Stone Master Corporation Berhad v Dato Koh Mui Tee (W-02(NCC)(W)-1802-10/2019)

STARFIELD CAPITAL SDN BHD (NO. SYARIKAT:971026-D) ... RESPONDENTS [In The Matter of Civil Suit No: WA-22NCC-232-06/2017 in the High Court of Malaya in Kuala Lumpur Between STONE MASTER CORPORATION BERHAD (No. SYARIKAT: 498639-X) ...PLAINTIFF

STARFIELD CAPITAL SDN BHD (NO. SYARIKAT:971026-D) ... DEFENDANTS CORAM RAVINTHRAN A/L PARAMAGURU, JCA SEE MEE CHUN, JCA HASHIM HAMZAH, JCA GROUNDS OF JUDGMENT Introduction [1] This is the Appellant's appeal against the decision of the learned High Court Judge ("HCJ") who had dismissed the Appellant's application to set aside a consent judgment dated 30.5.2017 ("the Consent Judgment") between the $ 4^{\mathrm{th}} $ Respondent as the plaintiff and the Appellant as the defendant in Kuala Lumpur High Court Civil Suit No: WA-22NCC 195-05/2017 ("Suit 195"). [2] In Suit 195, the $ 4^{\mathrm{th}} $ Respondent claimed a total sum of RM18 million due and owing by the Appellant under two separate loan agreements, dated 14.1.2016 and 19.1.2016, respectively, the details of which shall be discussed later in this judgment. [3] On 29.5.2017, the $ 4^{\mathrm{th}} $ Respondent filed a notice of application praying for several orders, including restraining the Appellant from removing, dealing, or disposing of its assets up to RM18 million. [4] On 30.5.2017, the Appellant and the $ ^{4} $ th Respondent recorded the Consent Judgment before the High Court through their respective solicitors. It was agreed and recorded between the parties in the Consent Judgment, among others, that the Appellant was to pay RM18 million to the $ ^{4} $ th Respondent. [5] On 19.6.2017, the Appellant filed a fresh suit to set aside the Consent Judgment through Kuala Lumpur High Court Civil Suit No: WA- 22NCC-232-06/2017 ("Suit 232"). Suit 232 was heard before the learned HCJ below. [6] On 22.8.2017, an order was obtained to stay the execution of the Consent Judgment pending the disposal of this action. [7] On 18.9.2019, after a full trial, the learned HCJ dismissed the Appellant's claim with costs. Dissatisfied, the Appellant filed this appeal against the decision of the learned HCJ. Factual Background [8] The Appellant was a public company listed in Bursa Malaysia at the material time. The $ 1^{\mathrm{st}} $ Respondent was appointed the Appellant's executive director on 8.12.2014 and subsequently became the Appellant's managing director on 14.7.2015. The $ 2^{\mathrm{nd}} $ Respondent was appointed as the Appellant's executive director on 15.12.2014. The $ 3^{\mathrm{rd}} $ Respondent was one of the Appellant's directors up until 30.3.2017. The $ 3^{\mathrm{rd}} $ Respondent was also the director and shareholder of the $ 4^{\mathrm{th}} $ Respondent. The $ 4^{\mathrm{th}} $ Respondent was the Appellant's creditor, the plaintiff in Suit 195 and the beneficiary of the Consent Judgment. The $ 3^{\mathrm{rd}} $ Party was the Appellant's executive director from 1.8.2014 until 29.3.2019. [9] On 8.1.2016, through a circular resolution, the Appellant's board of directors resolved that its directors be authorised to source for and procure loans to the extent of RM2.5 million since the Appellant needed substantial funds to carry out certain proposed corporate exercises. The Appellant's financial obligation then included disbursements, professional consultation fees and follow-up works concerning the carrying out of due diligence concerning 23 vendors from the People's Republic of China ("PRC"). The Appellant's directors signed this resolution, including Dato' Eii Ching Siew @ Yii Ching Siew ("Dato' Eii") and the $ 3^{rd} $ Party. The $ 3^{rd} $ Respondent did not sign this resolution. [10] On 14.1.2016, the Appellant signed a loan agreement with the $ ^{4} $ th Respondent (" $ ^{1} $ st Loan Agreement"). Through this agreement, the $ ^{4} $ th Respondent agreed to issue an RM2.5 million loan to the Appellant. The loan was already disbursed to the Appellant by way of a cheque. [11] On 19.1.2016, the Appellant's board of directors, i.e., the $ 1^{\mathrm{st}} $ $ 2^{\mathrm{nd}} $ and $ 3^{\mathrm{rd}} $ Respondents, the $ 3^{\mathrm{rd}} $ Party and Dato'Eii, had a meeting to discuss sourcing funds of approximately RM15.5 million to meet its financial obligations and intended business extension plans, which includes agency agreements with several companies from the PRC. The business extension plans were approved. To that effect, it was also resolved that the Appellant was authorised to enter into another loan agreement with the $ 4^{\mathrm{th}} $ Respondent for RM15.5 million. In the same meeting, the $ 1^{\mathrm{st}} $ Respondent, as the managing director then, was authorised to execute the agency and other incidental agreements on behalf of the Appellant to that effect. [12] On the same day, the Appellant obtained the second loan from the 4th Respondent amounting to RM15.5 million and formally documented in a loan agreement ("2 $ ^{nd}$ Loan Agreement"). It was stated in the agreement that one of the main purposes of securing the loan was to pay for the cash deposits to the 23 PRC companies to enter into agency agreements with them. [13] On 3.2.2016, the Appellant entered 23 exclusive agency agreements with the 23 PRC companies. These agency agreements confer exclusive rights to the Appellant to market and promote the products and services of the 23 PRC companies in Malaysia and Singapore. The terms of all the agency agreements are materially the same. [14] Under these agency agreements, the Appellant was required to pay RM3.05 billion as agency fees. The Appellant was also obliged to pay initial deposits amounting to RM11.59 million. The initial deposits and the balance of the agency fees were to be paid to 23 companies incorporated in Malaysia by the respective PRC companies ("23 PRC Beneficiary Companies"). Both the initial deposits and the balance of the agency fees were to be paid within seven days of the execution of the