1. ADISSAYAM @ XAVIER A/L SUSEIMANIKAM [NRIC No. 480201-08-5123] [suing as the Executor of the estate of BAGETIAMAH A/P RAYAPPAN, the Deceased] 2. MANI PETER XAVIER [NRIC No. 711124-10-5949] GREAT EASTERN LIFE ASSURANCE (M) BERHAD [Company

IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA SUIT NO. WA-22NCC-259-07/2018 BETWEEN 1. ADISSAYAM @ XAVIER A/L SUSEIMANIKAM [NRIC No. 480201-08-5123] [suing as the Executor of the estate of BAGETIAMAH A/P RAYAPPAN, the Deceased] 2. MANI PETER XAVIER [NRIC No. 711124-10-5949] .. PLAINTIFFS AND GREAT EASTERN LIFE ASSURANCE (M) BERHAD [Company No. 93745-A] ... DEFENDANT JUDGMENT (After trial) Introduction 1. This is the judgment of the Court after a full trial. There are two parts to the claims that were presented by the plaintiffs in the action which was filed on 3 July 2018. The claims relate to the insurance agency that was run by the late Mdm. Bagetiamah A/P Rayappan (“the deceased”) who was at all material times an agent of the defendant, a licensed life insurance company. The deceased ran her own agency under Agency Account No. 501996- 9 ("the Agency”). The deceased died on 16 December 2012. At the time of her death, the deceased was holding the agency rank of Group Sales Manager ("GSM"). The first part of the claim is in relation to the “succession” of the Agency. Specifically, the issue is whether the deceased had nominated the 2" plaintiff as her successor such that it entitles the 2° plaintiff to claim that the Agency should be transferred to him upon the demise of the deceased. The second part of the claim is for an alleged debt for monies which are said to be due and owing by the defendant to the estate of the deceased. The 1* plaintiff ("P1”) is Mr. Adissayam @ Xavier A/L Suseimanikam. P1 is the husband of the deceased. He brings this action as the executor of the estate of the deceased pursuant to a Grant of Probate dated 16 April 2013 issued under Kuala Lumpur High Court Originating Summons No. 32NCVC-352-03/2013. In essence, P1 is seeking to recover a debt which is said to be due and payable by the defendant to the estate of the deceased. Specifically, P1 seeks to obtain an order that the defendant do transfer to the estate, all the commissions, entitlements and benefits including, but not limited to the deferred benefits, overriding commissions, overriding production bonus and breakaway benefits in respect of the deceased's rank of GSM under the Principal Agency Agreement and the Supplementary Agreements. This part of the claim shall be referred to as “the Estate claim’. [2] As stated earlier, the first part pertains to the claim by the 2" plaintiff vis-a-vis the “succession” of the Agency. The 2™ plaintiff is Mr. Mani Peter Xavier (“P2”). He is the son of the deceased and P1. P2 was also an agent under the defendant. He was appointed as an agent of the defendant on 12 June 1997. On 21 June 2002, P2 was re-designated to be Unit Sales Manager (“USM”) with effect from 1 January 2002 (p.326 B2). The deceased had in fact given a letter dated 23 May 2002 (p. 328 B2) by which she strongly supported her son’s application for re-designation as USM. However, on 4 March 2013, P2’s rank as USM was terminated with effect from 1 January 2013 (p.347 B2) as he did not meet the defendant's “maintenance requirements”. However, he continued to be an agent of the defendant. After the instant suit was filed, P2 was terminated as agent with effect from 1 January 2019 (p.398 B2). The reason given was that P2 had failed to meet the production quota. P2 contends that upon the demise of the deceased, he became entitled to have the Agency transferred to him. In this action, P2 seeks an order to that effect plus associated consequential orders which are derived from the main order in regard to P2’s alleged entitlement as the lawful transferee (successor) of the Agency post the demise of the deceased. P2 seeks an order that the defendant must transfer the entire business of the Agency to P2 together with all the interests and rights accrued to date within 14 days of an order being made. | shall refer to the Agency succession claim as “the Agency claim’. [3] 10. 11. 12. In regard to the Agency claim, P2 relies on two letters that were authored by the deceased during her lifetime. The first is a letter dated 23 May 2002 (p. 328 B2) and the second is a letter dated 27 July 2012 (p.339 B2). In both these letters the deceased had clearly and unequivocally indicated (to the defendant) that she intended that P2 should “take over’ the Agency. But it is necessary to mention that the letter dated 27 July 2012 was only sent to the defendant after the demise of the deceased. It was in fact established during the trial that P2 had sent the said letter posthumously, i.e. after the death of the deceased as an attachment to his letter dated 24 December 2012 to the Chief Executive Officer (‘the CEO") of the defendant. In his letter to the defendant's CEO, P2 said, “/ refer to the recent demise of my mother GSM Mdm Bagetiamah Rayappan and wish to inform you that | have been nominated by her to succeed in her position as GSM’ [emphasis added]. The defendant initially took the position (paragraph 16 of the Defence - Enclosure 10) that the letter dated 27 July 2012 is not authentic. But during the trial they did not press the authenticity point. Instead, the defendant took the position that the letter was not sent to them prior to the demise of the deceased. During the trial, the plaintiffs conceded that the deceased's letter dated 27 July 2012 was not sent to the defendant prior to the demise of the deceased. 13. 14. In his correspondence with the defendant in relation to the Agency claim, P2 only made reference to the deceased's letter dated 27 July 2012 as evidence of her intention and wishes after her demise. Indeed, it is implicit that P2 considered the said letter to be evidence of the “nomination”. The letter is referred to in paragraph 14 and 15 of the Amended Statement of Claim dated 23 April 2019 (Enclosure 79) (‘ASOC’”) which reads as, “14. Prior to her demise, the Deceased wrote to the Defendant on 27- 7-2012 indicating her intention in respect of her succession plan. In the said letter, the Deceased made it clear to the Defendant that she would like to transfer the Agency to her son, the 2nd Plaintiff. 15. To the best of the Plaintiffs’ knowledge, this was not objected to by the Defendant at that material time save for the fact that the Defendant only disputed about the Deceased’s succession plan after the issuance of the Letter of Demand dated 28-4-2017.” The above-mentioned averments in the ASOC give the unmistakable impression that the deceased's letter dated 27 July 2012 was sent to the defendant contemporaneously with the issuance of that letter and that the defendant did not object to the contents of the letter. That is not quite right because P1 conceded quite candidly during cross- examination that the letter was only sent to the defendant after the demise of the deceased. There was no question of the defendant objecting to the letter because it was not sent to the defendant when the deceased was alive. [5] 15. Another interesting feature of the Agency claim is that in the ASOC, there is no mention the deceased's the letter dated 23 May 2002 (p. 328 B2). But it is however mentioned in the Reply to Defence (Enclosure 11). The relevant paragraphs in the Reply to Defence are:- “42. Paragraph 15 of the Defence is collectively denied and the Defendant is put to strict proof thereof. Further in reply, the Plaintiffs plead, as follows:- (i) At all material times, the Defendant was aware of the Deceased’s wish to have the Agency transferred to the 2nd Plaintiff, as the handwritten letter setting out the intention of the Deceased dated 23-5-2002 was attached to the letter of promotion dated 21-6-2002 from the Defendant to the 2nd Plaintiff. (ii) Further, pursuant to clause 31 of the Principal Agency Agreement, the Deceased was required to register the Agency under Registration of Business Ordinance. The business forms part of the estate of the Deceased which, under clause 6 of the Deceased’s will, is within the 1st Plaintiff's power to distribute as the Executor of the Deceased’s Will. (iil) Therefore, contrary to paragraph 15(c) of the Defence, the Plaintiffs state that the Agency rightfully belongs to the estate of the Deceased and that the Deceased had the right to will it away in the manner of her choosing. 13. | Paragraph 16 of the Defence is denied and the Defendant is put to strict proof thereof. Further in reply, the Plaintiffs state that the Defendant duly received the letter from the 2nd Plaintiff dated 24-12-2012 along with its attachment, where such reference was made in the Defendant's letter dated 4-1- 2013, in its admission at paragraph 17(b) of the Defence. [6] The Defendant's denial of the letter dated 27-7-2012 is without basis because at all material times, the Defendant had knowledge of the Deceased’s intention to transfer the Agency to the 2nd Plaintiff vide her letter dated 23-5-2002. This was not objected to by the Defendant at that material time. Further to that, it was widely known by the Defendant’s senior officers of the Indian Business Development Unit (IBDU) and the Indian Group Sales Managers, both of the Defendant, that the Deceased and the Plaintiffs had contributed massively in the field force, product knowledge and motivation trainings for more than 100 groups, wherein this was always the succession plan and decision of the Deceased. Therefore, the Defendant's objection and denials herein is but a mere afterthought.” [emphasis added] The 2 letters 16. 17. 18. At any rate, upon reading both letters, it was quite clear that it was always the deceased’s wish and indeed, her intention that P2 was to be her anointed successor and that he should take over the Agency. But it is important to keep in mind that the letter dated 27 July 2012 was not sent to the defendant prior to the demise of the deceased. For ease of reference, | have reproduced the 2 letters and they read as follows:- Letter dated 23 May 2002 (p.328 B2) “To: Great Eastern Life Assurance (M) Bhd 23 May 2002 Re: Mr. Mani Peter Xavier Account No. 562237-1 Background Mr. Mani Peter Xavier is my son. Lintent for him to take over my agency. He holds the Degree of Bachelor of Accounting, Honours Class Il (upper Division), University of Malaya. He is a Chartered Accountant, registered with Malaysian Institute of Accountants. Agency with GEL He was appointed as agent on 12.06.1997. The production of business:- 1997: RM30,067 1999: RM7,705 2001: RM33,006 1998: RM51,072 2000: RM6,190 He also assist me in my agency function, especially in training agents and during my weekly training and meetings. All the officers and agents in my group have personal contact and good relationship with him. Transfer of Agents | hereby agree to transfer these agents (who are under my own direct unit and directly recruited by me) for his requirement and redesignation of Unit Sale Manager: Agent A/C No. Agent Name 1. 556292-1 Mdm Alfonse Mary 2. 561278-3 Mdm Devaki 3. 569566-2 Mr Vengkateswaran Rao 4. 584209-6 Ms Janthi The total Production for the above (as a unit) for 2001 is almost 75,000 BAMC and other trainings Mr Mani Peter has completed his BAMC in 1998 and Certificate of Investment Link Life Insurance. Presently he is pursuing the Chartered Certificate of Insurance planners.| strongly support the above application and assure you this will definitely spur him for greater performance. | also thank you for your consideration and assistance. Yours sincerely.” [emphasis and underlining added] [8] Letter dated 27 July 2012 (p. 339 B2) “Yang Berbahagia Dato Koh Yau Hui, Director & Chief Executive Officer Dear YB, Re: Madam Bagetiamah A/P Rayappan Group Sales Manager (A/C NO 501996-9) With warmest regards | am writing this letter to you for your personal consideration. As you are aware, at the MDA award ceremony two years ago at Genting Highlands Convention Centre, my husband Dr. Adissayam Xavier went up the stage to receive the Awards from you on by behalf. My husband conveyed you wish that | will be well soon and your congratulation to me and that you hope to meet me sometime in the future. Well, somehow my health has not improved, contrarily, it has deteriorated and the doctor's latest report is that my heart is only 26% functioning. Puan Norizan is aware, | have wanted my son Mani Peter Xavier (USM Alc: 5622371) to take over my agency. He has been a USM for many years and since taking up the agency, he has been carry out most of my function including training of agents and policy holders needs and agency management. He is a multiple degree holder and also holding both RFP and CFP membership (his personal profile is attached herewith). While | wanted the succession plan to be effected earlier, my husband and my son did not want to do so as they felt my continued position as GSM will somehow motivate me in improving my health. ! sincerely appreciate all you assistance. My son will be a good and strong GSM (in terms of results). Thank you and may god bless you all good people. -sgd- (Nee Bagetiamah a/p Rayappan) Group Sales Manager NRIC:510727-10-5058 [8065387 (Old)] 27/7/2012” [emphasis added] 19. 20. 21. To my mind, the intention of the deceased was at all times quite clear. She unequivocally wanted P2 to be her successor and take over the Agency. But, the germane question for purposes of the Agency claim is whether the deceased had nominated a successor to take over the Agency upon her demise in accordance with the terms and conditions or in the manner as prescribed by the defendant. No doubt, it was put to P1 and he agreed that over time, a person’s intention can change. But the documentary and oral evidence (of P1 and P2) does not suggest that the deceased was unsure or had changed her mind at any time prior to her untimely death on 16 December 2012. In so far as the succession issue is concerned, the defendant’s clear and unyielding position (per paragraph 18 (c), (d), (e) and (f) of the Defence) is that P2 is not entitled to have the Agency transferred to him because the deceased did not, during her lifetime, comply with the deceased’s rules for succession per the defendant's circulars and nominate a successor by using the defendant's prescribed form called the “Succession Nomination Form” (‘the Nomination Form”) (p.522 B2). The defendant pleads that the deceased did not at any time notify the defendant of her intention to nominate anyone as her successor in accordance with the defendant's circular referenced as CAD/0546/FEB2008 ("the 2008 Circular’), and/or the circular referenced CAD/1021/JAN2011/SM (“the 2011 Circular’). [10] 22. 23. 24. 25. The defendant’s position is that they introduced an option plan for the GSMs succession which is subject to the terms stipulated by the defendant. Pursuant to this plan, the GSM will have the chance to nominate a successor, plan for their retirement and ensure that their agency business goes on after their retirement/sudden death. However, it is a term of the defendant’s GSM succession plan that the defendant must be notified prior via the Nomination Form duly executed from the intending to retire GSM (“the Retiring GSM’) as to who is his/her successor from that range of the retiring GSM’s spouse, children or brother/sister or next of kin who must already be a USM. Further, if such a nomination has not been formally effected with the defendant, then the provision of the 2008 Circular will not apply. According to the defendant, the latest point to exercise the retirement option is at the age of 6O or the 10 year after the date of the GSM being initially promoted, whichever is the later. Pursuant to the 2011 Circular, the deadline to submit the Nomination Form for those who have already reached age 60 on 31 January 2011 was extended to 30 June 2011. Thus, per the 2011 Circular, the Nomination Form should have been, but was not delivered to the defendant by 30 June 2011. There is no doubt that the deceased did not fill up the Nomination Form and deliver it to the defendant by 30 June 2011 or at all. [14] 26. 