Scott Andrew Joseph v Blockchain Labs Asia Ltd. (WA-B52NCvC-231-06/2022)

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1 IN THE CIVIL SESSION COURT AT KUALA LUMPUR IN THE STATE OF FEDERAL TERITORY KUALA LUMPUR CIVIL ACTION NO: WA-B52NCvC-231-06/2022 BETWEEN SCOTT ANDREW JOSEPH (NO PASPOT: LT323173) …PLAINTIFF AND BLOCKCHAIN LABS ASIA LTD. (NO SYARIKAT: LL11527)

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SCHEDULE A DUTIES 1. Position 1.1. The Contractor shall, during the term of this Agreement, act as the Marketing Director of the Company, reporting to the CEO. 1.2. The Contractor’s overall responsibilities are to provide leadership, oversight and direction to the Company and clients in their Marketing operations and to assist the Company and clients with the execution of their Marketing operations. 2. Responsibilities 2.1 In the performance of his/her duties as a Contractor, the Contractor must: a) act honestly and in good faith in the interests of the Company as a whole; b) act for a proper purpose; c) be answerable to the Company for the application or misapplication of its asset; d) avoid actual and potential conflicts interest and duty; e) disclose fully and fairly any interests in contracts with the Company; f) apply such a level of skill, care and diligence as may reasonably be expected of a person of his/her knowledge and experience; g) advise and provide oversight on the operational affairs of the Company; h) report to the Board; i) recommend to the Board strategic directions for the Company and, when approved by the Board, provide oversight on the business practices to attain such objectives; j) Monitor the required interaction between the Company and all service providers to the Company; and k) Meet regularly and as required with the Board to review material issues and to ensure that this Board are provided in a timely manner with all information and access to management necessary to permit the Board to fulfill its obligations. 2.2. The Contractor shall perform such functions and duties as the Company shall from time to time assign to the Contractor and fulfil any duties and responsibilities as are required by, inherent in or consistent with the position, nature or role of the Contractor to the satisfaction of the Company. [39] Pursuant to Clause 4 of the Contractor’s Services Agreement, the manner in which these services are to be provided are as follows: 4. Quality of Performance 4.1. The Services will be performed in a competent and professional manner. The Contractor represents and warrants that it has all the skills, qualifications and certifications necessary to perform the Services. 4.2. The Contractor shall observe and comply with all applicable laws, ordinances, codes and regulations of governmental agencies including federal, provincial, state, municipal and local governing bodies of any country having jurisdiction over the Services or any part thereof. 4.3. The performance of this agreement shall not breach any other agreement entered into by the Contractor 4.4. All Services or deliverable shall be original to the Contractor and shall not infringe the intellectual property rights of any third party. [40] The manner by which the Plaintiff was to be remunerated for his services is clearly spelt out in Clauses 7.1, 7.2, 7.3 and 7.4 of the Contractors Services Agreement and are as follows: 7. Fees For services 7.1. The Company shall pay the Contractor for the Services a base fee of three thousand United States Dollars (USD3,000) per month. 7.2. After the delivery of the Services for three (3) month and subject to the Contractor's satisfactory performance of the Services, the company shall also pay the Contractor an additional performance fee of two thousand United States Dollars (USD2,000) per month. 7.3. After the delivery of the Services for six (6) months and subject to the Contractor's satisfactory performance of the Services, the Company shall also pay the Contractor a one-time performance bonus of fifteen thousand United States Dollars (USD15,000). 7.4. After the delivery of the Services for twelve (12) months and subject to the contractor's satisfactory performance of the Services and renewal of the Agreement for an additional term, the Company shall also pay the Contractor one-time renewal bonus of fifteen thousand United states Dollars (USD15,000). [41] Plaintiff alleged that he provides the services to the Company in accordance to the Contractor’s Services Agreement and therefore entitled to the fees as provided in the said contract. Defendant agrees that Plaintiff provided the services but the services provided is not satisfactory in accordance to the Company’s need. [42] Thus, the court satisfied that it was the Defendant who need to proof that the services are not satisfactory. Defendant has no documentary evidence about its dissatisfaction of the Plaintiff’s services. The court are on the opinion any dissatisfaction needs to be communicated accordingly with proper record. Failure to communicate it in any documentary form is fatal to the Defendant’s case. [43] According to clause 3.2 of the Contractor’s Services Agreement, the Plaintiff has privilege to provide the service under his control as long as it meets the Defendant’s standard. 