KASI A/L K.L. PALANIAPPAN GAMELAN RENTAK SDN BHD

BA-22NCvC-200-04/2018 Kand. 95 18/07/2024 15:03:27 DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM DALAM NEGERI SELANGOR DARUL EHSAN, MALAYSIA GUAMAN SIBIL NO: BA-22NCVC-200-04/2018 ANTARA KASI A/L PALANIAPPAN [NO. K/P:581025-10-6855] …PLAINTIF DAN GAMELAN RENTAK SDN BHD [NO. SYARIKAT : 543993-P] …DEFENDAN (Melalui Tindakan Asal) Dan ANTARA GAMELAN RENTAK SDN BHD [No. Syarikat : 543993-P] …PLAINTIF DAN KASI A/L K.L. PALANIAPPAN [No. K/P: 581025-10-6855] …DEFENDAN (Melalui Tindakan Balas) 1 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal GROUNDS OF JUDGMENT Introduction [1] The present dispute arises from the Plaintiff’s claim on a piece of land measuring 0.99 acres purchased by the Defendant. He claims that he financed the acquisition to the extent of 35% of the purchase price. He now claims that the Defendant holds the said land on trust for him and he is the beneficial owner thereof, and seeks inter alia, a declaration to that effect. The salient facts [2] The Defendant is a property development company incorporated for the purpose of carrying out the business of property development in Bandar Damansara Perdana. Towards this end, the Defendant purchased a 3.54 acres land to develop a mixed development known as Ritze Perdana, which comprised of residential and commercial properties. [3] To facilitate the Ritze Perdana development, MK Project Management Sdn Bhd, an affiliated company, was appointed the Project Manager for the project. By an agreement dated 3.11.2003, MKPM was responsible for the construction and development of Ritze Perdana. A Power of Attorney was also granted to MPKM to execute all acts necessary for the project. The Plaintiff held 35% shares in MKPM. 2 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal [4] Sometime in 2006, the Defendant purchased another 3 parcels of land from Saujana Triangle Sdn Bhd with a view to future development of the lands. The first two parcels measured 0.8 acres and 0.58 acres and were formerly held under master title H.S(D) 222400 PT 44016 Mukim Sungei Buloh, Daerah Petaling, Negeri Selangor. (“the 1.38 Land”). The 1.38 Land is not the subject master of this suit. [5] In addition to the 1.38 Land, the Defendant also purchased another parcel of land held under title H.S(D) 222399 PT 44015 Mukim Sungei Buloh, Daerah Petaling, Negeri Selangor, and measuring 0.99 acres (“the 0.99 Land”) pursuant to a Sales and Purchase Agreement (“SPA”) dated 23.3.2006 for a consideration sum of RM 8,624,880.00. The 0.99 Land is the subject-matter of the Plaintiff’s claim. [6] At the time of the execution of the SPA, the individual titles for both lands had not been issued. Subsequent to the said sale and purchase of the 0.99 Land, the vendor submitted the Master Title for subdivision and issuance of a separate document of title. A separate document of title was subsequently issued and the 0.99 land is identified as H.S.D 256291 No. P.T. 47367, Mukim Sungai Buloh, Daerah Petaling, Negeri Selangor. [7] The consent of the State Authority to transfer the 0.99 Land was obtained on 19.5.2009. Subsequent thereto, the Defendant became the registered owner. 3 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal [8] Sometime in early 2012, the Plaintiff lodged caveats on both the 1.38 Land and 0.99 Land. Parties then entered into discussion on the sale of the lands and the consequential removal of the caveats lodged. [9] The 1.38 Land was eventually sold to Cosmopolitan Avenue Sdn Bhd pursuant to a SPA dated 26.3.2015. The then directors of the Defendant passed a resolution to approve the execution of the SPA for the sale. The caveat on the 1.38 Land was duly removed to allow the sale to proceed. [10] The 0.99 Land was however, not sold. The caveat filed on the 0.99 Land remained and in 2018, the Defendant filed Originating Summons No. BA-24NCVC-113-01/2018 seeking for its removal. However, the Defendant withdrew the OS as the caveat had lapsed by effluxion of time. [11] The Plaintiff then filed a fresh caveat in March 2018 on the 0.99 Land, causing the Defendant to file Originating Summons No. BA- 24NCVC-1112-09/2018 (“OS”) to remove it. The Defendant succeeded in its OS application. The Plaintiff’s subsequent appeal to the Court of Appeal was dismissed. [12] The 0.99 Land was eventually sold in 2021 to an entity named Ratna Bina Sdn Bhd for a sale price of RM 13,000,000.00. 