27. 28. 29. As such, the defendant contends that P2’s claim for the purported transfer of the business of the Agency and the deceased’s succession plan are misconceived and unsubstantiated. The issue therefore is whether, in the circumstances, P2 can nevertheless claim that he is the deceased's nominated successor and that therefore the Agency ought to be transferred to him. On the other hand, the plaintiffs sought to suggest that the deceased’s handwritten letter dated 23 May 2002 (p.328 B2) is in “substance”, the notification form. The significance of this letter is that this was the only letter that was received by the defendant during the lifetime of the deceased where she had indicated that she wanted P2 to take over the Agency. It was also admitted by the plaintiffs that the deceased had authored the letter in order to support or recommend P2’s application for re- designation as USM. P2’s application for re-designation is at p.327 B2. By letter dated 21 June 2002 (p.326 B2) (signed by K. Singarayar — PW3) the defendant informed P2 that he had been re-designated as USM. The letter was copied to the deceased. It is | think fair to say that the deceased’s letter dated 23 May 2002 was important in terms of helping P2 to be re-designated as a USM. [12] 30. 31. However, although the deceased's handwritten letter dated 23 May 2002 written to recommend P2 to become a USM, the plaintiffs contended that was in substance a letter nominating P2 as her successor and that by not replying to the letter and agreeing to promote P2 to the rank of USM, the defendant had implicitly agreed that P2 would inherit the Agency from the deceased. It comes as no surprise that the plaintiffs’ suggestion in this regard was flatly denied and repudiated by Ms. Selvamony Muniandy (Senior Manager & Head of Agency Administration Department) (“DW1") when it was put to her during cross-examination. The defendant relies on the terms and conditions of the relevant contracts, including the circulars and directives that were issued by the defendant as forming or framing the relationship between the deceased and the defendant. It is therefore necessary to refer to the terms and conditions of the Agency and the appointment of the deceased as a GSM. The Agency - Terms and Conditions 32. The deceased was appointed as an agent of the defendant under the Agency effective from 14 November 1988. She entered into a Principal Agency Agreement with the defendant on 23 December 1988 (p.41-44 B1). Nevertheless, as per the defendant’s practice of backdating, the deceased’s appointment took effect from 14 November 1988. [13] 33. 34, 35. It is a cardinal aspect of the defence that pursuant to the Principal Agency Agreement, the defendant was entitled to issue circulars and directives from time to time and these had to be complied with by the agents of the defendants such as the deceased. Particular reference was made to clause 18 of the Principal Agency Agreement which stipulates that, “/t is hereby agreed (i) that the [defendant] is at liberty to issue circulars and directives from time to time relating to the operation of the agency established hereunder and that (ii) the agent shall observe such circulars and directives as if they were part of this Agreement when distributed.” In so far as transferability or assignability of the Agency is concerned, the defendant relies on clause 17 of the Principal Agency Agreement (p.42 B1) which states that the “Agreement is personal to the Agent and he shall be prohibited from assigning or attempting to assign the benefits or burdens hereunder to a third party.” Pursuant to clause 23.5 of the Principal Agency Agreement the defendant is entitled to terminate the agreement (i.e. the Agency) upon the death of the agent, whereupon pursuant to clause 24 all benefits or compensation in any form whatsoever are understood as fully terminated unless accrued prior to the date of termination. Clause 28 contemplates that the defendant and the deceased may execute a further agreement (Supplementary Agreement) and that if the Principal Agency Agreement is terminated, then the Supplementary Agreement shall also automatically be terminated. {14] 36. 37. 38. 39. Pursuant to a Supplementary Agreement dated 29 August 1989, the deceased was appointed as Senior Agent (p.49-54 B1). Clause 9 of the Supplementary Agreement stipulates that it shall be read together with the Principal Agency Agreement as provided in clause 28 of the Principal Agency Agreement. Clause 9 also states that if the Principal Agency Agreement is terminated then the Supplementary Agreement shail also be automatically terminated. Finally, pursuant to clause 31 of the Principal Agency Agreement, the agent is required to register herself with the Pegawai Pendaftaran Perniagaan within 7 days from the date of the appointment (per s.2 of the Registration of Business Ordinance 1956). Thereafter, by a Supplementary Agreement dated 9 June 1993, the deceased was appointed as Agency Supervisor (p.55 -61 B1). Clause 13 of the Supplementary Agreement dated 9 June 1993 provides that if the Principal Agency Agreement is terminated then the Supplementary Agreement shall also be automatically terminated. Clause 21 stipulates that it supersedes, abrogates, and renders null and void all previous agreements, except the Principal Agency Agreement. By a Supplementary Agreement dated 25 May 1994, the deceased was appointed as Divisional Sales Officer (p.62-68 B1). The Supplementary Agreement was to be read together with the Principal Agency Agreement and a termination of the latter will cause an automatic termination of the former. [15] AO. 41. 42. 43. Thereafter, in accordance with the directive of Bank Negara Malaysia the deceased executed a “D” contract with the defendant (p.132-139 B1) to replace the Principal Agency Agreement (the “C” contract). The D contract was to achieve BNM’s purpose of reducing the cost of purchasing life insurance policies. The defendant’s life insurance agents had no choice in the matter and they had to comply and sign the requisite D contract. In fact by a general letter dated 19 April 1996 (p.71 B1), the defendant’s agents, including the deceased was asked to execute the D contract by 27 April 1996. Thereafter, by a letter dated 30 September 1996 (p.70 B1) the defendant's agents, including the deceased, was asked to execute the D contract by 10 October 1996. Despite the reminder, there were agents (such as the deceased) who did not execute the D contract. As such, by a letter dated 22 November 1996 (p.69 B1) the defendant’s agents were given a final deadline to execute the D contract on or before 5 December 1996, failing which the agency agreement will be terminated. As it turned out the deceased did not execute the D contract. But when it was put to him during cross-examination, P1 accepted that at the time of the demise of the deceased (16 December 2012), the contracts that were in place were the agency contract (p.132 to 139 B1) and the GSM-SA (p.140 to 148 B1). [16] 44. 45. 46. P1 agreed that despite the non-execution of the D contract, the deceased did in fact conduct herself as if she was bound by the terms and conditions of the D contract. P1 agreed that the deceased conducted herself and the defendant conducted itself with her, as if these two contracts were operative and that she was bound by these two coniracts. As such, nothing turns on the fact that the deceased did not execute the D contract because the deceased conducted herself as if she had executed the D contract and was bound by the terms thereof. Most certainly there is no room to suggest that the deceased’s non execution of the D contract means the C contract was alive and extant prior to her death. Pursuant to clause 32, the D contract is to take effect from 1 January 1996 irrespective of the diverse dates upon which the respective parties may have executed the D contract. It is expressly stipulated in clause 31 that the D contract together with any Supplementary Agreement and the Agency Rules and Regulations constitute the entire agreement and understanding between the parties with respect to the matters dealt with in the D contract. Clause 19.1 of the D contract states that the agreement shall be terminated automatically upon the death of the agent. Significantly, clause 15 of the D contract states that the agreement is “personal” to the agent and the latter is prohibited from assigning or attempting to assign the benefits or burdens to a third party. P1 initially resisted the suggestion but after the point was pursued at length in cross- examination, he finally accepted that looking at clause 15 in “isolation”, the Agency cannot be assigned or transferred. [17] 47. 48. 49. The next point of importance is that clause 16 of the D contract states that the [defendant] is at liberty to issue circulars and directives from time to time relating to the operation of the agency established and that the agent shall observe such circulars and directives as if they were part of the D contract when distributed. Clause 16 was read to P1 and he was asked, “Now, the reason why I’ve read 16 to you Dr is later on I'll refer you to some circulars which you yourself have referred to in your Witness Statement and which | believe both parties are at one. We treat those circulars as binding contractually. Am | correct?” and P1 answered, “Yes”. | turn next to the appointment of the deceased as GSM. Pursuant to a Supplementary Agreement dated 20 March 1997, the deceased was promoted to the agency rank of Group Sales Manager ("GSM") with effect from 1 January 1997. Since the Supplementary Agreement pertains to the appointment of the deceased as GSM, | shall refer to it as the “GSM-SA”. As stated earlier, at the time of her death, the deceased was holding the agency rank of GSM. Clause 14 of the GSM-SA stipulates that it shall be read together with the Principal Agency Agreement (i.e. the D contract) and that if the latter is terminated for whatever reason, then the GSM-SA shall also be automatically terminated. [18] 50. 51. 52. | turn now to the Grant of Probate which is predicated on the Last Will and Testament of the deceased dated 27 May 2003 (p.33-35 B1) (“the Will’). Under the Schedule of Assets which was annexed to the Grant of Probate, it is stated that the Agency forms part of the assets of the deceased. It reads as, “D. Perniagaan dan Pindahmilik Agensi 21. Great Eastern Life Assurance Malaysia Bhd.Pemindahan kesemua dan keseluruhan Perniagaan Kumpulan GSM Agency di bawah No. Akaun Agensi 5019969 kepada anak si mati dan bakal penggantinya Mani Peter Xavier, No. Agensi USM 5622371 pada tarikh kematiannya pada 16 Disember 2012 bersama dengan semua faedah dan hak yang terakru dan berterusan sehingga kini.” P1 testified that the deceased had “bequeathed” the Agency to P2 via the Will. But, during cross-examination he candidly accepted that the Agency was not specifically mentioned in the Will. To complete this point, the defendant states that in any event, the deceased cannot bequeath via the Will what she does not already own or that which is not hers to bequeath. Although clause 15 of the D contract states that there can be no assignment or transfer of the Agency, the defendant concedes that they had nevertheless come up with a plan to cater for the transfer of a GSM’s agency. To this end, by a circular dated 30 June 1997 (p.172 B1) (“the 1997 Circular’), the defendant put in place a pian to cater for the continuity of the GSM agency. [19] 53. Essentially, it permitted a transfer of the GSM agency to a family member provided the requisite terms and conditions are satisfied. In this regard, the defendant’s letter states (p.172 B1) that, “June 30, 1997 All Members of the Field Personnel Great Eastern Life Malaysia Dear Sir/Madam We are pleased to announce the implementation of the following benefits with immediate effect in order to encourage long term career development and loyalty to the Company. A) CONTINUITY OF GSM AGENCY A long serving GSM who has attained the age of 55 years and after having served the Company for 15 years as a GSM, may opt to redesignate to the rank of an agent and to transfer his entire agency with the consent of _his dowliners [sic] to an elected member of his immediate family i.e. spouse, children, brother or sister provided he/she holds the ADO contract and have passed the AMC. The privilege is also extended in cases of death or TPD of the GSM B) TRANSFER OF AGENCY 1) Upon the Death/TPD/Resignation of an ADO/GSM, his agency will automatically be transferred to his immediate officer/Company Direct as currently practiced. ADO’s CAs and Agents who are directly under the Company can now apply to join any ADO/GSM of their choice. However, this is not applicable to ADOs, CAs or agents who were released by their immediate officers to Company direct with certain conditions. Whatever conditions stipulated, they are only binding for 3 years. [20] 54. 55. 56. (2)(i} Upon the demotion of a GSM to an ADO, the demoted GSM, upon application, can rejoin the “mother” GSM if the demotion is within 5 years from the date of his appointment as a GSM. However, if consent is given by the “mother’ GSM, the demoted GSM may join another GSM of his choice. (ii) If the demotion is after 5 years from the date of his appointment as a GSM, the demoted GSM can join any GSM of his choice.” Thus the essential criteria for transfer under the 1997 circular is that the GSM must have attained the age of 55 years and served as GSM for 15 years. Upon transfer the GSM will transfer his entire agency with the consent of his downliners to an elected member of his immediate family i.e. spouse, children, brother or sister provided he/she holds the ADO contract and have passed the AMC. The GSM will then be redesignated to the rank of an agent. The plaintiffs’ contend that on 23 May 2002 (p.328 B2), the deceased wrote to the defendant stating that she would like to transfer the Agency to the 2™ plaintiff and that this was not objected by the defendant at the material time. But the defendant’s response is that the deceased’ letter dated 23 May 2002 was written with regard to P2’s application for re-designation as USM. Further, and in any event, the deceased could not have transferred the Agency to P2 via the said letter as she did not meet the necessary qualifications which were stipulated in the 1997 Circular. In particular, it was pointed out and P1 accepts, that when the deceased wrote the letter, she was only 51 years old and had been a GSM for only 5 % years. (24] In 2008, the defendant came up with another business succession plan. This was to soften the succession plan per the 1997 Circular which would have resulted in an immediate transfer of the GSM agency business to the successor and the former GSM would be re-designated as an agent. The relevant parts of the 2008 Circular read as, “CAD/0546/FEB2008 Members of the Field Force Malaysia Dear Sir/Madam, AGENCY BUSINESS CONTINUITY The present agency succession and continuity is provided under an existing circular, dated June 30, 1997 signed by the GM then, states: a) GSM aged 55 and 15 years service may opt to retire or re- designate to agent rank and transfer his agency (with down liners consent) to an immediate family — spouse, children, brother or sister who holds a USM post (passed BAMC). This is also applies in death and/or TPD. b) GSMs within the existing “five year rule” upon deceased of that GSM; the deceased GSM’s agency goes back to the Snr/Mother GSM ie. if the deceased/TPD GSM was promoted less than 5 years then his agency goes to the Snr/Mother GSM. There is no succession issue for USMs because upon his/her demise or TPD, the USM’s direct group and whole unit goes to the GSM. The 1997 rules remain in force to deal with those under the “five year rule” i.e. “GSMs within the existing “five year rule” upon deceased of that GSM; the deceased GSM’s agency goes back to the Snr/Mother GSM i.e. if the deceased/TPD GSM was promoted less than 5 years then his agency goes to the Snr/Mother GSM” and “There is no succession issue for USMs because upon his/her demise or TPD, the USM’s direct group and whole unit goes to the USM.” (p.239, B1) [22] 59. 