Seong v Siew Swee Yin (f) & Anor [2008] 5 CLJ 441, where His Lordship stated: “But in this case you do not have to be an expert to see for yourself that the signature supposed to be of Sarens appearing on the memorandum of transfer and the assignment do not match even upon a cursory visual examination. In fact, the signature said to be that of Sarens on the assignment is manifestly different from that appearing on the memorandum of transfer... Had the judge undertaken such an examination he would have concluded, even without the aid of an expert, that the signatures appearing on the assignment and the transfer were plain and undisguised forgeries...” [86] Similarly, in the Court of Appeal case of Majuikan Sdn Bhd v Barclays Bank PLC [2014] 9 CLJ 337, the court observed: “This is a fair and honest assessment, but even to the naked eye, these signatures on the circular resolution are structural very different when compared with their signatures which appear in the sample board resolution tendered in court, which we have alluded to earlier. Thus, the probabilities are such that when the evidence is viewed as a whole, it is most probable that there was forgery of the critical documents, namely the circular resolution, the side letter and the per aval indorsement on the promissory note.” [87] The visual comparison undertaken by this court independently supports and corroborates the expert evidence provided by DW1. The questioned signatures do not bear the hallmarks of Benny Lim's genuine signature as demonstrated in the fifty specimen signatures spanning four years. The structural differences observed are not explicable by natural variations in signing style, different writing instruments, or the passage of time. Rather, they represent fundamental incompatibilities that point inexorably to the conclusion that the questioned signatures were not executed by Benny Lim. This independent judicial assessment, undertaken pursuant to Section 73 of the Evidence Act 1950, reinforces and validates the expert forensic findings whilst serving as an additional and independent basis for the conclusion that the signatures on the five Work Orders are forgeries. Sixth Method: Direction to Write in Court [88] The sixth method available under the Evidence Act 1950 is for the court to direct the person who is alleged to have written the document to write any word or figure in the presence of the court to enable the court to make a direct comparison. This method was not employed in the present case. Sarens did not make any application for Benny Lim to be directed to sign documents in court for comparison purposes. Findings on Authenticity [89] Having considered all six methods of proving authenticity, I find that Sarens has comprehensively failed to prove that the signatures on the five Work Orders are genuine signatures of Benny Lim. The evidence overwhelmingly points to the opposite conclusion. [90] Benny Lim himself denies signing the documents. No witness saw him sign them. No person acquainted with his handwriting testified that the signatures appeared genuine. The expert evidence conclusively establishes structural differences indicating forgery. The court's own visual examination confirms these findings. [91] In contrast, the evidence affirmatively establishes that the signatures are forgeries. This finding is based on: a) The unequivocal denial by Benny Lim, whose testimony I find to be credible and consistent; b) The expert forensic evidence from DW1, which I accept in its entirety; c) The court's own comparison of the signatures pursuant to Section 73 of the Evidence Act 1950; and d) The contemporaneous conduct of Causeway and Benny Lim upon discovery, which I shall address in greater detail below. Contemporaneous Conduct Supporting Forgery Finding [92] Causeway and Benny Lim’s conduct immediately upon discovering the alleged forgery strongly corroborates their assertion that the Work Orders are forgeries. The legal principle is well-established that contemporaneous conduct following the discovery of forgery constitutes relevant and admissible corroborative evidence. In the High Court case of Chee Shet Khan @ Chu Set Kom v Golden Elate Sdn Bhd [2019] CLJU 2186, the court held: “[30] The subsequent conduct of Sarens upon discovering that his signature was forged by lodging a police report on the 11.1.2016 is also the corroborative evidence which lent support to his denial of the signatures in the PA and the S&P (p. 7 of Bundle B).” [93] This principle was further endorsed by the Court of Appeal in Chen Jin Quan v Hoo Boon Chuan, where the court stated: “[27] The learned Magistrate also neglected to adequately evaluate the defendant's contemporaneous actions which were relevant to the issues at hand. In Chee Shet Khan @ Chu Set Korn v. Golden Elate Sdn Bhd [2019] CLJU 2186; [2019] 1 LNS 2186; [2019] MLJU 1987; [2019] AMEJ 1793, the High Court acknowledged the evidentiary value of corroborative evidence. The court held that contemporaneous actions, such as the filing of police reports, could substantiate a party's denial of signatures and reinforce their credibility. The defendant's timely actions, including lodging police reports, warranted proper consideration as they directly supported his claim of forgery.” [94] The sequence of events and Causeway and Benny Lim’s immediate response upon discovery demonstrates genuine alarm rather than calculated fabrication. On 2.7.2020, upon being shown an email from Rise Engineering (dated 19.6.2020) forwarding a work order purportedly issued by Causeway, Benny Lim immediately recognised that he had not signed the document. Benny Lim took immediate investigative steps. On 5.7.2020, upon further investigation, documents were discovered in Jegan's room at Causeway's premises, including forged Work Orders addressed to Sarens and other companies, all bearing what appeared to be forged signatures of Benny Lim. Benny Lim attempted to contact Jegan between 2.7.2020 and 6.7.2020 but was unable to reach him, as Jegan became uncontactable. On 7.7.2020, Benny Lim on behalf of Causeway lodged a comprehensive police report at the Pondok Tanjung Karang Police Station, attaching the forged Work Orders and documents found in Jegan's room. This police report identified all companies that had been implicated and victimised by Jegan's scheme, including Sarens, Rise Engineering, Total Lift, Triple Aligned Transport & Heavy Machinery (“Triple Aligned”), Jerrica Jewell Sdn Bhd (“Jerrica Jewell”), PT Neo Trans Logistics, and others. On the same day, 7.7.2020, Chiang (DW6) contacted Dharmendra via WhatsApp to inform him of the forgeries and to arrange an immediate meeting at Causeway's office. On 9.7.2020, Causeway issued an immediate dismissal letter terminating Jegan's employment for gross misconduct and sent notification letters dated 9.7.2020 to all implicated companies, including Sarens, informing them of the discovery of the forgeries. [95] The Chen Jin Quan case cited above further emphasises the particular significance of pre-emptive action taken before any demand is received. The Court of Appeal stated: “[28] Of particular significance was the defendant's police report filed in March 2021, more than a year before he received any demand from the plaintiff. This pre-emptive action demonstrated the defendant's consistent assertion that his identity had been misused. The timing and content of the report strongly supported the defendant's position and added credibility to his denial of involvement in the disputed transactions.” [96] In the present case, Causeway's actions were similarly pre-emptive. The police report was lodged on 7.7.2020, the notification letters were sent on 9.7.2020, and the meeting with Sarens’ representatives was scheduled for 8.7.2020 (though ultimately held on 13.8.2020 due to Sarens’ unavailability), all before Sarens took any legal action or issued any formal demand against Causeway. Sarens only commenced the present proceedings on 30.12.2020, more than five months after being informed of the forgery. This timeline demonstrates that Causeway and Benny Lim’s response was not reactive to threatened litigation but was instead a genuine and immediate reaction to the discovery of fraud. The immediacy and comprehensiveness of Causeway and Benny Lim’s response demonstrates genuine alarm upon discovery of fraud, not a manufactured defence. [97] Furthermore, Causeway did not limit its response to lodging reports and sending letters. Causeway took concrete legal action against Jegan, pursuing him through the courts to final judgment and bankruptcy. On 30.9.2020, Causeway initiated legal proceedings against Jegan in the High Court of Shah Alam vide Suit No. BA- 22NCvC-385-09/2020 for conspiracy, forgery and fraud. Causeway obtained Judgment in Default of Defence against Jegan on 30.8.2021. Following an assessment of damages hearing, the court ordered Jegan to pay special damages, general damages and exemplary damages to Causeway pursuant to Judgment dated 25.11.2021. Ultimately, Causeway successfully applied to bankrupt Jegan, and a Bankruptcy Order was obtained against Jegan on 27.6.2023. These actions are entirely consistent with Causeway and Benny Lim’s position that they were victims of Jegan's fraud. [98] Additionally, Causeway published a Public Notice in the New Straits Times newspaper on 6.9.2021 announcing Jegan's dismissal and warning the public about his fraudulent activities. Causeway also issued cease and desist letters on 1.6.2021 to impersonators using email addresses similar to Causeway's addresses, and on

9.7.2021, Causeway's solicitors sent letters to Mugin Enterprise, Reach Eastern Resources Sdn Bhd (“Reach Eastern”), and Dscaff Group to address inquiries about alleged appointments. These comprehensive and sustained actions over a period of years demonstrate a commitment to addressing the fraud that goes far beyond what would be expected of a party merely fabricating a defence. [99] Sarens contends that these actions could have been undertaken merely to create a defence after the relationship broke down, arguing that “all of these actions are entirely consistent with a party attempting to create an excuse after the fact to avoid its contractual obligations” and that “filing a police report is easy” and “sending letters is easy”. I reject this submission entirely. While it is theoretically possible to manufacture evidence, the totality of the circumstances in this case points overwhelmingly towards genuine discovery of wrongdoing rather than calculated fabrication. [100] First, the timing is critical: Causeway's actions were taken immediately upon discovery and before any demand from Sarens, not in reaction to threatened litigation. Second, the scope and consistency of the response is telling: Causeway did not selectively inform certain parties while concealing information from others; rather, it transparently notified all affected parties, lodged a comprehensive police report with all relevant documentation, and took sustained legal action against Jegan over a period of years culminating in his bankruptcy. Third, the financial and reputational cost of pursuing Jegan to bankruptcy demonstrates commitment beyond mere lip service. Fourth, had Benny Lim been complicit in the fraud or had the Work Orders been genuine, there would have been no reason whatsoever to lodge a police report or to sue Jegan, as such actions would have exposed Causeway and Benny Lim to criminal liability and would have been entirely self-defeating. [101] The promptness, consistency, transparency, and comprehensive nature of Causeway and Benny Lim’s response, encompassing the immediate lodging of a police report, the termination of Jegan's employment, the notification of all affected parties, the sustained pursuit of Jegan through civil proceedings to judgment and bankruptcy, and the public advertisement warning others, demonstrate genuine discovery of wrongdoing rather than after-the-fact fabrication. [102] The contemporaneous conduct of Causeway and Benny Lim upon discovery constitutes powerful corroborative evidence supporting their denial of the signatures and their assertion that the Work Orders are forgeries. This conduct, when considered together with the unequivocal denial by Benny Lim, the expert forensic evidence establishing structural differences, and the court's own comparison of the signatures, forms part of the comprehensive evidentiary foundation upon which I find that the Work Orders are forgeries. The Project Name Discrepancy [103] A further matter which significantly undermines the authenticity of the Work Orders is the fundamental discrepancy in the project name. Sarens pleaded in paragraph 6 of its Re-Amended Statement of Claim that “The 1st Defendant is the Main Contractor of the KLCC Podium (Lot K, L and M) Project in Kuala Lumpur”. However, the actual project as evidenced by the subcontract agreement dated 15.8.2019 between Samsung and Causeway was for “Proposed Construction and Completion of Substructure, Retail Podium and Associated Work at Lot 164 (Lot M), Lot 165 (Lot L1) and Lot 166 (Lot L) at Kuala Lumpur City Centre, Kuala Lumpur” for a subcontract sum of RM3,761,663.30. The lots were correctly designated as Lot 164 (Lot M), Lot 165 (Lot L1) and Lot 166 (Lot L) - not “Lot K, L and M” as consistently pleaded and maintained by Sarens. [104] There is no project called “Lot K, L and M” at the KLCC site. This error appears not only in Sarens’ pleadings but also permeated various communications and documents throughout the dealings between Sarens and Jegan. The persistence of this fundamental error across multiple documents strongly suggests that neither Sarens nor Jegan possessed accurate information about the actual project being undertaken by Causeway. If Sarens had truly been appointed by Causeway and had genuinely conducted site visits and attended site induction meetings as claimed, this basic error about the project identification would not have occurred. The Project is a major, high-profile development where information about contractors and subcontractors is publicly available. Sarens’ inability to correctly identify even the lot designations of the project for which it was allegedly engaging cranes worth over RM52 million is inexplicable for a purportedly diligent commercial party. [105] When questioned about this discrepancy during trial, both Haikal and Dharmendra could not provide satisfactory explanations and their evidence revealed considerable confusion. During cross-examination on 8.5.2023, Haikal admitted: “Whether it's L, L1, M or K, L and M I'm not too sure.” When shown the Work Orders bearing different project names, Haikal stated: “I have no idea. Not sure.” Dharmendra initially insisted the project names were “the same” but eventually conceded during cross-examination on 15.7.2024 that “The description is different”. When pressed about the source of the project name, Dharmendra testified: “This information from Joshua” and admitted that he obtained the project name from Jegan. Dharmendra claimed to have verified the information through internet searches which showed “KLCC Podium Project Lot L, L1 and M”, yet Sarens’ pleadings, quotations, and various documents continued to refer to the non-existent “Lot K, L and M”. During re-examination