4 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal The Plaintiff’s claim [13] The Plaintiff claims to be a part beneficial owner of the 0.99 Land. His claim rests on the fact that he contributed 35% towards the purchase price of the said land. [14] The background to his claim arose in the following manner. The Plaintiff, together with his business partner, Tan Sri Kamal Mustapha (“TSMK”) and one Gerard Jude Timothy Pereira (“Gerard”) agreed to incorporate the Defendant as a special purpose vehicle to purchase lands which had development potential (“the Agreement”). The Agreement not reduced to writing. It was made orally and can also be inferred from the conduct of the parties. [15] The salient terms of the Agreement included the following:- (i) The monies for purchase the 1.38 Land and 0.99 Land would be advanced by the Plaintiff and TSMK in the proportion 35:65; (ii) The Defendant was to be controlled by Gerard through his nominees; (iii) MK Project Management Sdn Bhd. (“MKPM”) would be tasked with developing the lands purchased by the Defendant; and 5 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal (iv) Any profits generated by the Defendant would accrue to the Plaintiff and TSMK in the ratio 35:65. [16] In 2006, when the 1.38 Land and 0.99 Land were purchased from Saujana Triangle Sdn Bhd, the Plaintiff and TSMK provided the funds to purchase the lands in the proportion of 35:65. The funds were paid through the legal firm of Messrs SB Teh & Ho. [17] When the 1.38 Land was eventually sold in to Cosmopolitan Avenue Sdn Bhd in 2015, he received his entitlement of 35% from the sale. [18] To protect his interest on the 0.99 Land which had yet to be sold, he lodged a fresh caveat in 2018 after the earlier caveat in 2012 had lapsed in view of the Defendant’s plans to sell the land. He did so to protect his beneficial interest in the said land, having funded its purchase. [19] At the time of filing this suit in 2018, the 0.99 Land had not been sold. In view of the recent sale of the 0.99 Land, the Plaintiff has now fashioned the following reliefs to suit the facts of the case:- (i) A declaration that the Plaintiff is the beneficial owner of the 0.99 land in the percentage of 35%; (ii) A declaration that the Plaintiff is entitled to 35% of the proceeds of the sale of the 0.99 land; 6 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal (iii) A mandatory injunction that the Defendant pay to the Plaintiff 35% of the proceeds of the sale of the 0.99 land; and (iv) Costs on an indemnity basis. [20] I find no legal impediment for the Plaintiff to abandon certain reliefs which is no longer necessary in light of developments since the filing of the suit. The defence case [21] The Defendant’s version of events, is diametrically opposed to that of the Plaintiff’s. It denies the Plaintiff’s 35% beneficial interest in the 0.99 land. Instead it contends that the purchase price for the land was funded by the company, and it was a bona fide purchaser. [22] If there was a private arrangement as to the respective contribution of the Plaintiff and TSMK in relation to the purchase of the 1.38 Land and the 0.99 Land, it was a private arrangement and cannot not bind the Defendant as it was not a privy to the Agreement. In addition, it was not sanctioned by the Board of the Defendant. The counterclaim of the Defendant [23] Apart from defending the Plaintiff’s suit, the Defendant pleads a counterclaim. The Defendant claims that the Plaintiff through his nominees in the Defendant, had caused the Defendant to make unauthorized payments to P. Kasi Associates Sdn. Bhd. by the issuance of 5 cheques which amounts totaled RM 4,000,000.00. 7 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal The cheques were issued between the months of May to September 2009. [24] The Plaintiff was a director of P. Kasi Associates Sdn. Bhd. at the material time. The payment of RM 4,000,000.00 was made for invoices issued by P. Kasi Associates Sdn. Bhd between the years 2002 to 2006, but was not authorized by the Defendant’s Board of Directors. [25] As P. Kasi Associates Sdn. Bhd. had no contractual relationship with the Defendant, there was no obligation to make any payments. The Defendant therefore claims the return of RM 4,000,000.00 in this suit. Defence to the counterclaim [26] The Plaintiff’s defence to the counterclaim is this. Firstly, the payment was an incentive for the performance agreed between TSMK and him and secondly, the claim is time-barred. Issues for determination [27] It is immediately apparent that there is a divergent position taken by the parties on the facts. The outcome of this case would turn largely on a determination of the factual issues, requiring an evaluation of the oral evidence and documentary evidence adduced at the trial. [28] The factual issues can be broadly stated as follows:- 8 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal (i) Whether the Agreement between