60. The 2008 Circular goes on to provide (p.240 B1), ‘A) General Conditions ') ii) Must have been a GSM for more than 5 years consecutively from the date of promotion to GSM (consistent with the “5 Year Rule” interpretation). The Company must_be notified prior via_a Company prescribed Succession Nomination Form duly executed from the intending to retire GSM (“the Retiring GSM”) as to who is his/her Successor from that range of the Retiring GSM’s spouse, children or brother/sister or next of kin who must already be a USM (or that could be directly appointed to USM rank under the Direct Appointment rules) and succession exercised before or commence latest at the Succession Reference Point. Any other natural person than the above described may, in exceptional cases, be considered by the Company; subject always to the Company's prior assessment and approval of his/her suitability to succeed the Retiring GSM’s agency and ensuring its business continuity. lf such a nomination has not been formally effected with the Company; the provisions of this circular will not apply.” (p.240, B1) The 2008 Circular also provides (p.242 B1) that, “Sudden Death & TPD Before the Succession Point In the event of the sudden death of TPD besetting a GSM that is outside the “5 Year Rule” and before the Succession Point; the Retirement — Planned Succession/Continuity rules described above will also apply with the additional clarifications. i) Down liners consent is not requires. {23] il) There must still be a Successor USM from that range of the GSM’s spouse, children or brother/sister or next of kin who must already be at USM rank (or that could be directly appointed to USM rank under the Direct Appointment rules) to take over the suddenly deceased/TPD GSM. if there is not someone from the family members of the deceased/TPD GSM the agency will revert back to Company Direct. The Company in this situation may also at its absolute discretion allow someone outside the described affinity to be the Successor. iti) Successor USM is given 3 years or accelerated 2 years (but must still fulfill a minimal of 36 months as USM) using the LIAM minimal guidelines to be promoted to GSM. The 3 years will run from the year of death/TPD of the deceased/TPD GSM. Once promoted to GSM the Successor will immediately take over the whole of the Retiring GSM’s agency. iv) During the 3 years the Company will continue to pay AOM directly to the USM to help the successor USM to maintain the agency office and expenses. v) Full Overriding (OR) [of what the deceased/totally and permanently disabled GSM used to enjoy will be paid to the Successor starting from the date he/she takes over as the USM or if there is another USM, as most Senior USM in that agency.” 61. Atp.244 the 2008 Circular states that, “The effective date of this circular shall be on 1° January 2008 onwards and until superseded or revised with further circular’. 62. Next, by the 2011 Circular the defendant informed the GSMs the following:- (24) “315¢ January 2011 All members of the Field Force Malaysia Dear Sir/Madam, AGENCY BUSINESS CONTINUITY Further to our circular titled “AGENCY BUSINESS CONTINUITY” referenced CAD/0546/FEB2008, we are pleased to announce that with immediate effect, the deadline for execution/exercising of the succession option that ends at age 60 has been removed. With this removal of the deadline, GSMs/GAMs may now execute/exercise their succession option at any date after they reach age 55 provided the Company prescribed Succession Nomination Forms have been submitted by age 60. We are pleased to inform that: 1. The deadline to submit the Succession Nomination Form for those who have already reached age 60 has been extended and all such submission should reach us by the 30¢" of June 2011. 2. GSMs/GAMs who wish to change their nominee stated in their succession option form may do so as long as the option has not been executed. 3. All other requirements and conditions remains status quo as per our circular titled “Agency Business Continuity’ referenced CAD/0546/FEB2008. We encourage all qualified GSMs/GAMs to nominate a successor and _ plan for their retirement to ensure that their agency business goes on after their retirement and/or in cases of sudden death/TPD. Should you require further clarification, please contact our Regional Managers, Business Development Managers/Executives, or contact us at amd@lifeisqreat.com.my. [emphasis and underlining added] (p.213, B1) [25] 63. After the demise of the deceased, the defendant issued the following circular dated 10 CAD/1517/JULY2013/SM) 2013 ~— to and captioned July the as GSMs Continuity — A reminder to nominate” (p.223). It reads as, “10 July 2013 All members of the Field Force Malaysia Dear Sir/Madam, AGENCY BUSINESS CONTINUITY - NOMINATE We refer to our circulars titled “AGENCY BUSINESS CONTINUITY” referenced CAD/0546/FEB2008 and CAD/1021/JAN2011/SM and wish to remind all qualified GSMs and GAMs to nominate a successor and plan for their retirement to ensure that their agency business goes on after their retirement and/or in cases of sudden death/TPD. We regret to inform that there have been a number of sudden death of GSMs recently. If further saddens us to inform that few of the deceased GSMs who were qualified to submit nominations, had not submitted any nominations for nominating their successors. This had resulted in disruptions in the agency of the deceased GSMs as there A REMINDER TO were no successors nominated to take over the agency. The enclosed table summarized what happens when a GSMIGANM dies with and without submitting a nomination. Benefits Death ith nomination Death without nomination (Death is outside the 5 years rule)* 1 | Transferof Consent is not | Consent is agents required from the | required from deceased deceased GSMs/GAMs’ agents GSMs/GAMs’ agents. [26] (Ref; “Agency Business 2 | Transferof | The Successor USM | Not entitled to any GSM/GAM is conferred the | benefits entitled benefits same contractual | by the deceased benefit(s) as the | GSM/GAM. deceased GSM/GAM. Payment proceeds while the Successor USM is working for his promotion to GSM/GAM. This includes AOM & OR at GSM _ rate including OR on Direct GSMs/GAMs *Note: Death within 5 years rule will result in the deceased GSM’s agency being transferred to Mother GSM/GAM's group. We trust that this would bring to the attention of qualified GSMs/GAMs, the importance of submitting nominations. As a onetime exercise, in order to encourage all qualified GSMs/GAMs to nominate a successor, we are pleased to inform that GSMs/GAMs who are above age 60 and who are yet to submit their nominations, may now submit their the Succession Nomination Form nominating a successor to the Company. This Form must reach the Company by or before 31%* December 2013. A copy of the said Application of Succession Nomination Form is attached. All other requirements and conditions remains status quo as per our circular titled “Agency Business Continuity’ referenced CAD/0546/FEB2008 and CAD/1021/JAN/2011/SM. For ease of reference, please find enclosed; Appendix | which clarifies the process of nominating and executing the succession. Should you require further clarification, please contact our Regional Managers, Business Development Managers/Executives, or contact us at amd@lifeisgreat.com.my” 64. In so far as the Agency Claim is concerned, what happened after the demise of the deceased is that P2 sent a letter dated 24 December 2012 to the CEO of the defendant which reads (p.344 B2), [27] “Dated: 24 December 2012 YB Dato’ Koh Yau Hui Director & CEO Great Eastern Life Assurance (Malaysia) Bhd Menara Great Eastern 303, Jalan Ampang 50450 Kuala Lumpur Dear YB Dato’ Koh RE: Transfer of GSM Rank of the Late Mdm Bagetiamah Rayappan (5019969) | refer to the recent demised of my mother GSM Mdm Bagetiamah Rayappan and wish to inform you that | have been nominated by her to succeed in her position as GSM. | have not submitted her request as this is one of the few things she worked to achieve in her lifetime. The position and the responsibility that goes with it are the thing she enjoys most. We in the family were hoping that these will motivate her to improve her health. However, we did not expect this sudden event. | enclose herewith the following documents for your action and review:- 1. Her letter to yourself dated 27 July 2012, 2. My CV; and 3. Letter from my father, Dr. Adissayam S Xavier. | hope that you will do the necessary to assist me in fulfilling her wishes to transfer the agency. Thank you. Yours faithfully, [emphasis added] 65. The defendant’s CEO replied via letter dated 4 January 2013 (p.329 B2), [28] “04 January 2013 MR MANI PETER XAVIER Dear Sir, TRANSFER OF GSM RANK OF THE LATE MADAM BAGETIAMAH A/P RAYAPPAN (A/C 5019969) TO MANI PETER XAVIER (5622371) Your letter dated 24 December 2012 on the above mentioned subject addressed to our CEO Dato Koh and it’s attachments namely a letter from your mother the late Madam Bagetiamah dated 27 July 2012, a letter from your father Dr Adissayam dated 24 December 2012 and your CV referred. We note that you are requesting the Company to execute the “Agency Business” Continuity” upon the demise of your mother on 16 December 2012 based on her letter dated 27 July 2012 which was received by the Company on 24 December 2012. Having studied both the contents of your letter, it’s attachments and our circulars titled “Agency Business Continuity’ referenced CAD/0546/FEB2008 and CAD/1021/JAN2011/SM, we regret to inform that we are unable to execute the “Agency Business Continuity” upon the demise of your mother. We are unable to accede as your mother had failed to notify the company of her nominated successor prior to her demise via a company prescribed “Succession Nomination Form”. This requirement is clearly stated in our aforementioned circulars. You may however, apply for the agents from her group to be transferred to your unit. This requires the consent of all parties involved and is subject to Management approval. Please accept our condolence on the demise of your mother Madam Bagetiamah. Should you need any clarification on this matter please refer to your Regional Manager/Business Development Manager.” [emphasis added] {29] The plaintiffs’ contend that upon the demise of the deceased and pursuant to the Grant of Probate, the Agency must be transferred to P2. There were various letters that were written between the parties in relation to the Agency Claim and the Estate Claim. Eventually, the plaintiffs’ solicitors Messrs Arianti Dipendra Jeremiah issued a letter of demand on 28 April 2017 (“the LOD”). The LOD reads as follows, “GREAT EASTERN LIFE ASSURANCE (M) BHD (Company No. 93745-A) Dear Sir, Re: Letter of Demand — Succession and Transfer of the Agency of Bagetiamah a/p Rayappan conducting as Adiss Bagetiamah Martina Associates (ABM) to Mani Peter Xavier pursuant to the Grant of Probate of Bagetiamah a/p Rayappan (“the Deceased”) dated 16.4.2013 1. We refer to the above matter where we act for Adissayam @ Xavier a/l Suseimanikam, the Executor of the estate of the Deceased and Mani Peter Xavier, son of the Deceased (“our clients’). 2. Our clients has informed us of the following:- a) That the Deceased had entered into an Agency Agreement dated 14.11.1988 wherein the Deceased had been appointed as your Agent effective from 14.11.1988 with the Account No. 501996-9 in accordance with the terms and conditions stipulated in the said Agency Agreement (“the Agency Agreement’); b) That in view of the Deceased’s hard work and good performance, the Deceased had been rewarded and promoted on numerous occasions; [30] ¢) 9) That following the hard work and perseverance of the Deceased in contributing towards the growth of Great Eastern Life or the company, the Deceased was promoted to Group Sale Manager with effect from 1.1.1997 and had been conducting business as Adiss Bagetiamah Martina (ABM) Associates (“the Agency’); That at all material times, our clients have also been directly involved in the management, planning and development of the Agency together with the Deceased which led to the success and growth of the Agency; That unfortunately the Deceased had passed away on 16.12.2012 at Plaza Tol Ipoh Selatan, Perak leaving behind her estate a list of assets and liabilities, among others the Agency and her GSM rank and entitlements, a copy of the certified true copy of the List of Assets and Liabilities of the estate is enclosed herewith for your ease of reference; That prior to her demised, the Deceased had written to Great Eastern Life or the company on 27.7.2012 indicating her intention in respect of her succession plan for the position of GSM. In the said letter, the Deceased had sought Great Eastern Life or the company’s assistance to transfer the Agency to her son or our client i.e. Mani Peter Xavier; That upon the demised of the Deceased, our client ie. Mani Peter Xavier had written to Great Eastern Life or the company seeking the transfer of the Deceased’s rank of GSM and the Agency to be effected under our client's name in accordance with the Deceased’s wish and her request via her letter dated 27.7.2012; However, Great Eastern Life or the company has failed, refused and/or neglected to effect the transfer of the Agency to our client i.e. Mani Peter Xavier against the Deceased’s wish and her request prior to her demised on 16.12.2012; Our clients have reasons to believe that your continued failure, refusal and/or negligence to effect the transfer of the Agency and the Deceased’s rank of GSM to our client i.e. Mani Peter Xavier was done in bad faith and is oppressive and prejudicial to their rights as the beneficiaries for the estate of the Deceased; [34] i) That at this stage, our clients are also unclear over the status of the Agency and the Deceased GSM rank and entitlements which form part of the estate of the Deceased; 3. Our client has asked us to demand from you, of which we hereby do the following; a) Kindly Immediately effect the transfer of the Deceased’s rank of GSM and the Agency to Mani Peter Xavier in accordance with the Deceased’s wish and her request via her letter dated 27.7.2012:; Immediately transfer all legal and beneficial interests of the Deceased’s rank of GSM and the Agency to Mani Peter Xavier in accordance with the Deceased’s wish and her request via her letter dated 27.7.2012; To immediately provide a detailed account for all commissions, entitlements and benefits in respect of the Deceased’s rank of GSM and the Agency under the Account No. 501996-9 due and owing to the Deceased; To pay the outstanding commissions, entitlements and benefits in respect of the Deceased’s rank of GSM and the Agency under the Account No. 501996-9 due and owing to our clients. let us have hard copies of the documents to effect the transfer of the Deceased’s rank of GSM and the Agency to Mani Peter Xavier and information or account requested within the next fourteen (14) days, failing which our clients will take all necessary legal action open to them. Our clients hope that an amicable settlement can be reached for all parties involved failing which they will be constrained to pursue all legal remedies available. In the interim, all of our clients’ rights are reserved. Yours faithfully, Messrs Arianti Dipendra Jeremiah $.g.d. H R Dipendra Partner Emel/ [32] cc. GREAT EASTERN HOLDING LTD 1, Pickering Street #13-01 By Courier Great Eastern Centre Singapore 048659 Attn: Mr Christopher Wei (Group CEO) ce. Clients” 68. The defendant denied any liability and responded through their solicitors Messrs Azim, Tunku Farik & Wong who issued a letter dated 12 May 2017, which reads, “Arianti Dipendra Jeremiah 9-2, 2"4 floor Jalan Medan Setia 1, Plaza Damansara, Bukit Damansara, 50490 Kuala Lumpur By fax (2095-7505) Re: The late Madam Bagetiamah a/p Rayappan (“the deceased”) 1. We act for Great Eastern Life Assurance (Malaysia) Berhad (“GELM’) who have instructed us to respond to your letter of demand dated 29.4.2017 (sic). 