3. Independent Contractor Status 3.2. In accordance with clause 3.1 above, the manner by which the Contractor provides the Services are under the Contractor’s sole and exclusive control provided, however, that the services meet the Company’s standards regarding quality and timeliness. [44] Plaintiff provide the services. In a normal situation, when a person does certain works, according to the doer, the works or the services are good. A doer only will know the services or the jobs provided are not good or not achieve the required standard when he been told so. [45] In this case, the payment of the services is subjected to the satisfactory performance. So, it must be communicated and documented properly. The defendant cannot just keep silent and not paying the services fees accordingly and after the months lapse and after the time of contract lapse, denied the payment due to the unsatisfactory services. At the same time, no clause stating that the Plaintiff must show or prove his works to be entitled to his fees. It is on the Defendant to show that the company not satisfy with the Plaintiff’s services. [46] The court accept the Plaintiff’s testimony about the performance of the services. The court however cannot simply accept the Defendants allegation about the Plaintiff’s unsatisfactory work only by oral evidence. [47] The court refer to certain notes of evidence and concluded that there was non-dissatisfactory service of the Plaintiff. The Defendant make an allegation of the poor services of the Plaintiff but it was denied by the Plaintiff and the Defendant has no further documentary evidence to support it allegation. [48] Notes of Proceeding by SD1 from page 61 and 63 stated that: : No. So my question to be simple. Whether right now in front of you, do you have any documents, are any evidence, to shows that you are not satisfied with the Plaintiff's performance after the first three months? Right now in this Court, do you have it or you do not? We have a witness statement from a witness verifying the fact that we were not satisfied with the performance. : So you are relying on your witness statement? No. Mah : The other witness. : Thank you. Now I move on to the clause 7.4 of the same page. And based on this clause the Plaintiff should be entitle for the one-time renewal bonus of the USD15,000 after delivery of the services for twelve months and also subject to Plaintiff's performance? Do you have any evidence in this Court to shows that you are not satisfied with the performance after he deliver for twelve months? Yes. : So, can you please show it to the Court? The witness statement. [49] Page 66 of the Notes of Proceeding by SD1 stated that: : Okay, in your answer 18, you mentioned that the Plaintiff require for more supervisions and training than anticipated. So, you do have any evidence in this Court to support this assertion? Yes : Can you please show it to the Court? The other witness statement [50] The Notes of Proceeding by SD1 from page 67 and 68 stated that: : Alright, it's okay. I move on. So now can you please refer to answer 21 of your witness statements. So, in your answer 21, you have mentioned that the Plaintiff did provide the Defendant with a minimal amount of low-level services after the contract term which were not outlined in this contract and it's consistent mainly for content marketing. So now my question to you that, do you have any evidence in this Court like the contract, letter or any documentary evidence or even any conversations between the company and Scott to proof this assertion? Aside from the other witness statement, no. [51] The Notes of Proceeding by SD2 at page 95 stated that: : Alright. So, based on the answer given by Mr Rohan just now, so there is no documentary evidence but only witnesses' oral evidence, right? Agree. [52] SD2 also confirmed that there was no decision from the Board in relation to their allegations that the Plaintiff is not entitled for the fees: This can be seen from the page 94 of the Notes of Proceeding by SD2: : Alright, so there is no like formal written form of evidence? I don't see how you can prove. But no, we don't have that. : So, Mr. Rohan, in fact by the answer you given to me just now, so, I put it to you that the Board has never made decision that the Plaintiff is not entitled to the payment because there is no written. The former Board did not make that decision. : Sorry The former Board did not make that decision and nor was the former Board required to make that decision. : So that's all for your answer is it? Yes. [53] SD1 also agreed to the Plaintiff's counsel that it is impossible for company to discern one's performance based on verbal communication only. That testimony can be seen from page 65 of the Notes of Proceeding by SD1 as below: : So, my question to you, I'm going to rephrase for you. Would you agree with me that for the international company like your company which emphasize the work quality, it is impossible for the company stands to actually discern the Plaintiff's performance based on the verbal communication with the