Yyt Import & Export Sdn. Bhd. v Lo Swee Ling (WA-12BNCvC-138-10/2022)

This judgment deals with two legal issues that normally arise at a trial and on appeal thereafter. They are - i. How should a trial judge decide which party’s version of an oral agreement should be preferred; and ii. When should an Appellate Court interfere with the findings of facts of the trial judge.

Parties will be referred to as they are referred to in the Sessions Court.

This is an appeal by the Plaintiff after a full trial wherein the Sessions Court on 23-09-2022 had dismissed the Plaintiff’s suit and awarded to the Defendant RM 16,000 cost. The terms of the Judgment can be seen in Enclosure 10.

There was a counterclaim filed by the Defendant which was also dismissed by the Sessions Court with no order as to costs. No appeal was filed by the Defendant against the dismissal of his counterclaim. No appeal was filed by the Plaintiff against the order on costs.

Thus, these Grounds of Judgment will only concern the appeal filed by the Plaintiff against the dismissal of his suit against the Defendant.

The Sessions Court in the Grounds of Judgment [Enclosure 4] had dismissed the suit on the grounds that - i. The Plaintiff had failed to prove its version of an oral agreement between the Plaintiff and the Defendant. ii. Even if the Plaintiff had proven its version of an oral agreement between the Plaintiff and the Defendant the suit was time-barred under Section 6 of the Limitation Act 1953. iii. The allegation of fraud committed by the Defendant when he redeemed the Charge on the house was not proven.

I heard counsel on 12-04-2023 and dismissed the appeal by the Plaintiff with costs of RM 8,000 subject to allocatur.

The Plaintiff has filed an appeal to the Court of Appeal. These are my Grounds of Judgment.

The pleaded case of the Plaintiff is set out in its Statement of Claim at paragraphs 3 to 29 in particular at paragraphs 8 and 29.

In essence, the Plaintiff alleged that by an oral agreement Au Teck Heng/SP-3, a director of the Plaintiff, had agreed to help the Defendant to finance the Defendant's house. Therefore, on 17-10-2006 the Plaintiff had obtained credit facilities from Public Bank Berhad (“Public Bank") to finance the Defendant's house. The Plaintiff sued for repayment of RM 228,723.

The Defendant denies the version of the oral agreement of the Plaintiff’s. The Defendant alleged the Public Bank credit facilities were obtained for the use of the Plaintiff’s business using the Defendant’s house as security. [See Statement of Defence at paragraphs 5 to 9].

The Plaintiff also alleged fraud against the Defendant as the Defendant had redeemed the Charge on the Defendant’s house from Public Bank. [See Statement of Claim at paragraphs 22 to 25].

The Defendant denies fraud and contends that he and his wife were entitled to redeem the Charge as they are owners of the house.

Trial was conducted before the Sessions Court. The Plaintiff called 4 witnesses. The Defendant called 2 witnesses.

At the end of the trial the Sessions Court had dismissed the suit on the three grounds I had referred to above.

I will consider one by one the three Grounds relied on by the Sessions Court to dismiss the suit. Ground 1- The Plaintiff had failed to prove its version of an oral agreement between the Plaintiff and the Defendant.

In support of the Plaintiff’s version of the terms of the oral agreement Au Teck Heng/SP-3, a director of the Plaintiff, had testified. The Defendant testified as SD-1 to present his own version of the the terms of the oral agreement.

I begin with an analysis of the applicable law. How should a trial judge decide which party’s version of an oral agreement should be preferred?

The Sessions Court accepted the Defendant’s version of the oral agreement. This decision was arrived at after the Sessions Court had considered the testimonies of all the witnesses and analysed them against the contemporaneous documents.

This methodology was used by the Sessions Court judge Hakim Rofiah Binti Mohamad as stated by her ladyship in reliance on the High Court case of Nuri Asia Sdn Bhd v Fosis Corporation Sdn Bhd [2006] 5 CLJ 307 & [2006] 2 MLRH 166 Low Hop Bing J. [See Grounds of Judgment Enclosure 4 paragraph 25].

I agree with the approach taken by the Sessions Court Hakim in applying the methodology suggested by the High Court in Nuri Asia Sdn Bhd v Fosis Corporation Sdn Bhd [2006] 5 CLJ 307 & [2006] 2 MLRH 166 Low Hop Bing J.

In my view, when a trial judge has to choose whether the Plaintiff’s or the Defendant’s version of an oral agreement should be believed, the 7 correct approach is to consider the testimonies of all the witnesses and analyse whether they are consistent with their past conduct, past acts as well as the contemporaneous documents. The objective is to test which version of an oral agreement is clearly more consistent with the factual matrix and so should be accepted by the trial judge.