2. GELM are disappointed that the issue of Mani Peter Xavier's alleged entitlement to the deceased’s “business” has been resurrected after such a long hiatus. After ail: (i) the deceased passed away on 16.12.2012; (i) your clients brought up this issue to GELM in writing on 24.12.2012; (ii) _ GELM responded also in writing on 04.01.2013 denying your client's request; and (iv) your letter of demand is dated some 4 years and 4 months after GELM’s negative response. [33] GELM’s position has not changed. In this regard, we are instructed to reiterate that: (i) (ii) (iii) (iv) (v) the relationship between the deceased and GELM was one of agent and principal. Thus it was contractual in nature; it was an express term of this contractual relationship, as stated in GELW’s circular to its agents of February 2008 titled “Agency Business Continuity” that the pre- condition for an effective nomination of Agency Business includes: (a) receipt by GELM of notice of such a nomination prior to the agent’s death; and (b) the nomination must be made by a prescribed “Succession Nomination Form” which template was annexed to the circular; GELM never received any notice of nomination from the deceased whether in the prescribed form or otherwise before her untimely death; accordingly, there was no effective nomination; and for these reasons, your clients’ demand is without basis. Notwithstanding and without prejudice to the above, GELM stresses that it never received the deceased’s letter of 27.07.2012 until after her passing, when it was submitted by Mani Peter Xavier vide his letter dated 24.12.2012. In fact, GELM places on record that it does not agree to the authenticity of this alleged letter by the deceased. For the record, we have instructions to accept service on behalf of GELM.” [34] 69. In summary, the defendant's position with respect to the Agency claim and the Estate claim is that:- (a) the deceased's rights to the Agency and the benefits and rights accrued therefrom were derived from the Principal Agency Agreement (D contract) and the GSM-SA; (b} the deceased’s entitlement to inter alia, Overriding Commissions was subject to the enforcement and tenure of the Principal Agency Agreement. In other words, the deceased’s entitlement to inter alia, Overriding Commissions ceases upon the termination of the Principal Agency Agreement; (c) pursuant to the terms and conditions of the Principal Agency Agreement and ithe GSM-SA, _ the agreements shall be terminated automatically upon the demise of the deceased. Accordingly, the deceased’s entitlement to infer alia, Overriding Commissions was similarly terminated upon the demise of the deceased: and (d) however, pursuant to the 2008 Circular, the defendant introduced an option plan for succession to all GSM subject to the following terms:- (35] 70. 71. Circular. the deceased’s succession plan to P2 unsubstantiated. the GSMs have the chance to nominate a successor, plan for their retirement and ensure that their agency business goes on after their retirement / sudden death; the defendant must be notified prior via the defendant's prescribed Succession Nomination Form duly executed from the intending to retire GSM (“the Retiring GSM’) as to who is his/her successor from that range of the Retiring GSM’s spouse, children or brother/sister or next of kin who must already be a USM; and if such a nomination has not been formally effected with the defendant, the provision of the circular will not apply. The defendant's position is that the deceased did not at any time notify the defendant of her intention to nominate and / or of the nomination of anyone as her successor in accordance with / pursuant to the 2008 Accordingly, the purported transfer of the business of the Agency and [36] is misconceived and 72. 73. 74. As for the Estate claim, the defendant contends that they have paid the renewal commission payable to the deceased under the Principal Agreement. The balance of/unclaimed Deferred Benefit together with the prescribed accrued interest payable to the deceased of RM213,517.71 had been duly paid to P1 via the defendant’s Cheque No. 755976 on 12 June 2013. The breakaway benefit due to the re-designation of Chandra A/P Ponusamy to GSM on 1 January 2009 payable to the deceased pursuant to the GSM-SA was paid to the deceased prior to her demise. Thus, the defendant contends that the plaintiffs are not entitled to the reliefs prayed for against the defendant. The quantum of the alleged benefits, commissions and/or payment as pleaded by the plaintiffs are also denied. As for the Estate claim, P1’s evidence may be gathered from, inter alia, his oral testimony on 27 March 2019 and 22 April 2019. P1’s justification for the various items that were claimed as part of the Estate claim are as stated in his Supplementary Witness Statement which | have reproduce below for easy reference. “Q28b. What is the basis for the estate’s claim for the items as you have particularised in Answer A28a above? A28b. 1. For item 1(a) of paragraph 21 of the Statement of Claim:- The basis for this claim can be found in clause 10.1 of the GSM Schedule of Remuneration, where my late wife was entitled to the Deferred Benefit until she attained the age of 70 years old. [37] My late wife was not paid her Deferred Benefit in the year 2011 and 2072. | believe that she should be paid for the benefit accrued in 2011 because as at 1-1-2011, she had yet to attain the age of 70 and thus, the 50% reduction in quota was still applicable to her, as the production was done in 2010. Similarly, she ought to be paid her benefit in 2012 because the production was done in 2011. The 50% waiver of maintenance of production requirement was given until the age of 70, as provided by the Defendant's circular referenced as TSC/cmh/ssd dated 3- 2-1999. In any event, the Defendant admitted that the Deferred Benefit was not paid by way of its letter dated 3-12-2013, and in the further and better particulars provided by the Defendant. 2. For item 1(b) of paragraph 21 of the Statement of Claim:- The basis of this claim can be found in clause 10.2 of the GSM Schedule of Remuneration. | am only claiming the Dividend of 6.15% for the period 1 Jan 2013 to 12 June 2013 which amounts of RM5,864-00 and Interest of 4% p.a. from the period 16 June 2013 to 31 December 2017 (4 % years) amounting to RM1,056-00. Totai claim is RM6,920-00. In any event, the Defendant admitted that the Deferred Benefit was not paid by way of its letter dated 3-12-2013, and in the further and better particulars provided by the Defendant. 3. For item 2(a) of paragraph 21 of the Statement of Claim:- The basis for this claim can be found in clause 9.1 of the GSM Schedule of Remuneration. 4. For item 2(b) of paragraph 21 of the Statement of Claim:- The basis for this claim can be found in clauses 6.2, 9.1 and 9.2 of the GSM Schedule of Remuneration. 5. For item 2(c) of paragraph 271 of the Statement of Claim:- [38] The basis for this claim can be found in clause 6.2 of the GSM Schedule of Remuneration, for Madam P Chandra who was promoted as a GSM by my late wife. My late wife’s estate is entitled to this commission perpetually so long as Madam P Chandra continues to hold a GSM Contract with the Agency. Based on my wife’s production and in the absence of a clear record from the Defendant, the estimated unpaid amount is at RM10,000-00 to RM15,000-00 per year. The estate claims for an average of RM12,500-00 per year for 9 years of production from 2009 to 2017. For item 3 of paragraph 21 of the Statement of Claim:- The basis of this claim can be found in clauses 4, 7 and 6.2 of the GSM Schedule of Remuneration. The Defendant refused to make the payment because the GSM contract was terminated on 1-1-2013. However, since the production was done and clause 18 of the D Contract, the benefit ought to be paid to the Deceased’s estate. For item 4 of paragraph 21 of the Statement of Claim:- The basis of this claim can be found in the Defendant's circular dated 10-3-2000. There was a wrongful deduction on this commission by the Defendant, when the Deceased’s mother GSM, Gunasekaran was demoted to the rank of a USM. There should be no further deduction, but such deduction was carried out. Thus, the estate is entitled to the deductions made from 2002 to 2012, since there was no mother GSM in existence during such period. For item 5 of paragraph 21 of the Statement of Claim, the basis of the claim can be found in the Defendant’s circular referenced as TSC/cmh/ssd dated 3-2-1999. The Defendant admitted to the non-payment of this benefit in its letter dated 3-12-2013. [39] 9. For item 6 of paragraph 21 of the Statement of Claim, the basis of the claim is in clause 2 of the DSO Schedule of Remuneration, where payment was made by the Defendant on a “goodwill” basis, as the benefit was not included in the D Contract. Nevertheless, | believe that the benefit ought to continue to be paid until the termination and/or maturity of the respective policies. 10.For item 7 of paragraph 21 of the Statement of Claim, the basis of the claim can be found in the GSM “C” Contract. The Defendant had admitted to this benefit not being paid vide their letter dated 3-12-2013. The calculation for this claim is, as follows:- Annual Income (A) RM180,000-00 3 years Average Income (A/3x3) RM60,000-00 x 3 RM180,000-00 11. For item 8 of paragraph 21 of the Statement of Ciaim, the basis of the claim can be found in clause 12 of the GSM Schedule of Remuneration. The Defendant admitted the non-payment of this allowance in its letter dated 3-12-2013. 12. For item 9 of paragraph 21 of the Statement of Claim, the basis of the claim can be found in clause 12 of the GSM Schedule of Remuneration. 13. For item 10 of paragraph 21 of the Statement of Claim, the basis of the claim can be found in clause 12 of the GSM Schedule of Remuneration. Q28c. In answer A28a above, you mentioned that there are variations to the estate’s claim as set put in paragraph 21 of the Statement of Claim. Please tell this Honourable Court how the estate’s claim has been varied. [40] A28c. 1. For item 1(a), the estate is only claiming for Deferred Benefits for the year 2011 and 2012, amounting to RM24,054-00; 2. For item 1(b), the estate is only claiming Dividend/Interest Accrued and Payable on Deferred Benefits of RM213,517- 71 (as at 31-12-2012). As the said Deferred Benefit was only paid on 12-6-2013, the estate is only claiming for the period of 13-6-2013 to 31-12-2017, amounting to RM6,920-00; 3. The estate is abandoning the claim at item 2(a) pertaining to the Overriding Benefits from Junior GSM (Breakaway Commission) (estimated); 4. The esiate is abandoning the claim at item 2(b) pertaining to the Overriding Commission on Junior GSM’s production (4 years Commission) (2009 to 2014) (estimated) amounting to RM50,000-00; 5. For item 2(c), the estate is claiming for the Breakaway Perpetual Compensation @ 7% of Direct Unit (Year 1: 3.5% and Year 2: 3.5%), for the period of 2013 to 2017 amounting to RM62,500-00, because the Defendant had paid the compensation from 2009 to 2012; 6. For item 3, the estate is claiming for the Overriding Commission payable from USMs (Direct Unit of USMs) (estimated), for the period of 2013 to 2016, amounting to RM240,000-00 7. The estate is abandoning the claim at item 4, pertaining to the Overriding Commission payable to the Senior GSM (7% Deduction of Direct Unit of GSM) (1-1-2002 to 31-12- 2017); 8. For item 5, the estate is claiming for the Group Renewal Policy No. G 1009871 (Death Benefits) (fixed) amounting to RM300,000-00; 9. The estate is abandoning the claim at item 6, pertaining to Payment of 5% Commission on Hospital and Accident Riders Renewal Premium (1997 to 2017) (21 years), as it had been paid by the Defendant; [41] 10. For item 7, the estate is claiming the GSM Death Benefits (3 Year Average Income) amounting to RM180,000-00; 11.For item 8, the estate is claiming for the Agency Office Management (“‘AOM”) Expenses from 2013 to 2018 amounting to RM360,000-00; 12.The estate is abandoning the claim at item 9 pertaining to the AOM payment defaults (1997 to 2012) (16 years); 13. The estate is abandoning the claim at item 10 pertaining to the Breakaway GSMs on USMs past 6 year production commission (2009 to 2014). In total, the revised estate’s claim is now amounting to RM1,173,474-00 on commissions and benefits, due and payable, from the Defendant. A28d. What is the basis for the revision of the Estate’s Claim, pertaining to items 1(a), 1(b), 2(c), 3 and 8? A28d. 1. For item 1(a), the amount for the remaining period will go towards the 2nd Plaintiff, in the event the succession plan by my late wife is valid and the Agency is transferred to him. The calculation of this claim is, as follows:- Year | Deferred | Annual Dividen | Annual Total Benefit Deferred d Rate Dividend Dividend bid Benefit (Based (estimated) | on EPF) (A) (B) (C) (D) (E) D= (A+B) x | E=A=B+ Cc D 2011 11,000 6.00 660 11,660 2012 11,660 11,000 6.15 1,394 24,054 2. For item 1(b), the amount is capped at 2017 which is the year prior to the filing of this action. The claim can only be made now after the rate of interest was announced by EPF. In any event, the Defendant failed to acknowledge [42] the rate was already announced and the interest was due and payable to the estate. The calculation for this claim is, as follows:- Deferred Benefit sum of RM213,518-00 was paid on 12/6/2013 without the accrued dividend for 2012 based on EPF rate @ 6.15% Interest accrued until the date of payment (1/1/2013 to 12/6/2013)(163/365 days) RM5,864-00 RM5,864-00 Dividend (based on the above rate @ 4% p.a. from (16/6/2013 to 31/12/2017) 4% years RM1,056-00 Total RM6,920-00 3. For item 2(c), the Defendant had paid the compensation from 2009 to 2012, based on the summary of commission paid by the Defendant. The calculation for this claim is, as follows:- Year 2013 2014 2015 2016 2017 Production | 200,000- | 200,000- | 200,000- | 200,000- | 200,000- (RM) 00 00 00 00 00 Item Year | 2013 | 2014 | 2015 | 2016 | 2017 | Amount RM Rat (RM) Year 1 3.5% | 6,500} 7,000; 7,000] 7,000; 7,000] 34,500 Commission Year 2 3.5% -}| 7,000} 7,000] 7,000, 7,000] 28,000 Commission Total (RM) 62,500 [43] 4. For item 3, the calculation of this claim is, as follows:- Year 2012 2011 2010 2009 Production | Pandiyan | 296,000] 223,000] 117,000 197,000 Mani 26,000 | 37,000} 101,000 143,000 Peter Xavier Direct 18,000 | 34,000 32,500 35,000 Unit Total (RM) 340,000 | 294,000} 250,500 375,000 Item 2013 2014 2015 2016 Amount Year (RM) Rat Year 1 15% | 51,000 - - - 51,000 Commission Year 2 10% | 29,400 | 34,000 - - 63,400 Commission Year 3 8% | 20,040 | 23,520 | 27,200 - 70,760 Commission Year 4 5% | 18,750) 12,525 | 14,700} 17,000 62,975 Commission Total (RM) 248,135 However, the estate is only claiming for RM240,000-00. 5. For item 8, the Defendant took the position that the 2nd Plaintiff had no office thus could not claim for the AOM allowance. However, the estate to date continues to incur expenses in servicing the policies under the 2nd Plaintiff, which was transferred from my late wife. The calculation for this claim is, as follows:- Annual AOM Claim (A) RM60,000-00 2013 to 2018 (6 years) (A x6) RM360,000-00” [44] 75. 76. 77. P1's evidence was countered by the evidence of Koh Chin Wah (“DW2’). DW2 was the Manager of Agency Compensation and Information System, Agency Support Department, Customer Acquisition Division. He said that he was responsible for the administration of amongst others, the following agency related functions:- (a) Computation and payment of commissions to the agency force; (b) Agency System; and (c) Reporting of business statistic. In so far as the Estate Claim is concerned he said that the complaint as to alleged failure to pay the commission and other benefits due to the deceased’s estate was within the purview of the Agency Compensation and Information System, Agency Support Department. As such, the complaint was within his purview and scope of work. DW2’s answers to the questions posed in examination in chief (Witness Statement — “DW2A’) are as follows, “4. The plaintiffs allege that the Overriding Commission (“OR Commission’) at the rate of 7% per annum on the income from GSM FYLPI and SYLPI to the senior GSM from year 2002 to 2012 amounting to an estimated amount of RM189,000-00 payable to the deceased’s estate was withheld by GELM. What do you have to say? [45] A. The basis and particulars of the plaintiffs’ claim and the calculation used and records relied upon by the plaintiffs are unclear. However, based on GELM’s record, GELM did not withhold any OR Commission payable to the deceased from 2002 to 2012. If such OR Commission was indeed withheld, the deceased would have alerted GELM between 2002 and 2012. Further, GELM has duly paid the Renewal Commission payable to the deceased’s estate pursuant to clause 23 of the deceased’s Principal Agreement at pages 132 to 139 of Bundle B1 to the 1st plaintiff. 