A

Expunction of evidence — Whether questions and answers in witness

statements sought to introduce new line of defence departing from party’s
pleaded case — Whether allowing such evidence unfair and prejudicial to other
party — Whether ‘new evidence’ of little probative value as it contradicted line
of defence taken throughout trial — Whether agreement to include documents B
in Part A of bundle of documents estopped party from later disputing their
authenticity and contents — Whether certificate produced under s 90A of the
Evidence Act 1950 to admit computer printout not required to state when
relevant information was keyed into computer — Whether adverse inference
should be invoked against party for failure to call relevant witnesses to discharge C
onus of proof

Editorial Note: This case also discusses legal profession (retainer, duties to client),
partnership (liability of partners), civil procedure (whether firm can be sued in its name,
pleadings, rules of court, appearance) and damages. D

Public Bank Bhd v Paul Cheah & Assoc (FrankieTan Lyn

Seang, third party)
E
HIGH COURT (KUALA LUMPUR) — SUIT NO D-22NCC-165 OF 2011
MAH WENG KWAI J
30 NOVEMBER 2012

The plaintiff had engaged the defendant firm of solicitors (‘the firm’) to F
prepare the security documentation for a loan it had granted to a company
(‘Polyidaman’). The loan was to be secured by a charge on Polyidaman’s
property. The documentation and perfection of the charge were handled
by the third party (‘Frankie Tan’) who was a partner in the firm’s branch.
The plaintiff disbursed the loan. It had the original title to the property and G
the original charge document in its custody. When Polyidaman defaulted
and the plaintiff wanted to foreclose on the charge, it discovered that the
charge had been discharged without its knowledge; that the property had
been transferred to another person (‘Shahrol’) and that Shahrol had
charged the property to CIMB Bank. Frankie Tan had witnessed the forged H
signature of one of the plaintiff’s officers in the discharge of charge
document. He had also witnessed the signatures of the parties in the
document charging the property to CIMB Bank while Shahrol’s signature in
the memorandum of transfer was witnessed by a legal assistant, who later
became a partner, of the firm. The firm had presented the plaintiff’s I
discharge of charge, the transfer and the CIMB charge documents to the
relevant land office for registration. The plaintiff sued the firm for
negligence, breach of contract and fraud for causing the loss of the charge
for which the firm failed/refused to pay compensation. The firm contended
[2015] 4 MLJevi 194
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 195

A that it was not liable as Frankie Tan had acted on a frolic of his own and that
both he and Polyidaman were wholly responsible for the fraud perpetrated
on the plaintiff. The firm sought indemnity from Frankie Tan in the
proceedings. During the trial, the plaintiff applied to expunge several
questions and answers in the witness statements of three of the
B defendant’s witnesses on the ground they sought to introduce evidence
which departed from the defendant’s pleaded case and created a wholly
new defence.

Held, allowing the claimant's claim:

C
(1) The application to expunge the questions and answers was allowed
because by raising new matters through them the defendant was
embarking on a new line of defence and had made a 180-degree turn
from its pleaded case at a very late stage of the trial. The case had
D been conducted by the plaintiff based on facts and documents
admitted by the defendant and which were included in Part A of the
bundle of documents. By that inclusion, the defendant was estopped
from disputing the authenticity and contents of those documents. The
‘new facts’ sought to exonerate not only Polyidaman but Frankie Tan
E as well and to show Polyidaman was innocent of any wrongdoing in
the discharge of the plaintiff’s charge and was itself a victim in the
whole affair (see paras 52, 56 & 89)
(2) To admit evidence of the ‘new facts’ in the witness statements would
F be unfair and prejudicial to the plaintiff because no application had
been made to amend the defence, documents had been admitted in
Part A of the bundle of documents, the plaintiff had not had a chance
to verify the ‘new facts’ and the ‘new facts’ had not been put to
witnesses who had already been called. Even if the ‘new facts’ were
G allowed they were of little probative value as they contradicted the
line of defence taken throughout the trial. They were also self-serving
statements, the credibility of their makers left much to be desired
and, importantly, evidence of the ‘new facts’ failed totally to rebut the
plaintiff’s case (see paras 60–63).
H (3) The court was entitled to draw adverse inference against the
defendant on its failure to call a handwriting expert to challenge the
authenticity of Frankie Tan’s signature in the discharge of charge
document. The court held Frankie Tan did witness the forged
signature of the plaintiff’s officer in that document and that such
I attestation was fraudulent. Adverse inference was also invoked
against the firm on its failure to call Shahrol and the firm’s principal
partner, Paul Cheah, as witnesses and in failing to produce documents
to rebut plaintiff’s evidence that CIMB’s loan to Shahrol was paid into
the firm’s account and there was no explanation about what had
196 MLJournal IN FOCUS [2015] 4 MLJevi

happened to that money. In view of the findings of fact made, the A

court was of the view the firm was accountable for the loss suffered
by the plaintiff (see paras 82, 93, 96 & 97).
(4) Section 90A of the Evidence Act 1950 did not require the certificate
for the admission of a computer printout in evidence to state the date B
the relevant information was keyed into the computer. Section
90A(2) only required the certificate to be signed by a person
responsible for the management of the operation of the computer or
for the conduct of the activities for which the computer was used (see
para 102). C

[Bahasa Malaysia summary

Plaintif telah menggunakan khidmat firma peguamcara defendan untuk
menyediakan dokumentasi bagi satu pinjaman yang telah diberikannya
kepada sebuah syarikat (‘Polyidaman’). Pinjaman tersebut dicagar oleh D
pajakan ke atas hartanah Polyidaman. Dokumentasi dan penyempurnaan
pajakan tersebut diuruskan oleh pihak ketiga (‘Frankie Tan’) iaitu rakan
kongsi dalam cawangan firma. Plaintif membayar pinjaman tersebut. Ia
mempunyai hak milik asal ke atas hartanah tersebut dan dokumen pajakan
asal dalam jagaannya. Apabila Polyidaman mungkir dan plaintif ingin E
merampas harta pajakan tersebut, ia mendapati bahawa pajakan tersebut
telah digadaikan tanpa pengetahuannya; bahawa hartanah tersebut telah
dipindah milik kepada seorang lagi (‘Shahrol’); dan bahawa Shahrol telah
memajak hartanah tersebut kepada Bank CIMB. Frankie Tan telah
menyaksikan tandatangan yang dipalsukan oleh salah seorang pegawai F
plaintif dalam pelepasan dokumen pajakan. Dia juga telah menyaksikan
tandatangan-tandatangan pihak-pihak dalam dokumen pajakan hartanah
kepada Bank CIMB manakala tandatangan Shahrol dalam memorandum
pindah milik disaksikan oleh seorang peguam, yang kemudiannya menjadi
rakan kongsi firma tersebut. Firma mengemukakan pelepasan pajakan, G
dokumen-dokumen pindah milik dan dokumen pajakan kepada pejabat
tanah yang relevan bagi pendaftaran. Plaintif menyaman firma bagi kecuaian,
pelanggaran kontrak dan penipuan bagi menyebabkan kehilangan pajakan
yang mana firma gagal/enggan membayar ganti rugi. Firma menghujahkan
bahawa ia tidak bertanggungan kerana Frankie Tan telah bertindak lalai dan H
bahawa kedua-dua dia dan Polyidaman bertanggungan keseluruhannya bagi
penipuan ke atas plaintif. Firma memohon indemniti daripada Frankie Tan
dalam prosiding. Semasa perbicaraan, plaintif memohon untuk memotong
beberapa soalan dan jawapan dalam penyata saksi ketiga-tiga saksi defendan
atas alasan bahawa mereka memohon untuk mengemukakan keterangan I
yang asing daripada kes defendan yang diplidkan dan mereka satu
pembelaan yang baru.

