An employer can be held vicariously liable for an employee's intentional wrongdoing if closely connected to their employment; contributory negligence is not a defense in fraud cases.

JUDGMENT

Leong Wai Hong JC:

Introduction

[1] The law on vicarious liability states that, in certain circumstances, an employer can be held liable for an act of negligence or an intentional wrong committed by his employee, where no fault can be attributed to the employer.

[2] The jurisprudence behind vicarious liability is that some relationships, by their very nature, require the person who engages others to accept responsibility for the wrongdoing of those others. However, the test to be used to hold an employer vicariously liable has vexed the Courts for years since its origin in the common law since the 17th century.

[3] In these grounds of judgment, I will review the various tests formulated by Courts in the unending and elusive search for perfection.

[4] Parties shall be referred to as they were cited at the Sessions Court.

[5] The appeal before me by the 1st defendant deals with the vicarious liability of the 1st defendant for the misappropriation of monies by its employee A. Rahman Bin Sabar, the 2nd defendant, totaling RM314,542.97, while assigned to work at the plaintiff's condo office from 2017 to 2019.

[6] The key issue is whether the 1st defendant, a company that provides property management services to the plaintiff's condo, is vicariously liable for an intentional wrongdoing, i.e., monies stolen by its employee, the 2nd defendant, who was assigned to provide the 1st defendant's management services to the condo.

[7] A related issue is whether an employer, the 1st defendant, resisting a claim for vicarious liability, can plea, in its defence, that the plaintiff has allowed the wrongdoing by the 1st defendant's employee/the 2nd defendant by its own negligence and/or contributory negligence.

[8] The Sessions Court, after a full trial, has ruled in favour of the plaintiff and ordered the 1st defendant to pay the plaintiff:

i) A sum of RM314,542.97;

ii) Damages for breach of contract in the sum of RM7,000.00;

iii) Exemplary and aggravated damages in the sum of RM5,000.00;

iv) Interest at the rate of 5% per annum on items (i) to (iii) above to be paid from 21 June 2023 until the full settlement thereof;

v) Cost in the sum of RM7,000.00.

[9] The judgment of the Sessions Court can be seen in encl 22 Additional Appeal Record pp 4-9. The grounds of judgment can be seen in encl 22 Additional Appeal Record pp 10-35.

[10] Dissatisfied, the 1st defendant filed an appeal to the High Court. On 20 February 2024, I have allowed the appeal partly and made the following orders:

i. The order of the Sessions Court to award general, aggravated, exemplary damages, and cost is set aside.

ii. The award of RM314,542.97 is maintained.

iii. Interest at the rate of 5% per annum on sum awarded to be paid from 21 June 2023 until the full settlement thereof.

iv. Each party to bear own costs for this appeal and Court below.

[11] Dissatisfied again, the 1st defendant, on 20 March 2024, filed an appeal to the Court of Appeal against my order to maintain the award of RM314,542.97. These are my grounds of decision which will only deal with my reasons to maintain the award of RM314,542.97. My grounds will not consider my orders which have not been appealed on.

[12] As the Appeal Records have been filed in a haphazard manner by the solicitors, it is best I state at the outset here, the enclosure numbers for the more relevant Appeal Records:

i. Appeal Record Part B encl 20 contains the Witness Statements.

ii. Appeal Record Part D (Vol 4A) encl 18 contains the Pleadings, Agreed Facts, and Issues to be Tried.

iii. Appeal Record Part D (Vol 4B) encl 19 contains the Notes of Proceedings in the Sessions Court.

iv. Additional Appeal Record encl 22 contains the Sessions Court's grounds of judgment and the judgment against the appellant, who is the 1st defendant.

Background Facts

[13] The plaintiff is the management corporation for "Bukit Desa Kondominium" ["Bukit Desa Condo"].

[14] The 1st defendant is a private limited company providing "management of property and other services". The 2nd