on 17.7.2024, Dharmendra attempted to explain: “when we checked it somewhere we got like K, L, M, somewhere it is L, L1 and M. Later on, as we progress the information was more clear on the project which is saying L, L1 and M.” This testimony reveals that Sarens was demonstrably confused about the correct project description during its alleged verification stage, yet proceeded with the purported appointment despite this fundamental uncertainty. [106] The project name discrepancy assumes critical legal significance in light of established principles governing pleadings. The Court of Appeal in Ambank (M) Bhd v Abdul Aziz Hassan & Ors [2010] 7 CLJ 663 emphasised at page 671 that: “Pleadings operate to define and delimit with clarity and precision the real matters in controversy between the parties so that their respective cases can be prepared with ease and the court too can expeditiously adjudicate them. No litigant should be taken by surprise or be led astray due to faulty pleadings.” [107] The Federal Court in Instantcolor System Sdn Bhd v Inkmaker Asia Pacific Sdn Bhd [2017] 2 MLJ 697 reaffirmed at pages 717-718 the cardinal rule that: “…parties are bound by their pleadings and are not allowed to adduce facts and submissions on matters which they had not pleaded. Cases must be decided on the issues on the record; and if it is desired to raise other issues they must be placed on the record by amendment.” [108] The Federal Court further held that: “…all material facts must be pleaded in the statement of claim and failure to plead one material fact is fatal.” [109] In the present case, Sarens pleaded the Alleged Project as “KLCC Podium (Lot K, L and M)” and in Paragraph 8.1 of its Re-Amended Reply and Re-Amended Defence to Re-Amended Counterclaim maintained that Causeway had only appointed Sarens for that specific project. Furthermore, in Paragraph 10 of the same pleading, Sarens explicitly maintained that “Sarens has no knowledge of paragraphs 7.1 to 7.4 of the Defence as Sarens was not involved in the Alleged Project. The Sub-Contract Works and the Project as alleged by Causeway is not the subject matter on which Sarens’ claim is based”. [110] The High Court in Impact Elite Golf Academy Sdn Bhd v Mines Excellence Golf Resort Berhad [2020] MLJU 487 rejected a similar attempt by a plaintiff to depart from pleadings at the submission stage, holding at page 8 of 27 that arguments contrary to Sarens’ pleaded case could not be accepted. Having explicitly pleaded and maintained the non-existent “KLCC Podium (Lot K, L and M)” project, Sarens cannot now through submissions or evidence seek to advance a different case based on the actual project undertaken by Causeway. [111] This fundamental error about the basic identity of the project for which cranes worth over RM52 million were allegedly being engaged corroborates Causeway and Benny Lim’s case that the Work Orders did not originate from Causeway but were fabricated by Jegan. A genuine work order issued by Causeway would have correctly identified the project for which equipment was being engaged, namely, the Ground Floor Steel Structure Works under the Samsung subcontract for Lot 164 (Lot M), Lot 165 (Lot L1) and Lot 166 (Lot L). The persistence of the incorrect project designation throughout Sarens’ dealings with Jegan, combined with Sarens’ demonstrated confusion about the correct project name even after purported verification, strongly indicates that the Work Orders were not authentic documents from Causeway but were instead products of Jegan's fraudulent scheme. This conclusion is reinforced by the stark commercial implausibility which I will address in the subsequent section. Commercial Implausibility [112] Another striking feature of this case which supports a finding of forgery is the gross commercial implausibility of the alleged transaction. The Work Orders purport to engage cranes worth a minimum of RM52,140,000.00 for a project in which Causeway's entire subcontract value was only RM3,761,663.30. This subcontract represented Causeway's engagement by Samsung for ground floor steel structural works at the Project for Lot 164 (Lot M), Lot 165 (Lot L1) and Lot 166 (Lot L) in Kuala Lumpur, as evidenced by the subcontract agreement dated 15.8.2019 between Samsung and Causeway. [113] The rental value of the cranes allegedly ordered exceeds Causeway's entire subcontract value by a factor of nearly fourteen to one. Put simply, Sarens’ case requires acceptance of the proposition that Causeway would engage cranes costing RM52 million for works worth less than RM4 million, and that these cranes would be deployed for a subcontract with a completion period of merely six months from 15.8.2019 to 15.2.2020. This is commercially absurd. As Benny Lim testified, the alleged crane rental sum of RM52,140,000.00 was even higher than the total value of Sarens’ own non-current and current assets. The commercial implausibility becomes even more apparent when one considers that Samsung's total contract sum for the entirety of the Project was approximately RM742,000,000.00, of which Causeway's subcontract represented only about 0.5%. [114] Dharmendra conceded during cross-examination that he was aware Causeway was not the main contractor for the Project but admitted he did not know the total value of Causeway's subcontract works at the material time. Despite this lack of knowledge, he never inquired about the scope or value of Causeway's subcontract works before agreeing to supply cranes worth over RM52 million. When shown the subcontract agreement in court, which clearly stated the subcontract sum of RM3,761,663.30 and the six-month completion period, Dharmendra admitted: “By looking at the value yes” in response to the suggestion that RM52 million “is far exceeded the total contract value”. He further agreed that the quotation for the alleged cranes would potentially generate RM12.5 million for ten months, nearly equivalent to Sarens’ entire annual revenue of approximately RM13 million as reflected in its SSM search for financial year 2018. When it was put to Dharmendra that there was no way for 27 units of cranes valued at RM52 million to be deployed for Causeway's subcontract works, he disagreed but provided no credible explanation for how such deployment could be commercially feasible beyond relying on the alleged client's request. [115] Sarens’ submission is that it had no way of knowing the value of Causeway's subcontract because the subcontract was not provided to it. However, this submission entirely misses the point. A reasonably prudent commercial party dealing in transactions of this magnitude would make inquiries to ascertain whether its counter-party had the financial capacity and commercial need for equipment worth RM52 million. Sarens was in a position to conduct such verification. It had access to Causeway's telephone number, email address, fax number and office address. Indeed, Dharmendra admitted that not even one email was sent to the email address stated on Causeway's name card, not even one phone call was made to the number stated, and not even one fax was sent, despite the fact that this single transaction could potentially touch Sarens’ entire annual revenue. As the Federal Court emphasised in Kang Hai Holdings Sdn Bhd & Anor v Lee Lai Ban [2018] 2 MLJ 574 at page 581: “With the rapid development of modern technology, and the access to information available in the database of the Companies Commission of Malaysia, the law in our view imposes a minimum duty on the 'outsider' to, at the very least, make this minimum check to afford the outsider the protection of the rule in Turquand...” [116] Sarens presents itself as a sophisticated international company with over 60 years of experience in the heavy lifting industry. Dharmendra testified that Sarens had internal procedures and verification processes. Yet these procedures were manifestly not followed in this case. It is inconceivable that such a company would enter into transactions worth over RM52 million, representing 27 units of cranes to be deployed on a subcontract site with limited space and surrounded by skyscrapers, as confirmed by Dharmendra’s own observation, without any verification of its counterparty’s project scope, financial standing, or commercial need for such extensive equipment. The commercial implausibility was compounded by Sarens’ admission that Dharmendra had queried Jegan about Causeway's financial ability to pay, receiving in response the OCBC Facility Letter and audited accounts. Yet despite expressing concern about payment capacity, Sarens never thought to inquire whether the underlying project justified cranes worth fourteen times the subcontract value. As the Defendants' counsel submitted, if Sarens had really attended site induction meetings and conducted site inspections as claimed, it would have been able to immediately realise “the unusual circumstances pertaining to so many numbers of the crane and so much so high value of the crane rental”. [117] Sarens’ conduct stands in stark contrast to that of other crane rental companies who received similar forged work orders from Jegan. The evidence established that representatives from Mugin Enterprise and Reach Eastern contacted Causeway directly seeking confirmation of their purported appointments. Norashikin testified to receiving such inquiries, whilst DW5 testified that Causeway also received inquiries from Energy Workforce Sdn Bhd (“Energy Workforce”), UTS Setia Provider Sdn Bhd (“UTS Setia”), Cahaya Sina Sdn Bhd and DScaff Group. This is precisely what Sarens should have done. The failure of a self-proclaimed sophisticated international crane supplier to conduct the basic verification that other companies in the same industry performed is a telling indicator of either wilful blindness or gross negligence. As stated by the Court of Appeal in Ooi Meng Khin v Amanah Scotts Properties (KL) Sdn Bhd [2014] 6 MLJ 488 at pages 506-507: “Clearly there was an obvious case of wilful blindness on its part when dealing with D3 as regards the source of the millions that had come into its account. As the saying goes, 'there is none so blind as those who will not see'.” [118] The commercial implausibility of the transaction is a powerful indicator that the Work Orders did not originate from Causeway. A genuine work order issued by Causeway's authorised representatives would have been commensurate with the actual scope and value of Causeway's works at the project site. The stark disparity between the alleged crane rental value and the subcontract value, viewed together with Sarens’ failure to make even basic inquiries despite numerous red flags, reinforces the conclusion that these Work Orders were fabricated by Jegan without the knowledge or authority of Causeway and Benny Lim. Sarens cannot rely on the indoor management rule where, as the Federal Court stated in Pekan Nenas Industries Sdn Bhd v Chang Ching Chuen & Ors [1998] 1 CLJ 793, “an outsider who knows or ought to know that there is an irregularity” seeks to invoke that rule. Conclusion on Authenticity and Forgery [119] For the reasons set out above, I find that: a) Sarens has failed to discharge its burden of proving that the five Work Orders are genuine documents bearing the authentic signature of Benny Lim; b) The evidence affirmatively establishes that the five Work Orders are forgeries perpetrated by Jegan without the knowledge or authority of Causeway and Benny Lim; and c) The signatures on the five Work Orders purporting to be those of Benny Lim were not signed by him but were forged. [120] Having made this fundamental finding, it follows that the five Work Orders are nullities which created no contractual rights or obligations between Sarens and Causeway. A forged document is void ab initio and of no legal effect. [121] The principle is well-established and was clearly stated by the Court of Appeal in Boonsom Boonyanit v Adorna Properties Sdn Bhd [1997] 2 MLJ 62: “Third, it is axiomatic that a forged instrument is null and void and of no effect. (See, Kreditbank Cassel G.M.B.H. v. Schenkers Ltd. [1927] 1 KB 826, at p. 834, per Bankes LJ). It is not merely voidable. In the absence of an express statutory direction to the contrary, no rights whatsoever arise in favour of one who acquires title under a void instrument.” [122] This finding is fatal to Sarens’ entire case. Since the Work Orders are forgeries and therefore nullities, they cannot form the basis for any claim by Sarens against Causeway and Benny Lim. Sarens’ claim must fail in limine. Jegan's Authority [123] Given my finding that the Work Orders are forgeries, it is strictly unnecessary to determine whether Jegan had authority to bind Causeway. However, for completeness, and in case the matter goes on appeal, I shall address this issue. Jegan's Actual Role and Responsibilities [124] The evidence establishes that Jegan was employed by Causeway as an engineer with responsibilities primarily in quality assurance and quality control (QA/QC) matters. His employment commenced on 1.4.2017 pursuant to an employment letter dated 1.4.2017. The most reliable contemporaneous documentary evidence as to Jegan's actual role is the Organisation Chart for the Project, which expressly designates Jegan as “Technical Manager / Asst Design Manager” and “QA/QC Manager” and identifies KT Boo as the “Project Manager” and identifies KT Boo as the “Project Manager”. Sarens agreed that the employment letter appointed Jegan as an engineer and made no mention of any appointment as Project Manager. This fundamental documentary evidence is fatal to Sarens’ assertion that Jegan held the position of Project Manager for the Project. [125] KT Boo, who was the actual project manager for the Project, gave clear and consistent testimony about Jegan's role and responsibilities. KT Boo confirmed that he was the sole project manager appointed by Causeway for the Project and that Jegan was not a project manager. During cross-examination on 20.8.2024, when asked whether Jegan ever held the position of project manager in Causeway, KT Boo testified: “To my understanding no.” When asked more specifically whether Jegan could be the project manager in some projects, KT Boo stated: “Not really. He has not been, I don't think so, to my understanding” and when pressed for a yes or no answer, KT Boo clearly stated: “No.” KT Boo further testified that to his knowledge, Jegan's designation in Causeway before termination was: “He was the QA/QC Manager.” In his witness statement, KT Boo explained that Jegan “will usually be assigned to collect technical information, preparation and compilation of technical documents for submission purposes as well as responsible for quality assurance and quality control (QA/QC) on the works” and that “Jegan will be reporting on technical matters to me and at times, Jegan will be reporting on technical matters directly to the director.” Jegan's responsibilities were thus limited to technical matters such as ensuring quality standards were met and conducting inspections, which formed part of the broader project team but not in a managerial capacity. [126] DW2, Norashikin Binti Nasharuddin (Norashikin), a Quantity Surveyor who was an employee of Causeway, testified about Causeway's organisational structure and procedures. She confirmed that Jegan's role was technical in nature. Norashikin’s evidence, together with the evidence of the other witnesses called by Causeway and Benny Lim, established that there were two main aspects in Causeway's operations: the technical aspects and the commercial aspects. The technical aspects included the project team, site operation, and factory production team related to the execution of works in a project. The commercial aspects involved anything that required the making of commercial decisions by the company, including the contract and quantity surveyor team, the purchasing team, and the finance team. Jegan was part of the technical team and had no authority to make commercial decisions or to bind Causeway in commercial contracts. His responsibilities were confined to the collection, preparation, and compilation of technical documents, oversight of technical submissions, preparation of inspection forms, collection of technical data, and site documentation. [127] Elvin (DW3), who worked on the Project, similarly testified that KT Boo was the project manager and that Jegan's role was limited to technical and quality assurance matters. During cross-examination on 18.7.2024, when asked about the hierarchy, Elvin explicitly confirmed regarding KT Boo: “Yeah, he is the project manager”. This corroborated the evidence of Norashikin (DW2), who similarly testified on the same day: “Dia untuk, saya rasa dia lebih kepada project manager untuk projek ini” (meaning that KT Boo was more towards being the project manager for this project). Elvin consistently maintained that Jegan was not the Project Manager for the Project, stating “Disagree” when the specific suggestion was put to him. The consistency of evidence from all of Causeway and Benny Lim’s witnesses on this critical issue is striking and cannot be dismissed lightly. [128] Benny Lim himself, DW5, testified about the scope of authority delegated to Jegan. He confirmed that Jegan was never authorised to issue work orders, to engage subcontractors, or to make any commercial commitments on behalf of Causeway. During cross-examination on