the Plaintiff, TSMK and Gerard existed containing terms inter alia, wherein the Plaintiff and TSMK agreed to fund the purchase of the 0.99 Land in the proportion of 35:65; (ii) Whether in view of the Plaintiff’s contribution, the Defendant holds the 0.99 land on trust for the Plaintiff; (iii) Whether the Plaintiff is entitled to 35% proceeds of the sale of the 0.99 land; (iv) Whether the Plaintiff fraudulently caused the sum of RM 4,000,000.00 to be paid to P. Kasi Associates Sdn. Bhd., and whether the counterclaim is time-barred; [29] Both the Plaintiff and the Defendant called only one witness to testify in support of their respective case. The Plaintiff testified on his own behalf, whilst the case for the Defendant was established through its director, N. Murugarasan a/l Nagarajoo. Analysis and findings of this court [30] The principle that the Plaintiff bears the burden of proving his case on a balance of probabilities is one that is well established. It is only when the party on whom the burden of proof lies has discharged that burden that the evidential burden shifts to the other party. It is also trite law that he who asserts the existence of certain facts, bears the burden of proving those facts. (See: Sections 101-103 of the Evidence Act, 1950, Letchumanan Chettiar Alagapan (as 9 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal executor to SL Alamelooo Achi (Deceased) & Anor v Secure Plantation Sdn. Bhd.) [2017] 5 CLJ 418, Federal Court). Whether the Agreement to fund the purchase of the 0.99 Land exists [31] The Plaintiff’s case is primarily anchored on the existence of the Agreement and the terms agreed with TSMK and Gerard. This is a critical fact which the Plaintiff would need to prove in order to establish a prima facie case for the defence to rebut. [32] Proof of the Agreement was adduced through the oral and documentary evidence adduced by the Plaintiff as follows:- (i) his oral testimony; and (ii) the Power of Attorney executed by the Defendant in favour of MKPM as the project manager of the Defendant’s project Ritze Perdana and letter dated 12.4.2011 from TSMK to the Plaintiff offering to buy out his 35% stake in the 1.38 land and 0.99 land. [33] I shall now deal with the evidence Plaintiff relies on as to prove the Agreement. [34] The Agreement was not reduced into writing. It was expressly referred to in the Statement of Claim as one that was “made partly orally and partly by conduct and/or as a result of a course of dealing between the Plaintiff, his business partner, Tan Sri Mustapha 10 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal Kamal and Gerard Jude Timothy Pereira.” (See: paragraph 3 of the Statement of Claim). [35] I find it incredulous particularly when the terms upon which parties was said to have agreed to (as stated in paragraph 15 above) are material terms. The pleadings in relation to the Agreement is startlingly ambiguous and vague. It is bereft of particulars ordinarily attendant upon the formation of an agreement. There is no mention of the details of the oral representations, particularly when, where and by whom they were made. [36] Whilst the existence of an agreement and the terms thereof can be proved by oral evidence and contemporaneous documents, it is most surprising that parties did not find it necessary to have it reduced into writing. The Agreement was not merely to establish the Defendant as a special purpose vehicle. It was also to provide that both TSMK and the Plaintiff were to fund the purchase of the lands by the Defendant in the proportion of 65:35 respectively. I find it inexplicable that such an agreement can be reached merely on an oral basis. [37] The Plaintiff is no lay person in the world of business. He admitted in cross that he is a seasoned and experienced property developer. He even agreed that he is a careful man of business. I would have expected him to safeguard his interest by insisting on a written agreement instead of leaving it to the respective parties to honour their promises. 