Diputuskan, membenarkan tuntutan penuntut:

 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 197

A (1) Permohonan untuk memadam soalan-soalan dan jawapan-jawapan

dibenarkan kerana dengan membangkitkan perkara-perkara baru
melalui semua itu, defendan memulakan satu pembelaan dan telah
membuat pusingan 180 darjah daripada kes yang diplidkan di peringkat
akhir perbicaraan. Kes telah dikendalikan oleh plaintif berdasarkan
B fakta dan dokumen-dokumen yang diperakui oleh defendan dan
disertakan dalam Bahagian A ikatan dokumen. Dengan penyertaan
tersebut, defendan diestop daripada mempertikaikan kebenaran dan
kandungan dokumen-dokumen tersebut. ‘Fakta-fakta baru’ bertujuan
untuk melepaskan bukan sahaja Polyidaman tetapi juga Frankie Tan
C
dan untuk menunjukkan bahawa Polyidaman tidak bersalah dalam
salah laku pelepasan pajakan plaintif dan merupakan mangsa
keseluruhan urusan tersebut (lihat perenggan 52, 56 & 89).
(2) Untuk mengakui keterangan ‘fakta baru’ dalam penyata-penyata saksi,
D adalah tidak adil dan memprejudiskan plaintif kerana tiada
permohonan yang dibuat untuk meminda pembelaan,
dokumen-dokumen telah diakui dalam Bahagian A ikatan
dokumen-dokumen, plaintif tidak berpeluang untuk menjelaskan
‘fakta-fakta baru’ dan tidak dijadikan saksi yang telah dipanggil. Jika pun
E ’fakta-fakta baru dibenarkan, kesemuanya mempunyai nilai probatif
yang rendah kerana bercanggah dengan pembelaan yang dikemukakan
sepanjang perbicaraan. Kesemuanya juga adalah kenyatan-kenyatan
berbaur kepentingan diri, kredibiliti pembuat-pembuatnya tidak
mencukupi dan yang paling penting, keterangan ‘fakta-fakta baru’ gagal
F menyangkal keseluruhan kes plaintif (lihat perenggan 60–63).
(3) Mahkamah berhak membuat anggapan bertentangan atas defendan
atas kegagalannya memanggil pakar tulisan untuk mencabar keesahan
tandatangan Frankie Tan dalam pelepasan dokumen pajakan.
G Mahkamah memutuskan bahawa Frankie Tan ada menyaksikan
pemalsuan tandatangan pegawai plaintif dalam dokumen tersebut dan
penyaksian tersebut adalah penipuan. Anggapan bertentangan juga
dibangkitkan terhadap firma atas kegagalannya memanggil Shahrol dan
rakan kongsi prinsipal firma, Paul Cheah, sebagai saksi-saksi dan atas
H kegagalannya mengemukakan dokumen-dokumen untuk menyangkal
keterangan plaintif bahawa pinjaman CIMB kepada Shahrol dibayar ke
dalam akaun firma dan tidak terdapat penjelasan mengenai apa yang
berlaku kepada duit tersebut. Berdasarkan dapatan-dapatan fakta
yang dibuat, mahkamah berpendapat bahawa firma bertanggungan
I atas kerugian yang dialami oleh plaintif (lihat perenggan 82, 93, 96 &
97).
(4) Seksyen 90A Akta Keterangan 1950 tidak memerlukan sijil
penerimaan masuk cetakan komputer dalam keterangan untuk
menyatakan tarikh maklumat relevan yang dimasukkan dalam
198 MLJournal IN FOCUS [2015] 4 MLJevi

komputer. Seksyen 90A(2) hanya memerlukan sijil tersebut A

ditandatangani oleh orang yang bertanggungjawab bagi pengurusan
operasi komputer atau bagi tindakan aktiviti yang menggunakan
komputer (lihat perenggan 102).]

Cases referred to B
Alagappa Chettiar v Coliseum Cafe [1962] 1 MLJ 111, CA (refd)
Alan Michael Rozario v Merbok MDF Sdn Bhd [2010] MLJU 1331; [2011] 1
CLJ 433, HC (refd)
Cheong Heng Loong Goldsmiths (KL) Sdn Bhd & Anor v Capital Insurance
C
Bhd [2004] 1 MLJ 353; [2004] 1 CLJ 357, CA (refd)
Chu Choon Moi v Ngan Sew Tin [1986] 1 MLJ 34 (refd)
Clode v Barnes [1974] 1 All ER 1166, QBD (refd)
Dominic J Puthucheary v Jet Age Construction Sdn Bhd [1997] 2 MLJ 252, CA
(refd) D
Jaafar Shaari & Anor (Suing as administrators of the estate of Shofiah bte Ahmad,
deceased) v Tan Lip Eng [1997] 3 MLJ 693; [1997] 4 CLJ 509, SC (refd)
Keow Seng v Trustees of Leong San Tung Khoo Kongsi (Penang) [1983] 2 ML J
103, FC (refd)
Lee Ah Chor v Southern Bank Bhd [1991] 1 MLJ 428; [1991] 1 CLJ (Rep) 239, E
SC (refd)
MK Varma v K M Oli Mohamed [1950] 1 MLJ 80 (refd)
Recaliva Design Steel (M) Sdn Bhd v Vista Access Sdn Bhd [2008] 6 MLJ 604,
HC (refd)
Southern Empire Development Sdn Bhd v Tetuan Shahinuddin & Ranjit [2008] F
MLJU 60; [2008] 5 CLJ 195, HC (refd)
Sun Ho Sdn Bhd v Alliance Bank Malaysia Bhd [2008] 6 MLJ 457, HC (refd)
Tan Thoo Yow v Chia Kim San & Anor [1997] 1 LNS 536, HC (refd)
United Asian Bank Bhd v Tai Soon Hing Construction Sdn Bhd [1993] 1 MLJ 182
(refd) G

Legislation referred to
Bankers’ Books (Evidence) Act 1949
Evidence Act 1950 ss 90A, 90A(2), (6), 90B, 114(g)
H
National Land Code Forms 14A, 16A,
Partnership Act 1961 s 12
Rules of the Supreme Court 1957 [UK] O 48A
Barry Goh Meng Yew (Katherina Wee & Ernestine Khoo with him) (Iza Ng Yeoh
& Kit) for the plaintiff. I
Venu Nair (Sulaiman Mohd Said with him) (Paul Cheah & Assoc) for the
defendants.
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 199

A Mah Weng Kwai J:

THE PARTIES

[1] The plaintiff is a licensed bank which appointed the defendant as its
B solicitors to attend to its offer of a fixed loan facility to Polyidaman Sdn Bhd
(Polyidaman) (now known as Subang Aquatic Services Sdn Bhd).

[2] The defendant is a firm of practising solicitors with its main or head
office in Kuala Lumpur and a branch office in Subang Jaya. Frankie Tan Lyn
C
Seang (Frankie Tan), DW3, was the solicitor in charge of the Subang Jaya
branch.

THE PLAINTIFF’S CASE

D
[3] The defendant was first appointed onto the plaintiff’s panel of
solicitors in 1986 subject to the terms and conditions contained in the
Solicitors’ Guidelines.

E [4] By a letter of offer dated 1 October 2003 the plaintiff offered a fixed
loan facility of RM750 to Polyidaman to refinance a VA storey terrace
factory. As security Polyidaman executed a charge dated 28 January 2004
and charged the property to the plaintiff on 3 March 2004.

F [5] The defendant was appointed to attend to the legal documentation

to secure the loan and to perfect the security in favour of the plaintiff. At all
material times, it was the Subang Jaya branch of the defendant that handled
this conveyancing transaction. By letter dated 8 March 2004 the defendant
advised the plaintiff that it was in order to disburse the fixed loan to
G Polyidaman, which the plaintiff did on 24 March 2004 .