20.8.2024, when confronted with the suggestion that Jegan was promoted to “project manager and quality assurance and quality control officer”, DW5 clarified: “Yes, in terms of QA/QC manager.” When pressed whether he had any documents to show that Jegan was only a QA/QC officer, DW5 confirmed: “Yes” and that such documents were in the bundles, referring specifically to the Organisation Chart at B8, page 417. In his witness statement, DW5 stated unequivocally that “only directors have the right to decide and appoint subcontractors or to enter into contract with sub-contractors” and that “Jegan was at the material time only tasked with duties in the project team and therefore he would be involved in the construction or execution of project works. Mostly Jegan's task is on site technical matters, QAQC and for preparation and compilation of technical documentations.” Benny Lim's evidence was clear and consistent: the appointment of subcontractors was never within Jegan's scope of duties. [129] Having considered the totality of the evidence from all four witnesses, I find that Causeway and Benny Lim have established on a balance of probabilities that Jegan was employed solely in a technical capacity as a QA/QC Manager / Technical Manager. His responsibilities were confined to technical matters including quality assurance and quality control, collection and preparation of technical documents, and site documentation. He had no authority whatsoever to make commercial decisions, to issue work orders, to engage subcontractors, or to bind Causeway in contracts of any kind. The documentary evidence, particularly the employment letter dated 1.4.2017 and the Organisation Chart, corroborates this finding. Sarens has failed to adduce any contemporaneous documentary evidence to contradict this clear and consistent body of evidence. Sarens’ Knowledge of Jegan's Role [130] Significantly, Sarens’ own witnesses conceded that they had never dealt with anyone from Causeway other than Jegan. Haikal, Sarens’ Sales Executive, confirmed during cross-examination on 8.5.2023 that all communications relating to the Project were with Jegan alone. When asked directly: “So now I want you to confirm that there is no one else from Causeway that you have ever dealt with up to this stage?”, Haikal answered: “Yes”. Dharmendra, Sarens’ General Manager, similarly testified on 15.7.2024 that he dealt exclusively with Jegan. When asked to agree that “all communication... took place only between you, Haikal and D3”, Dharmendra answered: “Correct, agree”. Furthermore, when specifically asked whether “Benny Lim, D2... was not involved in the communication”, Dharmendra confirmed he was not by answering “No”. Dharmendra also admitted there were no records showing anyone from Causeway, other than Jegan, had ever contacted Sarens. [131] During cross-examination on 8.5.2023, Haikal made critical concessions about Sarens’ failure to conduct even basic due diligence. When confronted with the fact that he had been assuming throughout that Jegan represented Causeway, the following exchange occurred: So, all the while you have been assuming that D3 represent Causeway right. Did you do a facts check or background check on Causeway? I, no.” [132] When asked whether Sarens would normally conduct such verification when dealing with work orders of substantial magnitude, Haikal was compelled to admit: “Would normally Sarens do checking?” Haikal: “Yes, Sarens has the procedures.” When pressed further: “Have a procedure but you not the one, you didn't do it?”, Haikal answered: “Yeah.” Haikal further admitted that the person responsible for conducting such verification was Dharmendra, Sarens’ General Manager. [133] Dharmendra's testimony revealed an equally troubling pattern of failure to verify. During cross-examination on 15.7.2024, Dharmendra was asked repeatedly whether he had conducted any verification of Jegan's authority at various stages of the alleged transaction. At each critical juncture, his answer was the same: “No.” When asked: “At this point of time when the email was sent on the 15.8.2019, do you have any document to show D3 was authorized by D1 to deal with you on CC6800 crane?”, Dharmendra answered: “No.” When asked: “Did you do any verification with D1 on D3's authority to deal with you on CC6800 crane?”, Dharmendra answered: “No.” When asked: “Did you do any verification or checking with D1 on D3's position in the subcontract work with Samsung?”, Dharmendra answered: “No.” These admissions were repeated for the additional crawler cranes and for each of the work orders received in early 2020. The magnitude of the transactions makes these failures all the more stark. Sarens’ own corporate information showed that its total revenue for the financial year ending in 2018 was only approximately RM13 million. Yet Dharmendra admitted that a single quotation for the CC6800 crane could potentially generate approximately RM12.5 million over 10 months, nearly equal to Sarens’ entire annual revenue. Despite this, when confronted with whether he had sent even one email to the company email address on Causeway's business card, Dharmendra admitted: “Not sure.” When asked: “Not even one phone call to the number stated in the name card?”, Dharmendra answered: “I did not make any call.” [134] These concessions are deeply damaging to Sarens’ case. They demonstrate that Sarens failed to undertake even the most basic verification procedures despite dealing with alleged Work Orders worth over RM52 million, representing approximately four times Sarens’ annual revenue. Sarens simply assumed that Jegan had authority to bind Causeway without making any inquiries whatsoever to verify this assumption. This failure is particularly significant in light of the legal principles governing the indoor management rule. In Kang Hai Holdings Sdn Bhd, the Federal Court held that, given modern technology and the ready accessibility of corporate information through the Companies Commission of Malaysia database, an outsider is subject to a minimum duty to conduct at least a basic verification in order to avail itself of the protection of the Turquand rule. The court further underscored that advances in, and the use of, modern record-keeping systems require any person or company dealing with a corporation to take reasonable steps to ascertain the authority and identity of those purporting to act on the company’s behalf. In the present case, Sarens took no steps whatsoever. Not even a single telephone call or email to Causeway's registered business address or contact details. Sarens’ conduct falls far short of even the minimum standard of verification required by law. [135] The evidence further establishes that Sarens had its own internal procedures for conducting verification and credit checks, yet these procedures were not followed. Haikal confirmed that “Sarens has the procedures” for conducting such checks and that “the main person is Dharmendra” who was responsible for performing this function. The fact that Sarens had established procedures but failed to apply them in this case, despite the unprecedented magnitude of the alleged transaction, demonstrates a recklessness that cannot be excused. As observed by the Federal Court in Pekan Nenas Industries, the Turquand rule is unavailable to an outsider who has actual knowledge of an internal irregularity, or who, in the circumstances, ought reasonably to have been aware of such an irregularity. In this case, the combination of the transaction's unprecedented scale, the exclusive dealings with a single individual, the absence of any contact with the company's director or management, and the failure to follow Sarens’ own verification procedures should have put Sarens on inquiry. Sarens’ failure to conduct even minimal verification in these circumstances renders the indoor management rule inapplicable. No Express Authority [136] There is no evidence whatsoever that Causeway expressly authorised Jegan to issue work orders for crane rental or to engage Sarens as a subcontractor. No board resolution, no letter of authority, no written delegation of power has been produced showing that Jegan was given such authority. Benny Lim himself testified about the scope of authority delegated to Jegan and unequivocally confirmed that “the 3rd Defendant was never authorised to issue work orders, to engage subcontractors, or to make any commercial commitments on behalf of the 1st Defendant.” This evidence was not challenged or contradicted by any evidence adduced by Sarens. [137] It is trite law that the burden of proving the existence of authority rests squarely on the party alleging such authority. In the Federal Court case of Teh Eok Kee & Anor v Tan Chiah Hock & Anor [1996] 2 CLJ 227, the Federal Court held that “the burden of proof of establishing such authority, in common with all cases of agency, must rest on the party alleging the agency.” [138] In the present case, it is therefore Sarens who bears the burden of proving that Jegan had the requisite authority to appoint Sarens and to bind Causeway in commercial contracts. As explained by the Federal Court in Chew Hock San & Ors v Connaught Housing Development Sdn Bhd & Another Case [1985] CLJ Rep 64, “Actual authority and apparent authority are quite independent of one another. Generally they co-exist and coincide, but either may exist without the other and their respective scopes may be different.” [139] The scope and extent of authority cannot simply be inferred from a job title alone. As held in Usahasama SPNB-LTAT Sdn Bhd v Entry Construction (M) Sdn Bhd & Ors [2013] CLJU 790, which quoted with approval the English Court of Appeal decision in Kreditbank Cassel Gmbh v Schenkers Limited [1927] 1 KB 826, the court stated: “in the absence of evidence I am not prepared to hold that the manager of a provincial branch, even if he is in such an important position as manager of the Manchester branch of a forwarding agency, has authority to draw bills to bind his company.” Sarens has adduced no documentary evidence whatsoever establishing that Jegan, whether by virtue of his position or otherwise, had authority to issue work orders or engage subcontractors on behalf of Causeway. [140] Sarens’ case on authority rests entirely on the assertion that Jegan held himself out as having authority and that Sarens was entitled to rely on this apparent authority. However, as I shall explain below, the doctrine of apparent authority cannot assist Sarens in this case. No Apparent Authority [141] The doctrine of apparent or ostensible authority is based on representation. The Federal Court in Chew Hock San & Ors v Connaught Housing Development Sdn Bhd [supra], adopting with approval the dicta of Lord Diplock in the English Court of Appeal decision Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, explained that actual authority and apparent authority are quite independent of one another: “Generally they co-exist and coincide, but either may exist without the other and their respective scopes may be different.” For apparent authority to arise, there must be: a) a representation made by the principal (or someone with actual authority to make representations on behalf of the principal) that the agent has authority; b) the person dealing with the agent relies on the representation; and c) the person dealing with the agent alters his position in reliance on the representation. [142] The nature of apparent authority was comprehensively explained by Lord Diplock in Freeman & Lockyer (adopted by the Federal Court in Chew Hock San): “An 'apparent' or 'ostensible' authority, on the other hand, is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the 'apparent' authority, so as to render the principal liable to perform any obligations imposed upon him by such contract. To the relationship so created the agent is a stranger. He need not be (although he generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract.” [143] In the present case, there is no evidence of any representation made by Causeway or by any person with actual authority that Jegan had authority to issue work orders for crane rental. Sarens’ witnesses never testified that they had any communication with Benny Lim, with KT Boo (the actual project manager), or with any other authorised representative of Causeway about Jegan's authority. All their dealings were with Jegan himself. During cross-examination, Dharmendra admitted: “LAI: ...I'm asking you 2017 - 2019, is there any records showing that someone anyone, apart from D3, from D1 has ever contacted Sarens? PW4: No.” [144] A person cannot create apparent authority in himself by his own representations. Apparent authority must be founded on a representation made by the principal or by someone with actual authority on behalf of the principal. As the Federal Court held in Chew Hock San at page 353: “but he must not purport to make the agreement as principal himself”. This principle directly undermines Sarens’ position, as the entirety of its case on apparent authority stems from Jegan's own conduct, representations, and dealings, not from any representations made or authorised by Causeway or Benny Lim. This principle