(2019) 10 BLR

1
Usniakaya Sdn Bhd
v
Kidara Sdn Bhd
5

High Court, Sabah and Sarawak (Kota Kinabalu) –​Civil Appeal

No. BKI-​12BNCvC-​15/​9-​2018
Celestina Stuel Galid JC
February 26, 2019
10
Contract –​Breach –​Construction agreement –​Claim for balance due and owing under
revised certificate of final payment –​Defendant contending monies paid to plaintiff
through third parties based on letter of authorisation purportedly issued by plaintiff –​
Whether defendant discharged burden of proving it was entitled to make payment to
plaintiff through third parties pursuant to letter of authorisation
15
The respondent (“the plaintiff”) was engaged by the appellant (“the defendant”)
as its sub-​contractor for a construction project. The plaintiff’s claim against the
defendant is for breach of contract by its failure to pay the sum of RM637,805.78
being the sum outstanding under the revised certificate of final payment. The
20
defendant in response contended that it had, pursuant to the letter of authorisation
issued by the plaintiff’s director (“PW1”), made payments totalling RM490,000 to
the plaintiff through the plaintiff’s agent, one Chia Get Peng (“the first third party”);
and that the said payment was collected on behalf of the plaintiff by the first third
party and/​or the first third party’s son Chia Poh Seng (“the second third party”). By
way of third party proceedings, the defendant sought indemnity from the third
25 parties who failed to defend the third party action during the trial. The plaintiff
argued that it had never authorised the defendant to make payments to the second
third party or one Seow Wei Wei (“Seow”) and that the first third party was only to
collect the cheques on its behalf. The Sessions Court found in favour of the plaintiff
and held the defendant liable to pay the plaintiff RM450,000 notwithstanding the
defendant’s claim of payments to the third parties.
30
The defendant appealed against the said decision on the grounds, inter alia, that
the Sessions Court had failed to take into account the fact that the plaintiff had
in its pleadings, denied the existence of the said letter of authorisation and had
departed from its pleaded case; that the Sessions Court had erred in failing to
consider that the plaintiff had failed to disclose that it had received RM40,000 from
35
the defendant through the first third party; and that the decision of the Sessions
Court was against the weight of the evidence.

Issue

40 Whether the defendant had discharged the burden of proving that it was entitled
to pay the monies to the third parties and/​or Seow in purported reliance on the
letter of authorisation.

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Held, dismissing the appeal with costs 1

1. The inconsistencies in the plaintiff’s pleaded case, particularly with regard to

the said letter of authorisation if at all, merely goes to the credibility of PW1
and the weight to be attached to his evidence. It is not a radical departure
5
from the pleadings nor can it be said that the defendant had been taken
by surprise or that the defendant had been prejudiced, embarrassed or
misled by the turnaround. On this basis there is no merit to the defendant’s
contention that the Sessions Court had erred in failing to consider that the
plaintiff in its pleadings had completely denied the existence of the letter
of authorisation; that the plaintiff had departed from its pleaded case in the 10
course of the trial without any amendments being made to its pleadings;
and in allowing the plaintiff to raise unpleaded issues. [paras 14, 23-​24]
2. It being the defendant’s case that the payment of RM490,000 to the plaintiff
was made through the third parties and Seow, the burden was therefore on
the defendant to show that the said payment was in fact made and binds 15
the plaintiff. In this regard and on the totality of the evidence, the defendant
has failed to discharge that burden. [paras 41-​42]
3. The evidence on the payment of the RM40,000 is insufficient to prove the
defendant’s case that the letter of authorisation allowed them to pay the
sums owed to the plaintiff through the third parties and/​or Seow. On the
20
contrary, it only goes to show that there was payment made or deposited
into the plaintiff’s account but falls short of establishing that the alleged
arrangement was with the agreement of the plaintiff so as to bind the plaintiff
by the rest of the other payments that were made by the defendant to the
third parties and/​or Seow. [paras 46-​47]
4. The inconsistencies in PW1’s testimony on the existence of the letter of 25
authorisation and the deposit of RM40,000 would not sway the court’s
finding that the defendant was not entitled to rely on the said letter of
authorisation to make payments to the third parties and/​or Seow. The
evidential burden had not shifted to the plaintiff so that PW1’s failure to
disclose the letter of authorisation and/​or the deposit of RM40,000 would 30
be of material consequence to its case. [paras 51-​52]
Appeal status: No appeal.

