2011 MarsdenLR 4519 ; 2011 MarsdenLR 1

MAH WENG KWAI
M & A SECURITIES SDN BHD – Appellant
Versus
KOK CHEK LIANG – Respondent

A stockbroker's representative acts as an agent for the client; hence the client is liable for all transactions, authorized or not, unless explicitly challenged in a timely manner.

Headnote:(A) Rules of the High Court 1980 - Order 4 - Evidence Act 1950 - Defamation - The Plaintiff, a stock-broking firm, claimed RM327,067.99 from the Defendant for defaulting on share transactions—Defendant's defenses included allegations of misconduct by the Plaintiff's representative and unauthorized transactions—Defendant failed to prove his Counter-Claim or his defense of unawareness of the trades conducted through his accounts. (Paras 9.1-9.6, 10.1-10.2, 12.1-12.3, 13.1-13.6)

Facts of the case:
The Plaintiff was a Participating Organisation of Bursa Malaysia with the Defendant as a client. The Defendant opened two trading accounts and failed to settle losses resulting from trades performed by the Plaintiff's representative. The Plaintiff alleged the Defendant owed RM327,067.99 due to contravening terms of the accounts. The Defendant contested the claim, denying knowledge of trades and alleging collusion.

Findings of Court:
The Plaintiff proved its claim by a balance of probabilities, and the Counter-Claim was dismissed. The Defendant's allegations of misconduct did not absolve him from liability.

Issues: Whether the representative of the Plaintiff acted as the client’s agent and whether the Defendant is liable for trades and losses incurred.

Ratio Decidendi: The representative acted as the Defendant's agent, and thus, the Defendant is liable for all transactions conducted, regardless of authorization. The finding of mismanagement by the Plaintiff does not relieve the Defendant of responsibility.

Result: Judgment as prayed in terms of the Amended Statement of Claim was entered for the Plaintiff and the Counter-Claim dismissed with costs.