5. Could you please elaborate on clause 23 of the deceased's Principal Agreement at pages 132 to 139 of Bundle B1? A. Yes. The deceased’s rights to commission were derived from and pursuant to her Principal Agreement at pages 132 to 139 of Bundle B1 and the GSM Supplementary Agreement at pages 140 to 148 of Bundle B1. Pursuant to the terms and conditions of the Principal Agreement and the GSM Supplementary Agreement, the agreements shall be terminated automatically upon the demise of the deceased. Accordingly, the deceased's entitlement and rights to commission cease upon the demise of the deceased and termination of the agreements with effect from 01.01.2013. However, pursuant to clause 23 of the Principal Agreement, which reads as follows:- “an agent who has attained the age of 55 and who has held the agreement for 10 consecutive years and produces not less than RM125,000/- First Year Life Premium Income shall continue to receive renewal commission regardless of whether he continues to write business or not provided the business secured by him achieves an annual persistency ratio as stipulated in the prevailing Agency Rules and Regulations. In the event of the death of the agent, renewal commission shall be paid to this estate” the deceased’s estate is entitled to the Renewal Commission. [46] In this regard, the payments of the Renewal Commission to the deceased's estate from the deceased’s demise in December 2012 to February 2019 are detailed and evidenced in the following documents:- (a) (b) (c) the deceased’s Agent’s Detailed Commission Statement from December 2012 to December 2017 at pages 1552 to 2928 of Bundle B5 to B8; the deceased’s Agent’s Summary Commission Statement from December 2012 to June 2013 at pages 3573 to 3580 of Bundle B10; a letter from GELM to the 1° plaintiff dated 31.05.2013 at page 372 of Bundle B2; the deceased’s Agent’s Summary Commission Statement from January 2018 to December 2018 at pages 3581 to 3592 of Bundie B10; the record of payment from March 2018 to February 2019 at pages 3593 to 3615 of Bundle B10; and paragraph 1 of GELM’s Particulars Served pursuant to Order (O. 18 r. 12) dated 03.12.2018 at pages 114 to 118 of Bundle A. Please refer to paragraph 21(1a) of the SoC at page 46 of Bundle A. The plaintiffs allege that GELM has failed to pay the “Deferred Benefits for the year 2011 and 2017” of RM99,375- 00. What do you have to say? | disagree. The deceased’s right to the Deferred Benefit was provided under paragraph 10 (Fringe Benefit) of the Schedule of Remuneration (“SoR”) annexed to the GSM Supplementary Agreement at pages 140 to 148 of Bundie B1. Pursuant to paragraph 10.1 (Fringe Benefit) of the SoR, upon the deceased _achieving the maintenance requirements in the previous year in accordance to GELM's prevailing Agency Rules & Regulations, GELM shall allocate to the deceased a Fringe Benefit (hereinafter referred to as “Deferred Benefit’) equal to 1.25% of her Direct Unit (DU) Renewal Life Premium Income (RLPI) received by GELM at the end of the following year from new policies secured after 1 January 1996. [47] Provided always that the payment in the form of Deferred Benefit shall continue to accrue only so long as the GSM Supplementary Agreement between the deceased and GELM has not been determined or until the deceased attains the age of 60, whichever is the earlier. Pursuant to pages 66 and 67 of GELM’s Agency Rules & Regulations at pages 517 to 518 of Bundle B1, the applicable maintenance requirement was RM65,000-00 First Year Life Premium Income (FYLPI) secured from the deceased’s Direct Unit. The deceased attained the age of 60 on 27.07.2011. Pursuant to the GSM Supplementary Agreement, the Deferred Benefit would have ceased in 2011. However, pursuant to GELM’s circular referenced AMD/AA/0149/2003 dated 28.05.2003 at pages 408 to 409 of Bundle B2, for GSM aged 60 and above, Deferred Benefit shall continue to accrue after the age of 60 subject to the fulfilment by the deceased of her full prevailing maintenance quota in the previous year. In short, for Deferred Benefit ending 2011, the deceased was to meet her full maintenance requirement of RM65,000-00 First Year Life Premium Income (FYLPI) secured from her Direct Unit in the previous year (i.e. 2010). Based on the DCMS Online Enquiry on the deceased’s production in 2010 at page 536 of Bundle B1, the deceased did not meet her full maintenance requirement of RM65,000-00 First Year Life Premium Income (FYLP!) secured from her Direct Unit in 2010. As for her Deferred Benefit ending 2017, the deceased was not entitled to it since the GSM Supplementary Agreement was terminated upon her demise w.e.f. 01.01.2013. Please refer to paragraph 21(1b) of the SoC at page 46 of Bundle A. The plaintiffs allege that GELM has failed to pay dividend / interest accrued and payable on the Deferred Benefit (which was only paid to the estate on 12.06.2013) from 2011 to 2017 of RM25,926-00. What do you have to say? I disagree. Pursuant to paragraph 10.2 of the SoR, only Deferred Benefit accumulated as at 31 December of each year shall accrue interest calculated at such rate as GELM shall annually determine. [48] The sum of RM213,517-71 paid to the deceased's estate on 12.06.2013 was inclusive of the interest on the accumulated Deferred Benefit accrued as at 31.12.2011 and 31.12.2012. This is shown in the Non-Contributory Deferred Benefit statements as at 31 December of each year from 2003 to 2012 issued by GELM to the deceased at pages 551 to 560 of Bundle B3. As for the alleged interest accrued and payable on the Deferred Benefit from 2013 to 2017, as the deceased’s estate had asked for and been paid the Deferred Benefit accumulated (including interest accrued) as at 31.12.2012 on 12.06.2013, there was no Deferred Benefit accumulated in the deceased’s account as at and since 31.12.2013 to attract interest. 8. Please refer to paragraph 21(2a) of the SoC at page 46 of Bundle A. The plaintiffs allege that GELM has failed to pay overriding benefits from junior GSM (Breakaway Commission) of RM15,000-00. What do you have to say? | disagree. The breakaway benefit due to the re-designation of Chandra A/P Ponusamy to GSM on 01.01.2009 payable to the deceased pursuant to the GSM Supplementary Agreement was duly paid to the deceased prior to her demise. Please refer to paragraphs 21(2b), (2c), (3), (4), (6) and (10) of the SoC at page 46 of Bundle A. The plaintiffs allege that GELM has failed to pay:- (a) “Overriding Commission on Junior GSM’s production (4 years Commission) from 2009 to 2014” of RM50,000-00; (b) “Breakaway Perpetual Compensation @ 7% of Direct Unit from 2009 to 2017” of RM112,500-00; (c) “Overriding Commission payable from USMs between 2012 to 2017” of RM360,000-00; (d) “Overriding Commission payable to Senior GSM from 01.01.2002 to 31.12.2017” of RM189,000-00; (e) “Payment of 5% Commission on Hospital and Accident Riders Renewal Premium from 1997 to 2017” of RM147,000-00; and (f) “Breakaway GSMs on USMs past 6 year production commission from 2009 to 2014” of RM37,800-00. [49] What do you have to say? A. 10. 11. The basis and particulars of the plaintiffs’ claim and the calculation used and records relied upon by the plaintiffs are unclear. However, based on GELM’s record, GELM has duly paid all Commission, OR Commission and Breakaway Benefit payable to the deceased under her agreements with GELM. Please refer to paragraph 21(5) of the SoC at page 46 of Bundle A. The plaintiffs allege that GELM has failed to pay the Death Benefit under a Group Renewal Policy No. G 1009871 of RM300,000-00. What do you have to say? Pursuant to a circular entitled “Non-Contributory Group Schemes Coverage for Qualified Field Personnel for period from 1st May to 30 April of each year’ referenced TSC/emh/ss at pages 173 to 176 of Bundle B1, to qualify for coverage under the Group Renewal Policy at pages 410 to 421 of Bundle B2, the deceased must secure a minimum Persistency Ratio of 75% for new business period Jan to Dec of each year and at least RM300,000-00 preceding year's First Year Life Premium Income (FYLPI) secured. All qualifiers will be automatically covered in accordance with the scheme and will be notified of their qualifications through the issuance of “Certificate of Insurance’. To be entitled to the Death Benefit under the Group Renewal Policy upon her demise on 16.12.2012, the deceased must be covered under the Group Renewal Policy for period from 1% May 2012 to 30! April 2013. To be covered for period from 1s May 2012 to 30 April 2013, the deceased had to meet amongst other, at least RM300,000-00 First Year Life Premium income (FYLPI) secured in 2011. However, the deceased had failed to meet this requirement. Accordingly, the deceased was not qualified to be covered under the Group Renewal Policy and was not issued the Certificate of Insurance for period from 1st May 2012 to 30 April 2013 and hence not entitled to any Death Benefit under the Group Renewal Policy upon her demise. The 1* plaintiff was informed of this vide GELM’s letter dated 22.05.2013 at page 368 of Bundle B2. Please refer to paragraph 21(7) of the SoC at page 46 of Bundle A. The plaintiffs allege that GELM has failed to pay the GSM Death Benefits (3 years Average Income) of RM180,000-00. What do you have to say? [50] A. The basis and particulars of the plaintiffs’ claim and the calculation used and records relied upon by the plaintiffs are unclear. In any event, | deny that the deceased was entitled to this benefit. 12. Please refer to paragraphs 21(8) and (9) of the SoC at page 46 of Bundle A. The plaintiffs allege that GELM has failed to pay:- (a) the Agency Office Management (“AOM”) expenses from 2012 to 2017 of RM300,000-00; and (b) the AOM from 1997 to 2012 of RM480,000-00. What do you have to say? A. | disagree. The deceased’s entitlement to the AOM was derived from and pursuant to the GSM Supplementary Agreement at pages 140 to 148 of Bundle B1. Pursuant to the terms and conditions of the GSM Supplementary Agreement, the agreement shall be terminated automatically upon the termination of her Principal Agreement (which was terminated with effect from 01.01.2013 upon the demise of the deceased). Accordingly, the deceased’s entitlement and rights to the AOM cease upon the demise of the deceased and the termination of the GSM Supplementary Agreement with effect from 01.01.2013. Based on GELM’s record, GELM has paid to the deceased all AOM payable to her up to her demise and the termination of the GSM Supplementary Agreement. For the AOM after the termination of the GSM Supplementary Agreement from 2013 to 2017, | deny that the deceased is entitled to the same as the deceased's entitlement to the AOM ceased upon the termination of the GSM Supplementary Agreement.” [54] 78. 79. 80. In relation to the claim for Deferred Benefit for the year 2011 to 2012, counsel submitted with reference to DW2’s evidence and submitted that the deceased’s right to the Deferred Benefit was provided under paragraph 10 (Fringe Benefit) of the Schedule of Remuneration (“SoR’) annexed to the GSM-SA. Pursuant to paragraph 10.1. (Fringe Benefit) of the SoR (p.146 to 147, B1), upon the deceased achieving the maintenance requirements in the previous year in accordance to the defendant’s prevailing Agency Rules & Regulations, the defendant shall allocate to the deceased a Fringe Benefit (hereinafter referred to as “Deferred Benefit’) equal to 1.25% of her Direct Unit (DU) Renewal Life Premium Income (RLPI) received by the defendant at the end of the following year from new policies secured after 1 January 1996. But the rider to this benefit is the payment in the form of Deferred Benefit shall continue to accrue only so long as the GSM-SA between the deceased and the defendant has not been determined or until the deceased attains the age of 60 whichever is the earlier. Next, counsel for the defendant referred to pages 66 and 67 of the defendant’s Agency Rules & Regulations (p.517 to 518 B2) and said that the applicable maintenance requirement was RM65,000.00 First Year Life Premium Income (“FYLPI") secured from the deceased's Direct Unit. The deceased attained the age of 60 on 27 July 2011. Pursuant to the GSM-SA, the Deferred Benefit would have ceased in 2011. [52] 81. However, pursuant to the defendant’s circular referenced AMD/AA/0149/2003 dated 28 May 2003 (p. 408 to 409, B2), for GSM aged 60 and above, Deferred Benefits shall continue to accrue after the age of 60 subject to the fulfilment by the deceased of her full prevailing maintenance quota in the previous year. Thus, it is the defendant's position that:- (i) for Deferred Benefit ending 2011, the deceased was to meet her half maintenance requirement of RM32,500.00 FLYPI secured from her Direct Unit in the previous year (i.e. 2010). Based on the DCMS Online Enquiry on the deceased’s production in 2010 (p.536, B2) the deceased did not meet her half maintenance requirement of RM32,500.00 FLYPI secured from her Direct Unit in 2010 as it was only RM32,369.71; and (ii) for Deferred Benefit ending 2012 the deceased was to meet her full maintenance requirement of RM65,000.00 FLYPI secured from her Direct Unit in the previous year (i.e. 2011). (iii) Based on the DCMS Online Enquiry on the deceased’s production in 2011 (p.537 B2), the deceased did not meet her full maintenance requirement of RM65,000.00 FLYP! secured from her Direct Unit in 2011 as it was only RM33,075.65. 82. As such, the deceased was not entitled to Deferred Benefit for the year 2011 and 2012. (53) 83. 84. 85. Next, in so far as the claim for dividend/interest on Deferred Benefit from 1 January 2013 to 31 February 2017 it was contended for the defendant that pursuant to paragraph 10.2 of the SoR (p.146, B1), only Deferred Benefit accumulated as at 31 December of each year shall accrue interest calculated at such rate as the defendant shall annually determine. For the alleged interest accrued and payable on the Deferred Benefit from 1 January 2013 to 31 December 2017, as the deceased’s estate had asked for and been paid the Deferred Benefit accumulated (including interest accrued) as at 31 December, 2012 on 12 June, 2013, there was no Deferred Benefit which had accumulated in the deceased's account as at and since 31 December 2013 so as to attract interest. The next items are the Breakaway Perpetual Compensation (from 2013 to 2017), Overriding Commission (from 2013 to 2016) and Agency Office Management Expense (from 2013 to 2017). It was submitted that the basis and particulars of the Estate Claim and the calculation used and records relied upon by the plaintiffs are unclear. It was nevertheless submitted that the deceased’s entitlement to these items, if any, was derived from and are pursuant to the GSM-SA (p.140 Bi). Pursuant to clause 14, the GSM-SA shall be terminated automatically upon the termination of the deceased’s Agency Agreement (which was terminated with effect from 1January 2013 upon the demise of the deceased pursuant to clause 19.1 of the Agency Agreement) (p.133 and 141, B1). [54] 86. 87. 