Cases referred to by the court

Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 AMR 601; [2015] 2 MLJ 35
441; [2015] 2 CLJ 453, FC (ref)
Iftikar Ahmed Khan (sebagai wakil bagi harta pusaka Sardar Mohd Roshan Khan) (si
mati) v Perwira Affin Bank Berhad (dahulunya dikenali sebagai Perwira Habib Bank
Malaysia Berhad) [2017] 8 AMR 517; [2018] 1 CLJ 415, FC (foll)
Lee Ing Chin @ Lee Teck Seng & 4 Ors v Gan Yook Chin (p) & Anor [2003] 2 AMR 357;
[2003] 2 MLJ 97, CA (ref) 40
Merita Merchant Bank Singapore Ltd v Dewan Bahasa dan Pustaka [2015] 1 AMR
575; [2014] 9 CLJ 1064, FC (ref)

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 Usniakaya Sdn Bhd v Kidara Sdn Bhd
(2019) 10 BLR Celestina Stuel Galid JC 3

1 Superintendent of Lands and Survey (4th Div) & Anor v Hamit bin Matusin & Ors
[1994] 3 MLJ 185 (ref)
Tenaga Nasional Berhad v Greatpac Sdn Bhd [2016] MLJU 384 (ref)
Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 (ref)
5 Legislation referred to by the court
Rules of Court 2012, Order 18 r 11

Ryan Soo and Chan Chee Ching (RYCO Law Firm) for appellant
Catherine Chau (Catherine Chau & Associates) for respondent
10
Celestina Stuel Galid JC

Introduction

The appeal
15
[1]‌  The parties herein shall be referred to as they were in the court below i.e. the
defendant (“the appellant herein”) and the plaintiff (“the respondent herein”).

[2]‌  By a notice of appeal dated September 9, 2018, the defendant appealed against
the decision of the Sessions Court after trial in allowing the plaintiff’s claim in the
20 sum of RM450,000 with interest at 5% per annum from November 16, 2016 until
the date of full and final settlement and costs in the sum of RM15,700 with interest
at 4% per annum from August 27, 2018 until the date of full settlement.

The dispute

25
[3]‌  The dispute in this case revolves around the payment due to the plaintiff
by the defendant for the construction works done by the plaintiff in the project
known as “Cadangan Membina dan Menyiapkan Balai Polis Jinjang, Kuala Lumpur
dan Kerja-​Kerja Luar di atas Lot 7642 and 7644, Mukim Batu, Wilayah Persekutuan,
Kuala Lumpur” (“the project”).

30 [4]‌  The plaintiff claimed that in breach of the terms of contract between them, the
defendant had failed to pay the sum of RM637,805.78 being the outstanding sum
under the revised Certificate of Final Payment dated January 26, 2015.

The defence

[5]‌  The defendant admitted engaging the plaintiff as a subcontractor to carry out
35
the construction works on the project and that the amount of the revised certificate
of final payment was RM637,805.78.

[6]‌  However, the defendant averred that it had on various dates paid the plaintiff
a total sum of RM490,000 through its agent, one Chia Get Peng (“first third
40
party”) who had been authorised via a letter dated January 7, 2015 (“the letter of
authorisation”) by the plaintiff through its director, one Chan Kien Woh (“PW1”)
to collect the outstanding sum due from the defendant on the plaintiff’s behalf. It

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was further averred that the sum collected by the first third party and/​or through 1
the first third party’s son, Chia Poh Seng (“second third party”) are deemed to have
been made to the plaintiff.

[7]‌  The defendant also brought third party proceedings against both the first
5
and second third party for an indemnity in respect of the plaintiff’s claim to the
extent of RM490,000.

[8]‌  The first and second third party shall be referred to herein as the “third parties”
unless specifically stated otherwise.

[9]‌  The third parties filed a defence to the third party action stating that there was 10
an arrangement and agreement between the plaintiff and the first third party on
the commission and payments for services rendered by the first third party and
the debt-​collector named Steven as follows:

(A) Total sum to be collected: RM637,805.78 15

(i) Steven’s 50% share of (A): RM318,902.89

(ii) The plaintiff’s 25% share of (A): RM159,451.44
(iii) The first third party’s 25% share of (A): RM159,451.44
20
[10]  The third parties did not however defend the third party action during the trial.
The first third party testified as a subpoenaed witness (“DW6”) for the defendant.