[6] The defendant forwarded by letter dated 22 November 2004 the

following documents to the plaintiff for their safe keeping namely:
H (a) the original document of title of the property with the original plan;
(b) duly stamped original charge annexure over the property dated
2 January 2004 entered into between the plaintiff and Polyidaman;
and
I (c) the original Form 40 (Certificate of Registration of Charge).

[7] On or about 25 November 2008, Polyidaman defaulted in the

repayment of its loan. The plaintiff issued a letter of demand dated 2 January
2009 recalling the fixed loan facility and demanded payment of the
200 MLJournal IN FOCUS [2015] 4 MLJevi

outstanding sum. With a view of commencing foreclosure proceedings, the A

plaintiff then appointed a firm of valuers to prepare a valuation report on
the property. Arising from the report and from inquiries made at the Land
Office, the plaintiff discovered that:
(a) the charge over the property had been discharged from as early as 1
B
November 2006;
(b) the property had been transferred from Polyidaman to one Shahrol
@ Sahrol bin Mat Sum (‘Shahrol’) on 1 November 2006; and
(c) the property had been charged by Shahrol to CIMB Bank Bhd
C
(‘CIMB’) on 1 November 2006.

[8] Needless to say, the discharge and transfer of the property was
done without the knowledge and consent of the plaintiff which still holds
the original title, the charge annexure and Form 40 in its custody. D

[9] Further inquiries by the plaintiff revealed the following:

(a) the plaintiff’s charge was discharged on 1 November 2006 by way of
a Form 16N (discharge of charge) of the National Land Code (‘NLC’)
which contained the forged signature of Khoo So Yin (PW6), an E
officer of the plaintiff;
(b) the forged signature of Khoo So Yin was witnessed by Frankie Tan
on 12 October 2006;
(c) the memorandum of transfer (Form 14A of the NLC) which F
contained the signature of Shahrol was witnessed on 16 August 2006
by Chow Kah Wai (DW4), a legal assistant and later a partner of the
defendant;
(d) a copy of the identity card of Shahrol was certified by Chow Kah G
Wai;
(e) the charge (Form 16A of the NLC) which was executed by Shahrol
in favour of CIMB to secure a loan of RM831,607 contained the
signatures of Shahrol and an officer of CIMB which were witnessed
by FrankieTan on 19 October 2006; and H

(f) the defendant had presented the discharge of the plaintiff’s charge,
the transfer and the CIMB charge by way of a penyata perserahan
dated 1 November 2006 at the Pejabat Tanah dan Galian Selangor.
I
[10] The plaintiff’s claim against the defendant is founded on negligence,
fraud caused by forgery and for breach of contract.

[11] The fixed loan facility is still due and owing by Polyidaman and due to
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 201

A the breaches of the defendant, the plaintiff has lost its charge over the
property and has been unable to commence foreclosure proceedings.

[12] The defendant has failed and/or refused to pay the sum of
RM561,483.62 claimed by the plaintiff as compensation for the loss of the
B charge over the property.

THE DEFENCE

[13] The defendant admitted it is a firm of practising solicitors which

C previously had a branch office in Subang Jaya;

[14] In June 2008, Frankie Tan resigned from the defendant and set up a
legal firm known as Frankie, Phang & Nazura, which took over and
continued conduct of the files at the Subang Jaya office, including the
D plaintiffs file;

[15] The defendant denied it is responsible or liable to the plaintiff for the
events that occurred when Frankie Tan was a partner as the defendant is
E
now of a ‘different complexion’ from the time then. The defendant averred
that the plaintiff has no cause of action against it as at all times it was Frankie
Tan who had control, management and conduct of the plaintiff’s file;

[16] Further and/or in the alternative the defendant denied that it was
F guilty of negligence or a party to any fraud or dishonesty or other breach
of conduct, contract or duty alleged by the plaintiff;

[17] That the plaintiff knew or ought to have known that Frankie Tan
was related to the directors and shareholders of Polyidaman and as such
G knowingly condoned and instructed the defendant and Frankie Tan to act
and hence the defendant denied any breach of the retainer or any breach of
duty or fraud or dishonesty as alleged;

[18] Essentially, the defendant’s defence is that it is not liable for the acts
H of its partner, Frankie Tan, at the material time and that whatever was done
by Frankie Tan, if any, was outside his scope, duty and authority. The
defendant did not authorise and/or consent to any of the breaches
complained of and that Frankie Tan had acted, if he did so act, on his own
volition and embarked on a frolic of his own. The acts complained of where
I not carried out in the ordinary course of business of the defendant; and

[19] Lastly, the defendant averred that the plaintiff should have filed a
claim against Polyidaman as it was Polyidaman that had defeated the
plaintiff’s charge by causing it to be discharged and not the defendant!
202 MLJournal IN FOCUS [2015] 4 MLJevi

[20] It will be noted at this juncture that the defendant after disclaiming A
its liability for the alleged breaches by Frankie Tan and putting the blame
squarely on his shoulders went on to obtain an order on 7 August 2011 for
a third party notice to be issued against Frankie Tan.

DECISION OF THE COURT B

[21] After a lengthy trial that took 14 days of hearing, the court upon
reading the written submissions of counsel for the plaintiff and the
defendant and upon hearing the oral submissions of counsel aforesaid
allowed the plaintiff’s claim in the sum of RM521,483.62 together with C
interest and costs.

THE APPEAL

[22] Being dissatisfied with the order of the court, the defendant now D
appeals against the decisions given in respect of encl 68 and in the trial
proper.

GROUNDS OF DECISION
E
[23] Before I deal with the grounds of decision in the trial proper, I would
like to deal with the following three issues first namely:
(a) encl 68 — Whether the defendant can be sued as a firm.
(b) expungement of the written statements of DW2, DW3 and DW4 F
and
(c) the ‘Unless’ Order dated 29 October 2012.

Enclosure 68 - Whether the defendant can be sued as a firm G

[24] The plaintiff elected to sue the defendant as a firm rather than to
name the partners as at 1 November 2006, the date the plaintiff’s charge
was discharged and the property charged to CIMB, and to cite them as
defendants individually. H

[25] The suit was filed in 2011 and after 17 interlocutory and case
management dates the trial finally got under way on 16 May 2012.

[26] On 29 October 2012, at the last day of the trial after counsel for the I
defendant had closed his case but before directions could be given by the
court on the filing of submissions, counsel for the defendant informed the
court that he had filed a summons in chambers vide encl 68 on 15 May 2012
pursuant to O 33 r 2 of the Rules of the High Court 1980 (‘the RHC’) and
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 203

A asked to be heard. In encl 68, which was filed without any affidavit in
support, the defendant sought an answer to the question of whether the
defendant can be sued solely in its firm name when the same has no legal
personality.

B [27] The counsel for the plaintiff proposed that the point be taken up in
the main submissions itself.

[28] However, the court fixed encl 68 for hearing at 2.30pm the same
C afternoon. When the court resumed sitting, counsel for the plaintiff
informed the court that a sealed copy of encl 68 was only served on him on
23 October 2012.

[29] As encl 68 only concerned 1m on a point of law, the court directed

D the parties to file their written submissions on encl 68 and that the
summons in chambers will be decided together with the trial proper.
Parties were directed to file their written submissions, including
submissions on encl 68 by 5 November 2012. Decision was fixed on
30 November 2012.
E
[30] On 30 November 2012, encl 68 was dismissed with costs. The court
held that it was too late in the day for counsel for the defendant to canvass
the point under O 33 r 2 of the RHC as the application had become
academic. Although encl 68 was filed on 16 May 2012, it was not extracted
F from the court registry till October 2012 and not served on counsel for the
plaintiff till 23 October 2012, ie six days before the trial ended on
29 October 20. It was the duty of counsel for the defendant and it was
incumbent upon him to extract and serve the application as soon as
possible after filing. Counsel should not have sat idly and waited for encl 68
G to be returned by the court.

