Tat Berjasa Enterprise v Seginas (M) Sdn Bhd (JA-22NCVC-5-01/2017)

1.4.2018 Page 2 of 12 Introduction [1] The plaintiff‟s claim is based on an oral agreement entered into between the plaintiff and the defendant. In broad terms, the oral agreement was that the defendant made an offer to the plaintiff to undertake and complete the construction works in a project known as “Cadangan Pembaikan dan Naiktaraf Kemudahan Fasiliti/Sukan di Sekolah Sukan Tunku Ismail (SSTMI), Bandar Penawar, Johor (Fasa 1)” (hereinafter „the project‟) on condition that the plaintiff shall advance its resources and money to complete the works. In consideration of the plaintiff fulfilling its obligations, the defendant shall pay the plaintiff an agreed profit sum of RM750,000.00 together with the money which the plaintiff has advanced for the completion of the works. [2] The parties have gone through a full trial. On 27.2.2018, this Court allowed the plaintiff‟s claim in part. The reasons for the decision are set out as below. Brief Facts [3] On 6.9.2013, Jabatan Kerja Raya (JKR) awarded the project to the defendant based on the defendant‟s tendered sum of RM11,076,978.40. The duration to complete the works was 12 months, i.e. from 23.9.2013 to 21.9.2014. [4] The plaintiff‟s narrative was that sometime in 2013 after JKR had awarded the project to the defendant, the defendant‟s representative, Encik Jamal Abd Nasir Bin Makhtar (DW1), a director of the defendant Page 3 of 12 company, approached one Harip Bin Jailani (PW2). PW2 is a friend of Mokhtar Bin Samad (PW1) who is the owner of the plaintiff company. The defendant through DW1 offered the plaintiff to be a sub-contractor of the project provided that the plaintiff should advance and use its own money to complete the works. In consideration of that, the defendant agreed to pay the plaintiff an agreed profit sum of RM750,000.00 together with the money which had been advanced by the plaintiff to complete the works. The plaintiff accepted the offer. The plaintiff appointed PW2 as the project manager to oversee the progress of the works in the said project. [5] The defendant also offered to open a joint account with the plaintiff in CIMB Bank, Kluang Branch, for the joint effort as security for payments to the plaintiff. However, the parties could not open a joint account because DW1, as representative from the defendant company, faced some regulatory problems in opening and operating new bank accounts. The defendant then offered its existing bank account with Hong Leong Bank to be used for the same purpose, and appointed PW1, as representative from the plaintiff company, to be a signatory to operate the said account. Later, PW1 was removed as a signatory to the said account without his knowledge. [6] According to the plaintiff, the plaintiff had incurred or advanced a sum of RM1,045,743.74 for the project. Thus far, the defendant had progressively paid the plaintiff a total sum of RM614,800.00. There is still an outstanding sum of RM430,943.74 owing to the plaintiff by the defendant. Hence, the plaintiff claims against the defendant, inter alia, Page 4 of 12 the sum of RM430,943.74 and the agreed profit of RM750,000.00 from the defendant. [7] The defendant‟s narrative was that the defendant was involved in the project, but the project did not involve the plaintiff. The defendant denied that there was any oral agreement entered into between the defendant and the plaintiff. The plaintiff also denied that the defendant had any dealings with the plaintiff. In the defendant‟s statement of defence, simply put, the defendant denied the claim and put the plaintiff‟s claim to strict proof. The Finding of this Court [8] The agreed issues to be tried are as follows:

Sama ada wujudnya ikatan kontrak di antara Plaintif dan Defendan untuk melaksanakan projek Cadangan Pembaikan dan Naiktaraf Kemudahan Fasiliti/Sukan di Sekolah Sukan Tunku Ismail (SSTMI), Bandar Penawar, Johor (Fasa 1).

Sama ada wujudnya ikatan kontrak di antara Defendan dan Plaintif untuk Defendan membuat bayaran keuntungan kepada Plaintiff sebanyak Ringgit Malaysia Tujuh Ratus Lima Puluh Ribu (RM750,000.00) sahaja daripada projek tersebut.