88. Accordingly, it was argued that the deceased’s entitlement and rights to these items ceased upon the demise of the deceased and upon the termination of the GSM-SA with effect from 1 January 2013. The next item which formed part of the Estate Claim is the Group Renewal Policy No. G 1009871. The defendant’s response to the claim in this regard is that pursuant to a circular entitled “Non-Contributory Group Schemes for Qualified Field Personnel for period from 1 May to 30 April of each year” referenced TSC/cmh/ss (p.173 to 176, B1) to qualify for coverage under the Group Renewal Policy the deceased must secure a minimum Persistency Ratio of 75% for new business period January to December of each year and at least RM300,000.00 preceding year’s FLYPI secured. According to DW2, all those who qualify will be automatically covered in accordance with the scheme and will be notified of their qualifications through the issuance of “Certificate of Insurance”. As such, in order for the deceased to be entitled to the Death Benefit under the Group Renewal Policy upon her demise on 16 December 2012, the deceased must be covered under the Group Renewal Policy for period from 1 May 2012 to 30 April 2013. And to be covered for period from 1 May 2012 to 30 April 2013 for the lowest coverage of RM100,000.00 the deceased had to meet amongst other, at least RM300,000.00 FLYPI secured in the preceding year i.e. 2011. However, the deceased had failed to meet this requirement in that her FLYPI in 2011 was RM291,754.40 only (p.537 B2). [55] 89. Accordingly, the deceased was not qualified to be covered under the Group Renewal Policy and was not issued the Certificate of Insurance for period from 1 May 2012 to 30 April 2013 and hence not entitled to any Death Benefit under the Group Renewal Policy upon her demise (p.532 to 529, B2). Analysis and conclusions 90. 91. 92. The issues for trial are (a) whether P2 is entitled to a transfer of the Agency and (b) whether the estate of the deceased is entitled to the estate claim. | will start with the Agency Claim. it can be seen from the several letters that were issued by P1 and P2 that they had ait all times after the demise of the deceased made an impassioned plea for the Agency to be transferred to P2. P2 had even sought the assistance of the Great Eastern Life Group Sales Managers Association Malaysia (“the Association’). The Association had looked at into the matter and gave their views (somewhat pejoratively) via their letter dated 19 March 2013 (p.355 B2) where they said, “The son of the late Bagetiamah, Mani Peter Xavier (USM A/C No. 5622371) has written to us seeking our assistance in securing his late mother’s agency and for continuity of the same. Viewing the case from a broad angle, it looks ridiculous for the company to invoke the failure of the late GSM to nominate a successor and therefore the company is unable to execute the “Agency Business Continuity”. This is because the late Bagetiamah had failed to nominate a successor by using a company prescribed form called “Sucession Nominaton Form’. [56] 93. 94. 95. 96. it is a clear case that Mani Peter Xavier is the legal son and it cannot be anyone else and therefore having absolute right to continue with the agency. Given the benefit of doubt Bagetiamah had already written to the company prior to her demise i.e. on 16/12/12 intending to transfer her agency to her son Mani Peter Xavier and who at that time was a Unit sales Manager...” The Association’s letter alludes to a letter which had been written by the deceased prior to her death. | can only decipher this to be a reference to the letter dated 27 July 2012. But (as mentioned earlier it was established that the said letter was not sent to the defendant prior to the death of the deceased on 16 December 2012. It was only sent as an attachment to P2’s letter dated 24 December 2012 to the defendant's CEO. There is no room for doubt that prior to her death, the deceased did not utilize the Nomination Form (p.522 B2) to nominate P2 as her successor. But it was vehemently argued for the plaintiffs that the defendant's insistence that the Nomination Form must be used for the purpose of nominating a successor to take over the Agency in the event of the demise of the deceased is a manifestation of the defendant's stance which unfairly and unconscionably emphasizes “form” over “substance”. Counsel for the plaintiffs said that the Nomination Form is not mandatory. It is merely a form for administrative purposes and was for convenience more than anything else. In amplification, counsel also drew support from the following endorsement in the Nomination Form which reads, [57] 97. 98. 99, “the Company's acceptance of this nomination form shall not in any way ensure its legal validity in the event of any subsequent estate dispute pursuant to the GSM’s administration of his/her estate or grant of probate. This nomination is for the Company's internal administrative process of ensuring the continuity of the GSM’s agency business to be nominated natural person above described to the Company and shall not involve any other aspects of his/her real and movable properties.” Counsel for the plaintiffs echoed PW3's evidence and said that the Grant of Probate has a higher ranking as compared to the Nomination Form and that since by the Will, the deceased had bequeathed her movable and immovable properties to her executors to hold the same on trust for her beneficiaries, it follows that the Agency is part of her movable properties and ought therefore to be transferred to P2 as per the wishes of the deceased. It was emphasized that at all times, or at any rate, by her letter dated 23 May 2002 (p.328 B1) the deceased had unequivocally conveyed her wish and intention that she wanted P2 to take over the Agency. As | said earlier, there is no ambiguity as to the deceased’s intention. No doubt the letter dated 23 May 2002 was written on a different occasion and for a different purpose. | also accept the point that was established, that at that time, the deceased did not meet the criteria or requirement per the 1997 Circular, to effect a transfer of the Agency. | think that it is quite clear that the letter dated 23 May 2002 was not a letter that was written to effect an immediate or any transfer of the Agency. Rather, the letter appears to have been written for the sole purpose of supporting P2's attempt at upgrading himself to USM. (58] 100. 101. 102. 103. But the deceased nevertheless took the opportunity to place on record (in writing) that eventually she wanted P2 to take over the Agency. During the trial and in their submissions counsel for the defendant made much of the fact that the deceased's letter dated 23 May 2002 was not even mentioned in any of the several correspondence that was sent by the plaintiffs to the defendant before the suit was filed. Indeed, the deceased's letter dated 23 May 2002 was not even mentioned in the LOD. Finally, the letter was not even mentioned in the ASOC. But it was mentioned in the Reply to Defence. 1 do not think that the absence of any mention of the letter dated 23 May 2002 prior to the suit being filed is necessarily fatal. To my mind, the relevant question is whether having regard to the Principal Agency Agreement, the GSA-SA, the 1997 Circular, the 2008 Circular, the 2011 Circular, the deceased's letters dated 23 May 2002 and 27 July 2012, P2 was to be deemed or treated as having been “nominated” as the deceased’s successor to take over the Agency. In this regard, counsel for the plaintiffs said that even if the Nomination Form had not been submitted the defendant had a “discretion” to construe and accept the deceased’s letter dated 23 May 2002 as the nomination of P2 to take over the Agency upon the demise of the deceased. The first point that | will make is that the issue of “discretion” was not even pleaded. But | will leave it at that. [59] 104. 105. 106. Nevertheless, it is to be observed that the defendant does not suggest that they do not have a discretion. Instead, they steadfastly maintain that there is no legal obligation that arises such that the Agency must be transferred to P2. On the issue of discretion, | rather think this being a private contractual relationship between the parties, they (the defendant) had every conceivable discretion in the matter. | do of course agree with the plaintiffs’ submission that the Nomination Form (per the 2008 Circular) does not have the force of the law. As such, the defendant could have departed from the need for the Nomination Form and waived or excused the need for strict compliance with the requirement for the Nomination Form to be executed by the deceased and submitted to the defendant. But of course, such a waiver by the defendant is essentially up to them in that it is entirely up to them as to whether they wish to strictly follow the contractual provisions or accede to P2’s request and treat the deceased’s letter dated 23 May 2002 and/or the letter dated 27 July 2012 as being “in substance” the nomination. Of course, any waiver on the defendant’s part will not be without repercussions. This is because the defendant has a huge agency force. It is obvious enough that any waiver in terms of the Nomination Form may open the proverbial Pandora’s box as it may create a precedent and a springboard for future “succession” claims. {60] 107. 108. 109. 110. Nevertheless, | think it is fair to say that the defendant could have, if they wanted to, accepted and treated the letters dated 23 May 2002 and/or 27 July 2012 as being “in substance” the nomination of P2 to take over the Agency upon the demise of the deceased. But the defendants chose not to exercise any discretion in the matter. On the issue of discretion, counsel for the defendant said that a discretion does not give rise to a cause of action. | don’t agree. | think that, that makes too broad a statement. There are in my view, certain circumstances where the exercise of a contractual discretion could give rise to a cause of action. See: Braganza v BP Shipping Ltd and another [2015] UKSC 17, [2015] 2 Lloyd's Rep 240, [2015] 1 WLR 1661, [2015] 4 All ER 639 UKSC. The case of Braganza deals with a situation where the contract conferred a unilateral discretionary power on one of the parties to the contract. Such discretion may appear to be unfettered. However, English courts have sometimes used the implication of a term that qualifies the manner in which it may be exercised by concepts of good faith, and genuineness and the absence of arbitrariness, capriciousness, perversity and irrationality (often referred to as the "Braganza duty"). [64] 111. 112. 113. 114. But the Braganza duty does not arise here because we are not dealing with a contractual discretion. In the present case, the word “discretion” is used in the sense of a contractual power on the part of the defendant to “waive” or “excuse” strict compliance with the need for submission of the Nomination Form. The plaintiffs (as well as the Association) have taken umbrage with the defendant's stance and have harshly criticized the defendant for rejecting the transfer of the Agency to P2 as the deceased did not submit a duly executed Nomination Form by the deceased per the 2008 Circular/2011 Circular. In an attempt at bolstering the argument that the need for Nomination form could be dispensed with, the plaintiff referred to the evidence of PW3 who said that during his time the defendant did exercise discretion in such matters (see: Q/A.10 PW3A). PW3 said that during his time when he was in the defendant’s employ with the last position being Head of Department (Agency Movement and Investigation), the defendant had in certain circumstances “by- passed” its own formalities and transferred the agency to non-agents and when such transfer takes place the defendant would ignore the conditions e.g. production quota and targets etc. He said that in the present case, it was “unconscionable” for the defendant to deprive P2 of the Agency as the deceased had clearly indicated her intention that P2 should be her successor per her letter dated 23 May 2002. {62] 115. 116. 117. 118. PW3 however agreed that there is a difference between a “discretion” and a “legal obligation’. He also confirmed that he left the defendant in 2003 and that the 2008 Circular was issued after he left the defendant and that he was in no position to comment on the defendant’s practice after he left. In my view, the success or otherwise of the Agency claim will depend entirely on the contractual rights of the deceased. This is particularly so because the deceased’s relationship with the defendant is admittedly based on contract. As correctly submitted by counsel for the defendant, the deceased’s rights to the Agency and the benefits and rights accrued therefrom were enshrined in the Principal Agency Agreement (p. 132 to 139, B1) and the GSM-SA (p. 140 to 148 B1). It is an express term of the GSM-SA (clause 14) that it terminates automatically when the Principal Agency Agreement terminates. Further, it is an express term of the Principal Agency Agreement (clause 19.1) that it terminates upon the death of the agent. Accordingly, the deceased’s entitlement and rights to the Agency and the benefits and rights accrued thereunder cease upon her demise save for the sole exception being the entitlement to renewal commission pursuant to clause 23 of the Principal Agency Agreement which is also subject to fulfilment of certain criteria or parameters. [63] 119. 120. 121. According to the defendant, the strict stance on non-transferability/non- assignment was “softened” in 1997 when the defendant for the 1° time allowed the transfer of an agent’s business upon retirement (see: the 1997 Circular). And pursuant to that the 1997 Circular the defendant implemented a benefit entitled “Continuity of GSM Agency” to long serving GSMs who have attained the age of 55 years and after having served the defendant for 15 years as GSM to re-designate to the rank of an agent and to transfer his entire agency with the consent of his down-liners to an elected member of his immediate family provided he/she holds the ADO (now known as USM) contract and have passed the Agency Management Course (AMC). Subsequently, the defendant implemented the 2008 Circular (p. 239 to 244 Bt) whereby the defendant introduced an option plan for succession to all GSM with effect from 1 January 2008 on condition that the defendant is notified via the defendant's prescribed Nomination Form (p. 522 B2) duly executed by the GSM who intends to retire GSM (the Retiring GSM) and nominating a successor from the permissible range The nominees could be the Retiring GSM’s spouse, children or brother/sister or next of kin who must already be a USM and succession exercised before or commence latest at the Succession Reference Point, i.e. at the age of 60; and if such a nomination has not been formally effected with the defendant, the provision of the 2008 Circular will not apply. [64] 122. 123. 124. Yet thereafter, pursuant to the 2011 Circular (p.213 B1), the deadline to submit the Nomination Form for those who have already reached age 60 on 31 January 2011 (including the deceased who had reached the age of 60 on 31 January 2011 pursuant to the formula stated in the 2008 Circular) was extended to 30 June 2011. The defendant's position is that the deceased did not at any time submit any Nomination Form to notify the defendant that she has nominated P2 or anyone else as her successor in accordance with / pursuant to the 2008 Circular and/or the 2011 Circular. Thus, having regard to the matters alluded to above, | am impelled to the view that there was at all material times a contract that existed between the deceased and the defendant. The Agency is not capable of being assigned or transferred to P2 save in accordance with the method or mode and in accordance with the condition, stipulations or qualifications prescribed by the defendant. | agree that the deceased cannot bequeath what she does not already own or what is not capable of being bequeathed. Hence, if there is no right to assign or transfer then clearly there can be no right to bequeath under the Will. To my mind, the Will (which does not even specifically mention the Agency) cannot be relied upon to support the Agency claim. The Agency claim must necessarily be predicated upon contractual foundations. [65] 125. 126. 127. 