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2013 MarsdenLR 2115
FEDERAL COURT PUTRAJAYA
TONG SOON TIONG & ORS – Appellant
Versus
FA SECURITIES SDN BHD – Respondent
[Civil Appeal No: 02-26-2012(T)]
The evidence of a bankrupt is admissible in court unless evidence rules exclude it based on lack of understanding or rationality.
Headnote:(A) Bankruptcy Act 1967 - Section 38 - Evidence Act 1950 - The court examines the admissibility of evidence from a bankrupt witness in civil proceedings. The absence of the first five plaintiffs does not render their claims inadmissible. The 6th plaintiff’s evidence, despite bankruptcy, was deemed admissible. (Paras 8, 18, 22)
(B) The learned judge clarified that bankruptcy does not inherently disqualify a witness under Section 118 of the Evidence Act 1950. Competency is determined by intellectual capacity and understanding, not by bankrupt status. (Paras 12, 22)
Facts of the case:
The plaintiffs, including a bankrupt, sued the defendant for refunds on charges. The 6th plaintiff’s evidence supported the claims of the other plaintiffs.
Issues: The court addressed the admissibility of a bankrupt's evidence and whether it impacts the claims of co-plaintiffs.
Findings of Court:
The initial ruling denying the first five plaintiffs their claims due to the bankruptcy of the 6th plaintiff was overturned, affirming that the 6th plaintiff's evidence was admissible.
Ratio Decidendi: The court ruled that the evidence of a bankrupt is competent unless excluded for reasons of understanding or rationality, reiterating that bankrupt status alone does not impede witness admissibility.
Result: The appeal is allowed with costs; the prior dismissal of the plaintiffs' claims is overturned.
| Table of Content |
|---|
| 1. question of admissibility of bankrupt's evidence. (Para 1) |
| 2. 6th plaintiff's evidence suffices for claims. (Para 2 , 5 , 7) |
| 3. testimony not obligated despite absence. (Para 3 , 4 , 6 , 8 , 9) |
| 4. legal status of bankrupt; restrictions applied. (Para 10 , 11 , 12 , 13) |
| 5. competence of bankrupt as a witness. (Para 14) |
[1] This is an appeal by the 1st to the 5th plaintiffs (first five plaintiffs/ applicants), and the question for determination is as follows:
"Is the evidence of a bankrupt, apart from his capacity as one of the plaintiffs in an action, inadmissible, even though the type and cause of action of the other plaintiffs are similar as against the respondent (defendant)?"
[2] Sometime in 1994 the first five plaintiffs and the 6th plaintiff who were remisiers, entered into a "Remisier's Agreement" with the defendant, which was a broking house. On 19 August 1999 these two parties entered into a new agreement. A dispute which centered on the imposition of various fees by the defendant arose later leading to compromises whereupon certain refunds were made to all the six plaintiffs. As the matter was not completely resolved the six plaintiffs filed an action against the defendant, demanding the refund of paid charges amounting to RM558,123.47 imposed in 1994 and 1995. None of the first five plaintiffs appeared as witnesses in support of their claims. Only the 6th plaintiff gave evidence. As the claims of each of the plaintiffs were similar, with the distinguishing factor being the amount filed, the 6th plaintiff's evidence had the effect of establishing the claims of the other five plaintiffs (as found by the learned judge).
[3] Nothing should be inferred from the absence of the first five plaintiffs to appear in court as there is no requirement in law for them to personally testify in support of their respective claims. Peter Gillies in Law of Evidence in Australia, 2nd edn wrote at p 653:
"A party in civil proceedings may decline to testify, and/or adduce evidence on a particular issue, such as by failing to call a particular witness...The approach of the courts has been that a relevant failure to call evidence or to testify in civil procedures is of evidential significance."
[4] Success of any claim depends on sufficiency of the relevant and admissible evidence made available to the court which may come from various sources.
[5] There was evidence adduced in court showing that the defendant had admitted to some of the erroneous charges, which should not have been imposed, and had indeed refunded some of the 1999 charges. On 15 March 2005 the 6th plaintiff was made a bankrupt, ie after the claims had been filed. That bankrupt status was only discovered in the midst of the submissions in 2008. Despite no sanction having been obtained from the Director General of Insolvency (DGI) the trial still proceeded on. The court eventually delivered its decision on 2 February 2009.
[6] The learned judge clarified that there was no law that prevented a bankrupt from giving any evidence and in the course of it alluded to the case of The Topps Company Inc v. Mally Jaya Sdn Bhd , [1998] 2 CLJ Supp 235 . Low Hop Bing J (as His Lordship then was) had remarked:
"In the circumstances, the mere fact that the deponent was an undischarged bankrupt did not deprive him of any legal competency in affirming an affidavit in support of the ex parte application in these proceedings specifically or, for that matter, any affidavit for use in any court or other proceedings generally."
[7] Having found the 6th plaintiff a competent witness, with his evidence being admissible for the first five plaintiffs' claims, the learned judge found for them but dismissed the 6th plaintiff's claim for want of sanction.
[8] The defendant then filed an appeal at the court of Appeal though not the 6th plaintiff despite having had his claim dismissed. The court of Appeal decided that the want of sanction caused the 6th plaintiff's evidence to be inadmissible, leaving