11 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal [38] When pressed in cross examination to elaborate on the specific conduct establishing the Agreement as pleaded in his Statement of Claim, the Plaintiff was evasive. He said that the terms of the Agreement were agreed upon as the business relationship progressed. The answer he gave, was not in the least convincing. [39] To reiterate, I find imprudent in this day and age for agreements to be unwritten, in the event of a dispute. No good reason was proffered by the Plaintiff for not contemporaneously putting it in writing particularly when there was no lack of opportunity to do so. [40] The courts have been reluctant to lend credence to allegations of oral agreement; giving instead, little probative value to any attempt to prove the existence of such oral agreement. (See: Alliance Bank Malaysia Bhd v W Shalihudin bin W Ibrahim [2013] 10 MLJU 374). It has also been held that the more complicated the matter the more likely the parties were to want to enshrine their contract in some document. (See: Cheverny Consulting Ltd v Whitehead Mann Ltd [2007] 1 All ER (Comm) 124, Court of Appeal). [41] In the absence of a written agreement to prove the Agreement, I would be hesitant to give much credence to the oral assertion of the Plaintiff alone. [42] TSMK passed away on 25.7.2022, after the suit was filed but before the trial commenced. Gerard, the other party to the Agreement, was not called to testify. As parties to the Agreement, they would have been crucial witnesses to testify to both its 12 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal existence and terms. Nonetheless, both TSMK and Gerard were not named as witnesses in the Plaintiff’s List of Witnesses filed as part of the pre-trial case management directions. The Plaintiff candidly admitted that he had not included TSMK nor Gerard as potential witnesses in this suit. It is obvious that the Plaintiff had no intentions of calling them even if they were available. [43] The Plaintiff attempted to explain that Gerard was not considered as a witness as there was a fallout between them. This seems to me a convenient excuse to explain his failure to call Gerard, particularly when Gerard’s evidence can confirm the existence of the Agreement. [44] The defence urged this court to invoke s.114(g) of the Evidence Act, 1950 upon the Plaintiff’s failure to call Gerard. I am of the view that as Gerard is a material witness acquainted with the facts of the Agreement, the omission to call him attracts the presumption that if called, his evidence would be unfavourable to the Plaintiff. (See: Khaw Cheng Bok & Ors v Khaw Cheng Poon & Ors [1998] 3 MLJ 457). [45] Apart from the Plaintiff’s oral evidence, the Plaintiff referred to 2 documents to prove the existence of the Agreement. The first is the Power of Attorney executed by the Defendant in favour of MKPM as the project manager for Ritze Perdana development. Having examined the contents, the Power of Attorney does not in any way refer to the Agreement nor prove its existence. I fail to see how this document can be relied on to substantiate the Plaintiff’s case that the Agreement exists. 13 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal [46] The second document relied on is a letter dated 12.4.2011 by TSMK offering to buy 35% of the Plaintiff’s stake in the 1.38 Land and the 0.99 Land at the price stated therein. This letter was not addressed to nor issued by the Defendant. As TSMK is not a witness, the import of the letter and the discussions leading to the issuance of it, cannot be ascertained nor confirmed. It is not for this court to attempt to construe the contents without being first apprised of the context the letter was issued. [47] I am therefore not convinced that on the evidence relied on by the Plaintiff, that the Agreement exists. In short, the Agreement to establish the Defendant as a special purpose vehicle to develop lands acquired for development and that the Plaintiff was to fund 35% of the lands purchased, stands on flimsy evidence. Whether the Defendant holds 35% of the 0.99 land on trust for the Plaintiff [48] The Plaintiff claims he funded 35% of the purchase price. The 0.99 Land was bought for RM 8,624,880.00 from Saujana Triangle Sdn Bhd. This is no insubstantial sum. I find it incredible that no documentary evidence was adduced to show the amount paid. [49] The Plaintiff attempted to explain this lack of proof by stating that the monies for the purchase of the land was paid by their solicitors who was holding monies for them. In his evidence, he stated, I am unable to show proof of payment for the Lands because the funds used to purchase the Lands were paid through the legal firm of Messrs SB Teh & Ho. At that time, Messrs SB Teh & Ho held 14 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal money belonging to TSMK and me in its clients’ account. These monies were used to pay for the purchase of the 1.38 land and the 0.99 land. [50] The reason given by the Plaintiff for being unable to furnish proof of payment beggars belief. In any event, the Plaintiff could easily have called Messrs SB Teh & Ho to corroborate his testimony but the said solicitor in charge was not called to testify. [51] Even if the funds for the purchase were paid by Messrs. SB Teh and Ho from its clients’ account, at the