Suriyadi Halim Omar JCA:

[1] This appeal was heard by this panel and was unanimously dismissed with costs.

[2] The plaintiff company (hereinafter referred to as the appellant), is a private company incorporated in Malaysia under the Companies Act and at the material time was a customer of the respondent. The respondent is and was at all material times a banker, carrying on its business at a branch office in Melaka. The appellant had an account at the said branch with the respondent. Between the period of 27 November 1993 until 3 October 1995, the respondent paid out various sums of money in respect of various cheques amounting to RM414,024.70 payable to the bearer, and had debited the account belonging to the appellant. 68 pieces of cheques (P3-P70) were involved altogether. The appellant alleged that it did not draw those cheques or authorise the drawing of those cheques and thereafter through its solicitors claimed that abovementioned sum from the respondent.

[3] At the commencement of the trial the appellant withdrew its claim in regard to cheque number 757318 dated 27 November 1993 for the sum of RM3,000 conceding that the claim for that sum to be time barred. Therefore the claim before us was only for 67 cheques totalling RM411,024.70.

[4] As per the statement of claim the appellant pleaded that the cheques were issued by one Vong Ai Foon and one Ong Swee Hoe, as representatives of the appellant. The respondent should know that the cheques were forged by Vong Ai Foon or by an unknown person. On that premise the respondent was without any authority to pay out or debit the account of the appellant and hence liable to refund the debited sum to the appellant.

[5] At the High Court stage parties agreed that the issues to be revolved were these questions:

i. whether the respondent honouring the 67 cheques which were the subject matter of the action in the sum of RM411,024.70 was in breach of its mandate;

ii. whether the said 67 cheques were signed and or countersigned by one Ong Ah Sim @ Ong Swee Hoe or other authorised signatories; and

iii. whether the respondent was indebted to the appellant with the above sum.

[6] Come the hearing date before us, parties agreed that the pertinent issue to be determined by the Court was whether the 67 cheques were forged, and if so whether the appellant was entitled to be reimbursed.

[7] Whether the appellant is entitled to be reimbursed very much depends on whether at the material time, it was a customer of the respondent in the legal sense. A permanent relationship with a bank, like having an account in it, as in this case obviously qualifies (Commissioners of Taxation v. English, Scottish and Australian Bank Ltd [1920] AC 683; The Great Western Railway Co. v. The London and County Banking Co. Ltd [1901] AC 414). Once the respondent is a customer certain rights will rise between it and the bank, in the like of the bank ensuring customer's confidentiality and exercising care when carrying out instructions etc.

[8] Sifting through past cases banks have not been successful in asserting that a customer is under a duty of care to take precaution in preventing the forgery of signature. With few defences available to banks on this issue, needless to say if the forgery is not proved, then the appellant's case must be dismissed. As stated above, the appellant had alleged that they were either forged by one Vong Ai Foon, an account's clerk of the appellant, and who at the material time controlled the appellant's cheque books, or by some unknown person. At the material time, the 67 cheques of the appellant required at least two authorised signatures from any two of the following persons viz. from one Ong Ah Sim @ Ong Swee Hoe, Vong Ai Foon, Lim Moi Cheng or Ong Keng Swee. Ong Ah Sim died in 2002. To establish its case the appellant called two witnesses namely PW1 and PW2.

[9] PW1, a forensic analyst in his report stated that all the 67 cheques differed with the specimen signatures (P73) given to him for a