was reaffirmed by the High Court in Playboy Enterprises International Inc v Zillion Choice Sdn Bhd & Anor [2011] 2 MLJ 59 at pages 81-82, where the court rejected a claim of apparent authority based on the self-representation of an agent: “[49] ... For 'apparent authority' to exist, the agent must not purport to make the agreement as principal himself. Therefore the source of the 'apparent authority' has to be the principal, not the agent. If there is no representation by the principal, there can be no apparent authority conferred on the agent, even if the agent represents the contrary. It is trite law that an agent cannot ordinarily confer ostensible authority on himself. He cannot pull himself up by his own shoe laces (see: United Bank of Kuwait v Hammoud [1988] 1 WLR 1051).” [145] Jegan's own statements about his role and authority cannot create apparent authority binding on Causeway. [146] Sarens contends that Jegan “held himself out” as the project manager and that representation by conduct can create apparent authority. Lord Diplock in Freeman & Lockyer explained that representation creating apparent authority “may take a variety of forms, of which the commonest is representation by conduct, that is by permitting the agent to act in some way in the conduct of the principal's business with other persons. By doing so the principal represents to anyone who becomes aware that the agent is so acting that the agent has authority to enter on behalf of the principal into contracts with other persons of the kind which an agent so acting in the conduct of his principal's business has usually actual authority to enter into.” However, this presupposes that the principal is aware of and has permitted such conduct. In the present case, Sarens has failed to establish that Causeway or Benny Lim had, by their conduct or acquiescence, created a representation or situation that would reasonably lead Sarens to believe Jegan was authorised to appoint contractors or issue work orders on behalf of Causeway. At all material times, Causeway and Benny Lim were entirely unaware of Jegan's dealings with Sarens. There is no evidence that Causeway or Benny Lim had any knowledge of the alleged crane mobilisation arrangements, nor did they authorise or ratify such dealings. [147] This principle that the representation must emanate from the principal and not the agent was applied by the High Court in Kerajaan Malaysia v RHB Insurance Bhd [2014] 7 CLJ 782 at pages 796-797: “[42] In this context the verification letter purportedly issued by Sulaiman Abdul Razak does not assist Sarens’ case as it is in effect a representation emanating directly from the 'fraudulent' agent himself, and not the principal, ie, the defendant. It does not therefore satisfy the requirements of the principle of ostensible authority that are to be met before a principal can be said to be bound by the acts of its agent. There must be a representation by the defendant, and not Sulaiman Abdul Razak himself, which is not the case here, as there is no such evidence.” [148] Since there is no evidence of any representation by Causeway that Jegan had authority to issue work orders for crane rental, the doctrine of apparent authority cannot assist Sarens. Sarens cannot rely on Jegan's self- representation, his business cards, his presentations, or his meetings with Sarens’ witnesses to establish apparent authority. These are all representations made by the agent himself, not by the principal. The doctrine of apparent authority requires a representation traceable to the principal, whether by words or conduct, and no such representation has been proven in this case. Conclusion on Authority [149] I find that Jegan had no express or implied authority to issue work orders for crane rental or to bind Causeway in commercial contracts of the nature and magnitude alleged in this case. His role was limited to technical quality assurance matters. He had no commercial authority. [150] Furthermore, the doctrine of apparent authority has no application in this case as there was no representation by Causeway or by any person with actual authority that Jegan had such authority. Sarens’ reliance on Jegan's own representations about his role and authority is misplaced. The Indoor Management Rule (Turquand Rule) [151] Sarens has extensively argued that it is entitled to rely on the indoor management rule, also known as the Turquand rule, derived from Royal British Bank v Turquand [1843-60] All ER Rep 435. Under this rule, persons dealing with a company are entitled to assume that internal requirements and procedures have been complied with, and are not required to inquire into the internal management of the company. [152] However, Sarens’ reliance on the Turquand rule is fundamentally misconceived for two independent reasons: first, the rule does not apply to forgeries; and second, even if it could potentially apply, the prerequisites for its invocation have not been satisfied. The Turquand Rule Does Not Apply to Forgeries [153] It is well-established law that the indoor management rule does not apply where forgery is involved. This critical limitation on the rule was authoritatively laid down by Lord Loreburn LC in the House of Lords decision in Ruben v Great Fingall Consolidated [1906] AC 439 at page 443: “It is quite true that persons dealing with limited companies are not bound to inquire into their indoor management and will not be affected by irregularities of which they had no notice. But this doctrine, which is well established, applies only to irregularities that otherwise might affect a genuine transaction. It cannot apply to a forgery.” [154] This principle has been consistently and expressly applied by Malaysian courts. In Ooi Meng Khin v Amanah Scotts Properties (KL) Sdn Bhd [supra], the Court of Appeal affirmed that the Turquand rule does not apply in cases involving forgery. The court stated at page 510: “[60]... What has also become clear as well is that this: Turquand's rule does not apply in a case where forgery is involved. That caveat to the rule was laid down by Lord Loreburn LC in the case of Ruben v Great Fingall Consolidated [1906] AC 439 at p 443 where he said like so: It is quite true that persons dealing with limited companies are not bound to inquire into their indoor management and will not be affected by irregularities of which they had no notice. But this doctrine, which is well established, applies only to irregularities that otherwise might affect a genuine transaction. It cannot apply to a forgery.” [155] The distinction drawn by the authorities is fundamental and principled. The Turquand rule protects outsiders from internal irregularities within a company's procedures - situations where proper internal requirements may not have been followed, but the transaction is nevertheless genuine and intended by the company. It does not, and cannot as a matter of law, validate a document which is forged and therefore not the act of the company at all. [156] Examples of situations where the Turquand rule properly applies include cases where a board resolution was not properly passed, where a seal was affixed without proper authorisation, or where internal approval procedures were not followed. In such cases, whilst there may have been internal procedural defects, the company nonetheless intended to enter into the transaction, and an outsider dealing with the company in good faith is entitled to assume that internal requirements have been complied with and is protected from the consequences of such irregularities. [157] However, where a document is forged, in the sense that the signature is falsified, the legal position is entirely different, as such a document is void ab initio and a complete nullity with no legal effect. As explained by the Court of Appeal in Boonsom Boonyanit v Adorna Properties Sdn Bhd, a forged instrument is not merely voidable but wholly void, and, in the absence of any express statutory provision to the contrary, it is incapable of conferring any rights on a party who purports to derive title or benefit from it. [158] This makes clear that a forged document does not create any rights or obligations. The Turquand rule provides no protection in such circumstances because there is no “genuine transaction” to which the rule can apply. [159] Having found that the five Work Orders are forgeries, it follows inexorably that the Turquand rule has no application whatsoever in this case. The rule is designed to protect outsiders from internal irregularities in transactions which the company intended to enter into. It cannot and does not operate to validate forged documents or to create binding obligations on Causeway and Benny Lim arising from documents which they never authorised and which bear forged signatures. Sarens cannot rely on the rule to give legal effect to forgeries. [160] Sarens’ extensive arguments about how it was not put on inquiry, about Jegan's apparent authority, and about the circumstances which led it to believe that the Work Orders were genuine are all rendered irrelevant and immaterial by the finding of forgery. Once forgery is established, the question of internal irregularity becomes academic. These considerations, whilst they might be relevant in a case involving genuine documents executed with some internal procedural defect, have no bearing where the documents themselves are forged and therefore void ab initio. The legal effect of forgery supersedes all such considerations. Even if Applicable, Prerequisites Not Met [161] Without derogating from the above findings, and assuming for the sake of argument that the Turquand rule could potentially apply (which I have found it cannot), Sarens has nevertheless failed to satisfy the prerequisites for invoking the rule. [162] The Turquand rule is not an absolute protection. It is subject to important limitations. The rule cannot be invoked where the person dealing with the company knew or ought to have known of the irregularity. As stated by the Federal Court in Pekan Nenas Industries Sdn Bhd v Chang Ching Chuen & Ors [supra]: “The rule in Turquand's case cannot, however, be invoked by an outsider who knows or ought to know that there is an irregularity.” [163] Furthermore, in modern times, with the availability of technology and information systems, a higher standard of verification is expected from commercial parties. In Kang Hai Holdings Sdn Bhd & Anor v Lee Lai Ban (trading as the sole proprietor under the name and style of “Sang Excavating Services') [supra], the Federal Court held at page 581: “[14] This principle has been adopted by this court with the necessary modifications in the case of Pekan Nenas Industries Sdn Bhd v Chang Ching Chuen & Ors [1998] 1 MLJ 465 and to a whole plethora of cases that deal with the point. However, the advancement of technology and records in the various government institutions which regulate companies and businesses, and which information is readily accessible on line, now facilitate and provide an avenue to verify information that previously was not easily accessible. Undoubtedly, the technological advancement offers new tools for assisting those seeking to do business with a company. The accessibility of information on line is easy and not costly. The advancement and utilisation of the modern technology in record keeping demand that a person or a company dealing with another company ought to take some reasonable steps to verify the position and who represents the company. This is the prudent thing to do.” [164] In Ooi Meng Khin, the Court of Appeal held that the Turquand rule is limited to bona fide dealings in good faith and cannot be relied upon where the circumstances, including the nature of the transaction, ought reasonably to have put the party on inquiry. [165] This establishes a critical principle: a party may be precluded from relying on the Turquand rule not only where there is actual knowledge of irregularity, but also where the circumstances are such as to put the party on inquiry and the party fails to make reasonable inquiries. The Court of Appeal further held at page 510 that, in cases where the circumstances go beyond merely putting a party on inquiry and where the facts are “highly suspicious”, the rule cannot apply at all. [166] In the present case, Sarens was confronted with numerous circumstances that should have put it on inquiry. These include: a) The gross disparity between the alleged crane rental value of over RM52 million and Causeway's known role as a subcontractor (not main contractor) with a subcontract worth only RM3,761,663.30 for ground floor steel structural works. The alleged crane rental cost was approximately fourteen times the total value of Causeway's subcontract. This staggering commercial implausibility should have been an immediate red flag that something was fundamentally wrong with the transaction; b) The fact that all dealings were exclusively with Jegan, with no contact whatsoever with Benny Lim or with any other representative of Causeway throughout the entire course of the alleged appointment and mobilisation preparations; c) The absence of any pre-contract negotiations, tender process, or discussions about commercial terms before the alleged work orders were issued. The Plaintiff proceeded to commit to supplying equipment worth over RM52 million based solely on work orders, without any formal written contract, without any deposit, and without payment terms being finalised; d) The incorrect project name appearing in the work orders and throughout the documentation. The Plaintiff pleaded that the project was "KLCC Podium (Lot K, L and M) Project", when the actual project was for Lot L, L1 and M. This was not a minor typographical error but a fundamental mistake about the identity of the project; e) The fact that the work orders were delivered personally by Jegan without any formal company procedures being followed. The work orders were not sent through official company channels but were handed over directly by Jegan to Dharmendra. [167] Any one of these circumstances should have given Sarens pause. Collectively, they constituted clear red flags requiring verification before Sarens committed itself to supplying equipment worth over RM52 million. The Court of Appeal further held at page 510 that, in cases where the circumstances go beyond merely putting a party on inquiry and where the facts are “highly suspicious”, the rule cannot apply at all. As the Federal Court emphasised in Kang Hai Holdings, sometimes “the very nature of the proposed transaction may put a party on inquiry”. A reasonable business person exercising ordinary commercial prudence would immediately question how Causeway could afford such crane rental costs, where the money would come from, and whether this made any commercial sense whatsoever. [168] Sarens’ failure to make even basic inquiries is particularly egregious given its self-professed status as an experienced, sophisticated international company in the heavy lifting industry. Dharmendra testified that Sarens had internal procedures and verification processes for transactions of this magnitude. Yet Dharmendra admitted under cross-examination that these internal procedures were not followed in this case. Sarens, despite claiming to be a major multinational