Sama ada Defendan masih berhutang kepada Plaintif baki wang kos dan perbelanjaan projek tersebut sebanyak Ringgit Malaysia Empat Ratus Tiga Puluh Ribu Sembilan Ratus Empat Puluh Tiga dan Tujuh Puluh Empat Sen (RM430,943.74) sahaja. Page 5 of 12 [9] After having scrutinized the oral and documentary evidence of the plaintiff‟s case, this Court is satisfied that the plaintiff has discharged its burden of proof on a balance of probabilities. This Court has taken into consideration of the evidence below to come to its conclusion. [10] First, the plaintiff adduced two documents entitled “Account Opening Application Form for Business/Company/Association/Others” (hereinafter „Application Form‟) and “Specimen Signature Form” (hereinafter „Specimen Form‟) which belonged to CIMB Bank (see pp. 9- 12 and p.13 respective Exhibit „B‟ – Ikatan Dokumen Plaintif). [11] The named applicant in the Application Form was the defendant company. The proposed signatories of the intended account holders were Noorzail Falilawati Binti Md Nor, PW1, PW2 and DW1 (see p. Exhibit „B‟). All the intended account holders had placed their signatures on the Application Form. [12] The authorised signatories for operating the intended account were Noorzail Falilawati Binti Md Nor, SP1 and DW1. They had placed their signatures in the Specimen Form as well. It is observed that NoorZail Falilawati is a director and shareholder of the defendant company. [13] It was explained by PW1 that the intended account was part of the oral agreement in that it was meant to be a security to secure payment to the plaintiff. [14] There was no evidence in the defendant‟s case to challenge or to suggest that the signatures of DW1 and NoorZail Falilawati were not theirs or were forged. In fact, DW1 admitted that those two documents Page 6 of 12 were documents meant for opening of an account for the defendant company (see Q&A 9 – DW1-WS). However, the defendant did not explain as to why the defendant wanted to open an account. The defendant also did not explain as to why PW1 and PW2 were involved in the opening of a new account for the defendant company. The defendant did not offer any explanation as to why DW1 and NoorZail Falilawati signed those documents together with PW1 and PW2 if not for the plaintiff to secure payments from the defendant. [15] DW1 admitted that the defendant company had passed a resolution (hereinafter „the Resolution‟) (see p. 8 Exibit „B‟) to open the intended account at the CIMB Islamic, Kluang Branch (see Q&A 9 – DW1-WS). The Resolution allowed the defendant company to open an account at CIMB Islamic, Kluang Branch and named PW1 and PW2 as authorised signatories (as Group B) to operate the intended account together with DW1 and NoorZail Falilawati (as Group A). Further, the intended account was to be operated by one signatory from Group A and any one signatory from Group B. The Resolution was passed on 2.10.2013 and signed by DW1 and NoorZail Falilawati. [16] The defendant did not challenge the authenticity and the contents of the Resolution. Likewise, the defendant did not challenge the signatures on the Resolution. [17] The defendant‟s counsel submitted that the information in the Application Form and Specimen Form are incomplete, undated and it was not acknowledged by the Bank, therefore, the Court should not rely on them. Further, the defendant‟s counsel also submitted that those Page 7 of 12 documents could not establish there was any contractual relationship between the plaintiff and the defendant. [18] After having examined the Application Form, Specimen Form and Resolution and the testimonies of the plaintiff‟s witnesses as well as the defendant‟s witness, this Court is satisfied that the documents can be relied upon as credible evidence in the plaintiff‟s case. As explained by PW1, he could not open the account with CIMB Bank because DW1 was facing some problem in opening and operating a new bank account. That explains why the documents were not submitted and there was no acknowledgement from the bank. Despite the fact that the Application Form and Specimen Form were undated, that did not negate the fact that the information stated therein was detailed enough to suggest the defendant company had intended to open a new account at some point in time. Further, the defendant did not deny that the defendant‟s stamp was placed on the two documents. In fact, the information provided in the two forms was sufficient to open a bank account at any point of time (if attached with those documents as required by the bank). [19] This Court did not just rely on the Application Form, Specimen Form and Resolution to conclude that there was an oral agreement between the two parties. This Court has also considered other evidence which will be unfold gradually in the following discussion. [20] Secondly, the plaintiff had adduced two Hong Leong Bank cheques (hereinafter „the HLB cheques‟) (see p.27 and p.33 Exhibit „B‟). The account holder of these HLB cheques belong to the defendant company. The HLB cheques were made payable to the plaintiff. The signatories in the HLB cheques were SP1 and DW1. Why was PW1 a signatory to the Page 8 of 12 defendant‟s account, and why did the defendant have to pay the plaintiff? The defendant through DW1 explained and stated as follows: “Q. 29 Rujuk Ms 27, 33 and 35. Kenapa ada cek bayaran kepada Tat Berjasa daripada Seginas? Cek ini ditandatangai untuk projek ini tetapi diarahkan oleh sub-con saya ANIKA SDN BHD untuk bayaran terus dibuat kepada Tat Berjasa, walaubagaimanapun saya tidak kenal Tat Berjasa tersebut, bayaran dibuat untuk urusan ANIKA SDN BHD dan Tat Berjasa. Q. 30 