agency agreements. [15] On 3.2.2016, the Appellant successfully paid the RM11.59 million initial deposits to the 23 PRC Beneficiary Companies. However, the Appellant was unable to pay the balance of the agency fees, totalling approximately RM3.04 billion. [16] On 10.2.2016, due to the failure of the Appellant to pay the balance of the agency fees, the Appellant and the 23 PRC companies entered into settlement agreements in which the Appellant agreed to allot and issue ordinary shares of RM0.40 each to the 23 PRC companies. [17] The Appellant also entered into a settlement agreement with the 4th Respondent on the same day. In this settlement agreement, the Appellant acknowledged its indebtedness to the $ ^{4} $ th Respondent, which was agreed to be settled by allotting shares in the Appellant company to the $ ^{4} $ th Respondent. [18] However, there was a condition precedent to this settlement agreement in which the approval of the Appellant's shareholders must be obtained in an EGM for the issuance and allotment of its shares to the $ 4^{th} $ Respondent within two months of the settlement agreement or with such extension of time as may be agreed upon. It is also stipulated in this settlement agreement that the $ 4^{th} $ Respondent may terminate the agreement if the condition precedent is not fulfilled. The number of shares to be issued and allotted to the $ 4^{th} $ Respondent was agreed at 45 million ordinary shares of RM0.40 each, totalling RM18 million. [19] On 23.9.2016, the Securities Commission Malaysia ("SC") issued a writ against the 3rd Respondent. The writ was originally issued as Kuala Lumpur High Court Civil Suit No: WA-22NCVC-608-09/2016 but was later redesignated as Civil Suit No: WA-22NCC-335-09/2016 ("Suit 335"). [20] In Suit 335, the SC claimed that the $ ^{3 rd} $ Respondent had breached certain provisions of the Capital Market and Services Act 2007 ("CMSA 2007") in which the $ ^{3 rd} $ Respondent was alleged to have created an elaborate scheme through the $ 4^{th} $ Defendant to defraud the Appellant to cause wrongful loss. The SC also claimed that out of the RM11.59 million paid by the Appellant to the 23 PRC companies, RM11.54 million had eventually ended up in the $ ^{3 rd} $ Respondent's coffers. The SC successfully claimed against the $ ^{3 rd} $ Respondent before the High Court. The decision was affirmed on appeal to the Court of Appeal, and the $ ^{3 rd} $ Respondent failed to obtain leave to appeal to the Federal Court. [21] On 21.10.2016, Dato' Eii lodged a police report against the $ 3^{rd} $ Respondent and Dato Clement Tai Wai Loon ("Dato Clement Tai"), the $ 3^{rd} $ Respondent's husband. Dato Clement Tai was also the Appellant's corporate advisor. The allegation in the police report was similar to the claims made by the SC in Suit 335. [22] On 30.3.2017, an Annual General Meeting ("AGM") was held, and a position was taken that Dato' Eii should cease to be Dato Sri Dr Chiew Han Ching's alternate director due to the latter's retirement after the said meeting. Dato' Eii challenged the position through an original summons filed in the Kuala Lumpur High Court through Originating Summons No: WA-24NCC-144-04/2017 ("OS 144"). [23] On 28.4.2017, the $ 3^{rd} $ Party gave notice according to section 310(b) of the Companies Act 2016 ("CA 2016") requisitioning and EGM to be held on 30.5.2017 at 11 a.m. The proposed agenda for the EGM included the removal of the $ 1^{st} $ and $ 2^{nd} $ Respondents as the Appellant's directors with immediate effect. [24] On 22.5.2017 at around 10.18 p.m., a notice of the Appellant's board of directors' meeting was issued through e-mail by one Nicholas Tan, who was described as the Appellant's executive director. The meeting was scheduled to take place on 29.5.2017 at 10 a.m. [25] On 26.5.2017, the $ ^{4} $ th Respondent commenced Suit 195 against the Appellant. In this suit, the $ ^{4} $ th Respondent claimed the repayment of the money which was lent to the Appellant through the $ ^{1} $ st and $ ^{2} $ nd Loan Agreements with interests due to the non-fulfilment of the conditions precedent in the settlement agreement resulting in the settlement agreement being duly terminated by the $ ^{4} $ th Respondent. On the same day, the $ ^{4} $ th Respondent also applied for a Mareva Injunction to restrain the Appellant from dealing with its assets up to RM18 million. [26] On 29.5.2017, only the $ 1^{\mathrm{st}} $ and $ 2^{\mathrm{nd}} $ Respondents had attended the board meeting. The $ 3^{\mathrm{rd}} $ Party had objected and refused to attend the meeting since the EGM to remove the $ 1^{\mathrm{st}} $ and $ 2^{\mathrm{nd}} $ Respondents from directorship was already scheduled for the next day. [27] It was resolved during the board meeting that the Appellant was to appoint Messrs. Wei Li Tan & Cheong to act as its advocates and solicitors to negotiate with Messrs. Tan Norizan & Associates to enter a consent judgment with the $ 4^{\mathrm{th}} $ Respondent regarding the claim and the Mareva Injunction granted against the Appellant. It was also resolved that the $ 1^{\mathrm{st}} $ Respondent be authorised as the managing director to sign all mandates, instructions, and relevant documents. [28] Simrenjeet Singh a/l Baldev Singh ("PW3"), one of the partners in Messrs. Wei Li Tan & Cheong, was instructed to attend the hearing of the $ ^{4} $ th Respondent's application for Mareva Injunction which was scheduled on the next day, i.e., on 30.5.2017. A warrant to act was executed, and he was instructed to record a consent judgment with the $ ^{4} $ th Defendant on behalf of the Appellant. [29] On the morning of 30.5.2017, the parties entered and recorded the Consent Judgment for Suit 195 through their respective solicitors. [30] The EGM convened as scheduled on the same day at around 11 a.m. The resolution to remove the $ 1^{\mathrm{st}} $ and $ 2^{\mathrm{nd}} $ Respondents was passed; as a result, they were removed from being the Appellant's directors. [31] On 