Defendant only? You agree or disagree? Agree. [54] In the case of Abu Bakar Pangis & Ors v Tung Cheong Sawmill Sdn Bhd & Ors [2014] 5 MLJ 384 the Court said as follows: “Per Abdul Wahab Patail JCA (as he then was) at paragraph 30:­ [30] The starting point is that there is no law against a person giving testimony in support of his own claim. Such testimony in support naturally appears to favour his own case, hence often labelled as self-serving. But the true reason for rejecting any testimony is if it is unreliable. Thus, to be rejected or dismissed as unreliable, the "self-serving" testimony must be more than the mere incident of one's testimony being in favour of oneself. It must be demonstrated it is unreliable. It is unreliable testimony if it is made by a person having or showing concern only about his own needs or interests in disregard of the truth or the interests of others. If such is demonstrated, there is reason to doubt and be cautious about the reliability of his evidence. In such a case, the good exercise of judicial discretion demands that there be corroborative evidence, to give reassurance as to the reliability of his evidence.” [55] The Defendant alleged that there was collateral contract where any payments made to the plaintiff would have to be from payments made by the defendant's clients to the defendant. The court found there is no collateral contract between the Plaintiff and the Defendant. [56] The contractual relationship between the Plaintiff and the Defendant is based on the Agreement, which does not stipulate that payment to the Plaintiff is contingent upon the Defendant's client making such payment. [57] Clause 7.7 of the Agreement which states clearly that all fees payable under this Agreement to the Contractor will accrue daily and be payable monthly in arrears on or about the twenty-eight (28th) of each month. [58] SD1 and SD2 also confirmed that there is no clause in the Agreement stating that the fee would be based on the payment from Defendant's client. Page 72 of the Notes of Proceeding by SD1 stated that: : My question to you is that based on this clause, it does not states that the payment, the fee to the Plaintiff under this contract would be based on the fees paid by the clients to the company? It does not stated. [59] From page 103 of the Notes of Proceeding by SD2, it stated: : So now I refer you to Q&A number 20. So, Mr. Rohan mention that the payment to the Plaintiff and then this contract would be made from the fees paid to the Defendant by client. So now, I refer to clause 7 of this agreement. Clause 7 in page 4 of Bundle B. So, my question is, sorry. So, Mr. Rohan, I put it to you that pursuant to this clause 7, it does not state that the payment to the Plaintiff under this agreement will be based on the fee paid by the client to the Defendant, agree or disagree? Agree. [60] At the same time, the so-called collateral contract, it not been explained further when it takes place and how it will operate. Since the agreement already specify the mood and the time of payment, the court stick with the terms of the written contract. [61] In the case Swiss Planner Sdn Bhd v Plush Dollar (M) Sdn Bhd & Anor [2022] 10 MLJ 2072, Mohd Arief JC makes the following observations: - “[36] Arden LJ (as she then was) in RE MUMTAZ PROPERTIES LTD; WETTON (AS LIQUIDATOR OF MUMTAZ PROPERTIES LTD) V AHMED AND OTHERS [2011] EWCA Civ 610, emphasized at para 14 of her judgment that: ... contemporaneous written documentation is of the very greatest importance in assessing credibility. Moreover, it can be significant not only where it is present and the oral evidence can then be checked against it. It can also be significant if written documentation is absent. For instance, if the judge is satisfied that certain contemporaneous documentation is likely to have existed were the oral evidence correct, and that the party adducing oral evidence is responsible for its non-production, then the documentation may be conspicuous by its absence and the judge may be able to draw inferences from its absence. [37] I am further guided by the decision of Leggatt J (as he then was) in GESTMIN SGPS SA V CREDIT SUISSE (UK) LTD AND ANOTHER [2013] EWHC 3560 (Comm) where: 22. In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose-though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth. (Emphasis added.) [38] It is also worth quoting the judgment of Males Win Simetra Global Assets Ltd and another company v Ikon Finance Ltd and others [2019] EWCA Civ 1413 where he stated: ... I would say something about the importance of contemporary documents as a means of getting at the truth, not only of what was going on, but also as to the motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party's internal documents including emails and instant messaging. Those tend to be the documents where a witness's guard is down and their true thoughts are plain to see. Indeed, it has become a commonplace of judgments in commercial cases where there is often extensive disclosure to emphasize the importance of the contemporary documents. Although this cannot be regarded as a rule of law, those documents are generally