Sungwoo Technologies Sdn Bhd v Oh Keum Jong (12BNCC-7-08/2016)

This is an appeal against the Sessions Court’s decision. The suit was brought by the Appellant (Plaintiff) against the Respondent (Defendant) at the Sessions Court claiming that the Respondent took the Appellant’s money as loan. After a full trial, the Session Judge dismissed the Appellant’s claim.

In this judgment, the parties will be referred to as they were in the Sessions Court.

The relevant factual background giving rise to this appeal based on the Plaintiff’s Amended Statement of Claim (pages 30-42 of Appeal Record

(A)) and both counsels’ written submissions may be briefly stated as follows:

The Plaintiff is a company incorporated in Malaysia on 5.2.2007, having its registered address at No. 5-1, Jalan Kuchai Maju 6, Kuchai Enterpreneurs’ Park, Off Jalan Kuchai Lama, 58200 Kuala Lumpur, Wilayah Persekutuan and is at all material times involved in the business of design, 3 manufacturing and printing electronics membrane switch and panels.

The Defendant is an individual, a citizen of the Republic of Korea and a former Director of the Plaintiff, his last known address is at Unit B-1—02, Block B, LI Villas Condominium, Jalan 16/20, 46350 Petaling Jaya, Selangor Darul Ehsan.

The Plaintiff claimed that the Defendant was appointed as the Managing Director of the Plaintiff from 1.3.2012 until 31.3.2015 and during the Defendant’s tenure as a director, the Defendant obtained loans amounting to the sum of RM 980,138.90 (the Outstanding Sum) from Plaintiff (as set out in Schedule A of the Amended Statement of Claim, at pages 35-39 of Appeal Record (A)).

The Plaintiff claimed that the Plaintiff’s Audited Accounts for Year Ended 31.3.2014, recognized and particularized a sum of RM896,139.90 was due and owing by the Defendant to the Plaintiff as a loan and the Defendant, being a Director of the Plaintiff, approved the Plaintiff’s Audited Accounts for Year Ended 31.3.2014.

The Plaintiff claimed that on or about 31.3.2015, the Defendant had resigned as a director and has not to date returned or repaid the said sum of RM980,138.90 and alleged that by reason of Defendant’s failure to repay the Outstanding Sum, 4 the Plaintiff has suffered loss and damage. The Plaintiff claimed that it is entitled to the Outstanding Sum and by letter of 28.4.2015, the Plaintiff through its solicitors demanded that the Defendant pay the Outstanding Sum to the Plaintiff. To date, the Plaintiff has failed, refused and/or neglected to pay the whole or any part of the Outstanding Sum. The Plaintiff prayed to this Court for the Outstanding Sum and other reliefs against the Defendant (page 33 of the Appeal Record (A)).

The Defendant avers that as the Defendant was employed by the Plaintiff from 2007 until 31.3.2015, the Defendant is entitled to all the payment made by the Plaintiff to the Defendant.

The Defendant denied the Plaintiff’s allegation of the Outstanding Sum (pages 44-46 Amended Statement of Defence, Appeal Record (A)) and further avers that the sum in which was listed out in Schedule A is part of Defendant’s salary from year 2007 until 31.3.2015 when the Defendant was working with Plaintiff.

The Defendant claimed that what the Plaintiff is doing is “partly ‘revenge’” against the Defendant because the Plaintiff demanded from the Defended only after the Defendant had resigned on 31.3.2015 and joined the Tae Seong (M) Sdn Bhd, a rival of the Plaintiff. 5

The Plaintiff’s case after a full trial was dismissed by the Session Judge on 21.7.2016 who found that all the transaction payments made by the Plaintiff to the Defendant does not amount to a loan but as part payment of Defendant’s salary.