[31] As the parties had submitted on encl 68 in the respective written

submissions and the court was ready to deliver its’ decision on
30 November 2012, there was no basis or reason for the court to
H postpone the decision just so that encl 68 could be heard orally. The court
time and expense would not be saved. Indeed court time and expense
would have been wasted if it had proceeded to hear the parties orally on
encl 68. As was held by the Court of Appeal in the case of Dominic J
Puthucheary v Jet Age Construction Sdn Bhd [1997] 2 MLJ 252, the court will
I only hear an application to rule on a preliminary issue under O 33 r 2 if the
‘application, if allowed, will result in a substantial saving of time and
expediture’. As mentioned earlier, by the time counsel for the defendant
asked for encl 68 to be heard, the trial was near completion leaving only
submissions to be filed, there would have been absolutely no saving of
204 MLJournal IN FOCUS [2015] 4 MLJevi

court trial time at all. Due to the delay by counsel for the defendant, encl A
68 had been superseded by the progress of the trial. Order 33 r 2 of the
Rules of Court 2012 , having come into operation on 1 August 2012, allows
the court a discretion in the matter and it would have been more
convenient, practical and expedient for the question posed in encl 68 to be
dealt with by the court in the trial proper. B

[32] The court accordingly proceeded to deal with the point of law
raised in encl 68 as part of the overall decision in the trial proper.
C
[33] The defendant maintained that it could not be ‘sued solely in its firm
name’ simply because the firm name has no ‘legal persona’. In support of his
contention counsel for the defendant relied on the case of Alagappa Chettiar
v Coliseum Cafe [1962] 1 MLJ 111 wherein Chief Justice Thomson said:
Nor are the defendants associated in any way that gives them any legal D
personality which is known to the law distinct and apart from their natural
personalities. James L said in the year 1879: We have not yet introduced into
our law the notion that a firm is a persona (In Re Sawers; ex parte Blain).

E
[34] Counsel submitted that the firm name is a mere label of expression
and does not constitute a legal entity. To sue a firm of partners one has to
therefore identify the members of the firm at the time of filing of the action
and to cite them as defendants individually.
F
[35] In Alagappa Chettiar, a point raised on appeal to the High Court was
‘whether the appellant being an unincorporated body having no legal
personality was capable of assuming the rights and obligation of the
relationship of landlord and tenant’. Hashim J in allowing the appeal held
that ‘the name under which a firm carries on business is in point of law a G
conventional name applicable only to the persons who, on each particular
occasion when the name is used, are members of the firm. That is to say,
the letting of the premises to the ‘Coliseum Cafe was a letting to the
persons who for the time being were or are the constituent partners
carrying on business under that firm’s name’. H

[36] On appeal to the Court of Appeal, the court agreed with the
conclusion of Hashim J that the respondent tenant was able to be the
tenant even though it was a partnership and had no legal entity of its own.
In effect a tenancy was lawfully created with the partners of the firm I
individually notwithstanding they were sued in the name of the firm. And in
the words of Good J A, ‘the firm name is a mere expression, not a legal
entity, although for convenience under Order 48A it may be used for the
sake of suing and being sued’.
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 205

A [37] Although a partnership is not a legal persona it nevertheless can sue

and be sued in its partnership or firm name. Order 77 r 1 of the Rules of
Court 2012 expressly provides for this situation.

Order 77 r 1 of the Rules of Court 2012 states:

B
Subject to the provisions of any written law, any two or more persons claiming
to be entitled, or alleged to be liable, as partners in respect of a cause of action
and carrying on business within the jurisdiction may sue or be sued, in the name
of the firm, if any, of which they were partners at the time when the cause of
C action accrued.

[38] A consideration of the following cases will clearly show that the
courts have over the years consistently held that a partnership can in fact
and in law be sued as a firm, namely:
D
(a) MK Varma v K M Oli Mohamed [1950] 1 MLJ 80:
... the plaintiffs had the alternative of joining all the partners as plaintiffs or
of taking advantage of the special procedure by suing in the firm name...

E (b) Tan Thoo Yow v Chia Kim San & Anor [1997] 1 LNS 536, interpreting
O 77 r 1 of the RHC:
it is clear as crystal that a partnership may sue or be sued in the name of
the firm

F (c) Keow Seng v Trustees of Leong San Tung Khoo Kongsi (Penang) [1983]
2 MLJ 103 at p 105:
When a firm’s name is used, it is only a convenient method for denoting
those persons who compose the firm at the time when that name is used,
and a plaintiff who sues partners in the name of their firm in truth sues
G them individually, just as much as if he had set out all their names ...

[39] In light of O 77 r 1 of the Rules of Court 2012 and the cases cited
above, the proposition by the defendant that ‘when you sue the firm you
H have to identify the members of the firm at the time of commencement of
the action’ cannot be sustained. In fact a closer reading of Alagappa Chettiar
will show that there was no requirement for the partners to be identified
individually in that case.

I [40] It is trite that in a partnership, the partners are jointly and/or

severally liable for the wrongdoings of each other. Liability will be attached
to all the persons who were partners at the time of wrongdoing or breach
or misdeed of one of its partners.
206 MLJournal IN FOCUS [2015] 4 MLJevi

[41] Further, under common law and the Partnership Act 1961 a firm of A
partners is liable for the wrongdoing of its partner or partners jointly
and/or severally. Section 12 of the Partnership Act 1961 provides:
Where, by any wrongful act or omission of any partner acting in the ordinary
course of the business of the firm or with the authority of his co-partners, loss B
or injury is caused to any person not being a partner in the firm, or any penalty
is incurred, the firm is liable therefor to the same extent as the partner so acting
or omitting to act.

[42] And in the case of Southern Empire Development Sdn Bhd v Tetuan C
Shahinuddin & Ranjit [2008] MLJU 60; [2008] 5 CLJ 195 it was held that:
The partnership acts through its human agency — its partners. Every act or
omission of the partners directly pertaining to the partnership is in law deemed
to be an act or an omission of the partnership ... Although the particular errant
partner has long left the partnership — the liability of the firm continues ... D

[43] It will be noted that the defendant on being served with the writ of
summons and statement of claim, only entered an ordinary appearance. If
it was the defendant’s case from the very beginning that the plaintiff had E
wrongly sued the defendant as a firm then it would have been proper for
the defendant to have filed a conditional appearance and to apply to strike
out the plaintiff’s claim. The court can only surmise that the issue of
capacity was only raised as an afterthought.
F
[44] Following from the above, the position must be that the partners of
a firm, whether located in the same office or in a branch office, will be held
liable for the wrongdoings or breaches of any one of its partners. The
contention by counsel for the defendant that the partners in the head office
cannot be held liable for its partners in a branch office is wholly wrong in G
law and cannot be legally justified.

Expungement of the written statements of DW2, DW3 and DW4

Expungement of questions and answers Nos 7 to 56 of witness statement H

of Andrew Tan Lyn San (DW2)

[45] Having informed the court previously that the defence would be
calling only one witness namely, Lim Choon Wee (DW1), counsel for the I
defendant on 20 July 2012 decided to call Andrew Tan Lyn San (DW2) as
his second witness. Counsel referred DW2 to his written witness
statement, a copy of which, the court noted had not been extended to
counsel for the plaintiff before DW2 was called to the witness stand.
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 207

A [46] Upon DW2 going through his witness statement, counsel for the
plaintiff objected to questions and answers Nos 7 to 56 (the impugned
questions and answers) primarily on the ground that the matters referred
to in the impugned questions and answers departed from the defendant’s
pleaded case.
B
[47] In the defence, the defendant had in the main made bare denials of
liability of the plaintiff’s claim and sought to lay blame on Frankie Tan
(DW3) who was at all material times in charge of the Subang Jaya Branch
C
office and had allegedly acted on a frolic of his own. The defendant had
accused Frankie Tan and Polyidaman of being the perpetrators of whatever
fraud that was committed. It was on that basis that the defendant had
commenced third party proceedings against Frankie Tan. The defendant
had, inter alia, accused Frankie Tan of breach of duty and sought to recover
D an indemnity from him.