The Sessions Court’s decision

[11]  The learned Sessions Court judge found in favour of the plaintiff and also, 25
in favour of the defendant in respect of the third party action. There is no appeal
against the decision of the Sessions Court in respect of the third party action.

[12]  In essence, the learned Sessions Court judge accepted the plaintiff’s evidence
that the letter of authorisation did not authorise the defendant to make payments
to the second third party and Seow Wei Wei (“Seow”), that the defendant was only 30
supposed to issue cheque payments to the plaintiff and the first third party was
only to collect the cheques on behalf of the plaintiff.

[13]  Thus, the learned Sessions Court judge found that the defendant was liable to
pay the sum of RM450,000 to the plaintiff notwithstanding the defendant’s claim
35
of payments to the third parties.

The defendant’s grounds of appeal

[14]  The defendant has grounded its appeal on the following grounds:
40
(1) The learned judge erred in law and in fact in finding that the respondent
has proven its case against the appellant on a balance of probability.

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 Usniakaya Sdn Bhd v Kidara Sdn Bhd
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1 (2) The learned judge erred to failing to consider that in the respondent’s
pleadings, it had completely denied the existence of its letter of authorisation
dated January 7, 2015 where the respondent had authorised its person in
charge, the first third party to collect the outstanding debt from the appellant
5
on its behalf (“the letter of authorisation”).
(3) The learned judge erred in law and in fact in failing to consider that the
respondent had departed from its pleaded case in the course of the trial
without any amendment being made to its pleadings, which departure
ought not to have been condoned by the court.
10 (4) The learned judge erred in law and in fact in allowing the respondent to
raise unpleaded issues.
(5) The learned judge made an erroneous finding of fact which was contrary
to the evidence at the trial when he found that the appellant ought not
to have made payment of the outstanding debt to the first third party (or
15 anyone else), other than the respondent.
(6) The learned judge erred in law and in fact in failing to take into account,
relevant evidence in that the respondent had previously accepted without
complaint, the payment of RM40,000 remitted to it by the first third party,
and which sum had been paid by the appellant to the first third party
20 through his representative.
(7) The learned judge erred in law and in fact in failing to consider that the
respondent had, through PW1, known of the payment of RM40,000 as
early as April 2015, and had therefore known that the appellant had made
payment to the third party pursuant to the letter of authorisation as early as
25 April 2015, instead of directly to the respondent, and who did not complain
about it.
(8) The learned judge erred in law and in fact in giving undue weight to the
oral evidence of PW1 who is not a credible witness for, inter alia, having
denied the existence of the letter of authorisation and withheld material
30 facts from the court in its pleadings.
(9) The learned judge erred in law and in fact in failing to consider that the
respondent had, in its pleadings, failed to disclose and to give credit for the
payment of RM40,000 received by it from the appellant through the first
third party.
35
(10) The learned judge erred in law and in fact in failing to construe the contents
of the letter of authorisation in its proper context.
(11) The learned judge erred in law and in fact in failing to find that by the plain
words of the letter of authorisation, the respondent had appointed the first
40 third party as the person in charge, and who by reason thereof, was in a
position to organise his own collection process.

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(12) The learned judge erred in failing to consider the evidence of DW6, whose 1
evidence supported the existence of an arrangement between DW6 with
PW1 on the collection of the debt due from the appellant in return for
commission that was to be appropriated from the sum collected from the
appellant. 5
(13) The learned judge erred in law and in fact in awarding a sum of RM450,000
to the respondent which was contrary to and not supported by the evidence
at the trial.
(14) The learned judge erred in law and in fact in failing to find that the sum
of RM490,000 paid by the appellant to the respondent to the first third 10
party (and/​or through his representatives) in reliance upon the letter
of authorisation is a matter between the respondent and the first
third party.
(15) The award of the learned judge is contrary to established principles of law,
and is excessive and erroneous. 15

(16) The learned judge erred in law and in fact in awarding interest on the sum
awarded when the appellant had settled a sum of RM490,000 prior to the
issuance of the letter of demand by the respondent’s solicitors.
(17) The learned judge erred in law and in fact in failing to find that payment made 20
by the appellant to the first third party (and/​or through his representative)
is deemed to be payment made to the respondent.
(18) The learned judge erred in law and in fact in taking into account
irrelevant considerations and in failing to give due weight to relevant
considerations.
25
(19) The learned judge erred in law and in fact in failing to give due weight to
the evidence of the appellants’ witnesses at the trial.
(20) The decision of the learned judge was against the weight of all the evidence.