corporation with extensive experience in crane rental, failed to apply its own established verification protocols to a transaction worth over RM52 million. [169] Sarens argues that it conducted some verification by checking online whether the Project existed and whether Samsung was involved. However, this limited verification fell far short of what was required in the circumstances. Sarens never: a) Contacted Causeway directly to verify that Jegan had authority to issue work orders for crane rental worth RM52 million; b) Requested to see the subcontract between Samsung and Causeway to verify the scope and value of Causeway's works, which would have immediately revealed the commercial implausibility; c) Sought confirmation from Benny Lim or from any other director or authorised representative of Causeway regarding the appointment and the authority of Jegan; d) Made inquiries with Samsung about whether Causeway's scope of works could conceivably require cranes worth RM52 million, or whether Samsung was aware of such a massive crane appointment; e) Investigated why the Work Orders appeared to be issued for a project called “Lot K, L and M” when readily available public information showed the actual project was “Lot M, L1 and L”; f) Verified Benny Lim's signature on the Work Orders by requesting specimen signatures or comparing with signatures on other publicly available documents; or g) Insisted on meeting with Causeway's directors or senior management before mobilising such expensive equipment, which would be standard commercial practice for a transaction of this magnitude. [170] Other crane rental companies who received forged Work Orders from Jegan took the prudent step of contacting Causeway directly to verify their appointments. The evidence from Norashikin established that in February 2021, a representative from Mugin Enterprise contacted Causeway seeking verification of an email and work order allegedly issued by Causeway. Norashikin testified that she received this inquiry and clarified that the documents were not from Causeway. Similarly, in April 2021, Reach Eastern Resources contacted Norashikin seeking verification of a work order dated 26.1.2021 allegedly from Causeway. Causeway clarified that this was also a forged document. These crane rental companies, faced with similar work orders from Jegan, exercised basic commercial prudence by directly verifying with Causeway before proceeding. This is precisely what Sarens should have done but conspicuously failed to do. [171] Sarens’ failure to make reasonable inquiries despite being put on inquiry by numerous suspicious circumstances means that even if the Turquand rule could potentially apply (which I have found it cannot), Sarens is not entitled to invoke it. The circumstances in this case went far beyond merely putting Sarens on inquiry. They were, as the Court of Appeal described in Ooi Meng Khin, “highly suspicious” and “beyond putting [the party] to inquiry”. Sarens cannot rely on the indoor management rule to shield itself from the consequences of its own failure to exercise basic commercial diligence in the face of glaring red flags that should have been apparent to any reasonable commercial party, let alone a self-professed sophisticated international crane rental company. Conclusion on the Turquand Rule [172] For the reasons set out above: a) The indoor management rule (Turquand rule) has no application in this case because the Work Orders are forgeries, and the rule does not apply to forgeries; and b) Even if the rule could potentially apply, Sarens has failed to satisfy the prerequisites for its invocation because it was put on inquiry by numerous suspicious circumstances and failed to make reasonable inquiries despite being in a position to do so. Fraudulent Trading Under Section 540 of the Companies Act 2016 [173] Sarens has alleged that Benny Lim carried on the business of Causeway with intent to defraud creditors pursuant to Section 540 of the Companies Act 2016. This is a serious allegation which impugns the personal integrity of Benny Lim. [174] Section 540(1) of the Companies Act 2016 provides: “(1) If, in the course of the winding up of a company or in any proceedings against a company, it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the Court, on the application of the liquidator or any creditor or contributory of the company, may, if the Court thinks proper to do so, declare that any person who was knowingly a party to the carrying on of the business in the manner aforesaid shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court directs.” [175] To succeed in a claim under Section 540, Sarens must prove: a) That the business of Causeway was carried on with intent to defraud creditors; b) That Benny Lim was knowingly a party to such conduct; and c) That there was dishonesty on the part of Benny Lim. [176] The element of dishonesty is crucial. In Tradewinds Properties Sdn Bhd v Zulhkiple bin A Bakar & Ors [2019] 1 MLJ 421, the Court of Appeal held that in order to establish dishonesty under Section 304 of the Companies Act 1965 (equivalent to Section 540 of the Companies Act 2016), the court must find that: “...according to the ordinary standard of reasonable and honest people what was done was dishonest and that the actor himself must have realised that the act was by those standards dishonest.” [177] This two-part test requires both objective dishonesty (judged by the standards of reasonable and honest people) and subjective dishonesty (the actor must have realised that what he was doing was dishonest by those standards). Mere commercial misjudgment or incompetence is insufficient. There must be actual dishonesty, that is to say, a real intent to defraud. No Evidence of Intent to Defraud [178] The evidence in this case comprehensively fails to establish any intent to defraud on the part of Benny Lim. Sarens has failed to adduce any credible evidence showing Benny Lim knowingly participated in fraudulent trading. There is no evidence of Benny Lim's knowledge or concurrence with Jegan's actions, no proof of dishonesty either objective or subjective, and no indication that Benny Lim took any steps to conceal any material facts from Sarens. Beyond this absence of evidence, there is also no document or correspondence at all evidencing any direct communication between Benny Lim and Sarens prior to 13.8.2020. Haikal confirmed under cross-examination that the very first and only time which Sarens communicated with Benny Lim was after Jegan's fraud and forgery had been discovered: So, the entire dealing, throughout the entire dealing how many times have you met D2 Benny Lim? Only once after I received the letter. After everything discovered, then you go to his office and talk to him? Yeah. That’s the only one, right? Yeah.” [179] This effectively ruled out any possibility that Benny Lim defrauded Sarens. On the contrary, the evidence establishes that Benny Lim was himself a victim of Jegan's fraud. [180] Upon discovery of Jegan's fraudulent activities, Benny Lim took immediate, comprehensive and transparent action. The chronology of events demonstrates genuine shock and alarm. On 2.7.2020, Causeway discovered from its purchasing department an email received from Rise Engineering which implicated fraudulent actions committed by Jegan. On 5.7.2020, Benny Lim discovered in Jegan's room numerous documents, including work orders and letters issued under Causeway's letterhead addressed to companies unrelated to Causeway and pertaining to different projects, all containing allegedly forged signatures. On 7.7.2020, Benny Lim on behalf of Causeway lodged a police report on the discovery of the forgery and fraud incident. That same day, Chiang contacted Dharmendra to inform him of the forgeries and to arrange a meeting at Causeway's office. On 9.7.2020, Causeway issued an Immediate Dismissal Letter terminating Jegan's employment for gross misconduct. [181] That same day, Causeway issued notification letters to the companies implicated in the initial discovery, formally rejecting the validity of the work orders and alleging forgery. These notification letters dated 9.7.2020 were sent to: Sarens, Rise Engineering, Triple Aligned, Jerrica Jewell, Total Lift, and PT Neo Trans Logistics. Causeway continued this transparent approach by notifying other companies as their involvement came to light, sending letters to Energy Workforce on 17.7.2020 and UTS Setia on 28.8.2020, and issuing solicitor's letters to Mugin Enterprise, Reach Eastern, and Dscaff Group in July 2021 following subsequent inquiries. These were not merely pro forma letters but detailed letters explaining what had occurred, identifying Jegan as the perpetrator, and putting all affected parties on notice that any work orders purportedly issued by Jegan were fraudulent and void. Causeway did not selectively notify only certain parties while concealing information from others; rather, Causeway was transparent with all affected parties upon discovery of their involvement. [182] Benny Lim's response did not stop with the immediate actions taken in July 2020. Causeway proceeded to initiate comprehensive legal action against Jegan. On 30.9.2020, Causeway filed its Writ and Statement of Claim against Jegan in the High Court of Shah Alam vide Suit No. BA-22NCvC-385-09/2020. Causeway obtained Judgment in Default of Defence against Jegan on 30.8.2021. Causeway then obtained Judgment for Assessment of Damages against Jegan on 25.11.2021. Ultimately, Causeway successfully applied to bankrupt Jegan, obtaining a Bankruptcy Order against Jegan on 27.6.2023. These legal proceedings demonstrate that Causeway was serious about pursuing Jegan for his fraudulent conduct and was not fabricating allegations of forgery as a pretext to avoid commercial obligations. In addition to these legal proceedings, Causeway went so far as to publish a Public Notice in the New Straits Times newspaper on 6.9.2021, announcing Jegan's dismissal and warning the public about Jegan's fraudulent activities. Causeway also issued cease and desist letters on 1.6.2021 to unknown impersonators attempting to use email addresses similar to Causeway's email addresses, and on 9.7.2021 sent letters to Mugin Enterprise, Reach Eastern, and Dscaff Group in response to their inquiries seeking confirmation about alleged appointments by Causeway. All of this contemporaneous conduct demonstrates clearly that Causeway's insistence on the forgery is genuine and not the conduct of a party attempting to fabricate an excuse to avoid commercial obligations. [183] These actions are wholly inconsistent with an intent to defraud. Sarens’ pleaded particulars of fraudulent trading at paragraphs 45.1 to 45.3 of the Re-Amended Statement of Claim fall short of establishing fraudulent trading. First, the issuance of the notification letter dated 9.7.2020 was conduct post-discovery of Jegan's fraudulent actions, consistent with Benny Lim's non-participation in the fraud. Such conduct negated any inference of dishonesty and did not show intention to carry on business with fraudulent intent; conversely, it showed transparency and good faith. Second, Benny Lim's denial of knowledge of Sarens’ involvement in the alleged project was again post-event conduct consistent with non-participation in the fraud, with no evidence of Benny Lim authorising engagement with Sarens. Third, Jegan's severance of all communications with Sarens and becoming uncontactable was Jegan's unilateral act of absconding. This allegation does not show that Causeway and Benny Lim were carrying on business with intention to defraud; in contrast, it implies that Jegan was the culprit behind all these fraudulent actions. If Benny Lim had been complicit in the fraud, he would not have lodged a police report, would not have taken legal action against Jegan through to bankruptcy, would not have published a public notice warning others, and would not have issued notification letters to all affected parties. The contemporaneous documentation and Benny Lim’s consistent conduct over a period of three years, from the discovery in July 2020 through to the bankruptcy proceedings concluded in June 2023, demonstrate that he was genuinely shocked and alarmed by the discovery of the fraudulent Work Orders and was himself a victim of Jegan’s fraud, rather than a party to it. No Benefit to Benny Lim [184] During cross-examination on 17.7.2024, Dharmendra made a critical concession that struck at the heart of Sarens’ fraudulent trading allegation. When confronted with the complete absence of any benefit accruing to Causeway and Benny Lim, Dharmendra admitted: Yeah. Now you agree with me D1 and D2 in this entire transaction is not receiving any benefit at all right from the work orders in question? They did not use your crane, correct? Yeah. Did they get any money from you? No. ..But I put it to you as matter of facts D1 D2 never received any benefits from the work orders in question. You agree? Agree.” [185] This concession by Dharmendra is fatal to Sarens’ allegation of fraudulent trading against Benny Lim. The evidence establishes beyond any doubt that Causeway and Benny Lim derived no benefit whatsoever from the five alleged Work Orders. No cranes were supplied by Sarens to Causeway's construction site. No rental payments were made by Causeway to Sarens. No works were carried out pursuant to the alleged Work Orders. The complete absence of any tangible benefit, whether in the form of crane services, commercial advantage, or financial gain, corroborates Causeway and Benny Lim’s position that they had no knowledge of, involvement in, or benefit from the transaction. [186] The legal significance of this absence of benefit cannot be overstated. In the Federal Court decision of Lai Fee & Anor v Wong Yu Vee & Ors [2023] 4 CLJ 1, the court held that motive is essential in establishing fraudulent intent. As stated at pages 16C-17F of that judgment, intent to defraud must be proven, and this includes an “intent to deprive creditors of an economic advantage or inflict upon them some economic loss”. The Court of Appeal in Tradewinds Properties Sdn Bhd v Zulhkiple bin A Bakar further held that dishonesty under Section 540 requires a criterion that is “partly subjective and partly objective”, and that the court must find that the actor “must have realised that the act was by those standards dishonest”. In the present case, the absence of any benefit negates any inference of motive on the part of Benny Lim. It reinforces the absence of dishonest intent as required under Section 540 of the Companies Act 2016. [187] Fraudulent trading typically involves a director or officer of a company obtaining benefits for themselves or for the company through fraudulent means. In this case, Benny Lim obtained nothing from the alleged Work Orders. The only person who potentially stood to benefit was Jegan himself, who was perpetrating the fraud entirely for his own purposes and without the knowledge, authority, or participation of Benny Lim. The complete absence of any benefit to Benny Lim is a powerful indicator that there was no intent to defraud on his part, and serves as further corroboration of his evidence that he was himself a victim of Jegan's fraudulent scheme. Benny Lim's Consistent Position [188] Throughout