19.6.2017, the Appellant filed a fresh suit to set aside the Consent Judgment through Suit 232, which was heard before the learned HCJ below. [32] On 28.6.2017, Dato' Eii was successful in his application in OS 144 ("the OS 44 Order"). It was ordered, among others, that: "(3) Suatu deklarasi bahawa apa-apa mesyuarat kononnya Lembaga Pengarah Defendan dan semua resolusi-resolusi yang kononnya telah diluluskan oleh Lembaga Pengarah Defendan sama ada secara nyata atau sebaliknya dan sama ada di mesyuarat fizikal atau melalui resolusi pekeliling atau sebaliknya, daripada 30.3.2017 dan seterusnya apabila penyertaan Plaintif sebagai seorang pengarah Defendan telah dikecualikan sama ada secara konstruktif atau sebaliknya, adalah tidak sah dan batal." [33] An appeal was filed against the decision in OS 144 but was subsequently withdrawn. [34] On 18.9.2019, after a full trial, the learned HCJ dismissed the Appellant's claim in Suit 232 with costs. Dissatisfied, the Appellant filed this appeal against the decision of the learned HCJ, which was heard before us. [35] Before our decision is delivered, the Appellant had, by way of a letter dated 4.9.2023, informed this court that it is confining its prayers to: a. set aside the decision of the High Court on 18.9.2019; b. set aside the Consent Judgment; and c. for costs to be paid by the Respondents to the Appellant. The Law on Setting Aside a Consent Judgment or Order [36] In the present case, the paramount issue before the learned HCJ is whether the Consent Judgment entered between the Appellant and the $ 4^{th} $ Respondent ought to be set aside. [37] First and foremost, a consent judgment or order is regarded in law as a contract, superadded with the court's command. [38] In Tan Geok Lan v. La Kuan [2004] 3 MLJ 465; [2004] 2 CLJ 301, Mohd Noor Ahmad FCJ (as he then was) speaking for the Federal Court stated that: "8. (1) On the first issue, which is related to question (1), a consent judgment or order is not the less a contract, and subject to the incidents of a contract, because there is superadded the command of the court, and its force and effect derives from the contract between the parties leading to, or evidenced by, or incorporated in, the consent judgment or order. A consent order must be given its full contractual effect, even if it relates to an interlocutory step in the action (see para. 390 @ p. 286, Halbury's Laws of England, 4th edn vol. 37). We gather from this proposition that (i) the agreement on the terms reached between the parties at the interlocutory stage of an action is a contract between the parties and (ii) the consent judgment or order arising out of that contract is also a contract between the parties except that the latter is superadded with the command of the court. In short, there are two contracts, one, before the court makes the order and two, after the order is made. After the order is made the first contract merges into the second contract. That being the case, short of the order being made, the first contract will have to be separately considered on its binding effect based on incidents of a contract. This statement is relevant to the present appeal in which the first contract is involved as no order had been made by the court. The learned trial judge should have proceeded in the first place to consider solely on the binding effect of the first contract without regard as to whether or not the court had made any order thereto. For the purpose, she should have inquired into the facts leading to the agreement and examined the facts and then decided on its binding effect based on the incidents of a contract. And if she considers that the first contract binds the parties then no party ought to be allowed to resile from it but to make an order in terms according to the merits of the facts as deposed in the affidavit of Mr. G. Proctor. Instead, by necessary implication, she proceeded to consider on the binding effect of the first contract simultaneously with the second contract when she opined that no Consent Order was made at all on the first contract. In short, her decision was simply based on the lack of an order made by the court in respect of the first contract. With due respect, she had failed to exercise her discretion judiciously." (emphasis added) [39] With its status as a judgment or order of the court, a consent judgment or order cannot be varied or set aside except under the slip rule after it has been regularly obtained, entered, or drawn up. [40] However, the consent judgment or order may be impeached through a fresh action if it was obtained by fraud or where further evidence could not possibly have been adduced at the original hearing. [41] In Hock Hua Bank Bhd v Sahari bin Murid [1981] 1 MLJ 143; [1980] 1 LNS 92, the Federal Court through Chang Min Tat FJ (as he then was) held: "Clearly the Court has no power under any application in the same action to alter vary or set aside a judgment regularly obtained after it has been entered or an order after it is drawn up, except under the slip rule in O. 28 r. 11 Rules of the Supreme Court 1957 (O. 20 r. 11 Rules of the High Court 1980) so far as is necessary to correct errors in expressing the intention of the Court: Re St. Nazaire Co. 12 Ch D 88, Kelsey v. Doune [1912] 2 KB 482; Hession v. Jones [1914] 2 KB 421, unless it is a judgment by default or made in the absence of a party at the trial or hearing. But if a judgment or order has been obtained by fraud or where further evidence which could not possibly have been adduced at the original hearing is forthcoming, a fresh action will lie to impeach the original judgment: Hip Foong Hong v. Neotia & Co. [1918] AC 888 and Jonesco v. Beard [1930] AC 298. The hearing of the action will in a proper case be expedited: Smith v. Peizer 65 SJ 607." (emphasis added) [42] Since the consent judgment or order is also an order of the court to carry out the contract between the parties, it can also be set aside on the same grounds that a contract