128. And this is exactly where the problem lies. On 23 May 2002 the deceased had put it in writing (via her handwritten letter) that she wanted P2 to take over the Agency. She repeated this in her letter dated 27 July 2012 (which was sent to the defendant only after her demise). As such, in terms of the intention of the deceased, there is no doubt that P2 was to be her successor. But the deceased, for unknown reasons, just did not take the simple step of formaily executing the Nomination Form and nominate P2 as her successor. Indeed, at all material times or at least from 1 January 2002 until 1 January 2013, P2 was a USM and he was qualified to be the successor to the deceased. Had the Nomination Form been duly executed and given to the defendant in accordance with the 2008 Circular and 2011 Circular, then the Agency must be transferred to P2. In this regard, | cannot fathom why P1 and P2 who were involved with the Agency and were supporting the deceased in her insurance business and who would have or should have been cognisant of the importance of the 2008 Circular/2011 Circular did not prompt the deceased to submit the Nomination Form on or before deadline stipulated by the defendant. And this all the more because at all times, the defendant kept reminding the GSMs to submit the Nomination Form. [66] 129. 130. 131. 132. 133. It is imperative to recall that the 2008 Circular/2011 Circular and their contents as well as the Nomination Form are part of the contract between the deceased and the defendant. However, the plaintiffs appear to relegate the Nomination Form as “merely for administrative purposes’. In my view, the fact that the Nomination Form states that it is for the defendant's “internal administrative process of ensuring the continuity of the GSM's agency business” does not detract from the contractual requirement for the deceased to submit the duly executed Nomination Form on or before the deadline. From the evidence it is clear that the defendant never conducted itself in such a manner as to mislead the deceased into thinking that they had “waived” or “excused” the need for compliance with the 2008 Circular and/or the 2011 Circular. As correctly submitted by counsel for the defendant, the legal nexus between the deceased and the defendant was a contractual one and there was at all material times, two contracts in issue namely, the Principal Agency Agreement (p. 132 to 139 B1) and the GSM-SA (p. 140 to 148 B1). It was an express term of the GSM-SA (per clause 14) that it terminates automatically when the Principal Agency Agreement terminates and it was an express term of the Principal Agency Agreement (per clause 19.1) that it terminates upon the death of the agent (the deceased). [67] 134. 135. 136. With effect from 1 January 2008, pursuant to the 2008 Circular (CAD/0546/FEB2008) (p. 239 to 244 B1) which is incorporated into the contract of the deceased by clause 16 of the Principal Agency Agreement, the defendant had put in place a succession (or transfer) route of the Agency subject to, inter alia, prior notification by the deceased to the defendant of the nomination of her successor by way of the Nomination Form (p. 522 B2) and at no time after 1 January 2008 until her death on 16 December 2012 did the deceased notify the defendant of her nomination and/or the transfer of the Agency to P2. lt was argued that the deceased’s letter dated 27 July 2012 is akin to a notification. But then that letter was only sent to the defendant after the demise of the deceased. Perhaps as an implicit recognition of the difficulty in sustaining the argument with regard to the letter dated 27 July 2012, the plaintiffs focussed instead on the deceased's letter dated 23 May 2002 (p.328 B1) as being in substance, the nomination. Having looked at the matter comprehensively, | concluded that the letter dated 23 May 2002 is not a nomination as stipulated in the 2008 Circular. It cannot be the nomination because it pre-dates the 2008 Circular and was at any rate, issued at a time when the deceased was not even qualified to initiate a transfer per the earlier circular, i.e. the 1997 Circular. As such, having regard to the Principal Agency Agreement (the D contract), the GSA-SA, the 1997 Circular, the 2008 Circular, the 2011 Circular, the deceased's letters dated 23 May 2002 and 27 July 2012, | am impelled to the view that P2 cannot be deemed or treated as having been “nominated” as the deceased’s successor to take over the Agency. [68] 137. 138. | move on to deal with another aspect of the plaintiffs’ claim vis-a-vis the Agency Claim. In paragraph 19 of the ASOC the plaintiffs had pleaded, inter alia, “negligence” and “bad faith’ with regard to the defendant’s conduct. “19. The Defendant’s continued failure, refusal and/or negligence to give effect to the transfer of the Deceased’s rank of GSM and the Agency to the 2°¢ Plaintiff was done in bad faith and is oppressive and prejudicial to the Plaintiffs’ rights as the beneficiaries of the Estate of the Deceased.” My approach to the issue is as follows. In my view, the answer to the plaintiffs’ said allegation is to be found in the decision of the Court of Appeal in American International Assurance Co Ltd v Koh Yen Bee (F) [2002] 4 MLJ 301, [2002] 4 AMR 3885, [2002] 4 CLJ 49 CA. The facts of that case were as follows. The respondent was the appellant's insurance agent. The respondent's agency was terminated by the appellant pursuant to cl 26(b) of the agent's contract (‘the contract’). Clause 26(b) provided that the contract may be terminated by either party without giving any reason thereof by giving to the other party 15 days' written notice. There was no indication that the contract was for any fixed period of time. The respondent was however required to sign a Schedule of Commissions (‘the schedule’) every year. The schedule fixed the rate of commissions payable to the respondent during the period of the schedule's subsistence. [69] 139. 140. 141. The respondent's contract was terminated following the termination of her husband's agency contract by the appellant. The respondent sued the appellant alleging that the termination of the contract was without sufficient cause, that the appellant had failed to give a reasonable notice of the termination, that the appellant had failed to disclose the reasons for the termination and that she had suffered loss and damage and had been deprived of her privileges, rights and benefits contained in the contract. The respondent claimed loss of earnings and loss of Agent's Provident Fund. The High Court gave judgment in the respondent's favour and awarded her RM3m for loss of earnings and RM20, 804.17 for loss of the provident fund. The appellant appealed. The issues for the Court of Appeal were whether clause 26(b) of the contract was inconsistent with sections 158 and 159 of the Contracts Act 1950 and therefore not valid, in particular, whether the agreement may be terminated by giving 15 days’ notice without giving any reasons and whether the rules of natural justice applied. Justice Abdul Hamid Mohamad JCA (as he then was) rejected the respondent's proposition that natural justice has a role te play in private contract. The insurance company’s appeal was allowed by a majority decision. Speaking for the majority, Justice Abdul Hamid Mohamad JCA said (p.313 MLJ), [70] “In the present case, the cause of action is purely on a private contract. The issue is whether cl 26(b) is valid, under the law of contract. Other principles like natural justice, which is applicable to public bodies, should not be applied to a purely contractual relationship. Judges, who, by the nature of their job, always have natural justice in their minds, should be slow to extend such principles to the world of business. Business management should not be equated with administration of justice. Business, indeed the country's economy might grind to a halt if companies are expected to be run like a court of law. 142. And at p.314 (MLJ) of the judgment Justice Abdul Hamid Mohamad said, “However, as we understand the judgment, the learned judge did not hold that the termination of the agents' contract was unlawful because a fair hearing was not given. In any event, the question of giving a fair hearing does not arise at all in this case. As submitted by the learned counsel for the appellant, and we agree with him, this is a case of and concerning the exercise of private law rights under a private contract. It does not concern a public body acting pursuant to powers derived from an Act of Parliament. The relationship between the appellant and the respondent was purely a contractual relationship, not that of an employer and an employee. Clause 32 clearly provides so.” 143. The next case that should be referred to is the decision of the Court of Appeal in Merbok Hilir Berhad V Sheikh Khaled Jassem Bin Mohammad (Berniaga Sebagai Petroserv v Sheikh Khaled Jassem Bin Mohammad Jassem Al-Thani (T/A Petroserv General Trading Establishment) And Other Appeals [2013] 5 MLJ 407, [2013] MLJU 552 which concerns the issue of a reasonable notice period for the termination of an agency. [74] 144. 145. 146. In paragraph 22 of the judgment in Merbok’s case (supra), the Court of Appeal enunciated in no uncertain terms that, “..Vo doubt, the linchpin in the relationship is contract and the freedom of contract has to be recognised...” [Emphasis added]. The next point is the so-called “duty of care” which was purportedly owed by the defendant to the deceased. In this regard, my view is that the defendant owes no obligation in tort beyond that which is subsumed in contract. The principle in this regard was lucidly explained by the Privy Council in Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd and others [1986] AC 80, [1985] 2 All ER 947, [1985] 3 WLR 317, [1985] 2 Lloyd's Rep 313, which states that the parties’ mutual obligations in tort cannot be greater / wider that those to be found expressly or by necessary implication in their contract, At p.107 (Appeal Cases) Lord Scarman opined, “Their Lordships do not believe that there is anything to the advantage of the law’s development in searching for a liability in tort where the parties are in a contractual relationship. This is particularly so in a commercial relationship. Though it is possible as a matter of legal semantics to conduct an analysis of the rights and duties inherent in some contractual relationships including that of banker and customer either as a matter of contract law when the question will be what, if any, terms are to be implied or as a matter of tort law when the task will be to identify a duty arising from the proximity and character of the relationship between the parties, their Lordships believe it to be correct in principle and necessary for the avoidance of confusion in the law to adhere to the contractual analysis: on principle because it is a relationship in which the parties have, subject to a few exceptions, the right to determine their obligations to each other, and for the avoidance of confusion because different consequences do follow according to whether liability arises from contract or tort, e.g. in the limitation of action’. Their Lordships respectfully agree with some wise words of Lord Radcliffe in his dissenting speech in Lister v. Romford Ice and Cold Storage Co. Ltd. [19571 A.C. 555. After indicating that there cases in which a duty arising out of the relationship between employer and employee could be analysed as contractual or tortious Lord Radcliffe said, at p. 587: ‘Since, in any event, the duty in question is one which exists by imputation or implication of law and not by virtue of any express negotiation between the parties, | should be inclined to say that there is no real distinction between the two possible sources of obligation. But it is certainly, | think, as much contractual as tortious. Since in modern times the relationship between master and servant, between employer and employed, is inherently one of contract, it seems to me entirely correct to attribute the duties which arise from that relationship to implied contract.’ Their Lordships do not, therefore, embark on an investigation as to whether in the relationship of banker and customer it is possible to identify tort as well as contract as a source of the obligations owed by the one to the other. Their Lordships do not, however, accept that the parties’ mutual obligations in tort can be any greater than those to be found expressly or by necessary implication in their contract. If. therefore, as their Lordships have concluded, no duty wider than that recognised _in Macmillan [1918] A.C. 777 and Greenwood [1993] A.C, 51 can be implied into the banking contract in the absence of express terms to that effect, the banks cannot rely on the law of tort to provide them with greater protection than that for which they have contracted.” (Emphasis added) [73] 147. 148. 149. Reference was also made to the case of United Asian Bank Bhd v Tai Soon Heng Construction Sdn. Bhd. [1993] 1 MLJ 182 SC. In the result, based on the principles that were enunciated in the cases referred to above, it is my view that once there is a contract, then it is the contract which defines the parameters of the rights and obligations. Thus, in the present case, the plaintiffs cannot escape the limitations of the deceased’s rights in contract by pleading tort. At any rate | find that there is just no evidence to sustain the plea of negligence. Likewise, | find that there is no evidence of bad faith. | cannot bring myself to equate the defendant’s conduct in insisting with strict compliance with the contractual terms and conditions as a manifestation of bad faith. At any rate, even if the defendant's conduct is to be construed as evidencing bad faith, that of itself is not sufficient to overcome the contractual provisions or hurdles. The net effect of all of the above is that the plaintiffs have failed to prove on a balance of probabilities that P2 is entitled to claim that the Agency must be transferred to him upon the demise of the deceased. As such, the Agency claim fails for all of the reasons articulated above. Before | start with the Estate Claim | think it is necessary to address a point that was taken up by counsel for the plaintiffs, namely that the circulars that were issued by the defendant nad unilaterally varied the contractual terms and consequently the entitlements or benefits that the deceased was entitled to. [74] 150. 151. 152. Counsel relied on a passage from the Supreme Court's decision in Paul Murugesu s/o Ponnusamy (As Representative of Nalamah d/o Sangapillay (Deceased) V Cheok Toh Gong & Ors [1996] 1 MLJ 843 SC. The case arose out of a sale and purchase transaction. By an agreement dated 6 October 1972 (‘the SPA”) one Nalamah d/o Sangapillay (‘the purchaser’) purchase a portion of land from the first and second defendants (‘the vendors’) for the price of RM9,000.00 The purchaser paid a sum of RM3,600.00 to the vendors as deposit. Pursuant to clause 3 of the SPA, the balance of the purchase price amounting to RM5,400.00 (‘the balance purchase price’) should be paid by the purchaser to the vendors at the office of the vendors’ solicitors within 14 days of the date of the receipt by the purchaser of a notice in writing from the vendors that the main title deed to the land had been issued (‘the completion date’). Clause 5 of the SPA further provided that if the purchaser should fail to pay the balance price on or before the completion date, the agreement would automatically be terminated and the deposit paid would be forfeited by the vendors without notice. The purchaser subsequently caveated the land. On 5 October 1981, the purchaser's son (‘the purchaser's son’) received a message from an unknown third party that the document of title to the land had been obtained. On the same day, he gave a cheque for RM5,000.00 to the vendors’ clerk. However, on the following day, payment on the cheque was stopped by the purchaser's son. He alleged that his mother asked him to stop payment because she wanted to pay through her solicitors. [75] 153. 154. 