these proceedings, Benny Lim has consistently maintained that: a) He never signed the Work Orders; b) He never authorised their issuance; c) He had no knowledge of them until July 2020; and d) He was himself a victim of Jegan's fraud. [189] Benny Lim's evidence on these points was clear, consistent, and credible. I accept his evidence in its entirety. There is no evidence to contradict his testimony or to suggest that he had any involvement in the issuance of the forged Work Orders. Conclusion on Fraudulent Trading [190] The allegation of fraudulent trading under Section 540 of the Companies Act 2016 against Benny Lim is wholly without merit and unsupported by any evidence. There is no evidence that: a) Benny Lim carried on the business of Causeway with intent to defraud; b) Benny Lim had any knowledge of the fraudulent Work Orders; c) Benny Lim conspired with or assisted Jegan in any way; and d) Benny Lim obtained any benefit from the alleged Work Orders. [191] On the contrary, the evidence establishes that Benny Lim was himself a victim of the fraud perpetrated by Jegan. This baseless allegation impugning Benny Lim's personal integrity is dismissed. Sarens’ Claims for Damages [192] Having found that the Work Orders are forgeries and therefore void ab initio, it follows that all claims premised on their validity must fail. However, for completeness and in case these findings are reviewed on appeal, I address Sarens’ claims on alternative grounds. Liquidated Ascertained Damages [193] Even if the Work Orders had been genuine (which I have found they are not), Sarens’ claim for liquidated ascertained damages of RM26,070,000.00 would still fail because Dharmendra expressly abandoned this claim during trial. Despite this head of claim being specifically pleaded in the Amended Statement of Claim as one of the reliefs sought, Dharmendra testified unequivocally during cross-examination on 17.7.2024 that Sarens was not pursuing this claim. The following exchange occurred: Agree. Ok good. Now you claim for LAD, right? You are claiming for LAD Liquidated Ascertained Damages, are you? We are claiming for loss of rental, not LAD. Not LAD? Yeah. Ok. You never issued any notice to claim LAD to D1, you agree? Yeah, I think we only claim rental for loss of rental.” [194] This concession by Sarens’ own witness is conclusive and constitutes a deliberate disavowal of the LAD claim. The legal principle is well-established: where a party has expressly abandoned a claim during trial, the court will neither consider nor assess that claim, and such a claim ought to be dismissed in entirety. In the High Court case of Mattackel Shibu Alexander v Balbir Kaur Gurdial Singh [2022] CLJU 1467, the court dismissed the defendant's counterclaim on the basis of the defendant's own concession that the counterclaim was no longer being pursued. At page 32 of that judgment, the court held: “[73] Following the Defendant's own concession to no longer pursue her counterclaim of the alleged RM10,000.00 in the OCBC joint account, this Court accordingly dismiss this same arm of the Defendant's counterclaim.” [195] The present case is directly analogous. Dharmendra's unequivocal confirmation amounted to a deliberate disavowal of the LAD claim, which is further compounded by the complete absence of any documentary evidence substantiating any claim for LAD from Causeway and Benny Lim. Accordingly, Sarens’ claim for liquidated ascertained damages is dismissed. Rental and Storage Claim [196] Sarens’ claim for RM2,553,150.00 in rental and storage costs suffers from fundamental evidential deficiencies beyond the issue of forgery. A critical defect in Sarens’ case relates to the chronology of the proforma invoices. The evidence shows that invoices dated 13.5.2020 were allegedly sent via email on 5.5.2020. This is chronologically impossible. Invoices dated 13.5.2020 could not have been sent on 5.5.2020 as that date had not yet arrived. During cross-examination on 22.5.2023, PW3 was confronted with this impossibility: Now you agree with me, no, can you tell me the dates of these invoices? 13th May 2020. Refer back to page 412. The email was dated 5th of May right? Yes. How could the email sent out invoices that post dated that specific email. Email dated 5th of May, invoices dated 13th May? No because in that email Mr Dharmendra as sent the proforma invoices not the invoices.” [197] Subsequently, during re-examination on 25.5.2023, PW3 sought to introduce allegedly corrected proforma invoices dated 4.5.2020, claiming these were the documents actually sent with the 5.5.2020 email. However, this belated production was procedurally irregular and inconsistent with PW3's earlier evidence, which clearly stated the invoices were dated 13.5.2020 and sent on 5.5.2020. Dharmendra then attempted to reinforce this revised version by amending his witness statement to state that he had emailed proforma invoices on 5.5.2020 and handed over tax invoices dated 13.5.2020 “in person to Joshua around few days later.” This tailored evidence, produced only after the evidential gaps were exposed during PW3's cross-examination, demonstrates a lack of contemporaneous documentation and strongly suggests that the invoices were created retrospectively to support the claim. [198] Sarens’ rental and storage claim is further undermined by the failure to produce critical supporting documentation. Sarens claims to have incurred RM1,415,190.21 in out-of-pocket expenses paid to Bayuvest for shipping, customs duties, transportation and storage costs. However, when PW3 was cross-examined on 22.5.2023, he was unable to produce numerous documents that should have existed if the transactions were genuine. First, PW3 admitted that Sarens could not produce any of the purchase orders that were referenced in the Bayuvest invoices. Second, PW3 could not produce any invoices showing temporary storage costs incurred before 2.3.2020, despite the claim for storage arising from delays to that date. Third, PW3 admitted that based on the Bayuvest invoices produced, none showed that any of the three cranes were being stored at the three locations specifically mentioned in Sarens’ solicitors’ letter dated 4.11.2022 (CC1500 at Negeri Sembilan, CKE2500 at Negeri Sembilan, and LR1160 at Pulau Pinang). Fourth, PW3 could not produce any import and customs documents despite Sarens’ letter claiming to have provided such documents. These evidential gaps are fatal to Sarens’ claim. A plaintiff seeking substantial damages has the, burden of proving both the fact and the amount of damages before he can recover - Tan Sri Khoo Teck Puat & Anor v Plenitude Holdings Sdn Bhd [1995] (Federal Court)1 CLJ 15; [1994] 3 MLJ 777. [199] More fundamentally, Sarens never mobilised its cranes to the project site, never delivered equipment to Causeway, and never carried out any works pursuant to the alleged Work Orders. During cross-examination, Dharmendra made a critical concession: But I put it to you as matter of facts D1 D2 never received any benefits from the work orders in question. You agree? Agree.” [200] No cranes were supplied by Sarens to Causeway's site. No rental payments were made by Causeway to Sarens. No works were carried out pursuant to the alleged Work Orders. The claimed losses are entirely speculative, based on contracts that never came into existence. The legal principle applicable to claims for damages is clear. In the Federal Court case of Datuk Mohd Ali bin Hj Abdul Majid & Anor (both practicing as Messrs Mohd Ali & Co.) v Public Bank Bhd [2014] 4 MLJ 465, the Federal Court held: “[31] The object of an award of damages is to give the claimant compensation for the damage, loss or injury he has suffered. [32] It is trite law that a claimant claiming damages must prove that he has suffered the damage. [33] Therefore, in a claim for damages, it is not sufficient for Sarens to merely state the amount of damages that he is claiming, he must prove the damage that he had in fact suffered to the satisfaction of the court.” [201] Sarens has failed to prove that it suffered any actual damage caused by Causeway. Any loss incurred by Sarens arose from its own failure to verify the authenticity of the Work Orders and the authority of Jegan, not from any conduct of Causeway. [202] For these reasons, even on alternative grounds independent of the forgery finding, Sarens’ claims for damages must fail. Sarens has failed to establish its claim for liquidated ascertained damages through express abandonment during trial. The claim for rental and storage costs is fatally flawed by chronologically impossible invoice dates, the absence of critical supporting documentation, and the fundamental fact that no cranes were ever mobilised or delivered and no works were ever carried out. Sarens has not discharged the burden of proving that it suffered the losses claimed or that such losses were caused by Causeway. Accordingly, both heads of claim for damages are dismissed. THE COUNTERCLAIM [203] Causeway has filed a Counterclaim seeking: a) Declaratory relief that no contractual relationship exists between Sarens and Causeway and that the Work Orders are null and void; and b) Damages arising from Sarens’ alleged negligence. Declaratory Relief [204] Causeway seeks declarations that: a) There is no contractual relationship between Sarens and Causeway; b) The five

Orders dated 9.9.2019,

11.2019, and 6.1.2020 bearing reference numbers L/LA01/012356, L/LA02/037632, L/LA02/097633, L/LA01/027158, and CIW/SARENS/KLCC LOT L/LA01/027159 are products of forgery and are null, invalid and void ab initio; c) Six additional work orders bearing dates 21.11.2019 and 6.1.2020 and bearing reference numbers L/LA01/027147, L/LA01/027160, and CIW/SARENS/KLCC LOT L/LA01/027161 discovered in Jegan's room are similarly products of forgery and are null, invalid and void ab initio. [205] Causeway submits that these declarations are necessary to clarify the legal position, to prevent any suggestion that the forged Work Orders created obligations on the part of Causeway, and to formally record the court's findings given the systematic nature of the fraud perpetrated by Jegan. Sarens opposes these declarations and maintains that valid contracts existed between the parties. [206] Having found that the five Work Orders relied upon by Sarens are forgeries, and that the six additional work orders discovered by Causeway are likewise forgeries, it follows that the declarations sought are justified. The legal position is clear and well-established: a forged document is a nullity. It creates no rights and imposes no obligations. This fundamental principle was firmly articulated by the Court of Appeal in Boonsom Boonyanit. The court affirmed that a forged instrument is a complete nullity, having no legal force or effect from the outset. Such an instrument is void ab initio and not merely voidable, and, unless there is an express statutory provision to the contrary, it is incapable of conferring any rights on a person who purports to derive title or benefit from it. This principle makes clear the distinction between a forged document and a merely voidable document. A voidable document is effective until set aside, but a forged document is void from its inception. It is a pure nullity, incapable of creating any legal rights or obligations. [207] The same principle was reiterated in the seminal House of Lords decision in Ruben v Great Fingall. In that case, Lord Macnaghten stated at page 444: “The thing put forward as the foundation of their claim is a piece of paper which purports to be a certificate of shares in the company. This paper is false and fraudulent form beginning to end. The representation of the company's seal which appears upon it, though made by the impression of the real seal of the company, is counterfeit, and to better than a forgery. The signatures of the two directors which purport to authenticate the sealing are forgeries pure and simple. Every statement in the document is a lie. The only thing real about it is the signature of the secretary of the company, who was the sole author and perpetrator of the fraud. No one would suggest that this fraudulent certificate could of itself give rise to any right or bind or affect the company in any way. It is not the company's deed, and there is nothing to prevent the company from saying so.” [208] This principle has been consistently applied by Malaysian courts. In Lai Ban Guan v Chan Phaik Boi & Ors [2012] 4 CLJ 255, the High Court dealt with forged signatures on corporate documents. The court accepted expert evidence confirming the forgery and declared the documents null and void, stating at page 262: “[12] Accordingly taking the evidence of Sarens that he did not sign the three documents and PW4 where she says the questioned signatures were not written by the writer of the specimen signatures who is Sarens, plaintiff has proven the signatures on the three documents were forged. The consequence of this is explained in Charlesworth's Company Law, 13th edn where at p. 298 it is stated 'A forged transfer of shares is a nullity and cannot affect the title of the shareholder whose signature is forged'. Refer also Boyle & Birds' Company Law where at p. 329 is stated 'A forged transfer is in law no transfer, and gives the alleged transferee no rights, not even if the company issues to him a certificate stating that he is the holder of the shares which the transfer purports to assign'.” [209] Similarly, in Kerajaan Malaysia v RHB Insurance Bhd, the High Court citing Ruben v Great Fingall Consolidated held at page 801 that a forged document cannot bind the company in any way, and there is nothing to prevent the company from saying so. [210] The declarations sought are particularly appropriate given the systematic fraud perpetrated by Jegan affecting multiple companies beyond Sarens. The evidence established that at least eleven other companies received forged work orders from Jegan using the same modus operandi. These companies include Total Lift, Rise Engineering, Triple Aligned, Jerrica Jewell Sdn Bhd, PT Neo Trans Logistics, Energy Workforce, UTS Setia, Cahaya Sina Sdn Bhd, Mugin Enterprise, Reach Eastern, and DScaff Group. Vincent (DW7), formerly employed by Total Lift, provided independent testimony confirming that Jegan employed identical methods with Total Lift as he used with Sarens: requesting quotations, issuing work orders on Causeway's letterhead bearing what appeared to be Causeway's company stamp and Benny Lim's signature, providing assurances about payment, maintaining regular contact, and then disappearing when the fraud was discovered. This similar fact evidence, admissible under Section 15 of the Evidence Act 1950, demonstrates that the fraud against Sarens was not an isolated incident but part of a systematic scheme perpetrated against multiple victims. [211] Upon discovery of the fraud, Causeway lodged a police report on 7.7.2020 and issued notification letters dated 9.7.2020 to the initial group of implicated companies, including Sarens, Rise Engineering, Triple Aligned, Jerrica Jewell, Total Lift, and PT Neo Trans Logistics. Causeway subsequently notified the remaining companies (Energy Workforce, UTS Setia Provider, Mugin Enterprise, Reach Eastern, and DScaff Group) as their involvement was