very least, the Plaintiff must have some proof that he paid the monies to his solicitors. In cross examination, he repeatedly stated that monies were given to the solicitor to buy the land. He was vague as to the precise time it was paid to the solicitor, stating that the monies were paid sometime in 2006 or 2007. Pressed further on the existence of records of such monies being given to the solicitors, he conceded that he did not have them. [52] I find it unbelievable that the Plaintiff would not have kept any records of such substantial payment. It almost defies logic. [53] His answers given in cross examination at some points, were evasive and unconvincing. In cross examination, he initially refused to agree to the counsel’s suggestion that he lent money to the Defendant to purchase the lands. Instead he preferred to state that he advanced monies, but eventually agreed that he did in fact lent money. I fail to see the distinction and would regard his answers 15 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal as an attempt to side step the critical issue of proof that he furnished the funds. [54] The defence contends that in the absence of a trust document, or board resolution that the 0.99 Land was held in trust for the Plaintiff, there is no convincing documentary evidence to prove the creation of a trust. I find the contention to have merit. [55] Having evaluated the entire evidence adduced by the Plaintiff to prove that he contributed 35% of the purchase price of the 0.99 land, I conclude that no such payments were made as claimed. [56] The Plaintiff further referred to correspondences between him and the Defendant pertaining to the saIe of the 1.38 Land to contend that the Defendant had acknowledged his entitlement to the lands. The 1.38 Land had always been dealt together with the 0.99 Land. When the 1.38 Land was sold, he received payment from the sale in the sum of RM 7,221,547.40 being return of previous advances made by him to the Defendant. The Defendant’s letter dated 21.4.2015 confirmed this fact. [57] Having considered the contents of the letters referred to, I am not persuaded that the sale of the 1.38 Land alone suffices to establish the Defendant’s acknowledgment that the Plaintiff has a beneficial interest in the 0.99 Land. The mere fact that the Plaintiff was paid part of the proceeds for the 1.38 Land does not mean the sale of the 0.99 Land would be on the same basis. 16 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal [58] It cannot be gainsaid that a plaintiff bears the burden of establishing a prima facie case. Only if he succeeds in discharging this burden, does the burden shift to the Defendant to rebut it. If he fails, the Defendant can even rely on its silence. [59] I am guided by the Federal Court case of Letchumanan Chettiar Alagappan @ L Allagappan (as executor to SL Alameloo Achi alias Sona Lena Alamelo Acho, deceased) & Anor v Secure Plantation Sdn Bhd [2017] 4 MLJ 697 where Justice Jeffrey Tan (FCJ) held, [58] ‘The party on whom the onus probandi lies … must begin’ (Woodroffe and Amir Ali, Vol 3 at p 3192). ‘The strict meaning of the term onus probandi is this: that if no evidence is given by the party on whom the burden is cast, the issue must be found against him’ (Woodroffe and Amir Ali, Vol 3 at p 3189). ‘The principle that the party who asserts the affirmative in any controversy ought to prove his assertion, and that he who only denies an allegation may rest on his denial, until, at least, the probable truth of the matter asserted has been established, is one which has received the widest recognition. The reason is obvious: to all propositions, which are neither the subject of intuitive or sensitive knowledge or probabilised by experience, the mind suspends its assent until proof of them is adduced or as it has been said: ‘Words are but the expression of fact; and therefore, when nothing can be said to be proved’; which is found is probably what is meant by the maxim per rerum naturam, factum negantis probatio nulla est’ (Woodroffe and Amir Ali, Vol 3 at pp 3190-3191). … [60] It would pan out that the respondent, who was the plaintiff, had both the ‘burden of proof’ to make out a prima facie case as well as the initial onus of proof to adduce evidence to prove the claim. The onus 17 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal of proof would only shift to the appellants if the respondent had made out a prima facie case. … [63] There is no law which says that a claim automatically succeeds if the defence fails. A claim succeeds only if a prima facie claim is made out or the cause of action is admitted, and there is no defence. [60] I am of the view that the