The court established that an individual can recover funds from another party if unjust enrichment occurs due to a failure in the underlying transaction.

[1] This is an appeal against the decision of the Sessions Court which had dismissed the claim filed by the appellant herein (the plaintiff in the Sessions Court below) for the recovery of a commission payment having earlier been made by the appellant to the respondent (the second defendant in the proceedings before the Sessions Court).

[2] After having heard the appeal, I allowed the same, and stated the main grounds in support thereof. This judgment contains the full reasons for my decision.

Key Background Facts

[3] The parties are Malaysians. The respondent who was the second defendant in the trial, is the wife of the first defendant. The first defendant however is a bankrupt. The trial had thus been pursued by the appellant against the respondent only.

[4] The salient facts, in so far as they are relevant to this appeal, are not complex. It started when the first defendant represented to the appellant that the former was an agent of one Bayerex Capital Ltd ("Bayerex"), an entity which was purportedly operating in Canada and that through Bayerex, the first defendant could assist the appellant secure a loan of USD5 million for the appellant's firm, I-Cloud Forest Incorporated, from HSBC Bank in Canada.

[5] It is common ground that this representation is contained in a written undertaking issued by the first defendant to the appellant by way of an email dated 27 November 2015. Based on other email communication, it is also not denied that the appellant was required to pay a commission amount of USD150,000, being 3% of the intended loan amount of USD5 million, to Bayerex for its services, which the first defendant undertook to remit to Bayerex, and that the first defendant would return the said USD150,000 if the loan from HSBC Canada to I-Cloud Forest Incorporated ("I-Cloud") did not materialize.

[6] A letter issued by Bayerex, signed by an individual who was stated as its CEO, dated 25 November 2015, and addressed to the respondent and the first defendant, authorised both of them as agents to collect the said 3% and to later remit the sum to Bayerex.

[7] The appellant then made the payment of the USD150,000 into the bank account of the respondent, upon the direction of the first defendant. The crediting of the account of the respondent was not disputed but respondent asserted that the account was handled by her husband, the first defendant. The first defendant subsequently delivered to the appellant a letter dated 30 November 2015 from HSBC in Toronto purportedly confirming an account for I-Cloud had been opened, and that certain documents such as a cheque book and an ATM card would be sent to the appellant. The appellant had also executed on behalf of I-Cloud, a loan agreement dated 24 November 2015 with Bayerex and HSBC Canada.

[8] However, as the documents from HSBC never arrived, the appellant did his own inquiries directly with HSBC on 14 December 2015 and discovered that HSBC Canada had neither opened any account nor approved any loan for I-Cloud. The appellant then wrote to the first defendant and the respondent, demanding the return of the USD150,000. This went unheeded. The appellant subsequently, through his solicitors issued a demand notice to the same parties dated 28 January 2016 for the same. This demand too went unanswered.

[9] Hence the suit instituted by the appellant at the Sessions Court in March 2016. The appellant also lodged a police report on 15 August 2016, claiming that that the first defendant had forged bank documents, and basically seeking assistance for the return of the commission.