can be set aside. [43] In Khaw Poh Chhuan v. Ng Gaik Peng & Yap Wan Chuan & Ors. [1996] 2 CLJ 185, the Supreme Court speaking through Peh Swee Chin FCJ (as he then was), held as follows: "A consent order is an order of the Court carrying out an agreement between the parties. It used to be thought at one time that only a ground of fraud could cause a consent order to be set aside. It is now well settled that a consent order can be set aside on the same grounds as those on which an agreement may be set aside, see e.g. again the Huddersfield Banking Co. supra." (emphasis added) [44] Again, in Badiaddin bin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd [1998] 1 MLJ 393; [1998] 2 CLJ 75, Peh Swee Chin FCJ (as he then was) in delivering the judgment of the Federal Court, held as follows: "The grounds referred to for setting aside a consent order of a judgement by consent are grounds which basically relate to consensus ad idem or the free consent of parties to a binding agreement or contract. It is elementary that if it is proved that there are grounds which vitiate such free consent, the agreement is not binding. Now a consent order or a judgement by consent is undoubtedly based on an agreement of both parties where consent to the agreement must or should have been free in the first place. If the agreement upon which a consent order or judgement by consent is based, is vitiated by any ground recognized in equity as vitiating such free consent, such as fraud, mistake, total failure of consideration, (see Huddesfield Banking Co. v. Henry Lister [1895] 2 Ch. 273 and the cases cited therein), then such a perfected consent order or judgement by consent could be set aside in a fresh action filed for the purpose. Grounds which would vitiate such free consent should also include misrepresentation, coercion, and undue influence and other grounds in equity." (emphasis added) [45] Ong CJ (Malaya) (as he then was) in delivering the judgment of the Federal Court in Tong Lee Hwa & Anor v. Chin Ah Kwi and Tong Chong Fah v. Chin Ah Kwi [1971] 2 MLJ 75; [1971] 1 LNS 143 had this to say: "After a judgment by consent has been passed and entered, it cannot afterwards be varied on the ground of mistake, except for reasons sufficient to set aside an agreement (see Attorney-General v. Tomline ). (1877-8) 7 Ch D 388 The general rule is that after a judgment has been passed and entered, even where it has been taken by consent and under a mistake, the Court cannot set it aside otherwise than in a fresh action brought for the purpose unless (a) there has been a clerical mistake or an error arising from an accidental slip or omission, or (b) the judgment as drawn up does not correctly state what the Court actually decided and intended to decide, in either of which cases the application may be made by motion in the action (see Ainsworth v. Wilding ) [1896] 1 Ch 673. The same rule must apply, a fortiori, where the parties have entered into an agreement in pursuance of the terms of settlement embodied in the consent order." (emphasis added) [46] The Appellant, in the present case, pleaded that the Consent Judgment was fraudulently obtained and ought to be set aside. [47] With these trite principles of law in mind, we consider the issues raised by all parties to this appeal. First Issue: Whether The Findings Of The High Court In The SC Suit Can Be Used As Evidence To Prove That The Respondents Had Conspired To Defraud The Appellant [48] Before us, the Appellant submitted that the Consent Judgment was tainted with illegality and fraud, as evidenced by the findings of the High Court in the SC Suit. The Appellant, throughout its submission, had relied heavily on the findings of the High Court in the SC Suit to prove its claim against the Respondents. [49] According to the Appellant, the findings of the High Court in the SC Suit had shown that the $ 3^{rd} $ Respondent had committed various breaches under the CMSA 2007, namely that the $ 3^{rd} $ Respondent: a. was in a position of power and control of the Appellant, and she was instrumental in (i) getting the Appellant to take up the RM18 million loan from the $ ^{4^{\mathrm{th}}} $ Respondent and (ii) proposing and getting the Appellant to enter into the agency agreements with the 23 PRC companies; b. was instrumental in the formation of the 23 PRC Subsidiary Companies; c. had appointed puppet directors for the 23 PRC Subsidiary Companies so that she could have full control over these companies; d. was the sole signatory of the 23 PRC Subsidiary Companies' bank accounts without the knowledge of the Appellant's board of directors; e. had concocted and fabricated the alleged letter of authorisation by the 23 PRC Subsidiary Companies giving her the mandate to set up those companies; and f. had kept the Appellant's board of directors in the dark about her activities with the 23 PRC companies and the 23 23 PRC Subsidiary Companies and failed to disclose her conflict of interest and related party transactions. [50] Furthermore, the Appellant submitted that the decision was upheld on appeal to the Court of Appeal, and the $ 3 ^{rd} $ Respondent had failed to obtain leave to appeal to the Federal Court. [51] Firstly, we hold that the relevancy and admissibility of judgments, orders, or decrees as evidence in any trial are subject to the limited circumstances set out under sections 40 to 43 of the Evidence Act 1950 ("EA 1950"). [52] For ease of reference, sections 40 to 43 of the EA 1950 are set out below. [53] Section 40 of the EA 1950 reads: "Section 40. Previous judgments relevant to bar a second suit or trial. The existence of any judgment, order or decree which by law prevents any court from taking cognizance of a suit or holding a trial is a relevant fact when the question is whether the court ought to take cognizance of the suit or to hold the trial." (emphasis added) [54] Section 41 of the EA 1950 states that: "Section 41. Relevancy of certain judgments in probate, etc., jurisdiction.