[48] In para 13 of the statement of claim, the plaintiff had pleaded, albeit
impliedly, that there was a sale of the property by Polyidaman to Shahrol.
The transfer of the property was never disputed by the defendant.
E
[49] However, in the impugned questions and answers, the defendant
through the evidence of DW2, sought to question the validity of the sale
and purchase agreement entered into between Polyidaman and Shahrol.
This was notwithstanding that counsel for the defendant had agreed to the
F sale and purchase agreement being included in Part A of the bundle of
documents. Needless to say, the defendant had not pleaded in the defence
that Polyidaman did not enter into a sale and purchase agreement with
Shahrol or that the sale and purchase agreement was false and fraudulent
with the signature of DW2 being forged.
G
[50] In his written submission (encl 56) counsel for the plaintiff referred
to the ‘new matters’ being raised for the first time in the impugned
questions and answers. They are, inter alia:
H (a) QA 7–11 and QA 19–23 — that Polyidaman did not sell the property
to Shahrol and that the purported signature of DW2 was a forgery;
(b) QA 12–16 and QA 24–27— that DW2’s signature in the resolution
to transfer (Bundle B pages 101, 102) was forged;
I (c) QA 28 and QA 44–47 — that the defendant’s Subang Jaya branch
office did not act for Polyidaman in the sale and transfer to Shahrol
nor in the discharge of the plaintiff’s charge nor in the CIMB charge;
(d) QA 29–31 and QA 42 — that Polyidaman was not involved in the
discharge of the plaintiff’s charge;
208 MLJournal IN FOCUS [2015] 4 MLJevi

(e) QA 43 — that Polyidaman was not involved in the CIMB charge A

(Form 16A) and
(f) QA 50–56 — that Shahrol did not demand for vacant possession of
the property from Polyidaman who remained in possession of the
property till 2010. B

[51] Counsel for the plaintiff submitted that the impugned questions and
answers ought to be expunged as they are matters not pleaded in the
Defence and that it is trite that the defendant cannot depart or deviate
from its pleaded case (see Lee Ah Chor v Southern Bank Bhd [1991] 1 MLJ C
428; [1991] 1 CLJ (Rep) 239; Cheong Heng Loong Goldsmiths (KL) Sdn Bhd &
Anor v Capital Insurance Bhd [2004] 1 MLJ 353; [2004] 1 CLJ 357; Recaliva
Design Steel (M) Sdn Bhd v Vista Access Sdn Bhd [2008] 6 MLJ 604).

[52] By raising the new matters, the defendant was embarking on a new D
line of defence at trial and was making a 180 degree turn from its pleaded
case at a very late stage especially since the case had been conducted by the
plaintiff based on facts and documents admitted by the defendant and which
are included in Part A of the bundle of documents. The ‘new facts’ sought
to exonerate not only Polyidaman but Frankie Tan as well, and to show that E
Polyidaman is ‘innocent’ of any wrongdoing in the discharge of the plaintiff’s
charge and is a victim itself in the whole transaction.

[53] Counsel for the defendant in response submitted that the defendant
was justified in raising the new matters as the plaintiff had failed to plead the F
sale and purchase agreement dated 16 August 2006 between Polyidaman
and Shahrol in the statement of claim and that the evidence of the sale and
purchase agreement had only been revealed through the plaintiff’s
witnesses. Counsel maintained that as the statement of claim was silent on
the sale and purchase agreement, the defendant cannot concoct a defence G
to a matter not pleaded in the statement of claim nor can the defendant be
seen to invalidate the sale and purchase agreement as it was not a matter
raised previously. Counsel further submitted that the defendant did not
know of the nature of the plaintiff’s claim and was taken by surprise when
the plaintiff did not plead the sale and purchase agreement from which H
‘everything emanated’.

[54] The court agrees with the submission of counsel for the plaintiff that
no surprise has been sprung on the defendant. The sale and purchase
agreement had impliedly been pleaded in para 13 of the statement of claim I
and in any event, the plaintiff’s case is not premised on the sale and
purchase agreement. In fact the sale and purchase agreement is not
necessary to prove the plaintiff’s case. The sale and purchase agreement is
evidence and it is trite that evidence need not be pleaded. Central to the
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 209

A plaintiff’s claim is the discharge of the plaintiff’s charge without any

redemption sum being paid by Polyidaman. It was the discharge of charge
that caused the loss to the plaintiff not the sale and purchase agreement. In
conveyancing any sale and purchase agreement will always be subject to the
charge and whoever is responsible for an unlawful discharge will have to be
B held liable to the chargee.

[55] If counsel for the defendant was so steadfast in his belief that the sale
and purchase agreement ought to have been pleaded expressly in the
statement of claim then one wonders why the sale and purchase agreement
C
was included as an agreed document in Part A of the bundle of documents
in the first instance and why counsel had wholly failed to object to any of
the evidence of the plaintiff’s witnesses touching on this matter. The
irresistible inference is that it was an afterthought on the part of counsel for
D the defendant.

[56] Upon reading the written submissions of counsel for the plaintiff and
defendant and upon hearing the oral submissions of counsel aforesaid, the
court on 24 July 2012, allowed the plaintiff’s application to expunge the
E impugned questions and answers from DW2’s witness statement. The
grounds for the ruling were read in court and it will be appropriate to
repeat them here as follows:
Application to exclude QA of DW2 from QA 7 to 56 - is allowed. Grounds,
F inter alia, are:

(1) In the statement of claim - the plaintiff has in paragraphs 13 and 14

averred to the Form 14A involving Shahrol, the charge in favour of PBB
and Discharge and charge in favour of CIMB —all these would imply
G that a SPA had been entered into between Polyidaman and Shahrol—
or ought to have been entered between these 2 parties — although
the plaintiff did not specifically plead the phrase ‘SPA’ that was entered
into.

H (2) The defendant knew or ought to have known about the SPA and to
have drafted the Defence with that in mind. There was no surprise
sprung on the defendant.

(3) Premise or tenor of defendant’s Defence was that the Discharge

I and following transactions were done by Frankie Tan on his own
without knowledge and consent of the defendant.

Now with new facts, the defendant seeks to exonerate Andrew Tan
(DW2) and Frankie Tan.
210 MLJournal IN FOCUS [2015] 4 MLJevi

A
Third Party proceedings have been commenced against Frankie Tan as
first third party to seek indemnity.

There is most certainly an identifiable and discernable change in the

line of Defence. Even Defence counsel concedes to this. This is like B
changing horses mid stream.

(4) If the new facts are allowed and there is a change in defence, this
will be unfair and prejudicial to the plaintiff because:
C
(a) Witnesses have been called and these new facts have not been
put to them
(b) Documents have been admitted in Part A of bundle of
documents
D
(c) The plaintiff has not had the chance to verify the defendant’s new
facts
(d) To date - no application has been made by the defendant to
amend Defence. bundle of documents were available before
commencement of trial (e) Even if new facts are allowed, there E
will be little probative value as it will contradict the line of
Defence taken by the defendant throughout trial thus far.

Expungement of questions and answers Nos 3 to 34 of witness statement

of Frankie Tan Lvn Seang (DW3) and expungement of questions and F
answers Nos 12 to 19 of witness statement of Chow Kah Wai (DW4)

[57] The application of counsel for the plaintiff to expunge the above
mentioned questions and answers from the witness statements of DW3
and DW4 respectively was allowed by the court at the end of the trial G
based on similar grounds/reasons given for the expungement of the
impugned questions and answers from the witness statement of DW2.

