Payments made under a mistake of fact can be recoverable, reinforcing the principle against unjust enrichment.

Kamardin Hashim JCA:

Introduction

[1] This is an appeal by the appellant/plaintiff against the decision of the High Court Judge ('trial judge') given on 18 December 2017 after a full trial, in dismissing the appellant/plaintiff's claim and in allowing the respondent/defendant's counterclaim in the sum of RM234,940.28 with a global cost of RM15,000.00.

[2] The appellant/plaintiff was one of the pioneers and was responsible for the setting up of the Miri branch of the respondent/defendant company. He was promoted to the position as the Agency Manager. He hold the post until he retired in the respondent/defendant company.

[3] The appellant/plaintiff's claim was for the overriding commissions in respect of Liew Sze Chin's and Mesir Ting's units calculated from September 2013 until the date of judgment.

[4] The respondent/defendant counterclaimed for the refund of the sum of RM234,940.28 which was paid to the appellant/plaintiff under the mistaken belief that appellant/plaintiff was entitled to it as overriding commissions.

[5] We heard the appeal on 25 June 2019. After considering the submissions of parties on the issues raised in during the preliminary objection by the respondent/defendant, we unanimously dismissed the appeal with costs. We now give our reasons in dismissing the appeal.

[6] For ease of reference, the parties will be referred to as they were in the High Court.

The Background Facts

[7] Facts of the case was not much in dispute. During the plaintiff's tenure as the Agency Manager in the defendant company, he had recruited an insurance agent named Voon Pin Kuan ('Voon').

[8] When Voon was promoted as Unit Manager and later Agency Manager, he in turn recruited his wife, Liew Sze Chin ('Liew') to be his agent. Another agent, Mesir Ting was later recruited by Liew under her direct control and supervision.

[9] Generally, an agency leader such as Voon, was entitled to earn overriding commission on his 'downline' agent namely Liew and also Liew's own 'downline' agent, Mesir Ting.

[10] However, pursuant to cl C1 of Schedule C of the Agency Manager Agreement, Voon could not override on Liew's production as they were spouses. In other words, Liew's production could not be taken into account in Voon's total production as the Agency Manager.

[11] Due to the above, the plaintiff being the 'mother manager' was entitled to override Voon's overriding commission in respect of Liew and Mesir Ting's units. This is pursuant to cl C2 of Schedule C of the Agency Manager Agreement.

[12] The plaintiff's entitlement of the overriding commission was subsequently reduced substantially from September 2013 onwards as the defendant had stopped crediting the overriding commissions from Liew's and Mesir Ting's units into the plaintiff's account.

[13] As such, sometime in December 2013, the plaintiff wrote to the defendant to enquire as to the reason for not crediting the said commission into his account. However, the defendant did not reply to the said letter.

[14] Sometime in February 2014, the plaintiff also discovered that his Retirement Gratuity Benefit ('RGB') for year 2014 amounting to RM211,202.96 was withheld by the defendant.

[15] Resulting therefrom, the plaintiff had through his advocates Messrs Suhaili & Bong Advocates wrote a few letters dated 10 June 2014, 14 July 2014 and 23 February 2015 to enquire the reason as to why the defendant did not credit the overriding commission for Liew and Mesir Ting's units into the plaintiff's account and the withholding of the plaintiff's RGB.

[16] It was only on 7 May 2015 that the defendant's advocates, Messrs Shearn Delamore & Co replied the plaintiff's above said letters. In its letter dated 7 May 2015, the defendant stated that the plaintiff was never entitled to any overriding commission with respect to Liew's and Mesir Ting's units under the Agency Manager Agreement and that the defendant had previously made payments of overriding commission to the plaintiff by mistake.

[17] It was also stated in the sa