BAHRULMAZI TRAVEL AND TOURS SDN BHD FIRDUS BIN ABD GHANI

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF KUALA LUMPUR CIVIL SUIT NO. 22NCVC-86-02/2017 BETWEEN BAHRULMAZI TRAVEL AND TOURS SDN BHD …PLAINTIFF (Company No. 208552-V) AND FIRDUS BIN ABD GHANI …DEFENDANT (IC No. 580819-02-5729) GROUNDS OF JUDGMENT A. INTRODUCTION [1] This action was brought by the Plaintiff company (BTTSB) against the Defendant for the recovery of monies allegedly obtain by way of fraud, breach of fiduciary duty and breach of trust by the Defendant. The monies sought were a total of (49) forty-nine cheques (P2 1-49) made out from the Plaintiff into the Defendant's personal account totalling a sum of RM3,810,171.00 during the period 18.8.2009 to 22.6.2010. 1 B. BACKGROUND OF THE CASE [2] The Plaintiff was a company incorporated in 1993, having registered and/or business addres at No. 48, Jalan Perda Selatan, Bandar Perda, 1400 Bukit Mertajam, Pulau Pinang. Plaintiff, as its principal activity, carried on business in arranging “Umrah” and “Haji” packages. The Plaintiff has appointed the Defendant as the manager for Taman Sri Gombak’s branch and one of the cheque signatories for the Plaintiff. [3] Plaintiff has appointed Defendant as manager in Plaintiff's business branch at No. 18. SG 3/2, Taman Sri Gombak, 68000 Batu Caves, Selangor. The Plaintiff has also given permission to the Defendant including as the signatory of bank checks especially at Maybank Islamic Berhad branch of Jalan Gombak, Kuala Lumpur according to account No. 120740. [4] While the Plaintiff was updating and reviewing the company's account, the Plaintiff found that the Defendant had withdrawn money from Maybank Islamic Berhad account amounting to RM3,810,171.00 for the period 18.8.2009 to 22.6.2010, a period before the Defendant established his own company, FAG Travel and Tours Sdn. Bhd. 2 [5] As a result of reviewing the documents of the Plaintiff's company, the Plaintiff found that there were no supporting documents proving the withdrawal of RM3,810,171.00. The Plaintiff then obtained copies of 49 checks from Maybank Islamic Berhad on 20.10.2010 and found that the Defendant had issued the checks amounting to RM3,810,171.00 in his name by fraud and without permission from the Plaintiff. The payments claimed by the Plaintiff were all paid out from the Plaintiff’s account Maybank Islamic Bhd. Gombak Branch (Account No 120740) whereby all the 49 cheques were issued and signed by the Defendant made payable to his personal account. [6] Plaintiff alleged that the Defendant had breached his fiduciary responsibility against Plaintiff and has committed breach of trust when issuing a sum of RM3,810,171.00 from the 49 cheques in the name of Defendant without Plaintiff's permission. [7] For that reason, the Plaintiff has claimed from the Defendant as follows: [a] Money amounting to RM3,810,171.00; [b] Exemplary damages because of breach of fiduciary duty and breach of trust to be assessed by the court; [c] Interests; 3 [d] Costs; and [e] Other reliefs. C. THE SUBMISSIONS [8] The Plaintiff claimed that there were no supporting documents for all the 49 cheques based on the forensic investigation by the accountant and the auditor of the Plaintiff. The monies taken from the cheques were without the authorization of the Plaintiff. The Plaintiff submitted that the Defendant has failed to prove that all the 49 cheques were for the purpose of purchasing flight tickets and other expenses. [9] The Defendant contended that he was not the manager of the Plaintiff at that material time but he was appointed as a consultant where his primary scope of service to the Plaintiff was to conduct the purchase of flight tickets for Haji and Umrah packages. The Defendant was paid a commission of RM200 per flight tickets on each successful transaction. There was also no employment contract with the Plaintiff. The Defendant did not deny signing and issued all those cheques under his name and subsequently credited in his personal account. The arrangement of crediting into his personal account was mainly to facilitate the payment of flight ticket which normally paid in cash and also for his commission. 4 [10] According to the Defendant all the 49 cheques were for the purchasing of flight tickets and payment of Visas. All the transactions were with the permission and within the knowledge of the Plaintiff. Furthermore, before the issuance of the cheques for the payment of the flights ticket, it must be supported by documentation approved by the Plaintiff. D. THE ISSUES [11] The issued to be tried are as follows: [a] Whether the Defendant has acted fraudulently, wrongfully and without the Plaintiff’s authorisation when he issued the 49 cheques (P2 1- 49) under his name totalling RM3,810,171.00. [b] Whether the Defendant has breached his fiduciary duties against the Plaintiff when all the 49 cheques totalling RM3,810,171.00 were issued under his name thus has committed a breach of trust. [c] In the alternative, whether the Defendant has fulfilled his obligation based on the arrangement that was agreed by both parties and/or on a reasonable standard provided by the law. 5 [d] Whether the Plaintiff has authorised the Defendant and/or has given an approval to issue the 49 cheques totalling RM3,810,171.00 under the Defendant’s name. [e] Whether the Plaintiff is entitled to claim the amount RM3,810,171.00 from the Defendant. [f] Whether the Plaintiff’s claim is time barred. [12] Having