Plaintiff has not discharged his burden of proof to establish a prima facie case necessary for the Defendant to respond in evidence. Nonetheless, for the sake of completeness, I shall proceed to deal with the Defendant’s defence evidence in rebuttal. [61] The thrust of the defence case is that the 0.99 land was purchased from its own funds. Consequently, the said land belongs to the Defendant. [62] In support of its case, the Defendant relies on a letter from Saujana Triangle Sdn Bhd confirming that the Defendant had fully settled the purchase price of RM 8,624,880.00. This letter is dated 16.8.2018 and it is in response to the Defendant’s letter dated 19.4.2018. Having scrutinized the contents of both the letters, I do not find any reason to reject what is represented therein. It is a contemporaneous document to substantiate the defence case that it financed the acquisition of the 0.99 land. In evaluating the conflict of evidence in this case, I have also borne in mind the principle in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 that it is safer to rely on contemporaneous documents in the face of conflicting oral evidence. 18 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal [63] The defence has also referred to the cause papers in the OS filed to remove the Plaintiff’s caveat and his inconsistent statements as to his alleged rights on the 0.99 Land. The grounds of judgment of the learned High Court Judge was also cited in argument wherein the High Court in Shah Alam rejected the Plaintiff’s contention that the said land was held in trust for him by the Defendant. Instead, the High Court found that the land was purchased by the Defendant. In short, the issues in this case had already been conclusively decided by the High Court. [64] I do not consider this court to be bound by any finding made in the OS application. The issues in the OS pertained to the removal of caveat and the Plaintiff’s caveatable interest, which is distinct from the issues here. In any event, the Defendant’s reliance on the decision in the OS makes no difference to the outcome here as I find that the Plaintiff has failed to prove the Agreement and his beneficial interest in the 0.99 Land. Whether the Plaintiff is entitled to 35% proceeds of any sale of the 0.99 land [65] It is in evidence that the 0.99 Land has been sold in 2021 for RM 13,000,000.00. In view of the Plaintiff’s failure to prove that he is the beneficial owner to the extent of 35% of the 0.99 land, the question of entitlement to the proceeds of sale does not arise. 19 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal Whether the Plaintiff fraudulently caused the sum of RM 4,000,000.00 to be paid to P. Kasi Associates Sdn. Bhd [66] The Defendant counterclaims for the sum of RM 4,000,000.00 which the Plaintiff caused to be wrongly paid to P. Kasi Associates Sdn. Bhd., (“PKA”) a company in which the Plaintiff owns 70% of the shares. The Plaintiff was alleged to have caused his appointed nominees in the Defendant, Ganeswaran and Autar Singh, to issue 5 cheques between the months of May to September 2009 for a total sum of RM 4,000,000.00 from the Public Bank account of the Defendant. [67] Details of the particulars of the fraud are as set out at paragraph 39 of the Defendant’s Amended Defence and Counterclaim. The Defendant pleads that the Plaintiff had abused his fiduciary position in MKPM and conspired with it by making these unauthorized payments to PKA. The Plaintiff was then also a shareholder of MKPM. [68] In defence to the counterclaim, the Plaintiff contends that firstly, the pleaded facts do not support the allegation of fraud. Secondly, the cause of action is time-barred. I find merit in the Plaintiff’s contention. [69] The only witness for the Defendant is its present director who took office only in 2021. The facts upon which fraud is premised, pertain to matters which occurred in 2009 and earlier. DW1 was not present at the material time. I am of the view that he is not able to give valuable evidence pertaining to the unauthorized payments. 