regarded as far more reliable than the oral evidence of witnesses, still less their demeanor while giving evidence. The classic statement of Robert Goff Win the Ocean Frost (1985] 1 Lloyd's Rep 1 at p 57 is frequently, indeed routinely, cited ... ... It is therefore particularly important that, in a case where there are contemporary documents which appear on their face to provide cogent evidence contrary to the conclusion which the judge proposes to reach, he should explain why they are not to be taken at face value or are outweighed by other compelling considerations.” [62] In the case Mulpha Pacific Sdn Bhd v Paramount Corporation Bhd [2003] 4 MLJ 357, the Court stated: ".. (1) construction of a contract is a question of law; (2) where the contract is in writing the intention of the parties must be found within the four walls of the contractual documents; it is not legitimate to have regard to extrinsic evidence (there is, of course, no such evidence in this case); (3) a contract must be construed as at the date it was made: it is not legitimate to construe it in light of what happened years or even days later; (4) the contract must be construed as a whole, and also, so far as practicable, to give effect to every part of it." "If those words are clear, there is very little that the court has to do. The court must give effect to the plain meaning of the words however much it may dislike the result." (emphasis added) [63] In the case Walter Pathrose Gomez & Ors v Sentul Raya Sdn Bhd [2007] 3 CLJ 176 where the High Court held: "The general principle of construction of contracts applies to all contracts whether or not they are building contracts, and in every case the meaning of any clause in a particular contract has to be ascertained by looking at that contract as a whole and giving effect so far as possible to every part of it: City Investment Sdn Bhd v. Koperasi Serbaguna Tanggungan Bhd [1985) 1 MLJ 285, 288. The purpose of doing so is to give effect to the intention of the parties as at the time they entered into the contract, to obtain as between the contracting parties the highest degree of certainty and predictability towards the practical realization of their intentions expressed in the contract as is necessary to make commercial enterprises possible. It is premised upon the assumption that in arriving at their bargain the contracting parties have considered and accepted certain risks in the performance of the contract, and are therefore bound by their promises". (emphasis added) [64] It is clear that the Contractor’s Services Agreement was for a period of 12 months beginning 4.11.2019. According to the clause 2 of the agreement, the renewal of the agreement for another 12 months may be made in writing, but the terms of the new agreement can be renegotiated and be put in writing. [65] The was no renewal of the Contractors Services Agreement in writing. According to the Plaintiff, the renewal was made orally since the Plaintiff continued providing the services after 4.11.2020 and the services was accepted by the Defendant. [66] Page 27 of the Notes of Proceeding by SP1 stated that: PD : I put it to you therefore Scott, that this agreement was never extended? Not in writing. PD : Never extended? Not-Yes, but I continue my services and they were accepted. [67] The Court refer to the page 48 of the Notes of Proceeding by SP1 and it stated that: : So, in the next question Mr. Scott, Mr. John also asked there’s no agreement in this Court to says that you have extend the agreement and your answer is yes. And you continue to says that you continue to provide services and then the Defendant's company accepted it. Can you please elaborate on your answers? Yes. So, my work was continued to be accepted. I was owed at that time of the renewal quite a lot of money by the Defendant. Who were being very slow and difficult to extract that money from. My work roles had increased and because of this I was reluctant to force on issue which I can see that the Defendant was not willing to address and I suppose my perspective was that if I continue to work I will eventually get paid and they will eventually renew my contract. And because they were accepting my work on a regular basis I felt that that was the best option for me at the time. [68] Plaintiff submitted that the services provided must be in accordance with the agreement; otherwise, the Defendant could have prepared a new agreement for the Plaintiff to sign. The Court however did not agree with this contention. The Contractor’s Service Agreement clearly provided that the terms of the renewal agreement must be put in writing. Since the terms of the agreement never been put in writing, any services or works done by the Plaintiff is not covered by the said agreement. The Plaintiff is not entitled for the services done after the contractor service agreement lapsed. [69] The Court agrees to the Defendant’s submission that the Contractor’s Services Agreement lapsed on 4.11.2020 since there were no renewal of the terms of agreement in writing. [70] At the same time, the term of the contractor service agreement stated that Plaintiff entitled for the 12 months bonus