considered the issues submitted by the parties, I am of the view that there is only one issue to be determined that is; whether all the 49 cheques issued by the Defendant were with the authority and/or knowledge of the Plaintiff. If the answer in the negative, whether the Defendant has acted fraudulently or wrongfully in that he has breached the fiduciary duty or breached of trust. E. ANALYSIS AND FINDING [13] It was not disputed that all the 49 cheques were issued by the Defendant, who is the alternate signatories, under his name totalling RM3,810,171.00. It was also not disputed that the Defendant signed all those cheques and later credited into his personal account. This position was supported by PW1. However, the Defendant only signed those 6 cheques when it was presented to him after an approval was obtained. According to the Defendant, each and every cheque is supported by voucher and invoice from the account department in Gombak and it must have prior approval from PW3. Therefore, there will be no issuance of cheque without the supporting documents. [14] DW2, the Plaintiff’s account officer at that material time in Gombak branch who is directly responsible to Plaintiff, testified he is the one who faxed the invoices which itemised the flight details, number of Jemaah and total payment to be made for the approval of Plaintiff. DW2 is responsible to prepare all supporting documents and to obtain the Plaintiff’s approval. Upon receiving the approval and endorsement by PW3, DW2 will then prepare the cheques for the Defendant’s signature under the Defendant’s name. DW2 confirmed that it was his handwriting on all 49 cheques including the cheque approved and signed by the Plaintiff (D3). DW2 added the reasons the cheques were made under the Defendant’s name so that the Defendant can made cash payment to the travel agency for each Jemaah and also secure the agreed commission. There is also no receipt been issued for the payment of flight ticket since the ticket itself is the proof of payment. In respect of the e-ticket (IDD 10 and IDD11), DW2 testified it were a computer print out of Adinas Travel and Tours which was produced in ordinary use. As the admissibility of IDD 10 and IDD11, 7 DW2 himself testified that the e-ticket were computer print out and as such it is sufficient to admit as exhibits without him issuing a certificate under Section 90A Evidence Act 1950. Therefore IDD10 and IDD11 are to be admitted as D10 and D11. [15] DW2 also testified that since he started work with the Plaintiff, the Defendant was already been given the authority by the Plaintiff to sign cheques for the Gombak branch. DW3, who is the predecessor of DW2 testified that it was his responsibility to prepare all the documents for payment and to request the approval of the Plaintiff. When the approval was obtained, he will then prepare the cheques for the payment of the flight tickets under the Defendant’s name. According to DW3 the purpose of issuing the cheques under the Defendant’s name was to enable the Defendant have cash so that payment can be made for reservation and securing the time and date of the flight as requested by the clients. All the relevant document with regard to payment from those cheques were kept in Gombak branch and copy to Penang branch and this position was well within the knowledge of the Plaintiff. This standard practice of work was then followed by DW2. However, PW2 in cross examination did not check the previous practise of the Gombak branch on the issuance of cheques. DW3 also testified that all the monies obtained from the client were utilised for them and there were no complained or discrepancies arises therefrom. 8 [16] DW4, an executive in charge for Visa Umrah employed by the Plaintiff, testified that once the application of Visa was approved, he will inform the Defendant for the flight ticket to be confirmed. It was the Defendant responsibility to liaise with the airline or agent. [17] I also observed that D3, were other cheques signed by the Defendant during the material time. PW2 confirmed that D3 had supportive documents and further agreed that it was possible that all the 49 cheques have supportive documents and had obtained the approval from the Plaintiff. [18] PW2 in her testimony confirmed that the practise of issuing cheques in the Defendant’s name was for the purpose of the ticket purchase and visa where it came from the monies received from the Umrah and Haji customers. To my mind, since the money was utilised for the purpose intended, I could not see that the Plaintiff had suffer financial loss in respect of all the 49 cheques. This was also supported by the fact that the Plaintiff’s financial records did not carry a deficit of cash flow of the disputed figure of RM3,810,171.00 for year 2010-2011. Although the Plaintiff pleaded that there was a forensic investigation report conducted by the accountant and auditor on the appropriation of the monies by the 9 Defendant, but the Plaintiff failed to furnish such report or the calling of the accountant or auditor the verify otherwise. [19] At this juncture, I am inclined to accept the evidence of DW2, DW3 and DW4 in respect of the standard in work practice of Gombak branch with respect of process of payment of tickets for Umrah and Haji. From the testimonies, I am satisfied that the practise of issuing cheques under the Defendant’s name for the purchase of flight tickets had been a normal business practised and