Being aggrieved by the Session Judge’s decision, the Plaintiff appealed to this Court. Plaintiff’s case [4] The learned counsel for the Plaintiff advanced several grounds for this appeal (pages 6A-6D of Memorandum of Appeal, Appeal Record (A)). The Plaintiff’s counsel’s main contention is that the Session Judge had erred in law and facts for finding Plaintiff failed to discharge its burden of proof on a balance of probabilities that the Outstanding Sum was a loan taken by the Defendant when the Defendant had admitted taking the monies and that the Plaintiff had tendered documentary evidence in support of its claim. [5] The Plaintiff’s counsel submitted that the Defendant had taken the loans regularly from April 2007 until January 2015 based on the documentary evidence (Exhibit P105) where the Defendant had acknowledged a balance of RM896,138.90 is due by Defendant as at 31.3.2014 to the Plaintiff (page 144 Appeal Record (C) and Q10 of Plaintiff’s Witness Statement at page 125 Appeal Record (B)). The Plaintiff’s counsel averred that the Defendant had admitted signing to those documents (page 136-137 Appeal Record (C)) and therefore would be 6 bound by the signed documents: Wan Salimah bte Wan Jaffar v Mahmood bin Omar [1998] 5 MLJ 162. The Plaintiff’s counsel averred that although Plaintiff’s witness (PW1) has no personal knowledge of Defendant’s salary, such statement is irrelevant as PW1’s testimony is supported by the documentary evidence and as such, is a relevant witness to prove Plaintiff’s claim. [6] The Plaintiff’s counsel pointed out to this Court that the payment vouchers from May 2007 to January 2015 stated clearly that the said documents were “being payment for loans to staff” (IDD6-IDD104, pages 174-272 Appeal Record (C)). It was submitted that in some of the payment vouchers, an example given based on payment voucher of 27.6.2007 (IDD 9 at page 177 of Appeal Record (C)), there was a distinction between Defendant’s salary RM6,460.00 and the loan of RM10,340.00 and asserted that such amount cannot be the Defendant’s salary as claimed by the Defendant. [7] It was argued by the Plaintiff’s counsel that the Defendant had acknowledged the payment vouchers by signing the payment vouchers. It was further averred that Defendant had affirmed and signed off the Plaintiff’s Reports and Financial Statements for the Year Ended 31.3.2014 and at the Plaintiff’s Balance Sheet as at 31.3.2014, confirming that an amount of RM896,139.00 is owed by a director to the Plaintiff (pages 145- 173 of Appeal Record (C)). It was asserted by the Plaintiff’s counsel that as the payment vouchers were prepared and some signed by Defendant, the Plaintiff has discharged its burden to proof: Tindok Besar Estate Sdn Bhd v Tingar Co [1979] 2 MLJ 299. 7 [8] The Plaintiff’s counsel submitted that the Session Judge had erred in law and facts in failing to consider that the Defendant’s defence of his lack of proficiency of the English language was not part of Defendant’s pleaded case and should have been disregarded. [9] It was submitted that the Session Judge failed to consider that the payment vouchers marked as IDD 6 – IDD 104 be admitted as exhibits as Defendant’s solicitors had retracted its objection to the admission of those vouchers and that the original payment vouchers were at all material times available and ready for inspection at the Court during the trial of 6.4.2016 and there was acknowledgement by the Defendant that the payment vouchers represented the amount of monies Defendant had taken. [10] After the oral submission of the Defendant’s counsel, the Plaintiff’s counsel submitted in reply, emphasizing that if the money paid was for Defendant’s salary, the Defendant would have paid his income tax. The counsel for the Plaintiff also argued that the amount in the vouchers tendered fluctuates which has different figures and such amount could not be Defendant’s salary. Defendant’s case [11] The learned counsel for the Defendant advanced several arguments, submitting on the oral and documentary evidence adduced by the Plaintiff. Briefly, it was pointed out to this Court that the Plaintiff’s witness PW1 has no knowledge of the day to day running of the company (page 81-82 Appeal Record (B)) and yet claimed that the Defendant took the Plaintiff’s 8 money as a loan. The Defendant’s counsel averred that as admitted by the Plaintiff’s witness, PW1, there were other persons in charge of payments whether salary or loan that is one Mr. Kwan the Managing Director who could prove Plaintiff’s claim but was not called by the Plaintiff to testify. [12] The Defendant’s counsel averred that as Plaintiff had failed to call other material witnesses, section 114(g) of the Evidence Act 1950 should be applied where the principle of adverse inference must be invoked against the Plaintiff that such witnesses were not called as they may give an unfavourable evidence against the Plaintiff. [13] The Defendant’s counsel revealed that the payment vouchers list as at page 24 of the Appeal Record (A) was since 7.5.2007 and if there was any real claim of loans given to Defendant, to be calculated from 2007, the Plaintiff would have been time barred under the Limitation Act 1953 (Act 254). [14] The Defendant’s counsel submitted that the documents as tendered were prepared by the Plaintiff for the Companies Commission of Malaysia (SSM) (at page 144 Appeal Record (C)) and was not a statutory declaration (SD) by Defendant as alleged and therefore was not a debt claimed by the Defendant. [15] The counsel for the Defendant submitted on the Year End 2014 of the Plaintiff and highlighted that the statement at page 145 of Appeal Record

(C) contradicts with the statement in relation to debt owing by director for the year 2013 (at page 155 of Appeal Record (C) where it was reported 9 that no amount owing by the director for year 2013. In addition, it was argued by the Defendant’s counsel that the amount stated as owing in 2014 is at RM896,139 is not consistent with the payment vouchers which was calculated from year 2007. [16] Based on the list of transactions, it was submitted by the Defendant’s counsel that, never in the span of nine years, the Plaintiff had asked the Defendant for the return of the money, but continued providing money to the Defendant. It was submitted that the amount comes with cents and averred that it could not be a loan where the payment was made automatically without request, which proves to show that they were Defendant’s salary. The counsel for the Defendant pointed out to the Court that during the re-examination of the Defendant (page 118 Appeal Record