[58] The ruling on the expungement of thequestions and answers from

the witness statements of DW3 and DW4 is not confined to thequestions H
and answers in the examination-in-chief only but extends to the evidence in
cross-examination and re-examination that pertain to the issues dealt with
in questions and answers Nos 3–34 of the witness statement of DW3 and
questions and answers Nos 12–19 of the witness statement of DW4 as
well. This is necessarily so as the court had on 7 August 2012 ruled that I
DW3 could continue giving his evidence and that the court would make a
final ruling at the end of the trial and after final submissions on whether the
impugned questions and answers of DW3’s witness statement ought to be
expunged from the record.
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 211

A [59] A similar ruling was made by the court on 14 August 2012 with
regard to the impugned questions and answers Nos 12–19 of the witness
statement of DW4, that is, the court would make a final ruling on the
admissibility at the end of the trial.
B [60] In the event the court is in error in expunging the impugned
questions and answers from the witness statements of DW2, DW3 and
DW4 respectively, the court is of the view that little or no weight ought to
be attached to the evidence of DW2, DW3 and DW4 for the following
reasons:
C

[61] The new line of defence adopted by the defendant given through the
evidence of DW2, DW3 and DW4 differed wholly from the defendant’s
pleaded case. The evidence was not only inconsistent with the pleaded
D defence but contradicted it in material particulars;

[62] The statements of DW2, DW3 and DW4 are self serving
statements and sought only to exculpable and exonerate Polyidaman and
Frankie Tan from any wrongdoing altogether without any cogent
E evidentiary basis.

[63] The credibility of DW3 and DW4 was very much in question and
left much to be desired. In fact the court treated their evidence with
caution and suspect. DW3 and DW4 were hesitant in giving their answers
F in cross-examination and whatever was said came across to the court as
being very contrived.

[64] Importantly, the evidence of DW2, DW3 and DW4 could not be
accepted as the evidence failed totally to rebut the plaintiff’s case. If the
G evidence of DW2, DW3 and DW4 were to be believed then it would mean
that the court would have to accept the story that the signatures of DW2,
DW3 and DW4 on all the relevant documents were forged and that the
whole transaction of discharge, transfer and charge must have been carried
out by some mysterious and unidentified third party to the detriment and
H loss of the plaintiff and to the benefit of Polyidaman, Shahrol and the
defendant. Lest it be forgotten, the ‘paper-trail evidence’ stops at the door
of the defendant’s Kuala Lumpur office with the RM800,000 loan allegedly
to Shahrol paid into the HSBC account of the defendant’s Kuala Lumpur
office, which account was operated by Paul Cheah himself. The defendant
I has refused and/or failed to explain what has become of the money in the
HSBC account to date. Suffice to say the silence of the defendant about the
money is deafening.

‘Unless’ Order dated 29 October 2012

212 MLJournal IN FOCUS [2015] 4 MLJevi

[65] At the close of trial on 29 October 2012 parties were directed to A

update their written submissions to include submissions on the
admissibility of exhs P16 and P17, (and on encl 68) and thereafter to refile
the submissions by 5 November 2012. Counsel were to exchange
submissions by 5 November 2012 and to file a reply, if deemed necessary
by 12 November 2012. Both counsel were informed that if the submissions B
and reply, if any, were filed late, the court would proceed to deliver
judgment without the benefit of reading the respective submissions or
reply.
C
[66] The defendant’s written submissions was filed by counsel on
6 November 2012 that is, it was filed one day late.

[67] On 30 November 2012, before the judgment was delivered, parties

were informed that the court would not be invoking the ‘Unless Order’ D
against the defendant as the filing, albeit late by one day, was in substantial
compliance of the direction of the court given on 29 October 2012 and that
the delay was not inordinate.

FINDINGS OF FACTS AFTER FULL TRIAL E

On liability

[68] The court was satisfied at the close of trial that the plaintiff had on
a balance of probabilities proved its case against the defendant. The court F
came to this conclusion after making the following findings of facts against
the defendant.

(a) Retainer
G
[69] At the request of the defendant, the defendant had been empanelled
since 1996 on the panel of solicitors of the plaintiff. The defendant was
instructed by letter dated 3 December 2003 to attend to the loan
documentation after the plaintiff had agreed to offer a fixed term loan H
facility to Polyidaman. By accepting the retainer, the defendant entered into
contractual relations with the plaintiff and undertook expressly and/or
impliedly to carry out its professional duties with due care and diligence
and with honesty. The terms and conditions of the appointment of
solicitors contained in the Solicitors Guidelines are included in Part B of the I
bundle of documents where authenticity of the document is not in dispute.
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 213

A (b) Loan to Polyidaman

[70] By letter of offer dated 1 October 2003, the plaintiff offered the
facility to Polyidaman. Polyidaman accepted the offer and agreed to charge
its property as security for the loan.
B
(c) Disbursement of the loan

[71] By letter dated 8 March 2004, the defendant advised the plaintiff that
C it was in order to disburse the loan sum to Polyidaman.

[72] The loan sum was disbursed by the plaintiff to the defendant by
letter dated 24 March 2004.

D [73] In return by letter dated 22 April 2004 the defendant delivered the
original document of title to the property (P8), the original stamped charge
annexure (P5) and the original Form 40 to the plaintiff for their safe
keeping.
E (d) Discharge of the plaintiff’s charge

[74] The discharge of the plaintiff’s charge was obviously done without
any redemption sum being paid by Polyidaman and was without the
F
plaintiff’s knowledge and consent.

[75] There is no evidence whatsoever of Polyidaman paying any money

to redeem its property. The fact that the original document of title, the
original stamped charge annexure and the original Form 40 remained in the
G possession and custody of the plaintiff until they were produced in court by
PW9 as exhibits, proves beyond doubt that the plaintiff had absolutely no
idea that the property held as security by them had been discharged
without any redemption sum being paid. PW9, the assistant manager of the
plaintiff confirmed that there was no request for a redemption of the
H property nor any redemption sum received.

[76] The plaintiff’s charge was discharged on 1 November 2006 by way of

a Form 16N of the NLC, lodged under Presentation No 97694/2006 vide
penyata perserahan (P9). This fact was confirmed by PW4 from the Land
I
Office.
214 MLJournal IN FOCUS [2015] 4 MLJevi

(e) Forgery of PW6’s signature on Form 16N (discharge of plaintiff’s A

charge)

[77] The purported signature of Khoo So Yin (PW6) an officer of the

plaintiff appearing in Form 16N has been proven to be forged. PW6 said so
herself, that she did not sign the form and the signature appearing thereon B
does not belong to her.

[78] PW5, a hand-writing expert and a forensic document analyst of 25

years experience testified that according to his findings contained in his C
signature verification report, the purported signature of Khoo So Yin
appearing on Form 16N was of a different authorship from the specimen
signatures of Khoo So Yin. The fact that the signature of Khoo So Yin was
forged was readily accepted by the court as there was no reason
whatsoever to the contrary not to do so (see United Asian Bank Bhd v Tai D
Soon Hing Construction Sdn Bhd [1993] 1 MLJ 182). The evidence of PW5
was received by the court as expert evidence and his report was accepted
as an expert report without dispute as it had been agreed between the
parties to be included in Part A of the bundle of documents. In doing so the
defendant admitted both the truth of the contents in the report as well as E
its authenticity (see Jaafar Shaari & Anor (Suing as administrators of the estate
of Shofiah bte Ahmad, deceased) v Tan Lip Eng [1997] 3 MLJ 693; [1997] 4 CLJ
509 on the authenticity and truth of documents admitted in Part A of the
bundle of documents).
F
(f) Forged signature of PW6 on Form 16N was witnessed by Frankie Tan

[79] Frankie Tan was in charge of the defendant’s branch office in Subang
Jaya. The Subang Jaya branch office had been instructed by the plaintiff to G
attend to the loan documentation and it was within the scope of Frankie
Tan’s duties to attend to the witnessing of any signature on any discharge
of charge form.

