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2011 MarsdenLR 1592
HIGH COURT MALAYA JOHOR BAHRU
SEE CHOO @ SEE GUAT KIOK – Appellant
Versus
JB SECURITIES SDN BHD – Respondent
[Civil Suit No. 22-935-2008]
The burden of proof lies with the plaintiff to establish fraud; mere suspicion does not satisfy the requisite legal standard, leading to claim dismissal.
Headnote:(A) Limitation Act, 1953 - Section 6(1) and Section 29 - Plaintiff's claim involved allegations of fraud regarding stock trading transactions conducted by the Defendant for two accounts. Defendant contended that the claims were time-barred as the transactions occurred over six years prior to filing. (Paras 6, 12)
(B) Fraud - Plaintiff failed to prove fraud as no specific allegations against the individual agent dealing with transactions were made. Allegations lacked sufficient particularity and failed to meet the standard of proof for fraud. (Paras 16, 18, 37)
Facts of the case:
The Plaintiff had two trading accounts with the Defendant, a stock broking company, alleging fraud and breach of contract based on improper execution of trades through her accounts. The Defendant argued the Plaintiff was aware of all details due to prior lawsuits. (Paras 1, 2, 3)
Findings of Court:
The court found the Plaintiff's claims to be time-barred due to the Limitation Act, as the discovery of fraud did not exempt her from this limitation. Evidence did not sufficiently prove fraud. (Paras 33, 37)
Issues: Key issues revolved around whether the defendant had operated accounts fraudulently, whether the plaintiff had suffered loss from negligence, and the impact of the limitation period on the claims. (Paras 4, 5)
Ratio Decidendi: The court emphasized that the Plaintiff carries the burden of proof in fraud claims, necessitating clear allegations against identifiable individuals. Speculative claims without concrete evidence of wrongdoing do not fulfill the required standard. (Paras 17, 37)
Result: Claim dismissed with costs.
| Table of Content |
|---|
| 1. plaintiff's claims arise from a contractual relationship. (Para 1 , 1 , 2) |
| 2. defendant's arguments include time barring and denial of fraud. (Para 3 , 4 , 5) |
| 3. discussion on limitation period for fraud claims. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 4. previous legal suit's impact on current claims. (Para 14 , 15) |
| 5. burden of proof and requirements for fraud allegations. (Para 16 , 17 , 18 , 19 , 20) |
| 6. examination of evidence and claims of fraud. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31) |
| 7. high standard of proof required for fraud; claim dismissed. (Para 32 , 33 , 34 , 35 , 36) |
[1] The plaintiff ('P')'s cause of action, which arises from a contractual relationship with the defendant ('D') involving share trading, is premised on fraud as particularised in the statement of claim. The alleged fraud by D revolved around the manner in which P's share trading accounts were operated by D. The claim was broken down into various heads, each particularised in the form of individual trading names for shares of companies listed on the Kuala Lumpur Stock Exchange ('KLSE'). The various heads refer to the trading counters as set out in the statement of claim ('SOC').
Summary of Facts (Agreed)
[2] (1) The plaintiff was a client of the defendant. The defendant is a stock broking company, whose main trading activity is the buying and selling of shares on the Kuala Lumpur Stock Exchange.
(2) The plaintiff had two trading accounts with the defendant, namely 2AM033 and 3SE035.
(3) Account No. 2AM033 was a margin-trading account. This margin trading facility was offered under account 2AM033 which was set up by Arab-Malaysian Merchant Bank Berhad ("AMBB").
(4) There were transactions under the following counters of companies of the KLSE:
(a) Malakoff
(b) Faber Merlin
(c) Jasa Mega
(d) Landmark
(e) MFCB
(f) Mentiga
(g) HICOM
(h) SittTatt
(i) NBT
(j) ANCOM
(k) BIN
(5) The plaintiff has made many complaints and inquiries, and had also made various relevant applications as follows:
(a) Johor Bahru High Court on 3/11/1999,
(b) Johor Bahru High Court 13/6/2002, and
(c) Johor Bahru High Court 2/12/2002
for the Defendant to disclose the said purchases (together with the documentation relevant thereto).
P obtained orders of disclosure against D through these applications.
Summary of Defendant ('D')'s Case
[3] 1. The Defendant states that the 2AM033 account was a margin financing facility opened by the plaintiff but operated by the plaintiff's agent, Arab Malaysian Merchant Bank Berhad (AMMBB).
2. AMMBB dealt directly with the Defendant in respect of the trade settlement of payments for the plaintiff under the 2AM033 account and since the margin financing facility was operated by AMMBB, the Defendant sent to AMMBB all contract notes, bills, contract statements and the monthly statement of accounts in respect of the 2AM033 account.
3. In respect of the trades in specific shares the gist of D's main contentions were:
a) All the sale and purchase transactions were done on P's instructions with her full knowledge without any fraud, breach of duty or wrongful actions.
b) All the contract notes pertaining to the above transactions had been given to AMMB, who managed P's 2AM033 account, in the normal course of business.
c) Losses, if any, sustained by P were the result of normal trades and risks associated with share trading.
d) D was not privy to the statements of accounts (SOA) issued by AMMB to P nor responsible for them.
e) P's two accounts, 2AM033 and 3SE035 were separate and distinct accounts.
f) The buy-in of shares complained of was to comply with KLSE's requirement and practice due to P's 'short sell' position and there was no wrongdoing.
g) All sale and purchase transactions in respect of the relevant counters were reflected in the SOA sent to P either by D for 3SE035 account or by AMMB for 2AM033 account, including the 'keying- in mistake' shown by notice of wrong entry and subsequent amendment.
h) D did not conceal any trades or cancellations from P.
i)