discovered or upon receiving their inquiries. Causeway subsequently took immediate legal action against Jegan, obtaining judgment in default of defence and ultimately securing a bankruptcy order against him. Jegan's failure to enter appearance in these proceedings and his complete absence from the trial speaks volumes about his culpability. [212] The necessity for these declaratory orders is underscored by Sarens’ persistent assertion throughout these proceedings that valid contracts existed between Sarens and Causeway, despite having been informed of the forgery as early as July 2020. On 7.7.2020, Chiang contacted Dharmendra via WhatsApp to inform him of the forgeries and to arrange a meeting at Causeway's office. Although Dharmendra declined to attend the scheduled meeting the following day, Causeway formally issued notification letters dated 9.7.2020 to Sarens by both fax and registered post, clearly stating the forgery issue and rejecting the validity of the alleged Work Orders. Sarens received the hardcopy of this notification letter on 13.7.2020. Yet Sarens’ representative only attended a meeting with Causeway on 13.8.2020, more than a month after being informed of the forgery. Despite this clear notification and despite the overwhelming evidence of forgery adduced at trial, including the expert forensic evidence from DW1, Benny Lim's consistent denial under oath, the absence of any commercial rationale for contracts worth over RM52 million against a sub-contract worth RM3.7 million, and the systematic pattern of fraud affecting multiple companies, Sarens has maintained its claim that binding contractual obligations arose from these forged documents. Sarens seeks to enforce alleged contracts purportedly worth in excess of RM26 million based on documents which the court has found to be forgeries. In these circumstances, the declarations sought will serve to clarify the legal position definitively and to prevent any future suggestion that the forged Work Orders created any rights or obligations on the part of Causeway. [213] I therefore grant the declarations sought in paragraphs 40.1 and 40.2 of the Re-Amended Defence and Re-Amended Counterclaim. I declare that: a) There is no contractual relationship between Sarens and Causeway; b) L/LA01/012356 dated 9.9.2019 is a product of forgery and is null, invalid and void ab initio; c) L/LA02/037632 dated 26.11.2019 is a product of forgery and is null, invalid and void ab initio; d) L/LA02/097633 dated 26.11.2019 is a product of forgery and is null, invalid and void ab initio; e) L/LA01/027158 dated 6.1.2020 is a product of forgery and is null, invalid and void ab initio; f) L/LA01/027159 dated 6.1.2020 is a product of forgery and is null, invalid and void ab initio; g) L/LA01/027147 dated 21.11.2019 is a product of forgery and is null, invalid and void ab initio; h) L/LA01/027160 dated 6.1.2020 is a product of forgery and is null, invalid and void ab initio; and i) L/LA01/027161 dated 6.1.2020 is a product of forgery and is null, invalid and void ab initio. Negligence Claim [214] Causeway's Counterclaim also seeks damages arising from Sarens’ alleged negligence. Causeway contends that Sarens owed a duty of care to verify the authenticity of the Work Orders and the authority of Jegan before acting upon them, and that Sarens’ failure to do so caused loss and damage to Causeway. Causeway submitted that Sarens voluntarily assumed responsibility by holding itself out as a sophisticated multinational company with extensive safety procedures and risk management processes, and that Sarens’ failure to conduct even basic verification despite numerous red flags constituted a breach of that duty. [215] While I have considerable sympathy for Causeway's position, and while I have found that Sarens failed to exercise reasonable care in its dealings, I am not persuaded that the legal elements necessary to establish tortious liability in negligence have been made out on the facts of this case. The Law of Negligence [216] The law of negligence requires proof of: a) a duty of care owed by the defendant to Sarens; b) breach of that duty; c) causation - the breach must have caused the loss; and d) the loss must be reasonably foreseeable. [217] The existence of a duty of care is a question of law. The applicable test for determining whether a duty of care exists was established by the Federal Court in Lok Kok Beng v Loh Ciak Eong [2015] 7 CLJ 1008. The Federal Court held that three ingredients must be fulfilled: a) the harm must have been reasonably foreseeable (foreseeability test); b) there must have been a relationship of proximity between the parties (proximity test); and c) it must be just, fair and reasonable to impose a duty of care on the defendant (policy consideration). [218] The Federal Court observed that where damages sought by the claimant constitute pure economic loss not flowing from personal injury or damage to property, “a more restricted approach is preferable for cases of pure economic loss. As such, the concepts of voluntary assumption of responsibility and reliance are seen as important factors to be established for purposes of fulfilling the proximity requirement. The reason for a more stringent approach taken in the claims involving pure economic loss is because such loss might lead to an indeterminate liability being imposed on a particular class of defendants, thus leading to policy issues.” The Contractual Relationship Context [219] In the present case, the relationship between Sarens and Causeway arose (if at all) from what Sarens believed to be a commercial contract for the supply of cranes. This was a pure commercial relationship between two sophisticated commercial entities, each engaged in the construction industry. As a general rule, contracting parties do not owe each other duties of care in tort beyond the contractual duties they have undertaken. The law is reluctant to impose tort duties in parallel with contractual relationships because this can undermine the parties' freedom to allocate risks through their contractual arrangements. Causeway submitted that the absence of a contractual relationship does not preclude the existence of a duty of care in negligence, citing the Court of Appeal case of Bodibasixs Manufacturing Sdn Bhd v Entogenex Industries Sdn Bhd [2018] 9 CLJ 52. However, that case concerned a situation where the court found factors giving rise to a duty of care independent of any contractual chain. The critical distinction in the present case is that Sarens’ entire interaction with Causeway was premised upon what Sarens believed to be a contractual arrangement arising from the Work Orders. [220] As stated above, the test for establishing a duty of care in Malaysian law was definitively set out by the Federal Court in Lok Kok Beng. The court held that a duty of care arises only where the threefold test is satisfied, namely reasonable foreseeability of damage, sufficient proximity between the parties, and that it is just, fair and reasonable to impose such a duty. This three-fold test was also affirmed in Tenaga Nasional Malaysia v Batu Kemas Industri Sdn Bhd and another appeal [2018] 5 MLJ 561, where the Federal Court emphasised that all three elements must be established before a duty of care can be imposed. Insufficient Proximity [221] In the present case, I am not satisfied that the requisite proximity exists to ground a duty of care in tort. Sarens’ relationship with Causeway (such as it was) arose from what Sarens believed to be a contractual arrangement based on the Work Orders issued by Jegan. Sarens did not undertake any responsibility towards Causeway independently of that supposed contract. [222] Causeway submitted that Sarens voluntarily assumed responsibility towards Causeway, relying on the Federal Court decision in Lok Kok Beng (supra) for the proposition that voluntary assumption of responsibility is a relevant factor in establishing proximity. Causeway argued that Sarens’ general corporate representations about its procedures and standards created a legitimate expectation that Sarens would exercise appropriate care. However, the concept of voluntary assumption of responsibility in the context of negligence law refers to a party undertaking to perform a task or provide a service with the knowledge that another party will rely on the careful performance of that undertaking. In this case, Sarens did not undertake any responsibility towards Causeway except through what it believed to be a contractual relationship arising from the Work Orders. Sarens’ general corporate representations about its procedures and standards do not constitute the specific assumption of responsibility towards Causeway that would give rise to a tortious duty of care. [223] Furthermore, there was no direct communication or dealing between Sarens and Causeway. Sarens dealt exclusively with Jegan. Causeway made no representation to Sarens about Jegan's authority. In these circumstances, the relationship lacks the degree of proximity necessary to impose a duty of care in tort. There was no prior course of dealing, no assumption of responsibility, and no reliance by Causeway on any undertaking by Sarens. Policy Considerations Against Imposing a Duty of Care [224] Even if proximity could be established, there are strong policy reasons against imposing a tortious duty of care in these circumstances. If every party who deals with a company were to owe a duty of care to that company to verify the authority of the persons purporting to act on its behalf, this would impose an unreasonable and unworkable burden on commercial transactions. It would effectively make parties insurers against fraud perpetrated by the other company's employees. Sarens submitted that it would be unreasonable, practically and commercially, to impose a duty of care on a sub-subcontractor to carry out full enquiries and investigations on the existence, exact scope and details of the subcontract works between a main contractor and sub-contractor, particularly where such contracts are private and the sub-subcontractor has no direct dealings with the main contractor. Sarens argued that such a duty would stunt the construction industry, as every sub-contractor would be required to carry out extensive and in-depth investigations on its employing contractor before it would be considered safe to accept a letter of award or work order. While Sarens’ argument has some force in the context of its own claim (which has failed on other grounds), it applies with equal force against the imposition of a duty of care running in the opposite direction. [225] The indoor management rule itself reflects a policy that outsiders are generally entitled to assume that persons purporting to act on behalf of a company have authority to do so, without being required to investigate the company's internal affairs. While I have found that the Turquand rule does not protect Sarens in this case (because of the finding of forgery and because Sarens was put on inquiry), the underlying policy consideration remains relevant to the question of whether a duty of care in tort should be imposed. The law seeks to balance competing interests: on the one hand, protecting innocent third parties from the consequences of internal corporate irregularities; on the other hand, protecting companies from fraudulent acts of their employees. To impose a duty of care on Sarens in favour of Causeway would upset this balance. [226] The policy considerations were cogently articulated by the Singapore Court of Appeal in Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd [2011] SGCA 22. In that case, the court considered whether an employer owed a duty of care to banks in respect of fraudulent acts committed by its employee. The court held: “In our view, the imposition of a duty of care on APBS vis-à-vis HVB would mean that any company which employs an employee whose functions include contacting banks might, in the event of the employee defrauding any bank, potentially be liable for the employee's criminal acts if it has not exercised due care in employing the employee. We do not think there are any policy considerations that warrant imposing, in favour of banks, such a duty of care on companies which borrow money from them. By the nature of their business, banks are regular targets of fraudsters. The law should be slow to shield banks from the consequences of their own carelessness or incompetence.” [227] While the facts of that case concerned a bank, the principle applies with equal force to commercial parties generally: the law does not impose on companies a duty of care to protect third parties from fraud perpetrated by the company's own employees, particularly where the third party had means available to verify and protect itself. The Proper Analysis [228] The proper analysis in this case is not that Sarens owed a duty of care to Causeway, but rather that Sarens failed to take reasonable steps to protect its own interests. Sarens’ failure to make inquiries and verify the authority of Jegan was a failure of prudence on its own part, not a breach of duty owed to Causeway. The law does not generally impose duties on commercial parties to protect their counterparties from fraud perpetrated by the counterparty's own employees. To hold otherwise would be to impose on every person dealing with a company a duty to police the company's internal affairs and protect the company from its own employees' wrongdoing. [229] I am fortified in this conclusion by considering the practical implications. If Sarens were found liable in negligence to Causeway in these circumstances, it would mean that every victim of a forgery by a company's employee would have a claim against other victims who failed to detect the forgery. This cannot be correct as a matter of law or policy. Both Sarens and Causeway were victims of Jegan's fraud. The fact that Sarens failed to exercise reasonable care in protecting its own interests does not transmute that failure into a breach of duty owed to Causeway. For these reasons, while I have found that Sarens failed to exercise reasonable care in its own interests, I do not find that Sarens owed a duty of care to Causeway in tort. Accordingly, Causeway's claim for damages for negligence must fail. Conclusion [230] However, this finding should not be taken as any criticism of Causeway's decision to pursue this Counterclaim. Causeway was placed in an extremely difficult position by Jegan's fraud and by Sarens’ decision to pursue this litigation despite having been informed of the forgery. Causeway was entitled to defend itself vigorously and to seek all appropriate relief. Causeway sought declaratory relief that no contractual relationship exists between Sarens and Causeway and that all the Work Orders are null and void. This declaratory relief serves an important function in protecting Causeway's commercial reputation and providing certainty in its dealings with other parties. [231] The Counterclaim for damages for negligence is dismissed. However, as indicated above, I allow the declaratory relief sought by Causeway pursuant to paragraphs 40.1 and 40.2 of the Re-Amended Defence and Re-Amended Counterclaim dated 1.6.2021, namely: a) a declaration that no contractual relationship exists between Sarens and Causeway; and