A final judgment, order or decree of a court, in the exercise of probate, matrimonial, admiralty or bankruptcy jurisdiction, which confers upon or takes away from any person any legal character, or which declares any person to be entitled to any such character, or to be entitled to any specific thing, not as against any specified person but absolutely, is relevant when the existence of any such legal character or the title of any such person to any such thing is relevant.

Such judgment, order or decree is conclusive proof—

that any legal character which it confers accrued at the time when the judgment, order or decree came into operation;

that any legal character to which it declares any such person to be entitled accrued to that person at the time when the judgment, order or decree declares it to have accrued to that person;

that any legal character which it takes away from any such person ceased at the time from which the judgment, order or decree declared that it had ceased or should cease; and

that anything to which it declares any person to be so entitled was the property of that person at the time from which the judgment, order or decree declares that it had been or should be his property." (emphasis added) [55] Section 42 of the EA 1950 reads: "Section 42. Relevancy and effect of judgments, orders or decrees other than those mentioned in section 41. Judgments, orders or decrees other than those mentioned in section 41 are relevant if they relate to matters of a public nature relevant to the inquiry; but such judgments, orders or decrees are not conclusive proof of that which they state." (emphasis added) [56] Section 43 of the EA states that: "Section 43. Judgments, etc., other than those mentioned in sections 40 to 42 when relevant. Judgments, orders or decrees other than those mentioned in sections 40,41 and 42 are irrelevant unless the existence of such judgment, order or decree is a fact in issue or is relevant under some other provision of this Act." [57] In particular, illustration (a) to section 43 of the EA clearly mentions as follows: "ILLUSTRATIONS

A and B separately sue C for a libel which reflects upon each of them. C in each case says that the matter alleged to be libellous is true, and the circumstances are such that it is probably true in each case or in neither. A obtains a decree against C for damages on the ground that C failed to make out his justification. The fact is irrelevant as between B and C." (emphasis added) [58] Turning to the facts of the present case, we found that the grounds judgment in the SC Suit relied on by the Appellant did not fall under any of the provisions under sections 40 to 42 of the EA 1950 above. [59] We pause here to note that this court had, on 17.3.2023, allowed the Appellant's application in Encl. 161 to adduce the said grounds of judgment as fresh evidence. At most, the said grounds of judgment are relevant and admissible under section 43 of the EA 1950. [60] We are of the considered view that under section 43 of the EA 1950, the production of a previous judgment merely establishes the existence of a prior decision of the court and nothing more. [61] We affirm our earlier decision in Datuk S Nallakaruppan & Ors v Datuk Seri Anwar bin Ibrahim and other appeals [2015] 4 MLJ 34 in which it was held as follows: [21] Our s 43 is in pari materia with s 43 of the Indian Evidence Act. Based on the Indian authorities cited to him, learned judicial commissioner concluded that the rationale for the enactment s 43 is that every case is to be treated as a class by itself; and the production of a previous judgment merely establishes the existence of a prior decision. There is no presumption that a prior judgment is the correct decision on the matter. What the law of res judicata establishes is that one cannot go behind the decision in certain similar factual cases based on the ground of public policy. The fact in issue in each case must be proved independently. [22] The rational underlying s 43 can be gleaned from the statement in Hollington's case which is as follows: 'The Court which has to try the claim for damages knew nothing of the evidence that was before the criminal court. It cannot know what arguments were addressed to the court or what influence the court in arriving at its decision. Moreover, the issue in the criminal proceeding in not identical with that raised in claim for damages.' In other words, as said in the Indian case of Gopalkrishna Gupthan v Ammalu Ammal And Ors AIR 1972 Ker 196: ... it is the duty of the court to scrutinize the soundness or validity of opinion evidence exercising its own independent judgment. In the case of a previous judgment such scrutiny is impossible because the court trying the subsequent case cannot reopen the case and hear it on the merits as if the court is hearing an appeal or is retrying the previous case on fresh evidence. The court in the subsequent case has to decide it on the materials before it exercising its own independent judgment ... [23] In the face of overwhelming authorities locally and from foreign jurisdictions in particular UK (before the statutory intervention) and India that had been considered by the learned judicial commissioner that a judgment in a criminal case cannot be used as proof of a fact in issue in a civil case for claim for damages, we are inclined, as the learned judicial commissioner did, to agree with the above statement. [24] Therefore, with regard to the defendants' defence of justification, we are in agreement with the learned judicial commissioner that s 43 of the Evidence Act would be a bar to the defendants to rely on the judgment or order or decree of another court proceeding more so it is a criminal proceeding." (emphasis added) [62] As a matter of fact, what the Appellant sought to do in the present case was to admit certain passages from the High Court's grounds of judgment in the SC Suit as evidence of conspiracy to injure