This court’s decision 30

[15]  At the outset, I remind myself the test for appellate intervention laid down
by the Court of Appeal in Lee Ing Chin @ Lee Teck Seng & 4 Ors v Gan Yook Chin (p) &
Anor [2003] 2 AMR 357; [2003] 2 MLJ 97 is as follows:
Suffice to say that we re-​affirm the proposition that an appellate court will
35
not, generally speaking, intervene unless the trial court is shown to be plainly
wrong in arriving at its decision. But an appellate interference will take place
in cases where there has been no or insufficient judicial appreciation of the
evidence. It is, we think appropriate that we say what judicial appreciation of
evidence involves.
A judge who is required to adjudicate upon a dispute must arrive at his decision on 40
an issue of fact by assessing, weighing and, for good reasons, either accepting or
rejecting the whole or any part of the evidence placed before him. He must, when

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 Usniakaya Sdn Bhd v Kidara Sdn Bhd
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1 deciding whether to accept or to reject the evidence of a witness, test it against

relevant criteria. Thus, he must take into account the presence or absence of any
motive that a witness may have in giving his evidence. If there are contemporary
documents, then he must test the oral evidence of a witness against these. He must
also test the evidence of a particular witness against the probabilities of the case.
5
A trier of fact who makes finding based purely upon the demeanour of a witness
without undertaking a critical analysis of that witness’ evidence runs the risk of his
findings corrected on appeal. It does not matter whether the issue for decision is
one that arises in a civil or criminal case: the approach to judicial appreciation of
evidence is the same.
10
The letter of authorisation –​The unpleaded point

[16]  Central to the dispute between the parties is the letter of authorisation. It
is therefore useful to reproduce it herein. The letter of authorisation which was
written on the plaintiff’s letterhead reads:
15 7th January 2015
Usniakaya Sdn Bhd
Lot 31, 2nd Floor, Block C
Phase 1, Damai Plaza,
Jalan Kolam, Luyang
88300 Kota Kinabalu, Sabah
20
Tel: 088-​256 336 /​088-​256 773
Attn: Mr. Rocky Tsen
Dear Sir,
RE: AUHTORIZATION FOR COLLECTION OF DEBT
25
With refer to the above mentioned; we hereby authorize our person in charge Mr. Chia
Get Peng to collect the outstanding debt by you on behalf of our company.
Your co-​operation on the above is very much appreciated.
Thank you.
30 Yours faithfully,
KIDARA SDN BHD
CHAN KIEN WOH
Director

35 [17]  The defendant relied on the letter of authorisation to assert that it was entitled
to and did make payments to the third parties. This was pleaded in paragraph 9
of the statement of defence.

[18]  In paragraphs 2 and 3 of its reply to defence, the plaintiff denied such
authorisation was issued, resolved, authorised or executed by the plaintiff.
40
[19]  However, the plaintiff appeared to have had a complete turnaround during
the trial when in Q & A 4 of his witness statement, PW1 who was the sole witness
for the plaintiff testified that he had written the letter of authorisation to authorise

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 8 Borneo Law Reports (2019) 10 BLR

the first third party to collect the outstanding amount owing by the defendant 1
on behalf of the plaintiff.

[20]  Notwithstanding the fact that PW1’s evidence was (a) absent in the plaintiff’s
pleading and (b) ran contrary to the plaintiff’s denial in paragraphs 2 and 3 of its reply
5
to defence, the learned counsel for the defendant did not raise an objection to this
evidence being led –​see lines 20 –​21 and line 1 of the notes of proceeding (“NOP”) at
pp 44 and 45 of the record of appeal (“ROA”). Thus, the objection raised in submission
by the learned counsel for the appellant was too late in the day –​see Superintendent
of Lands and Survey (4th Div) & Anor v Hamit bin Matusin & Ors [1994] 3 MLJ 185.
10
[21]  This issue was recently revisited by the Federal Court in the case of Iftikar
Ahmed Khan (sebagai wakil bagi harta pusaka Sardar Mohd Roshan Khan) (si mati) v
Perwira Affin Bank Berhad (dahulunya dikenali sebagai Perwira Habib Bank Malaysia
Berhad) [2017] 8 AMR 517; [2018] 1 CLJ 415 where one of the questions posed was,
“when evidence is led without objections at trial, can an appellate court reverse
of decision of the court on the sole ground that the cause of action in negligence 15
has been abandoned”.