b) a declaration that all the Work Orders produced in evidence are null, invalid and void ab initio. ADDRESSING THE ISSUES TO BE TRIED [232] The Issues to be Tried were agreed between the parties and filed on 2.6.2022. Although I have addressed most of these issues in the analysis above, for clarity and completeness I now set out my determination of each issue. Issues Relating to the Main Suit Issue 1 [233] Issue 1 is set out as follows: Whether Jegan had the express or implied authority to enter into contracts with Sarens for and on behalf of Causeway? [234] This is answered in the negative. Jegan had no express or implied authority to enter into contracts for crane rental or to issue work orders on behalf of Causeway. His role was limited to technical quality assurance matters. He had no commercial authority. Issue 2 [235] Issue 2 is set out as follows: Whether Causeway appointed Sarens as its subcontractor? [236] This is answered in the negative. Causeway never appointed Sarens as a subcontractor. The alleged appointment rests entirely on the five Work Orders, which I have found to be forged documents created by Jegan without the knowledge, consent, or authority of Causeway. No genuine contractual relationship of subcontracting ever came into existence between Sarens and Causeway. Issue 3 [237] Issue 3 is set out as follows: Whether the five Work Orders between Sarens and Causeway are valid and binding on Causeway? [238] This is answered in the negative. The five Work Orders are not valid and binding on Causeway. They are forged documents and are therefore null and void ab initio. A forged document is a legal nullity: it creates no rights, imposes no obligations, and is incapable of founding any contractual liability. Issue 4 [239] Issue 4 is set out as follows: Whether the five Work Orders were products of forgery, and if so, whether this affects their validity vis-à-vis Sarens? [240] This issue is answered in the affirmative. The five Work Orders are products of forgery, which renders them null and void ab initio. [241] The signatures on the five Work Orders, which purport to be those of Benny Lim, were not signed by him but were forged by Jegan. This finding is supported by multiple strands of evidence: first, Benny Lim’s clear and unequivocal denial of having signed the documents; second, the expert forensic evidence of DW1, who identified fundamental structural differences between the questioned signatures and fifty specimen signatures; third, the court’s own visual comparison of the signatures; fourth, the inherent commercial implausibility of the alleged transactions; and fifth, the contemporaneous conduct of Causeway and Benny Lim upon discovering the existence of the Work Orders. As forged instruments, the Work Orders are void from inception and have no legal effect. Issue 5 [242] Issue 5 is set out as follows: Whether Causeway wrongfully terminated the five Work Orders, or whether the five Work Orders were in fact and/or in law void ab initio? [243] This issue is answered by holding that the five Work Orders were in fact and in law void ab initio. Since the Work Orders were forged, they were void from the outset. There was therefore nothing capable of termination. Causeway did not terminate any valid contractual arrangement, and the question of wrongful termination does not arise. Issue 6 [244] Issue 6 is set out as follows: Whether Sarens may rely on the protection of the Indoor Management Rule (the Turquand Rule), or whether the surrounding circumstances placed Sarens and/or its employees on a duty of inquiry? [245] This issue is answered as follows: first, Sarens cannot invoke the protection of the Turquand Rule; and second, the surrounding circumstances placed Sarens on a duty of inquiry. [246] The Turquand Rule does not extend to cases of forgery. This principle is well-established by the decisions in Ruben v Great Fingall and Ooi Meng Khin v Amanah Scotts Properties (KL) Sdn Bhd [supra]. In any event, even if the rule were potentially applicable, Sarens was placed on inquiry by numerous red flags, including the gross disparity between the alleged crane rental value exceeding RM52 million and Causeway’s subcontract value of less than RM4 million, Sarens’ exclusive dealings with Jegan, the incorrect project name appearing in the documents, and the absence of normal commercial and contractual procedures. Issue 7 [247] Issue 7 is set out as follows: Whether Sarens has suffered loss and damage, and if so, whether such loss and damage was caused by Causeway and/or contributed to by Sarens? [248] This issue is answered in the negative. Sarens has failed to establish that it suffered any actual loss caused by Causeway. The evidence shows that Sarens never mobilised cranes to the project site and no works were ever carried out. The alleged losses are speculative and premised entirely on contracts that never existed in law. [249] Any loss suffered by Sarens arose from its own failure to verify the authenticity of the Work Orders and the authority of Jegan, rather than from any act or omission on the part of Causeway. Issue 8 [250] Issue 8 is set out as follows: Whether Causeway is liable to pay Sarens

liquidated ascertained damages of RM26,070,000.00 as stated in the five Work Orders and/or Sarens’ quotations, and/or (ii) rental and storage charges of RM2,553,150.00? [251] This issue is answered in the negative. Causeway is not liable to pay either sum. Both claims are premised on the validity of the Work Orders, which I have found to be forged and therefore void ab initio. In addition, Sarens expressly abandoned its claim for liquidated ascertained damages during the course of the trial. Issue 9 [252] Issue 9 is set out as follows: Whether Causeway and/or Benny Lim owed Sarens a duty of care in respect of the actions of Jegan? [253] This issue is answered in the negative. Causeway and Benny Lim did not owe Sarens a duty of care in tort to prevent or detect fraud committed by their employee. An employer is not generally liable to third parties for undetectable criminal acts committed by an employee wholly outside the scope of employment and for the employee’s own benefit. [254] Jegan’s acts of forgery and fraud were not acts performed in the course of his employment as a quality assurance officer. They were criminal acts undertaken entirely for his own purposes. Issue 10 [255] Issue 10 is set out as follows: If the answer to Issue 9 is in the affirmative, whether Causeway and/or Benny Lim failed to exercise reasonable care, and whether they were negligent and/or reckless? [256] This issue does not arise and is therefore not applicable, given my answer to Issue 9. Issue 11 [257] Issue 11 is set out as follows: Whether Benny Lim carried on the business of Causeway with intent to defraud Sarens? [258] This issue is answered in the negative. There is no evidence that Benny Lim carried on the business of Causeway with any intent to defraud Sarens. Benny Lim had no knowledge of the forged Work Orders until July

Upon discovery, he acted promptly. He derived no benefit from the forged documents and was himself a victim of Jegan’s fraud. Issue 12 [259] Issue 12 is set out as follows: If the answer to Issue 11 is in the affirmative, whether Benny Lim is jointly and severally liable with Causeway for Sarens’ claims? [260] This issue does not arise and is therefore not applicable, given my answer to Issue 11. Issues relating to the Counterclaim Issue 13 [261] Issue 13 is set out as follows: Whether Sarens (as the 1st Defendant in the Counterclaim) owed Causeway (as the Plaintiff in the Counterclaim) a duty of care in this matter? [262] This is answered in the negative. Although Sarens failed to exercise reasonable care in protecting its own interests, I do not find that Sarens owed Causeway a duty of care in tort. The imposition of such a duty would be inconsistent with established principles and contrary to policy, as it would effectively render commercial parties insurers against fraud perpetrated by the employees of another company. Issue 14 [263] Issue 14 is set out as follows: If the answer to Issue 13 is in the affirmative, whether Sarens (as the 1st Defendant in the Counterclaim) failed to exercise reasonable care in this matter, and whether it was negligent and/or reckless in failing to do so? [264] This issue does not arise and is therefore not applicable, given my answer to Issue 13. I nevertheless observe that Sarens did fail to exercise reasonable care in its own interests by neglecting to conduct proper verification before committing to supply equipment allegedly valued at over RM52 million. Issue 15 [265] Issue 15 is set out as follows: Whether the six work orders addressed to Sarens, referred to in paragraph 9.20 of the Re-Amended Defence and Re-Amended Counterclaim dated 1.6.2020, are products of forgery? [266] This issue is answered in the affirmative. The evidence establishes that the six additional work orders discovered in Jegan’s room are also products of forgery. They were perpetrated using the same modus operandi as the five Work Orders relied upon by Sarens. Issue 16 [267] Issue 16 is set out as follows: If the answer to Issue 15 is in the affirmative, whether the six work orders referred to therein are in fact and/or in law void ab initio? [268] This issue is answered in the affirmative. As forged documents, the six additional work orders are null and void ab initio. They create no rights and impose no legal obligations. Issue 17 [269] Issue 17 is set out as follows: Whether there was any complot and/or conspiracy between Jagen (4th Defendant in the Counterclaim) and employees of Sarens (1st Defendant in the Counterclaim), namely Dharmendra and/or Haikal. [270] This is answered in the negative. Causeway initially brought counterclaims against Dharmendra and Haikal alleging conspiracy with Jegan. However, both Dharmendra and Haikal were struck out as parties to the Counterclaim by court order dated 20.10.2021. [271] Even if they had remained as parties, no credible evidence was adduced at trial to establish any conspiracy between Causeway and Sarens’ employees. The allegation of conspiracy rested primarily on speculation and suspicion arising from the fact that Dharmendra and Haikal had dealings with Jegan. However, their dealings with Jegan were entirely consistent with their employment duties at Sarens, where they were responsible for liaising with potential clients. [272] During the cross-examination of Dharmendra, Causeway’s counsel put to him that certain email communications were “a private arrangement between you and D3 to fabricate a claim against D1.” Dahrmendra disagreed with this allegation. No independent evidence was produced to support the allegation of conspiracy. [273] For a conspiracy to be established, there must be an agreement or understanding between two or more persons to commit an unlawful act or to commit a lawful act by unlawful means. The burden lies on the party alleging conspiracy to prove the existence of such agreement. In this case, Causeway has failed to discharge this burden. The evidence shows only that Dharmendra and Haikal dealt with Jegan in their capacity as employees of the Plaintiff, believing him to be a legitimate representative of Causeway. There is no evidence that they knew of or participated in Jegan’s fraudulent scheme. Issue 18 [274] Issue 18 is set out as follows: Whether Causeway (as the Plaintiff in the Counterclaim) is entitled to the declaratory reliefs sought in paragraphs 40.1 and 40.2 of the Re-Amended Defence and Re-Amended Counterclaim dated 1.6.2021 (Enclosure 24)? [275] This issue is answered in the affirmative. Causeway is entitled to the declaratory reliefs sought, namely a declaration that no contractual relationship exists between Sarens and Causeway, and a declaration that all the Work Orders produced in evidence are null and void. Issue 19 [276] Issue 19 is set out as follows: Whether Sarens (as the 1st Defendant in the Counterclaim) is liable to pay the 1st Defendant (as the Plaintiff in the Counterclaim) general damages, exemplary damages and/or aggravated damages? [277] This issue is answered in the negative. Although I have considerable sympathy for the position of Causeway, I have found that Sarens did not owe Causeway a duty of care in tort. In the absence of such a duty, the claim for damages cannot be sustained and must fail. CONCLUSION AND ORDER [278] For the reasons set out in this judgment, I find that: a) The five Work Orders upon which Sarens’ entire claim is founded are forgeries perpetrated by Jegan, Jegathisvaran a/l Mathevan, without the knowledge or authority of Causeway and Benny Lim; b) As forged documents, the Work Orders are null and void ab initio and create no contractual rights or obligations; c) Sarens has failed to discharge its burden of proving the authenticity and validity of the Work Orders; d) Jegan had no express or implied authority to bind Causeway in commercial contracts of the nature alleged; e) The Turquand Rule (indoor management rule) does not apply to forgeries and, in any event, Sarens was put on inquiry by numerous suspicious circumstances; f) The allegation of fraudulent trading under Section 540 of the Companies Act 2016 against Benny Lim is without merit; g) Sarens has not established any loss caused by Causeway and Benny Lim; h) Causeway is entitled to declaratory relief that no contractual relationship exists and that all the Work Orders are null and void; i) Causeway's claim for damages for negligence fails as Sarens did not owe a duty of care to Causeway in tort. Main Suit [279] Accordingly, I make the following orders: a) Sarens’ claim against Causeway and Benny Lim is dismissed in its entirety with costs. b) Sarens shall pay Causeway and Benny Lim costs of RM100,000.00 (Ringgit Malaysia One Hundred Thousand only) (subject to allocatur) for the Original Action. Counterclaim [280] Causeway's Counterclaim against Sarens is allowed in part as follows: a) It is declared that there is no contractual relationship between Sarens and Causeway; b) Declaratory order that the said Work Orders (Pesanan-Pesanan Kerja) of the First Defendant and the Forged Work Orders (Aturan Kerja) to the Plaintiff are invalid and void, including and not limited to:- i) The said Work Orders of Causeway as detailed in paragraph 10 of the Statement of Claim of Sarens; ii) Work Order dated 09.09.2019 [Ref: L/LA01/012356] under the Project alleged by Sarens; iii) Work Order dated 21.09.2019 [Ref: L/LA01/027147] under the Project alleged by Sarens; iv) Work Order dated 06.01.2020 [Ref: L/LA01/027158] under the Project alleged by Sarens; v) Work Order dated 06.01.2020 [Ref: L/LA01/027159] under the Project alleged by Sarens; vi) Work Order dated 06.01.2020 [Ref: L/LA01/027160] under the Taiwanese Temple Project; vii) Work Order dated 06.01.2020 [Ref: L/LA01/027161] under the Taiwanese Temple Project. [281] Causeway's claim for damages for negligence in the Counterclaim is dismissed. [282] Each party shall bear their own costs for the Counterclaim. 5 February 2026 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Emilia Van Buerle (Messrs Peter Ling & Co) For the 1st and 2nd Defendants: Lai Yee Fan, Fyiona Lai Phik-Wy, Tan Xuan Ying, and Lee Kah Xin (Messrs. Fyiona, Lai & Dennis Thong)