20 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal The signatories to the cheques were not called to testify. The provisions of s. 114(g) applies in this instance. [70] Further, the payments were made to PKA, a legal entity of which the Plaintiff was merely one of the directors and shareholders. No explanation was given as to why PKA was not sued instead. [71] It is trite that to pin liability on the Plaintiff, the Defendant is required to show that there is justification for the corporate veil ought to be lifted. The evidence adduced did not address this issue. As the claim is against the Plaintiff, it is all the more imperative to lead evidence to prove that he did so to enrich himself. [72] Although the Defendant alleged that the Plaintiff conspired with MKPM, it is unclear on the evidence based DW1’s oral assertion alone, how it was done. It is also strange that notwithstanding the allegation, MKPM is not cited as a party in the counterclaim. [73] The Defendant appears to be relying on the tort of conspiracy to injure which would require fulfilment of the elements of the tort, as enunciated in the Court of Appeal case of Global Ventures Network Sdn Bhd v Lokman bin Dato’ Mohd Kamal and another appeal [2018] 6 MLJ 103 as follows, …in order to make out a case of conspiracy, the plaintiff would need to establish that there was an agreement between two or more persons to injure the plaintiff; and that the acts done in execution of that agreement resulted in damage to the plaintiff… 21 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal [74] The Defendant has made serious allegations in its pleadings which to my mind ought to be proved by witnesses with direct knowledge of the matter. DW1’s evidence barely satisfies the elements of the tort of conspiracy. [75] The legal burden of proof applies equally where the Defendant seeks to establish a counterclaim against the Plaintiff. The Defendant has to discharge its burden of a prima facie case before the Plaintiff is required to lead evidence in rebuttal. [76] The weightier issue however, is the defence of limitation raised which if it succeeds, would defeat the Defendant’s counterclaim. As the cause of action is founded on the tort of conspiracy to injure, section 6(1)(a) of the Limitation Act 1953 requires the Defendant to bring this action within 6 years. The unauthorized payments were allegedly made in 2009. The suit ought to have commenced within 6 years from 2009, but was only filed in 2018. [77] In an anticipated response to the issue of limitation, the Defendant pleaded in paragraph 33 of its Amended Defence and Counterclaim that these payments were only discovered in the course of reconciling its records for the purpose of preparing its statutory accounts. [78] It is obvious that the Defendant is relying on section 29 of the Limitation Act 1953, which provides, Postponement of limitation period in case of fraud or mistake 29. (1) Where, in the case of any action for which a period of limitation is prescribed by this Act, either— 22 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal (a) the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent; or (b) the right of action is concealed by the fraud of any such person as aforesaid; or (c) the action is for relief from the consequences of a mistake, the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it: (Emphasis added) [79] Having perused the Defendant’s pleading, I find it devoid of any mention as to the precise time the statutory records were prepared, which was supposed to coincide with the discovery by the Defendant. The witness statement of DW1 is a mere repetition of the pleadings, and failed to mention the time of discovery. [80] The Defendant is obliged to prepare its statutory accounts annually. There is no explanation as to how the payments made were missed until 2018. [81] At paragraph 40, the Defendant pleaded “Upon discovery of the unauthorized payment, the board of directors of the Defendant immediately took action to terminate the services of MKPM and change the bank signatories.” DW1 in his testimony stated that the services of MKPM were terminated in December 2009. This would mean that the Defendant discovered the unauthorized payments at the very latest, in December 2009. In view of this, the filing of the instant suit in 2018 is clearly out of time. 23 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal [82] For these reasons, I find the counterclaim not proven. Conclusion [83] Premised on the foregoing conclusions, I now make the following orders:- (i) the Plaintiff’s claim against the Defendant is dismissed; (ii) the Defendant’s counterclaim against the Plaintiff is dismissed; and (iii) no order is made as to costs. Dated : 18th day of July 2024 -sgd- ....………………..….... Alice Loke Yee Ching Judge High Court in Malaya at Shah Alam 24 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal Counsel for the Plaintiff : Mr. Yeoh Cho Kheong (Miss Villie Nethi with him) Messrs. Ranjit Singh & Yeoh Counsel for Defendant : Datuk George Varughese (Mr. T. Gunaselan, Mr. Johan Mohan b. Abdullah and Miss Wan Fazila Salmi binti Wan Yaacob with him) Messrs. Gamelan Rentak Sdn Bhd 25 S/N VRxADNOxF0ex0y5H57lUBg **Note : Serial number will be used to verify the originality of this document via eFILING portal