or to defraud on the part of the Respondents. [63] The Appellant submitted that the decision of the High Court in the SC Suit, which has been affirmed on appeal, binds this court. Reference was made to the Court of Appeal case of Goh Keat Poh & Ors v Farlim Properties Sdn Bhd and other appeals [2009] 5 MLJ 449. [64] However, we are of the considered view that the facts in Goh Keat Poh (supra) can be distinguished from the facts in the present case. [65] In Goh Keat Poh (supra), the plaintiff filed a suit against the defendants, claiming that the defendants had agreed to sell their land 'spes successionis', even though the issues on the validity of the Farlim agreements and their effects have been conclusively decided by the Federal Court in another case (Chor Phaik Har v Farlim Properties Sdn Bhd [1997] 3 MLJ 188). [66] Therefore, the Court of Appeal in Goh Keat Poh (supra) had rightly concluded that the doctrine of res judicata was applicable, and the plaintiff was estopped from such a claim against the defendants. [67] It is also pertinent to note that the Federal Court's judgment in Chor Paik Har (supra) pertaining to the Farlim agreements was admitted and considered by the High Court and the Court of Appeal in Goh Keat Poh (supra) to determine the issue of whether the plaintiff's claim was caught under the doctrine of res judicata. This is clearly allowed under section 40 of the EA 1950, but this is not the case here. [68] A considerably similar issue was raised in DP Vijandran v Karpal Singh & Ors [2000] 3 MLJ 22 in which the defendant, in that case, sought to attack the plaintiff's character by admitting as evidence certain passages from the judgment of the Court of Appeal in a separate criminal proceeding. [69] In addressing this issue, Kamalanathan Ratnam J (as he then was) in DP Vijandran v Karpal Singh & Ors (supra) held as follows: "There is no doubt that the existence of the judgment of the Court of Appeal is not a fact in issue in this case. Admittedly what the first defendant is seeking to do is to admit a certain passage from the judgment of the Court of Appeal as evidence in this case. It is clear that established authorities are totally against the first defendant on this score. Sarkar on Evidence (15th Ed) Vol I states at p 839 para 2 as follows: The object behind enacting s 43 appears to be two fold: (1) to treat every case a class by itself so that the judgment delivered in one case may not be availed of by parties to another case; and (2) to maintain the independence of courts by preventing the parties from submitting before the court hearing their case the judgments of other courts. Again at p 839 para 4: There is no provision in the Act by which the actual decision or the findings arrived at in a previous judgment can be used as evidence to decide the points which are in issue in a particular case. Such a decision may operate as res judicata or be relevant under ss 40-42 to prove assertion of a right, but otherwise it is no better than a mere opinion expressed on the issues in a particular case and opinion is relevant in those cases only in which it is specially referred in the Act and in no others [ Purnima v Nandlal PLT 582 Ramparekha v Ramjhari AIR 1933 P 690; Hitendra v Rameswar AIR 1925 P 625 ]. Statements of facts in a previous judgment is not admissible under s 43 in a subsequent case to decide any points in issue [ Khubnarain v Ram Ch AIR 1951 P 340 ]. Almost 70 years ago, the Privy Council had occasion to consider this issue. This is what his Lordship Sir John Wallis had to say at p 102 of Kumar Gopika Raman v Atal Singh AIR 1929 PC 99: ... The Indian Evidence Act does not make finding of fact arrived at on the evidence before the court in one case evidence of that fact in another case. From this case and the numerous authorities cited it seems to me the law that the production of a previous judgment merely establishes the existence of a prior decision. There is no presumption that a prior judgment is the correct decision on the matter. What the law of res judicata establishes is that one cannot go behind the decision in certain similar factual cases based on the ground of public policy. In Gopalkrishna Gupthan v Ammalu Ammal AIR 1972 Ker 196, Narayana Pillai J said at p 197: ... Judgments not coming under ss 40 to 42 are not relevant at all in respect of opinion expressed therein. They can amount only to opinion evidence and opinion evidence is generally inadmissible. Such opinion evidence is, however, admitted under s 45 of the Evidence Act when the court has to form an opinion upon a point of foreign law, or of science or art or as to identity of handwriting but in such cases it is the duty of the court to scrutinise the soundness or validity of opinion evidence exercising its own independent judgment. In the case of a previous judgment such scrutiny is impossible because the court trying the subsequent case cannot reopen the case and hear it on the merits as if the court is hearing an appeal or is retrying the previous case on fresh evidence. The court in the subsequent case has to decide it on the materials before it exercising its own independent judgment. Therefore my conclusion is that judgments qua judgments and as expression of opinion of the courts which pronounce them are not relevant at all except under ss 40 to 42 of the Evidence Act. I agree and accept the views of the learned judge. I am therefore compelled to conclude that there is nothing in the Evidence Act to warrant the conclusion that the statements or findings of facts in another case can be used as evidence in a subsequent case to decide the points which are in issue in the subsequent case." (emphasis added) [70] We agree and endorse the decision in DP Vijandran (supra) and reiterate that there is nothing in the EA 1950 which allows the statements or findings of facts in another case to be relevant and admissible evidence in a subsequent case to decide the points