[22]  The Federal Court reiterated the principle, stating that:

[38]  The cases cited by both counsel to us clearly show that the law on the first
question posed by the appellant is settled. It is this. In a case where the matter or
20
material facts are not pleaded but evidence is led without objections at trial, the
court is duty bound to consider such evidence although it may be a departure from
the pleading. It has the effect of curing defects in the pleading. In such a case, the
opposite party is not taken by surprise, prejudiced, embarrassed or misled. The
exception is where the evidence represents a radical departure from the pleading
and is not just a variation, modification or development of what has been alleged 25
in the pleading.
[23]  While the plaintiff’s turnaround on this matter does certainly make one sit up
and take note of the inconsistency in the plaintiff’s evidence to its pleaded case;
to my mind, if at all, this merely goes to the credibility of PW1 and the weight to
be attached to his evidence. It is not a radical departure from the pleadings and
30
neither can it be said (and there is no such suggestion by the learned counsel
for the defendant) that the defendant had been taken by surprise, prejudiced,
embarrassed or misled by the said turnaround.

[24]  On this basis, I find grounds 2, 3 and 4 of the defendant’s memorandum of

appeal to be without any merit.
35
The letter of authorisation –​A matter of construction

[25]  It was the plaintiff’s case that the letter of authorisation did not authorise
the first third party to do anything more than to merely collect cheque payments
issued by the defendant in the plaintiff’s name and for the first third party to forward
40
those cheques to the plaintiff i.e. for the first third party to act as an errand person
on behalf of the plaintiff.

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1 [26]  It was submitted for the plaintiff that to read the letter of authorisation the
way the defendant had suggested would mean that the plaintiff had assigned
its rights to the first third party which was not the case. This contention was
objected to by the learned counsel for the defendant on the ground that it
5
was not part of the plaintiff’s pleaded case. As PW1’s evidence (see Q & A 4 at
p 40 of the ROA) on this matter was not objected to by the learned counsel for
the defendant, I again find the objection to be of no merit. In any event, the
issue of assignment is a question of law raised by the plaintiff in rebuttal to
the defendant’s defence and need not necessarily be pleaded –​see Order 18
r 11 of the Rules of Court 2012 and Tenaga Nasional Berhad v Greatpac Sdn Bhd
10 [2016] MLJU 384.

[27] What is of merit, however, is the contention by the learned counsel for

the defendant that nothing in the letter of authorisation supports the plaintiff’s
suggestion that the first third party was merely an errand person for the plaintiff.
I agree that the letter did not state as such. Neither did the letter state that the
15 payments were to be made by cheques issued in the plaintiff’s name as suggested
by PW1.

[28]  I find substance in the defendant’s contention that the previous practice
of issuing cheques in the plaintiff’s name was only applicable at the time before
the letter of authorisation was issued i.e. when the payment was made directly
20 by the defendant to the plaintiff but not thereafter. In fact, that the plaintiff had
used the words “to collect the outstanding debt” instead of “to collect the cheque
payments for our company” certainly left room for one to interpret as to what the
first third party was entitled to collect. But that is not to say that the defendant’s
understanding of the letter of authorisation must therefore be correct. It will still
be subject to the facts and circumstances of this case as shown by the evidence
25
led during the trial.

[29]  It was contended for the defendant that the plaintiff having described the
first third party as “the person in charge” in the letter of authorisation meant
that DW6 had full authority as to how he chose to execute the task or organise
30
the collection process, including delegating the task to the second third party
and Seow.

[30]  DW5, who was a director of the defendant testified that it was the first third
party who had shown him a copy of the letter of authorisation when he came to
collect payment for the outstanding sum after the issuance of the certificate of
35 final payment dated January 5, 2015 of RM830,607.67. DW5 said that the first third
party came with Seow –​see Q & A 10, 11 and 12 of DWS-​5.