(B)), it was stated that the transactions were made part of salary and not as loans. THE SESSIONS COURT’S DECISION [17] The Session Judge, after full trial made its findings based on evidence adduced which are partly reproduced, for easy reference, as follows: “18. Satu-satunya isu yang dipertikaikan oleh pihak-pihak dalam kes ini adalah sama ada wang yang dituntut oleh syarikat Plaintiff terhadap Defendan itu adalah merupakan “pinjaman/loan” yang perlu dibayar balik kepada syarikat Plaintif atau adakah jumlah yang telah diterima Defendan itu sebahagian daripada wang 10 gajinya? Saya berpendapat bahawa persoalan utama yang perlu diputuskan di dalam kes ini adalah, adakah jumlah wang yang dituntut oleh Plaintif terhadap Defendan itum suatu pinjaman?

Selain itu, saya mendapati bahawa dakwaan Defendan di perenggan 7 Pernyataan Pembelaan Terpinda Defendan bahawa surat tuntutan bertarikh 28.4.2015 (P107) tidak pernah dilihat oleh Defendan, tidak dibuktikan penyampaiannya dan gagal disangkal oleh Plaintif. …..

Saya mendapati pada setiap masa yang material, defendan sememangnya telah menerima wang yang terlibat dan butir-butir bayaran tersebut terkandung di Lampiran A, muka surat 6- 10 Ikatan Pliding. Fakta ini juga tidak dipertikaikan oleh Defendan. …..

Pembayaran kepada Defendan itu telah dibuat oleh syarikat Plaintif sejak dari tahun 2007 sehinggalah tahun 2015. ….Saya mendapati, pada setiap masa yang material, selama tempoh sembilan

tahun tersebut, tiada keterangan yang dikemukakan oleh pihak Plaintif untuk menunjukkan bahawa syarikat Plaintif ada atau pernah menuntut pembayaran balik bagi mana-mana bayaran tertunggak bagi transaksi yang 11 didakwa sebagai ‘loan’ tersebut, sehinggalah Defendan berhenti kerja dari syarikat Plaintif.

Saya berpendapat, transaksi atau pembayaran sebegini tidak mempamerkan sebarang ciri-ciri sesuatu “pinjaman”. Terma-terma perjanjian pinjaman antara pihak Plaintif dan Defendan adalah tidak jelas dan juga tidak diketahui dan ia tidak dikemukakan semasa perbicaraan. ….

Secara logiknya, saya bersetuju dengan hujahan peguamcara pihak Defendan yang bijaksana bahawa, sekiranya transaksi berkenaan adalah merupakan “loan” sepertimana yang didakwa oleh Plaintif, maka Plaintif sepatutnya menghentikan pemberikan “loan” tersebut kepada Defendan selagi mana pembayaran bagi “loan’ terdahulu tidak diselesaikan atau ditamatkan.

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Adalah dihujahkan bahawa Defendan sebagai Pengarah Eksekutif Plaintif tidak boleh mengelak liabiliti untuk suaty 12 dokumen syarikat yang dia telah tandatangani. Selanjutnya dihujahkan bahawa seluruh objektif pengarah menandatangani Laporan Kewangan syarikat akan menjadikan dokumen itu sebagai dokumen kepunyaannya dan mesti bertanggungjawab terhadapnya. Oleh yang demikian adalah dihujahkan bahawa Defendan adalah terikat dengan kontraknya tanpa mengira hakikat bahawa mungkin beliau jahil tentang bahasa dalam mana dokumen tersebut telah ditulis.

Adalah dihujahkan bahawa kefasihan Bahasa Inggeris Defendan adalah sangat lemah dan bahawa pada masa yang material beliau tidak memahami peranan dokumen-dokumen terlibat serta tidak memahami maksud perkataan “loan” dan telah menandatangani apa-apa sahaja dokumen yang diminta untuk menandatangani oleh Plaintif, khususnya SP1.

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Saya berpendapat dalam keadaan kes ini, terdapat saksi-saksi lain misalnya auditor yang sepatutnya dipanggil tetapi tidak dipanggil untuk memberi keterangan dan penjelasan dengan dokumen yang dikemukakan. Saya berpendapat bahawa anggapan sebaliknya berpihak (adverse inference) kepada Defedan di bawah s.114(g) Akta Keterangan 1950 wajar terpakai terhadap Plaintif kerana kegagalan Plaintif memanggil saksi-saksi yang material tersebut.

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… Had Masa di bawah Akta Had Masa 1953 51.