which are in issue in the subsequent case, except if the judgment, order or decree sought to be admitted falls under any of the provisions under sections 40 to 43 of the EA 1950. In our mind, this is generally applicable to civil and criminal proceedings since it involves the rule of evidence. [71] For the same reason, we agree with the learned HCJ that: [134] It was apparent throughout the Plaintiff's case that what it had sought to do was to link the RM18 million loan to the allegations made against the 3rd Defendant in Suit 335. However, as stated, that is a matter quite discrete from the issues and the remedies sought by the Plaintiff in the present case. If the allegations in Suit 335 are made out the remedies sought, which includes repayment to the Plaintiff of the RM11.54 million allegedly received by the 3rd Defendant would compensate for the alleged wrongful loss of that sum of money by the Plaintiff. [135] If, apart from the RM18 million loan, there was any damage suffered by the Plaintiff by reason of any conspiracy or breach of duty or other wrong, that is another matter and one which the Plaintiff may choose to pursue against those individuals alleged to be part of the conspiracy and seek to render them personally liable. This case was however, strictly in regard to the Consent Judgment and a matter between the two companies i.e. the Plaintiff and the 4th Defendant." (emphasis added) [72] As such, we hold that the Appellant should not be allowed to admit certain passages from the High Court's grounds of judgment in the SC Suit as evidence of conspiracy to injure or fraud on the part of the Respondents. Therefore, for this appeal, we dismiss all of the Appellant's references to the findings of the High Court in the SC Suit. Second Issue: Whether the Learned Trial Judge Erred in His Findings on The Effect of The OS 144 Order [73] The Appellant submitted that the learned HCJ had erred in his findings that the OS 144 Order did not exist at the time the Consent Judgment was entered into. Thus, no party would have been aware of the declaration granted under the OS 144 Order. The Appellant also submitted that the learned HCJ erred in holding that the transactions that the Appellant entered into with third parties are not ipso facto null and void under the Turquand's rule. [74] According to the Appellant, the resolution of the board of directors particularly on 29.5.2017, was null and void and can no longer stand in light of the OS 144 Order, which operates retrospectively. Hence, the appointment of Messrs. Wei Li Tan & Cheong to act as the Appellant's counsel in Suit 195 and the instruction to PW3 to record the Consent Judgment were also null and void. [75] In support of its submission, the Appellant relied on the High Court case of Dato' Jaffar bin Mohd Ali & Anor v Jasatera Bhd & Ors (Public Bank Bhd, Intervener) [2002] 4 MLJ 207. [76] The same issue was already canvassed before the learned HCJ below. In our view, the learned HCJ had correctly distinguished the facts in Dato' Jaffar bin Mohd Ali & Anor (supra) with the facts in the present case, as can be seen below: "[101] In Jasatera Bhd, nothing done pursuant to the resolution prior to the injunction was set aside. No monetary transaction by the new board through the intervener bank was set aside. [102] In the case at hand, the Board resolution of 29th May 2017 had been implemented. The Consent Judgment was entered into at the time when the Order in OS 144 had not been made. Neither the Court nor the parties in Suit 195 could have been aware that the Order in OS 144 would be made with the declaration in paragraph (3).” (emphasis added) [77] In addition, there is nothing to show that PW3 had any knowledge of the irregularities in the management of the Appellant company. The warrant to act was also signed by the 1 $ ^{st} $ Respondent, who was still the managing director of the Appellant's company at that material time. Based on the circumstances of the present case, we agree with the learned HCJ that the Appellant's appointed counsel was entitled to assume that the Appellant had acted within its constitution and power and is protected by this rule. [78] We also agree with the learned HCJ's findings that the dealing or transaction between the Appellant and its appointed counsel is valid by applying the principles of real and ostensible authority and the 'indoor management rule' or the Turquand's rule. [79] In Lee Chee Keong v. Fadason Holdings Sdn Bhd & Other Appeals [2017] 7 CLJ 295, this Court, through Her Ladyship Mary Lim JCA (now FCJ) [73] It is without doubt that Lee was the Managing Director of the respondent at the material time. It would be safe to say that a Managing Director is generally authorised to transact the sales of properties on behalf of the respondent including entering and signing on behalf of the respondent such SPAs as those produced and admitted at trial. In fact, the authenticity and truth of the contents of all the SPAs are not challenged. The SPAs were genuine agreements to sell the properties to the appellants. What was disputed was simply the matter of payments. The respondent could not trace any appellant's payments in their records, and for that reason say that the appellants have conspired with Lee to defraud the respondent. With these circumstances, we fully agree with the appellants that the learned JC was clearly erroneous when finding that the appellants were not entitled to rely on the rule in Turquand 's case. The appellants were perfectly entitled to rely on the real and ostensible authority of Lee as the SPAs were valid and enforceable. Consequently, the Lee letters are rightly evidence that the appellants could rely on to prove each of their claims." (emphasis added) [80] There is nothing in the evidence to suggest that the Consent Judgment, which was recorded by the Appellant through PW3 in Suit 195, was obtained illegally or through fraud. [81] In addition, we agree