Adakah encik kenal plaintiff encik Moktar? Saya kenal dan manjadi orang tengah antara RADEN ENTP dan ANIKA SDN BHD, dan sebagai penandatangan cek bagi projek ini. Q.31. Adakah encik kenal Tat Berjasa dan biasa berurusan? Tidak kenal dan tidak berurusan.” [21] The defendant stated that the reason why PW1 was made a signatory to the defendant‟s account was because the plaintiff was a middle party for two entities. This explanation could not be probable because no person with a right frame of mind would simply allow a stranger to be a signatory to its bank account just to facilitate its sub-Page 9 of 12 contractor ANIKA SDN BHD‟s wishes. The defendant‟s explanation was incoherent, the more so when DW1 alleged that he had no dealings with the plaintiff. The defendant did not call any witness either from ANIKA SDN BHD or RADEN ENTP to give evidence in support of its narrative. [22] The plaintiff‟s narrative was that the defendant had agreed that for one of its existing accounts to be used as security for payment to the plaintiff. As such, the plaintiff‟s representative PW1 was made an authorised signatory in the defendant‟s account. Thus far, the HLB cheques supported the plaintiff‟s narrative that its payments will be secured by allowing PW1 to be a signatory in the defendant‟s account after the attempt to open a new account was unsuccessful. The fact that PW1 was a signatory to the defendant‟s account shows it is more probable than not that the plaintiff at some point in time had a relationship with the defendant. It was more probable than not that the relationship between the parties was that the plaintiff was appointed as a sub-contractor in the project by the defendant. It was probable that the reason as to why PW1 was a signatory in the defendant‟s account was that it was meant to secure payment from the defendant in the project. The documentary evidence seems to be more favourable to and supportive of the plaintiff‟s narrative than the defendant‟s narrative. [23] Thirdly, the plaintiff claimed for a sum of RM430,943.74 which was the outstanding balance sum that the plaintiff had incurred. This amount was made up of the sum of money that the plaintiff had paid to third parties. The plaintiff had adduced the third parties‟ invoices addressed to the plaintiff. All the materials supplied by these third parties were delivered to the project site. For example, the invoice of KMYA dated 15.4.2014 was invoiced to the plaintiff, the material (pasir sedang) was Page 10 of 12 delivered to Sek. Sukan, Bandar Penawar, Kota Tinggi (see p. 79 Exhibit „B‟). Other invoices were loose items purchased by the plaintiff, payments made to hire machineries, lorry and etcetera. DW1 had denied that the defendant had any dealings with all the third parties. This Court is not satisfied with the DW1‟s denial of its involvement with these third parties. These third parties had dealt with the plaintiff because the plaintiff was the sub-contractor who had purchased materials or hired the services from these third parties. Obviously, there were no direct dealings between the defendant and the third parties. However, from the invoices, there is evidence that the materials or machineries hired were delivered and used at the project site. The project site was managed by the defendant. Hence, the defendant‟s denial was unsustainable. [24] Fourthly, DW1 testified that the defendant made payments to the plaintiff in this project because it was directed by its sub-contractor Anika Sdn Bhd to pay direct to the plaintiff. DW1 was referring to the HLB cheques and another Hong Leong Bank cheque 271545 dated 25.7.2014 for a sum of RM50,000.00 (see p.35 Exhibit „B‟). There was no documentary evidence to support the defendant‟s story. [25] Based on the above evidence and contemporaneous documents, this Court is inclined to accept the plaintiff‟s narrative as being more probable than just possible compared with the defendant‟s narrative. Hence, this Court is satisfied that the plaintiff had, on a balance of probability, discharged its burden in proving that there was an oral agreement entered into between the parties, and that the plaintiff did spend a substantial amount to complete the works in the project, and the plaintiff was not paid for its expenses. With regard to the defendant‟s Page 11 of 12 story, the documentary evidence does not support the defendant‟s case. The explanation provided by DW1 is preposterous and could not explain coherently as to why the documentary evidence existed. The defendant‟s defence was in substance a bare denial. [26] Notwithstanding the above, this Court is not inclined to allow the plaintiff‟s claim for the agreed profit of RM750,000.00. Other than what has been said by the plaintiff‟s witnesses, no evidence was adduced to support that the project has been completed, and that the defendant had been fully paid by JKR. The plaintiff did not prove that the defendant was paid for the project for which the plaintiff is entitled to the agreed profit. Conclusion [27] Based on the above reasoning, this Court ordered that the defendant to pay the plaintiff the sum of RM430,943.74, and interest at the rate of 5% per annum based on the judgment sum to be calculated from the date of the decision (27.2.2018) until the date of full settlement. This Court also ordered the defendant to pay costs of RM15,000.00 to the plaintiff. -Signed- …………………………………….. (CHOO KAH SING) Judicial Commissioner High Court Johor Bahru Page 12 of 12 Counsel for the plaintiff : Mohd Asmadi (Noraizalian Ghazali with him) Tetuan Aizalian Asmadi & Co. Counsel for the defendant : Suzana Farikah Tetuan Suzana Farikah & Co.