accepted by the Plaintiff. These facts remained unrebutted by the Plaintiff when he was unable to produce evidence in respect cheques made for the payment of flight ticket other than under Defendant’s name. [20] From the evidence, I concluded that there was a poor financial management on the part of the Plaintiff. PW3 himself confirmed that director in charge of the finances of the company but he did not pay much attention on the financial records including bank statement. The audit of the company was not conducted for several years and there was also a failure or late in the filing of the audited account. PW2 even agreed in the balance sheet of audited account for 2011, 2012 and 2013. As reflected in the audit report D[6](A)(B) and (C) respectively, there were no deficit of RM3,810,171.00 which would have been apparent if such loss to occur in 10 2009 and 2010. Although the Plaintiff’s account has been continuously audited by independent auditor but there was never any issue raised with regards to any of the 49 cheques. [21] Taking into account of the evidence before me and the non- rebuttable by the Plaintiff, I believed that the Defendant had utilised the money from those 49 cheques, save in so far as to the commission, for the purpose of purchasing flight tickets. [22] The Plaintiffs also alleged fraud against the Defendant. As for the standard of proof, the Plaintiff is only required to prove the fraud in a civil claim on a standard of a balance of probabilities. The test has been put to rest in the Federal Court cases of Dato' Prem Krishna Sahgai v. Muniandy Nadasan & Ors [2017] 10 CLJ 385 and Sinnaiyah & Sons Sdn Bhd v. Damai Setia Sdn Bhd [2015] 7 CLJ 584. [23] Fraud implies some base conduct and moral turpitude and a person is taken to have acted fraudulently or with intent to defraud if he acts with the intention that some person be deceived and by means of such deception that either and advantage should accrue to him or injury, loss or detriment should befall some other person. That is what is known as 11 "fraud" or "fraudulently". (see Hock Hua Bank (Sabah) Bhd v. Lam Tat Ming & Ors [1995] 1 LNS 80; [1995] 4 MLJ 328. [24] Critically, it must be borne in mind that the burden of proving that the Defendant has committed fraud rests upon the Plaintiff. It must be borne in mind that in an action in fraud, when fraud is pleaded, bare allegation of fraud without particulars are to be disregarded by Court. In this regard, there was in fact no evidence led by Plaintiff that rebutted the evidence and testimony of the Defendant and his witnesses in regard to those cheques transaction that were done in accordance with the standard practise of the company for the purchasing of flight tickets. Based on the evidence led, there was justification for the Defendant receiving the sums of monies that made up the total amount of RM RM3,810,171.00 for the purpose of payment flight tickets and his commission. The Plaintiff failed to give definite facts pointing to the fraud as to satisfy the Court that those facts which make it reasonable to allow the Defendant to raise his defence. On the balance of probability, I find that the Plaintiff has failed to prove that the Defendant has committed fraud. 12 [25] I also observed that in this case the RM3,810,171.00 was the money paid by Jemaah to the Plaintiff for the arrangement of Umrah and Haji. There was no evidence before me that there was any single complain from any Jemaah in not getting such services from the Plaintiff. Thus, it would be reasonably concluded that the monies paid by the Jemaah to the Plaintiff and in turn to the Defendant were utilised for the purpose of Umrah and Haji and the agreed commission. On the other premise, indeed, whether a fiduciary or otherwise, there was simply a basis to support that these monies were paid to the Defendant for the Plaintiff business in accordance with the standard practise of the company. With the evidence above, I am inclined that the whole episode was mainly contributed by poor management in accounting by the Plaintiff and lack of or absence or otherwise poor in auditing process. I find that there was no breach of fiduciary duty, if any and breach of trust on the part of the Defendant. As such, the payments received by the Defendant were with justification or lawful authority of the Plaintiff and therefore breach of trust also could not arise. It follows that the issue on time barred raised by the Defendant is no longer a matter to be dealt with. In the conclusion, by reason of foregoing I therefore on balance of probabilities find that the 13 Plaintiff has failed to prove its claim against the Defendant, therefore the Plaintiff’s claim is dismissed with cost of RM50,000.00 (subject to allocator fee). t.t. ROZANA BINTI ALI YUSOFF HIGH COURT JUDGE KUALA LUMPUR Dated: 21 November 2020 14 Case(s) referred to: 1. Dato' Prem Krishna Sahgai v. Muniandy Nadasan & Ors [2017] 10 CLJ 385. 2. Sinnaiyah & Sons Sdn Bhd v. Damai Setia Sdn Bhd [2015] 7 CLJ 584. 3. Hock Hua Bank (Sabah) Bhd v. Lam Tat Ming & Ors [1995] 1 LNS 80; [1995] 4 MLJ 328. Legislation(s) referred to: 1. Evidence Act 1950. 2. Rules of Court 2012. 15 Counsel for the Plaintiffs: Messrs Amareson & Meera Advocates & Solicitors 1st Floor, No. 1D King Street 10200 PULAU PINANG Counsel for the Defendant: Messrs Vin Law Co. Advocates & s Solicitor, Suite 6.05, 6th Floor, Wisma E & C No. 2, Lorong Dungun Kiri, Damansara Heights 50490 KUALA LUMPUR 16