[80] The signature of Frankie Tan appearing on Form 16N was examined H
and analysed by PW5. PW5’s conclusion was that the signature was of the
same authorship from the specimen signatures of Frankie Tan extracted
from other documents previously witnessed by Frankie Tan and which
were kept by the plaintiff’s security documentation unit. These specimen
signatures have been admitted by the defendant in that they are included in I
Part A of the bundle of documents. Further, Frankie Tan himself in his
cross-examination had admitted that the specimen signatures used in
PW5’s Report appeared to be his signatures.
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 215

A [81] In cross-examination of PW5, counsel for the defendant attempted

strenuously to discredit the findings of PW5 on Frankie Tan’s signature
appearing in the Form 16N. Unfortunately all these questions came to no
avail as the defendant did not have their own expert report to back up
counsel’s contentions. At best these were questions put together by
B counsel as a lay person emanating from the Bar without the benefit of an
expert report. No serious challenge was mounted by the defendant. To do
so it would have been incumbent on the defendant to produce an expert
report or to call an expert to contradict the evidence of PW5 (see Sun Ho
Sdn Bhd v Alliance Bank Malaysia Bhd [2008] 6 MLJ 457 and Chu Choon Moi
C
v Ngan Sew Tin [1986] 1 MLJ 34).

[82] In fact and in law, in the absence of a hand writing expert called by
the defendant, the court would be entitled to draw an adverse inference
D against the defendant for failing to do so especially since no reason was
proferred as to why no expert’s report had been obtained on the
authenticity of Frankie Tan’s signature which was being challenged by the
defendant (see Jaafar Shaari & Anor (suing as administrators of the estate of
Shofiah bte Ahmad, deceased) v Tan Lip Eng).
E
[83] In conclusion, the court holds that Frankie Tan did witness the
forged signature of Khoo So Yin. The attestation as such was fraudulent.

[84] An issue was raised by counsel for the defendant that the plaintiff
F
had not proved who had in fact forged the signature of Khoo So Yin. This
goes to show that the counsel for the defendant has missed the point
completely. The issue at hand is not who had forged the signature of Khoo
So Yin but whether it was Frankie Tan who had witnessed the forged
G signature. By placing his signature on Form 16N, Frankie Tan must accept
the responsibility of being the witness to the forged signature. The
plaintiff’s cause of action is not premised on who had forged Khoo So Yin’s
signature but that Frankie Tan in breach of his duties had witnessed a
forged signature. In fact in the written submission of counsel for the
H defendant he had admitted that Khoo So Yin’s signature was a forged
signature.

(g) Form 16N was presented by the defendant

I [85] Form 16N was undoubtedly presented by the defendant to the Land
Office vide the penyata perserahan (P9) on 1 November 2006 which was
attested by PW4. The fact of presentation was even admitted by DW1
during his cross-examination.
216 MLJournal IN FOCUS [2015] 4 MLJevi

(h) Form 14A and Form 16A were presented by the defendant A

[86] Form 14A (the memorandum of transfer) to transfer the property

of Shahrol and Form 16A (the CIMB charge) were presented to the Land
Office at the same time as Form 16N (the plaintiff’s discharge of charge)
using the same penyata perserahan on 1 November 2006. This was B
confirmed by PW4 of the Land Office.

(i) Attestation of Form 14A

C
[87] Form 14A (the memorandum of transfer) to transfer the property
to Shahrol and Shahrol’s NRIC were certified by Chow Kah Wai (DW4)
who was at the material time a legal assistant of the defendant and later
became a partner. DW4 had initially agreed that he had certified the Form
14A and Shahrol’s NRIC but later retracted his evidence and purported to
D
dispute the authenticity of his signatures. The court is of the view that the
change of evidence by DW4 had rendered him to be an unreliable witness.
The reason given by DW4 that while the sale price of the property was
RM1.5m, the consideration price stated in Form 14A was only RM630,000
and as there was a difference in the figures he would not have certified
E
Shahrol’s signature, appears to be an afterthought.

(j) Form 16A (the CIMB charge)

[88] Form 16A charging the property to CIMB Bank signed by Shahrol F
and an officer of CIMB was witnessed by Frankie Tan on 19 October 2006.

[89] PW1, an officer of CIMB had testified that the defendant had been
appointed by CIMB to attend to the loan documentation between CIMB
and Shahrol and that he was the officer who had executed the charge G
documents for CIMB.

(k) CIMB’s loan to Shahrol

[90] The loan agreement between CIMB and Shahrol and the sale and H
purchase agreement between the bank and Shahrol (which was also
witnessed by DW4) had been included in Part A of the bundle of
documents. The defendant is thus estopped from disputing the authenticity
and contents of these documents. It cannot be denied that these
documents were in fact prepared by the defendant. I

[91] The defendant by its letter dated 1 November 2006 to CIMB had
advised CIMB that it was in order for it to release the loan sum to the
defendant’s HSBC Account No 352–050389–101 ‘as stakeholders for the
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 217

A Vendor’, (the vendor being Polyidaman). In this same letter the defendant
had admitted that it had presented the discharge of the plaintiff’s charge for
registration.

[92] Frankie Tan in cross-examination admitted that the HSBC Account

B belonged to the defendant’s Head Office and was under the control of Paul
Cheah himself.

(l) Disbursement of CIMB’s loan sum of RM800,000

C
[93] PW10, a Vice President of CIMB produced the bank’s single credit
completion advice dated 8 November 2006, admitted into evidence as
exh P16, proved categorically that CIMB had indeed transferred the loan
sum of RM800,000 to the HSBC account belonging to the defendant.
D
[94] No evidence was tendered by the defendant to challenge or rebut
PW10’s evidence. The defendant was given the opportunity to recall
Frankie Tan to explain otherwise but unfortunately Frankie Tan failed to
show up in court again. No reason was given by counsel for the defendant
E for Frankie Tan’s absence despite counsel’s assurance that Frankie Tan
would be recalled. The court agrees with counsel for the plaintiff that this
would be a fit and proper case for an adverse inference under s 114(g) of
the Evidence Act 1950 to be drawn against the defendant for the failure to
produce the register book or other documents referred to by Frankie Tan
F to rebut exh P16.

[95] In the absence of any evidence to the contrary, the court accepts as
of fact that the RM800,000 ended up in the HSBC account of the
defendant’s Kuala Lumpur office and since nothing has been said about the
G further disbursement of that money, it is not unreasonable for the court to
conclude that the said sum of RM800,000 may very well still be sitting in the
account of the defendant to date.

[96] It is in evidence that the HSBC account is under the control of the
H Head Office and could only be assessed by the defendant’s Kuala Lumpur
partners. Yet no evidence has been forthcoming from the defendant to
show whether the money was disbursed to Polyidaman if indeed the loan
sum obtained by Shahrol was to purchase the property from Polyidaman.
Interestingly, neither Shahrol nor Paul Cheah for that matter have been
I called as defence witnesses nor any reason given for not calling them. A
nagging question remains as to why the RM800,000 was paid into the Kuala
Lumpur Head Office Account when the sale of the property to Shahrol was
a transaction handled by the Subang Jaya Branch. It appears there is a lot
more than meets the eye and the complaint of complicity by the Kuala
218 MLJournal IN FOCUS [2015] 4 MLJevi

Lumpur Head Office made by counsel for the plaintiff may be well A
grounded. In any event, again this is a fit and proper instance for the court
to invoke an adverse inference under s 114(g) of the Evidence Act 1950
against the defendant for failing to call Shahrol and Paul Cheah as witnesses.

[97] In view of the findings of fact made above, the court is of the view B
that the defendant must be held accountable for the loss suffered by the
plaintiff.