This is what Low Hop Bing J said in the High Court case of Nuri Asia Sdn Bhd v Fosis Corporation Sdn Bhd [2006] 5 CLJ 307 & & [2006] 2 MLRH 166 –

In my judgment, the issue herein revolves around the existence or otherwise of an oral guarantee. The first step towards the resolution of this issue is to determine the burden of proof. [14] Section 101 of the Evidence Act 1950 provides as follows: 101 Burden of proof

Whoever desires any court to give judgment as to any legal right or liability, dependent on the existence of facts which he asserts, must prove that those facts exist.

When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person. [15] As the plaintiff desires this court to give judgment as to the legal right or liability, dependent on the existence of facts which he asserts in relation to the existence of an oral guarantee, the plaintiff must prove that those facts exist, in accordance with s. 101(1). Under s. 101(2), the burden of proof lies on the plaintiff (see also MBf Finance Bhd, supra, and Tenaga Nasional Berhad (Formerly Lembaga Letrik Negara Tanah Melayu) v. Perwaja Steel Sdn Bhd (Formerly Perwaja Terengganu Sdn. Bhd.) [1995] 4 CLJ 670 HC). [16] As this is a civil case, the burden of proof may be discharged by the plaintiff on a balance of probabilities i.e., that the plaintiff's version is probably true. [17] The evidence adduced by the parties respectively pertaining to the existence or otherwise of an oral guarantee is sharply conflicting. I therefore follow the safer approach set out by Chang Min Tat FJ (as he then was) for the Federal Court in Tindok Besar Estate Sdn Bhd, supra, ie, to refer to and rely on the witness' acts and deeds which were contemporaneous with the event and to draw reasonable inferences from them, adding that judicial reception of evidence requires that the oral evidence be critically tested against the whole of the other evidence and circumstances of the case, and that plausibility should never be mistaken for veracity. [18] The above approach was also applied by James Foong J (now JCA) in Industrial Concrete Products, supra. [19] For this purpose, the police report lodged by SP1 may be used to determine the probability and plausibility of his oral evidence. The importance of a police report in providing evidence of what had actually transpired was stressed by Abdul Malik Ishak JC (now J) first in Mohd Tajuddin bin Salleh, supra, and then in Abdul Kadir bin Mohamad, supra. [20] In the case before me, the plaintiff's claim founded on the existence of an oral guarantee appears to run counter to the plaintiff's own police report exh P2 which has made no mention whatsoever of any oral guarantee. Had such an oral guarantee ever existed, SP1 would most certainly have stated this crucial fact in his police report. [21] The absence of an oral guarantee is further fortified by the plaintiff's acts and deeds in issuing the notices of demand to the first defendant only while none was issued to the second defendant. Had there been truly an oral guarantee as alleged by the plaintiff, the plaintiff would have had no hesitation whatsoever in making such demands on the second defendant. The evidence before me is clearly more consistent with the absence of an oral guarantee. [22] Hence, I am of the view that the plaintiff has not discharged the burden of proving on a balance of probability that the second defendant has given an oral guarantee. Indeed, it is my specific finding that the second defendant has not given any oral guarantee, but has merely acted in his capacity as an introducer or a middleman. [Emphasis added] When should an appellate court interfere with the findings of facts of the trial judge? [24] The law on appellate interference with the findings of facts of the trial judge is well settled. [25] In UEM Group Bhd v Genisy Integrated Engineers Pte Ltd & Anor [2018] Supp MLJ 363 & [2010] 2 MLRA 668 FC, Rauf Sharif FCJ said - [26] …the prime issue is whether the Court of Appeal had erred in interfering with the findings of facts of the trial judge. It is well settled law that an appellate court will not generally speaking, 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 trial court is guilty of no or insufficient judicial appreciation of evidence. [Emphasis added] Application of law to facts [26] The Sessions Court judge has set out her analysis of facts in support of her decision to accept the version of the oral agreement put up by the Defendant. [See Enclosure 4 Grounds of Judgment paragraphs 25-33]. [27] I see no reason to interfere with the findings of facts of the Sessions Court. The Sessions Court is not guilty of no or insufficient judicial appreciation of evidence. The Sessions Court judge has set out clearly her analysis of facts to accept the version of the oral agreement put up by the Defendant. [See Enclosure 4 Grounds of Judgment paragraphs 25-33]. [28] My perusal of the evidence further shows the following - i. The credit facilities were obtained in 2006. If indeed the oral agreement is for the Plaintiff to obtain the credit facilities to help the Defendant to finance the Defendant's house - as alleged by the Plaintiff - it is strange