[31]  DW5 further added that PW1 had called him to say that he was sending the
first third party and his associate to collect the sum of RM830,607.06 and that when
the first third party and Seow turned up at his office, he called PW1 to confirm that
40 they were sent by PW1. However, the defendant disagreed with the amount stated
in the certificate of final payment and the first third party and Seow left without
collecting any payment.

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[32]  After the revised certificate of final payment was issued on January 26, 1
2015, Seow came back with the second third party. DW5 continued stating as
follows:
Q: What was your reaction at the time when the two men were in the defendant’s
office? 5
A: I was uncomfortable. They were like thugs and were rather aggressive. This was
not the first time that Mr Seow had come to the defendant’s office within the
same month.
Q:  What happened while they were at the defendant’s office?
A:  They insisted that payment for the outstanding sum be made in cash. 10

Q:  What did you do?

A: I issued two cash cheques made payable to “Chia Get Peng” for the sum of
RM315,00 each, and post-​dated them to February 10, 2015 and March 10, 2015
respectively. The total amount of these two cheques was RM630,000.
[see lines 574–591 of the NOP at p 152 of the ROA] 15

[33]  What is crucial to note here is that while PW1 did confirm speaking to DW5
on the telephone about sending the first third party to collect the outstanding
debts on behalf of the plaintiff (see lines 15–17 of the NOP at p 91 of the ROA),
there is no evidence led by DW5 of having asked or verified with PW1 as to how
the payments were to be made and to whom. 20

[34]  There was also no suggestion that PW1 had in that telephone conversation
informed DW5 that the payments can be made in cash or to the third parties or
for that matter, anyone else besides the plaintiff and that such payments will be
deemed payment of the defendant’s dues to the plaintiff.
25
[35]  Crucially, neither was PW1 cross-​examined as to the evidence by DW6 in his
witness statement namely that there was allegedly an agreement between him
and the plaintiff for the collection of the debts and for commissions of 50% and
25% of the total sum to be paid to Seow and DW6 respectively.

[36]  The defendant had purportedly issued the letter dated January 26, 2015 to 30
the first third party when it issued the first two cheques in the name of the first
third party of RM315,000 each. The letter was stated to have carbon copied (“c.c.”)
to the plaintiff, however, PW1 stated in examination-​in-​chief that he had not prior
to the trial seen the document. Curiously, PW1 was never cross-​examined on
this document at all. Thus, there was no evidence that the plaintiff was aware of
35
the defendant’s purported letter of January 26, 2015 when it first issued the two
cheques to the first third party.

[37]  In fact, the whole basis for the defendant’s making payments to the third parties
and Seow was premised on DW5’s understanding of the letter of authorisation
that as the first third party was the person in charge of the collection, his (the first
40
third party’s) instruction to DW5 was as good as the plaintiff’s instruction (see
Q & A 19 at p 252 of the ROA).

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1 [38]  The question is, was it justified for DW5 to make such an assumption without
verifying or getting confirmation from the plaintiff that the payments can be made
in cash and to third parties other than the plaintiff?

[39]  I say not. It must be borne in mind that the amount outstanding was a fairly
5
substantial one i.e. RM637,805.78. More importantly, the third parties and Seow
were at the time, complete strangers to the defendant. DW5 even went on so far as
to describe the second third party and Seow as “thuggish” and “ rather aggressive”
(see lines 576–577 of the NOP at p 184 of the ROA). If nothing at all, this observation
ought to have prompted DW5 to seek clarification from PW1 as to whether his
10 “understanding” of the letter of authorisation was correct.

[40]  Also, while DW6 did give evidence as to the purported arrangement between
him and the plaintiff for the collection of the debts, there was no evidence led
to show that DW5 was aware of such alleged arrangement when the defendant
made the payments to the third parties and Seow. Thus, there was no reason for
15 the defendant to have accepted the alleged instruction by the third parties and/​
or Seow without anything more.

[41]  It is not in dispute that there was RM637,805.78 due from the defendant to
the plaintiff under the revised certificate of final payment. As it is the defendant’s
case that they have made payments in the sum of RM490,000 to the plaintiff
20 through the third parties and Seow, the defendant bore the burden of proof of
showing that such payments have indeed been made and that the said payments
bind the plaintiff.