[98] The defendant in particular Frankie Tan, knowing that the plaintiff’s C
loan to Polyidaman was still outstanding and that the redemption sum had
not been paid had no reason whatsoever to witness the forged signature of
Khoo So Yin on Form 16N to discharge the plaintiff’s charge. Due to the
fraudulent discharge of plaintiff’s charge, the transfer of the property to
Shahrol and the wrongful registration of CIMB’s charge, the plaintiff has lost D
its security for the loan to Polyidaman. All these events took place due to
the fraudulent conduct of Frankie Tan and his breaches of the duty of care
and contract owed to the plaintiff. The complicity of Frankie Tan in this
criminal venture is evident. Without redeeming the property, Frankie Tan
managed to secure a loan of RM800,000 from CIMB. The money was E
disbursed into the HSBC Account operated by the defendant at its Head
Office where presumably it remains till today.

[99] All the partners of the defendant in the Head Office as well as in the
Subang Jaya Branch are jointly liable for the loss and damages suffered by F
the plaintiff due to the fraudulent acts, negligence and breaches of contract
committed by Frankie Tan. In the law of partnership there is no distinction
between the branches and the Head Office in so far as liability is concerned.

[100] The conveyancing practice of the Subang Jaya branch was the G
ordinary business of the firm. The fact that Frankie Tan had carried out the
transactions in respect of the property in a fraudulent manner does not
exempt the firm from being liable under s 12 of the Partnership Act 1961 .
The fact that the transactions were carried out through illegal means is
irrelevant to the determination that the transactions were within the H
ordinary course of business of the defendant. A partner who is ignorant of
the offence committed by his partner is still liable for the same offence as
a partner (see Clode v Barnes [1974] 1 All ER 1166). And in Alan Michael
Rozario v Merbok MDF Sdn Bhd [2010] MLJU 1331; [2011] 1 CLJ 433 it was
held that although the second defendant was ‘not an equity partner of the I
main branch of the legal firm and that he had no knowledge of the matter
did not absolve him in law under the Partnership Act 1961, of his liability as
a partner of the firm at the material time. The second defendant’s
obligation and liability to the plaintiff under the Letter of Undertaking was
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 219

A pursuant to his being a partner of the firm and not his knowledge or
express authorisation of it’).

(m) The pleading point

B [101] In his submission, counsel for the defendant complained that the
plaintiff had failed to plead the sale and purchase transaction between
Polyidaman and Shahrol in the statement of claim. Counsel contended that
the whole of the plaintiff’s case emanated from this sale and purchase
transaction and as it was not pleaded the defendant was unable to address
C
the issues that flowed from it.

[102] The court agrees with counsel for the plaintiff and holds that the
counsel for the defendant is wholly wrong on his complaint. The plaintiff’s
D claim is not premised on whether the sale and purchase agreement and the
memorandum of transfer between Polyidaman and Shahrol and the loan
agreement between Shahrol and CIMB are valid and binding but the cause
of action is that the plaintiff has lost its security over the property due to
the breaches of conduct and fraudulent acts of Frankie Tan (and of the
E defendant) in causing the plaintiff’s charge ot be discharged and the
memorandum of transfer and the CIMB charge to be registered without
the property having been redeemed in the first instance. Everything was
done without the knowledge of the plaintiff and fraudulently behind its
back. Hence, there is no lack of pleading in the statement of claim by the
F plaintiff.

(n) Admissibility of exhs P16 and P17

[103] The disbursement of the loan sum of RM800,000 by CIMB into the
G defendant’s HSBC account at the Kuala Lumpur Head Office is evidenced
by the production by PW10 of the bank’s single credit completion advice
dated 8 November 2006. It was admitted into evidence and marked as
exh P16. As P16 was a computer printout, it was incumbent upon the
plaintiff to produce the certificate required under s 90A of the Evidence
H Act 1950. But before the certificate could be marked as an exhibit, counsel
for the defendant objected to it on the ground that it was not stated in the
certificate the date the relevant information was keyed into the computer.
The court held that counsel was wholly misconceived in his objection as
there is no such requirement imposed by s 90A. All that is required by
I s 90A(2) is that the certificate is signed by a person who is responsible for
the management of the operation of the computer or for the conduct of
the activities for which the computer was used. Further s 90A(6) provides
that the document produced by a computer (P16) shall be admissible in
evidence and any such document so produced by a computer shall be
220 MLJournal IN FOCUS [2015] 4 MLJevi

deemed to be produced by a computer in the course of its ordinary use. A

And as the certificate was signed by PW10 as being the person responsible
for the management of the operation of the computer, the certificate was
admitted and marked as exh P17. There is no requirement under s 90A(2)
or s 90B that the certificate has to state the date of the input of the
information into the computer. In any event counsel for the defendant B
failed to cross-examine PW10 on the date of supply of the information into
the computer. The court was satisfied nonetheless that the information
keyed into the computer was contemporaneous as P16 was dated
8 November 2006 and the money was received by the defendant in its
C
HSBC account on the same date.

(o) Statement of accounts of Polyidaman

[104] Counsel for the defendant contended that the accounts of D

Polyidaman cannot be admitted in evidence as the plaintiff had failed to
produce a s 90A Evidence Act certificate in respect of the computerised
documents and being in breach of the Bankers’ Books (Evidence) Act 1949
as well. Counsel also contended that Kwan Kin Leong (PW9) had no
knowledge of the accounts and her evidence was therefore hearsay. The E
court is of the view that counsel’s contentions are wholly misguided as
counsel seems to forget that these accounts found in Bundle D from pp 986
to 1014 are in fact comprised in Part A of the bundle of documents. Thus
the authenticity and contents of the said documents have all along been
admitted by the defendant (see Jaafar Shaari & Anor (suing as administrators F
of the estate of Shofiah bte Ahmad, deceased) v Tan Lip Eng). This means that
the defendant cannot now dispute that the sum owing by Polyidaman to the
plaintiff at the material time was RM561,483.63.

On quantum G

[105] As at 4 January 2011 the amount owing by Polyidaman on the

outstanding loan was RM561,483.62. The plaintiff sought to recover the
sum of RM720,000 being the fair market value of the property if it was
auctioned in foreclosure proceedings. The court saw no reason why the H
plaintiff should recover any sum higher than the sum actually owed by
Polyidaman. In any event even if the sum of RM720,000 or any other sum
was recovered as a result of a sale by auction, the excess sum must be paid
back to Polyidaman. Hence, the court was only prepared to order the sum
of RM561,483.62 being awarded to the plaintiff as loss and damages I
suffered.

[106] The sum owing by Polyidaman was not seriously challenged by

counsel for the defendant. In any event, the defendant could not have made
 Public Bank Bhd v Paul Cheah & Assoc (Frankie Tan Lyn
[2015] 4 MLJevi Seang, third party) (Mah Weng Kwai J) 221

A much of a challenge as the statements of accounts relating to Polyidaman’s

loan were included in Part A of the bundle of documents.

On costs

B [107] Parties were also requested to submit on costs in their written

submissions.

[108] Counsel for the plaintiff requested for costs of RM200,000 and filing
and other fees in the sum of RM5,704.70 and expenses incurred in respect
C for the forensic signature analysis reports and attendance of the expert in
court in the sum of RM19,256.

[109] Counsel for the defendant suggested that costs to the defendant
D
should be RM150,000.
CONCLUSION

[110] On the totality of the evidence the court was satisfied that the
E
plaintiff had proven its case against the defendant on a balance of
probabilities. The burden of proof had shifted to the defendant who
unfortunately had failed miserably to discharge that burden.

[111] In the result, the plaintiff’s claim was allowed with costs of
F RM180,000 and the sums of RM5,704.70 and RM19,256 being filing and
other fees and the cost of the signature analysis report and attendance of
PW5 in court, respectively.

Claim allowed.
G
Reported by Ashok Kumar