there is no mention of such oral agreement in the Plaintiff’s directors’ meetings, resolutions, audited accounts or in the Plaintiff’s AGMs at all from 2006 to 2020 when this suit was filed. ii. The Plaintiff had sent one letter of demand dated 21-11-2018. [See Enclosure 3 Appeal Record page 194]. The Plaintiff’s solicitors sent one letter of demand dated 20-08-2019. [See Enclosure 3 Appeal Record page 195]. The reasons stated there do not support the Plaintiff’s version of the oral agreement. In the letter of demand dated 21-11-2018 the Plaintiff said action was taken as the Defendant had resigned from the Plaintiff since 2007. It is strange the Plaintiff waited from 2007 to 2018 before alleging the Defendant owe the Plaintiff monies. Further the alleged oral loan agreement is not mentioned in this letter of demand. iii. In the Plaintiff’s solicitors’ letter of demand dated 21-11-2018 at item 3 the Plaintiff alleged the Defendant obtained a loan from Public Bank. This factually contradicts the Plaintiff’s pleaded case and assertion at trial that it was the Plaintiff that obtained credit facilities from Public Bank to finance the Defendant's house. iv. Further, in the Plaintiff’s solicitors’ letter of demand dated 21-11- 2018 at item 4 the Plaintiff alleged the Plaintiff was the guarantor for the loan obtained by the Defendant from Public Bank. This also factually contradicts the Plaintiff’s pleaded case and assertion at trial that it was the Plaintiff that obtained credit facilities from Public Bank to finance the Defendant's house. Further, again the alleged oral loan agreement is not mentioned in this letter of demand. v. Au Teck Heng/SP-3, a director of the Plaintiff, admitted under cross-examination there was no oral agreement between parties whereby the Plaintiff gave a loan to the Defendant. [See Appeal Record page 882 lines 4-7]. vi. The Plaintiff admitted in its Statement of Claim at paragraph 10 that it had in fact used the credit facilities. This contradicts the Plaintiff’s alleged version of an oral agreement that the credit facilities were to help the Defendant to finance the Defendant's house. vii. The evidence shows the Plaintiff in fact used the credit facilities for its business. [See the Statements of Accounts from Public Bank]. This again contradicts the Plaintiff’s alleged version of an oral agreement that the credit facilities were to help the Defendant to finance the Defendant's house. [29] In conclusion, the Plaintiff has failed to discharge the legal burden on him under Section 101 of the Evidence Act 1950 to prove the terms of the oral agreement. [30] I now move on to issue 2. Issue 2 - Even if the Plaintiff had proven its version of an oral agreement between the Plaintiff and the Defendant the suit was time-barred under Section 6 of the Limitation Act 1953. [31] The Plaintiff in its letter of demand dated 21-11-2018. [See Enclosure 3 Appeal Record page 194] said the Defendant had to repay the money to the Plaintiff because the Plaintiff had resigned from the Plaintiff since September 2007. [32] By its own statement, the Plaintiff said the obligation of the Defendant to repay starts from September 2007. So, the cause of action starts from September 2007. [See Pan Northern Air Services Sdn Bhd v Maybank Islamic Bhd & Another Appeal [2021] 3 CLJ 34 & [2020] MLRAU 370 CA Lee Swee Seng JCA at 103(3)]. [33] As this suit was only filed in 2020 it is clearly time-barred under Section 6 of the Limitation Act 1953. [34] I now move on to issue 3. Issue 3 - The allegation of fraud committed by the Defendant when he redeemed the Charge on the house. [35] The Sessions Court judge has set out her analysis of facts to reject the Plaintiff’s allegation of fraud committed by the Defendant [See Enclosure 4 Ground of Judgment paragraphs 37-40]. [36] I see no reason to interfere with the findings of facts of the Sessions Court. The Sessions Court is not guilty of no or insufficient judicial appreciation of evidence. [See UEM Group Bhd v Genisy Integrated Engineers Pte Ltd & Anor [2018] Supp MLJ 363 & [2010] 2 MLRA 668 FC Rauf Sharif FCJ]. [37] This issue was also not pursued by the Plaintiff during submissions before me. In any event, as the Defendant is the registered owner of the house he has every right to redeem the house. Decision [38] I dismiss the appeal with costs of RM 8,000 subject to allocatur. ………(signed).………. Leong Wai Hong Judicial Commissioner High Court of Malaya Kuala Lumpur (NCVC 10) Dated: 19th May 2023 COUNSEL: 1) Darshnan Kumar for Appellant. (Tan Kong Hai & Tui (Bentong)) 2) Ng Chin Han for Respondent. (C.H. Ng & Co. (Petaling Jaya)) CASES REFERRED TO: 1) Nuri Asia Sdn Bhd v Fosis Corporation Sdn Bhd [2006] 5 CLJ 307 & & [2006] 2 MLRH 166 HC. 2) Pan Northern Air Services Sdn Bhd v Maybank Islamic Bhd & Another Appeal [2021] 3 CLJ 34. 3) Tenaga Nasional Berhad (Formerly Lembaga Letrik Negara Tanah Melayu) v. Perwaja Steel Sdn Bhd (Formerly Perwaja Terengganu Sdn. Bhd.) [1995] 4 CLJ 670. 4) UEM Group Bhd v. Genisy Integrated Engineers Pte Ltd & Anor [2018] Supp MLJ 363 FC. LEGISLATION REFERRED TO: 1) Section 6 of the Limitation Act 1953. 2) Section 101 of the Evidence Act 1950.