with the learned HCJ that lack of mandate on the part of the counsel per se is not a valid ground to set aside a consent judgment. Any action to recover any losses can be taken by the client against the counsel (see Waugh and Others v HB Clifford & Sons Ltd and another [1982] Ch 374, Lee Teng Siong v Lee Geok Thye Holdings Sdn Bhd [2004] 5 MLJ 13; [2003] 4 CLJ 834, and Shinning Crest Sdn Bhd (appointed receiver and manager) & Ors v Malaysia Building Society Bhd [2018] 10 MLJ 491). [82] Therefore, we disagree with the Appellant that the learned HCJ had erred in his findings that the appointment of PW3 as the Appellant's counsel in Suit 195 was null and void since the OS 144 Order did not exist at the time the Consent Judgment was entered into thus no party would have been aware of the declaration granted under the OS 144 Order. We found no merit in this issue. Third Issue: Whether The Appellant Had Successfully Proven That The Consent Judgment Was Obtained Through Fraud [83] The Appellant, in their reply, submitted that the learned HCJ failed to take into consideration the following relevant evidence adduced during the trial. [84] According to the Appellant, on 29.05.2017, the $ 1^{\mathrm{st}} $ and $ 2^{\mathrm{nd}} $ Respondents attended the board of directors' meeting, which began at 10.00 a.m. Only the 1st and 2nd Respondents attended the meeting. In the midst of the meeting at 11.00 a.m., the $ 1^{\mathrm{st}} $ and $ 2^{\mathrm{nd}} $ Respondents were interrupted by the office clerk who informed them that the cause papers for Suit 195 were served on the Appellant. This meeting was held in the Appellant's office. The $ 1^{\mathrm{st}} $ Respondent then confirmed that Suit 195 was discussed during the meeting. There was no evidence to show that the $ 1^{\mathrm{st}} $ Respondent or the 2nd Respondent had made any attempts to contact Datuk Karen to inform her of Suit 195 and had instead blamed the office clerk for not informing her. Despite the $ 1^{\mathrm{st}} $ and $ 2^{\mathrm{nd}} $ Respondents knowing that their tenure as directors was coming to an end, they called for a board of directors' meeting and appointed a solicitor to record the Consent Judgment. On the same day, at around 6.00 p.m., the $ 1^{\mathrm{st}} $ Respondent met with PW3 from Messrs. Wei Li Tan & Cheong for the first time, where PW3 was given the cause papers for Suit 195. Payment by the Appellant to the 23 Beneficiary Companies ended up in the $ 3^{\mathrm{rd}} $ Respondent's personal coffers. [85] All of the above has been considered by the learned HCJ, as can be seen below: [132] It has to be conceded that objectively, the circumstances giving rise to the Consent Judgment would raise concern to an ordinary man on the street. The fact that the board resolution to have the Consent Judgment entered was passed just the day before the $ 1^{st} $ and $ 2^{nd} $ Defendants were removed as directors, the fact that the instructions regarding the Consent Judgment were given to the solicitors on the very evening before the $ 1^{st} $ and $ 2^{nd} $ Defendants were removed and the fact that the Consent Judgment was entered the following morning of $ 30^{th} $ of May 2017, followed closely by the $ 1^{st} $ and $ 2^{nd} $ Directors removal as directors later that morning, all had the flavour of something amiss and nefarious. [133] Suspicious though the circumstances may appear to be, it has to be upon evidence and the law, that cases are decided by the Court." (emphasis added) [86] We do not see any reason to depart from the findings of the learned HCJ. In our view, the Appellant failed to show any appealable error on the part of the learned HCJ. We found no merit in this issue. The Law on Appellate Intervention [87] It is trite that when a matter comes up on appeal, an appellate court is required to determine whether the trial court had arrived at its decision or findings correctly based on the relevant law and established evidence. It is also trite that an appellate court will not generally intervene with the decision of a trial court unless the trial court is shown to be plainly wrong in arriving at its decision. A plainly wrong decision happens when the decision of the trial court is arrived at without judicial appreciation of the evidence (see UEM Group Bhd v. Genisys Integrated Engineers Pte Ltd & Anor [2010] 9 CLJ 785; [2010] MLJU 2225, Chow Yee Wah & Anor v. Choo Ah Pat [1978] 1 LNS 32; Watt or Thomas v. Thomas [1947] AC 484, Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4 CLJ 309; [2005] 2 MLJ 1, and Ng Hoo Kui & Anor v. Wendy Tan Lee Peng, Administrator of The Estates of Tan Ewe Kwang, Deceased & Ors [2020] 10 CLJ 1; [2020] MLJU 1469; [2020] 12 MLJ 67). Conclusion [88] In conclusion, after hearing the submissions by all parties and after careful perusal of the appeal records, we have come to a unanimous decision that there is no merit to this appeal. We see no appealable error on the part of the learned HCJ's decision. Therefore, the Appellant's appeal in the present case is dismissed with costs of RM20,000.00 to each Respondent subject to payment of allocato. The decision of the High Court is hereby affirmed. Dated: 20 Disember 2023 (HASHIM BIN HAMZAH) Judge Court Appeal Malaysia Solicitors For The Appellant: Alex De Silva dan Joshua Lawson Cowie Tetuan Bodipalar Ponnudurai De Silva D3-1-8, Solaris Dutamas No,1, Jln Dutamas 1 50480 Kuala Lumpur Solicitor For $ 1^{\mathrm{st}} $ Respondent: Dato' Koh Mui Tee (Mewakili Diri Sendiri) Solicitor For 2 $ ^{n d} $ Respondent: Yeap Kim Hock Tetuan Koh & Associates Suite 15.07, Wisma Zelan Jalan Tasik Permaisuri 2 Bandar Tun Razak 56000 Kuala Lumpur Solicitors For 3rd Respondent: Alina Filza Binti Abd Muhsin Tetuan Ramli Yusuff & Co. C-20-05, Dataran 3 Two Square Jalan 19/1 46300 Petaling Jaya Selangor Solicitor For 4th Respondent: Suzanne Arockiaraj Tetuan Alwin Rajasurya Unit 1305, Amcorp Trade Centre 18 Persiaran Barat 46050 Petaling Jaya