[42]  On the totality of the evidence and as discussed above, I find that the defendant
has failed to discharged that burden. In relation thereto, I find grounds 1, 4, 10, 11,
25 12, 14 and 17 of the defendant’s memorandum of appeal to be without any merits.

Payment of RM40,000

[43]  Part of the monies paid by the defendant to the third parties and/​Seow was
the sum of RM40,000. The payment was deposited into the plaintiff’s bank account
30 by DW6. PW1 said that he found out about the payment sometime in April 2015
through the plaintiff’s Accounts Department.

[44]  It was contended for the defendant that the payment of the said sum of
RM40,000 meant that the plaintiff and/​or PW1 must have known about the payment
or collection method since April 2015 but they did not question or complain
35 about it and only raised the issue at the trial. It was further contended that the
said payment confirmed the arrangement for collection of the debts between the
plaintiff and the first third party.

[45]  In addition, learned counsel for the defendant submitted that the court
should take cognizance of the fact that despite PW1’s knowledge of the payment
40 since April 2015, the plaintiff had in this action claimed for the full sum of
RM637,805.78, that the plaintiff had the propensity of withholding material
facts from the court.

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 12 Borneo Law Reports (2019) 10 BLR

[46]  The question for this court is whether the evidence on the payment of RM40,000 1
was sufficient to prove the defendant’s case that the letter of authorisation allowed
them to pay the owed sums to the plaintiff to the third parties and/​or Seow.

[47]  I am of the view that it is not. It only goes to show that there was payment
5
made or deposited into the plaintiff’s account. It falls short of establishing that the
alleged arrangement was with the agreement of the plaintiff so that the plaintiff
would be bound by the rest of the other payments made by the defendant to the
third parties and/​or Seow.

[48]  That being the case, grounds 5, 6, 7 and 9 of the defendant’s memorandum
10
of appeal must fail.

On PW1’s credibility

[49]  It was submitted for the defendant that PW1’s evidence was not credible
and that he should therefore not be believed. Learned counsel for the defendant
took issue with the fact that the learned Sessions Court judge did not address his 15
mind to this matter when assessing the evidence.

[50]  While it is trite law that the credibility of a witness is the domain of the trial
judge and an appellate court should be slow in interfering with the findings of
the trial judge who has the audio visual advantage, an appellate court is bound
20
to intervene when the lower court is shown to have exercised no or insufficient
appreciation of the evidence. See Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2
MLJ 229, Merita Merchant Bank Singapore Ltd v Dewan Bahasa dan Pustaka [2015]
1 AMR 575; [2014] 9 CLJ 1064 and Dream Property Sdn Bhd v Atlas Housing Sdn Bhd
[2015] 2 AMR 601; [2015] 2 MLJ 441; [2015] 2 CLJ 453.
25
[51]  The question for this court is whether the inconsistencies or withholding of
facts by PW1 namely on the existence of the letter of authorisation and the deposit
of the RM40,000 sway this court’s findings that the defendant was not entitled to rely
on the letter of authorisation to make payments to the third parties and/​or Seow.

[52]  I would answer that in the negative. The reason being, it was the defendant
30
who had the burden of proving that the letter of authorisation was such that they
were entitled to make payments to the third parties and that the said payments
were binding on the plaintiff. As already discussed above, the defendant has
failed to discharge that burden. The evidential burden had not shift to the
plaintiff so that PW1’s failure to disclose the letter of authorisation and/​or the
deposit of RM40,000 would be of material consequence to the plaintiff’s case. 35
In any event, the court is not bound to either accept a witness testimony in
entirety or not at all.

Conclusion

[53]  Based on all of the above, I am of the considered view that there are no merits 40
to the defendant’s appeal. It is not in dispute that the defendant had owed the

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 Usniakaya Sdn Bhd v Kidara Sdn Bhd
(2019) 10 BLR Celestina Stuel Galid JC 13

1 plaintiff monies under the revised certificate of final payment. The only issue was
whether the defendant was entitled to pay to the said monies to the third parties
and/​or Seow in purported reliance on the letter of authorisation. The defendant
has not discharged that burden.
5
[54]  Accordingly, I dismiss the appeal with costs subject to payment of allocatur  fees.

10

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40

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