155. On 6 May 1982, the purchaser's solicitors wrote to the vendors to inquire if the document of title had been issued pursuant to clause 3. No reply was received to that letter nor to the subsequent reminders issued. The vendors then alleged that the purchaser was in breach of clause 3 of the SPA and had thereafter sold that portion of land to the fifth defendant. The third and fourth defendants acted as trustees for the fifth defendant (‘the second purchaser’). The purchaser sought specific performance of the agreement, contending that a written notice pursuant to clause 3 should have been sent to her when the document of title to the land was issued. It was also contended that the second purchaser's trust was null and void. The vendors, the second purchaser, and his trustees counterclaimed for the removal of the private caveat entered on the land by the purchaser, arguing that by issuing the cheque on the part of her son, the purchaser had varied clause 3 by doing away with the requirement for a written notice. The trial judge decided in favour of the vendors, the second purchaser and his trustees. The purchaser died in 1985, and the case was continued by her son. The purchaser's son appealed. [76] 156. The issue before the court was whether there had been variation of clause 3, in the manner that both parties had agreed to accept the oral notice (ie the message left by the third party for the son) in place of a written notice. The Supreme Court held that the purchaser had understood the variation which the vendors had in mind, but she had not intended to be bound by it. Consequently, there was no consensus ad idem about the variation of clause 3 and the purchaser could still fall back on clause 3 in its original form. 157. At p.854-855 the Supreme Court (per Peh Swee Chin) said, “It is to be borne in mind also that mere knowledge of a variation is not consent of a variation: see Coronation Electronics Ltd v Lalchand Mahtani [1987] 1 MLJ 190 at p 197 per Chan Sek Keong JC (as he then was). Thus, in Cowey v Liberian Operations Ltd [1966] 2 Lloyd's Rep 45, which can throw light on the nature of evidence required to prove consent to a variation of a term of agreement, the court held there that it was not competent for a party to a contract to vary the terms of the contract just by passing out a circular or notice unilaterally to the other party. In that case, plaintiff, an engineer, was engaged on the basis of a three months’ notice of termination of service. About three months later after his employment, a circular was passed to all employees including the plaintiff for them to initial it. All employees including the plaintiff initialed it, and it had provided, inter alia, that their employment would be on a monthly basis unless otherwise agreed. Notwithstanding his initialing it, the court gave judgment to the plaintiff holding, on an alternative but conclusive ground, that it was not competent for one party to vary it by passing such circular. By the way, because of the plaintiff initialing it, we are bound to say that the cited case is a borderline case.” (7] 158. 159. In my view, the facts of the present case are vastly different from the factual matrix of the Pau! Murugesu case. In the present case, the deceased had joined the defendant as an agent and it was expressly stated in the Principal Agency Agreement (later replaced by the D contract) that the defendant is entitled (per clause 16 of the Principal Agency Agreement) to issue circulars and directives from time to time and these are to have coniractual effect. Indeed, P1 admitted that the defendant's circulars have contractual effect. Thus, any variation to the rights of the parties or as to their entitlements as agent or GSM, are variations which the deceased as agent/GSM had agreed to from the beginning. Thus the point of unilateral variation that was raised by counsel for the plaintiffs does not assist the plaintiffs’ case in any way. Before | leave the topic of the Agency claim, | should also mention that there is no basis for the plaintiffs’ suggestion that the Agency is to be considered as a business which is capable of forming part of the estate of the deceased. In so far as the issue of Adiss Enterprise is concerned, it cannot be the relevant business entity as it was formed on 15 January 1990 which about 8 years prior to the deceased is becoming an agent of the defendant. At any rate, whether it is Adiss Enterprise or Adiss Bagetiamah Martina (ABM) Associates, the clear and unarguable point here is that the defendant did not execute any life insurance agency contract with Adiss Enterprise or any other entity or business or sole proprietorship. Rather, the life insurance agency contract was at all times between the defendant and the deceased in her personal name. [78] 160. 161. 162. 163. | turn next to the Estate claim. In analysing this part of the claim, | had to trawl through the several documents that were alluded to by counsel, and by P1 and by DW2 in the course of the trial. | also had cross- referenced the documents with the submissions that were made by counsel. The plaintiffs’ submissions on the Estate Claim are to be found in paragraphs 72 to 86 of the written submissions dated 31 May 2019 and paragraphs 14 to 16 of the submissions in reply dated 7 June 2019. The defendant’s submissions on the Estate claim are at paragraphs 10.1 to 106 of the written submissions dated 31 May 2019 read together with the explanations annexed to the defendant’s Core Bundle (“CB”) (Tabs L, M, N and O) and paragraph 7.1 of the defendant's submissions in reply dated 7 June 2019 and finally, the attachments “A’ and “C” in respect of Enclosure 8. Enclosure 8 is the plaintiffs’ application made under Order 24 rules 3, 5 and 7 of the Rules of Court 2012 and the inherent jurisdiction of this Court for discovery of a substantial number of documents. Before the trial, all the necessary documents were produced by the defendant and placed in the respective bundles. The plaintiffs were therefore under no impediment in terms of supporting documents and were in a position to collate all the evidence and establish their claim for purposes of the Estate claim. [79] 164. 165. 166. However, having looked at the evidence comprehensively (and without going into the specific details) although P1 did testify at length on the various heads of claim, | found DW2’s evidence to be more convincing, credible and compelling. P1’s evidence was quite self-serving and was based on his own interpretation of the terms of the contract pertaining to the deceased’s entitlements. Ultimately, | found that there was really no tangible or cogent evidence to support the plaintiffs’ claim that the defendant owes any monies to the estate of the deceased. In my view, DW2 had satisfactorily explained why the deceased was not entitled to Deferred Benefit for the year ending 2011. In this regard, he said that the deceased had to meet her half quota of RM32,500 First Year Life Premium Income, secured from her direct unit in the previous year i.e. 2010. According to the DCMS online inquiry on the deceased's production in 2010 (p.536 B2), the deceased did not meet her half quota of RM32,500 First Year Life Premium secured from her direct unit in 2010. Next, as for the Deferred Benefit for the year ending 2012, the deceased was to meet her full requirement of the maintenance requirement of RM65,000 first year life premium from her direct unit in the previous year which is 2011. He said that the deceased’s production was RM33,075. As such, the deceased did not meet her full quota requirement of RM65,000. DW2 referred to the defendant’s circular dated 28 May 2003 (p.536 B2) to support his explanations as to why the deceased was not entitled to the Deferred Benefit. [80] 167. 168. 169. The deceased reached the age of 60 on 27 July 2011. As such per the circular dated 28 May 2003, when the deceased reached the age of 60 she had to meet the full requirement, i.e. RM65,000.00. Of course, counsel for the plaintiff referred to that part of the defendani’s circular which states that the requirement for full maintenance quota will not apply for those who are on waiver based on their years of service or medical grounds. Counsel for the plaintiff developed the issue by saying that the defendant knew that the deceased had medical issues pertaining to her heart and therefore she was not in a position to meet a full production quota as envisaged by the document at p.408 B2. This line of questioning prompted counsel for the defendant to raise an objection that this is not part of the plaintiffs’ pleaded case and was not brought up during examination in chief of the plaintiffs’ witnesses. in response, counsel for the plaintiff said that the defendant had knowledge that the deceased was unwell. DW2 agreed that a GSM can be given a waiver if there is a medical condition. Otherwise, the GSM must be age 55 and 15 year service or 20 year service to be entitled to the half quota. But when the GSM is 60 years old then he/she needs to meet full quota, unless there is a waiver on medical grounds. [84] 170. To me, this issue should have been pleaded and brought up as part of 171. P1’s testimony. At any rate, even if the deceased’s medical condition is to be asserted, there must be contemporaneous evidence to show that the deceased sought a waiver on medical grounds. But such evidence was sorely lacking. There is no evidence as to what exactly the defendant knew as regards the deceased’s medical condition. It is just too speculative to assume that the defendant knew of the deceased’s medical condition and that therefore there must be a waiver. | have to therefore reject the plaintiffs’ suggestion in this regard. Counsel for the plaintiff then referred DW2 to p.178 B1 and said that it is also open for the deceased to interpret the requirements at page 178 to say that she was more than 565 or at least 55 years and had more than, at least 15 years of service whereby she is entitled to only meet half quota. To this, DW2 countered by saying that p.178 B1 is the relevant criteria for ithe defendant’s appointment/ promotion/ maintenance guidelines (attached to the defendant’s letter dated 3 February 1999 p.177 B1) and had nothing to do with the qualifying criteria for deferred benefits. DW2 also said that the defendant has paid all the overriding and compensation to the deceased prior to her death. According to DW2, before 2013, the defendant paid everything. But after 2013 when the contract was terminated, the defendant ceased all payments as these are no longer payable. On the issue of GSM Death Benefits, DW2 said that these are payable to GSMs who was promoted prior to 1996. In the case of the deceased, she was promoted to become GSM with effect from 1 January 1997. As such, GSM death benefits are not payable. [82] 172. 173. 174. With respect to the deceased’s entitlement to perpetual breakaway commission referenced to GSM P. Chandra, DW2 said that the deceased would not be entitled to the breakaway perpetual commission even if P. Chandra is still a GSM because the deceased’s Principal Agency Agreement terminated upon her death and this in turn terminated her GSM-SA. As for the accuracy of calculations DW2 said that (as far as he was aware) the calculations tendered by the defendant are correct. DW2 explained that his job is to make sure that the system calculates the commission correctly. He confirmed that there is still some “human input” prior to calculations being finalized. As such, he agreed that the calculations are not entirely systems-based. DW2 also said that Group Renewal Policy is based on the defendant's circular entitled Non-Contributory Group Schemes Coverage for qualified field personnel for the period from 1 May to 30 April of each year. As such for the period of May 2012 to 30 April 2013, the deceased must meet the quota of minimum at least RM300,000.00 to qualify to get this coverage. But she did not meet her quota for 2011 as her production was only RM291,754.00. Therefore, the deceased was not covered under this group insurance. DW2 went on to explain that there is no half-quota for this benefit. [83] 175. 176. 177. 178. To round off, it was DW2’s evidence that with the termination of the Principal Agency Agreement and the GSM-SA, the estate is not entitled to the breakaway perpetual compensation and overriding commissions. DW2 said that as far as the defendant’s records are concerned, they have paid all the overriding commissions and other monetary compensation prior to the death of the deceased. Thus, based on clause 14 (p.141 B1) once the GSM passes away, the Principal Agency Agreement and GSM-SA is terminated and there is no commission payable thereafter. DW2 said that the GSM-SA is to be read together with the Principle Agency Agreement. And if the latter is terminated for whatever reason, then the GSM-SA shall also automatically be terminated. DW2 also said that the agency office management expenses even if incurred by P2 for having to service the policies under the Agency which were transferred to P2, Is not payable to P2. Ultimately, | concluded that the evidence and explanations that were rendered by DW2 in respect of each and every item that formed part of the Estate claim is to be preferred. | find that DW2’s evidence was not credibly neutralised or repudiated during his cross-examination. Of course, the plaintiffs’ did put their case to DW2 but that’s as far as it goes and beyond that | am of the view that the plaintiffs had not proven their case with respect to the items that were claimed as part of the Estate claim. [84] 179. | find that all monies that were due to the estate have been paid and | do not find any error in terms of the defendant’s calculation. | also do not find any erroneous interpretation by the defendant of the Principal Agency Agreement, the GSM-SA or the SoR. Thus, | agree that upon the demise of the deceased, the Principal Agency Agreement is terminated and with that the GSM-SA also is automatically terminated. All the commissions and benefits payable thereunder will cease, except for whatever amounts that have accrued to the benefit of the estate. | find no evidence that there is any amount which is still due and payable to the estate of the deceased and which remains outstanding to-date. Outcome 180. To conclude on this point, on the whole | found P1’s evidence vis-a-vis the Estate claim to be inherently improbable, unproven and unsupported by any cogent and corroborative evidence. In the result, for the reasons discussed above, | find that the plaintiffs have not discharged their burden of proving on a balance of probabilities the Agency Claim and the Estate claim. The plaintiffs’ claim(s) (i.e. the Agency claim and the Estate claim) are therefore dismissed with costs of RM20,000.00 (subject to allocator). 4 S. Nantha Balan Judge 7 Court of Appeal Putrajaya Date: 26 November 2020 Legal representation: For the Plaintiffs H.R.Dipendra Farez Jinnah Nadhirah Amalina Messrs Farez Jinnah, Advocates & Solicitors A-11-05, Plaza Taragon Kelana, No.3, Jalan SS 6/6, Kelana Jaya, 47301 Petaling Jaya, Selangor Darul Ehsan. Tel: +6012 659 0496 Fax: +603 7887 5481 [Ref: FJ.AM.GE.L128] For the Defendant Wong Hok Mun Koh Pei Siah (Elaine) Messrs Azim, Tunku Farik & Wong Advocates & Solicitors Sth Floor, Wisma Badan Peguam Malaysia, 2 Lebuh Pasar Besar, 50050 Kuala Lumpur. Tel: 03-2697 0355 Fax: 03-2693 8060 [Ref: 7.107.63] Cases: American International Assurance Co Ltd v Koh Yen Bee (f) [2002] 4 MLJ 301,[ 2002] 4 AMR 3885, [2002] 4 CLJ 49 CA Merbok Hilir Berhad V Sheikh Khaled Jassem Bin Mohammad (Berniaga Sebagai Petroserv v Sheikh Khaled Jassem Bin Mohammad Jassem Al- Thani (T/A Petroserv General Trading Establishment) And Other Appeals [2013] 5 MLJ 407, [2013] MLUU 552 CA [86] Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd and others [1986] AC 80, [1985] 2 All ER 947, [1985] 3 WLR 317, [1985] 2 Lloyd's Rep 313 PC United Asian Bank Bhd v Tai Soon Heng Construction Sdn. Bhd. [1993] 1 MLJ 182 SC. Paul Murugesu s/o Ponnusamy (As Representative of Nalamah d/o Sangapillay (Deceased) v Cheok Toh Gong & Ors [1996] 1 MLJ 843 SC Braganza v BP Shipping Ltd and another [2015] UKSC 17, [2015] 2 Lloyd's Rep 240, [2015] 1 WLR 1661, [2015] 4 All ER 639 UKSC [87]