when there is a renewal for the contract. Hence, since there was no renewal, Plaintiff is not entitled for the said bonus 12-month bonus since the renewal of the agreement is the conditions president to the said bonus. [71] According to the Defendant's documents, the Defendant has admitted that there is a sum of USD 54,000 as the amount of payment to be paid the Plaintiff that accrued based on the said agreement in 2020. The Defendant has also made payments to the Plaintiff until October 2020 (Appendix 1 and Appendix 3). Base on the Defendant’s calculation, USD 23,430 was been paid. The balance of the amount owed is USD 30,570. [72] According to the Defendant, Plaintiff only entitled for USD 3000 per month as no additional fees is given due to unsatisfactory performance. However, the Court cannot understand how USD 54,000 is derived on the Defendant calculation as the amount is more than what the Defendant alleged that the Plaintiff was entitled for i.e. USD 3000 x 12 months = USD 36,000. [73] At the same time, Appendix 1 - Summary of fees and payment, only stated the services fees accrued in 2020, while the said agreement started in 4.11.2019, ending on 4.11.2020. The additional 6 months according to the Plaintiff ended in 2021. The court make a conclusion that the Defendant is willing to pay a sum of USD 2000 in addition to the monthly payment after 3 months of the Plaintiff's service as the amount the company admitted it owned the Plaintiff is more than the alleged amount that Plaintiff supposed to be entitled under the said agreement. [74] The Plaintiff is entitled to a USD 15,000 bonus since the Plaintiff has served for 6 months. The Defendant acknowledges the work done by the Plaintiff, but according to the Defendant, it does not meet the requirements outlined in the contract. Nevertheless, the Defendant has given the token to the Defendant. [75] The Plaintiff submitted that during the course of the services, the Plaintiff received some MetalStream Gold tokens and EGX tokens ("tokens") from the Defendant as appreciation for the quality of services that were provided by the Plaintiff to the Defendant. [76] In Appendix 2, the said tokens were stated as a bonus. The court thinks, if the work done by the Plaintiff does not reach the Defendant's standards, why does the Defendant give the tokens as a bonus? Furthermore, the value of the tokens given at that time was high, which was USD 57,018.36. The value of the tokes is more than the amount of bonus that the Plaintiff should have received according to the contract, which was only USD 30,000 (6 months & 12 months bonuses). At the same time, the Defendant started to give the tokens as early as 6.1.2020, just a few months after the said agreement being signed, even the Plaintiff still not entitled for the additional fees of his services in accordance to the agreement. The Plaintiff only entitled for the additional fees after three months of the services. [77] The Court accepted the Plaintiff’s submission that the Defendant both approbates and reprobates their own allegations. On one hand, they alleged the existence of a collateral contract stipulating that the Plaintiff could only receive fees after payment by the Defendant's client. However, on the other hand, the Defendant makes a separate allegation that the tokens were intended as fees. These two allegations differ significantly regarding the intended payment to the Plaintiff for their services and need to be rejected by the court. The Defendant’s document shows that the Defendant is willing to pay Plaintiff for USD 54,000 under the said agreement. [78] The Court are in the opinion that Plaintiff entitled for the services fees according to the Contractor’s Services Agreement. However, The Plaintiff is only entitled to the following payments since the said agreement never been renewed for the Plaintiff to be entitled for the one-time performance 12 months bonus: a) USD 3000 x 12 months = USD 36,000 b) USD 2000 x 9 months = USD 18,000 c) USD 15,000 (one-time performance bonus for 6 months of the services)  Total amount: USD 69,000 [77] The Plaintiff in his claim has stated that a payment of USD 22,720.00 has been made by the Defendant. The court accepted the amount considering that the Defendant did not object to the amount in his defense. Therefore, the outstanding amount is USD 46,280.00 (USD 69,000-USD 22,720). CONCLUSION [78] Based on the reasons stated above, the Court allowed Plaintiff’s claim partly. Plaintiff is entitled for the outstanding amount of USD 46,280.00 and not for USD 91,280.00 as per statement of claim. The Court also allowed the interest of the 5% per annum on the outstanding amount from the date of filing this writ until the date of full and final settlement. The Court also awarded the costs according to the scale costs to be paid by the Defendant to the Plaintiff. Prepared by: WAN NOR AKLIMA BT WAN SALLEH, Session Court Judge, Session Court Kuala Lumpur Dated: 18.10.2024 Parties before the Court: Solicitor for the Plaintiff: Mr. Y F Chan together with Mr. Law Hui Ying [Messrs. Y F Chan & Partners] Solicitor for the Defendant: Mr. John Aloysius Skelchy [Messrs. James Monteiro]