The court clarified that recantation of testimony requires substantial scrutiny, and the burden of proof for fraud allegations lies with the one asserting forgery, underscoring the trial judge's broad discretion in witness assessment.

Headnote:(A) Courts of Judicature Act 1964 - Section 96 - Comprehensive analysis of multiple appeals involving questions of law regarding shareholding disputes and validity of agreements related to family companies - Variance in judgment interpretations concerning recantation of witness testimony and burden of proof for fraud allegations - Key principles established around judicial discretion in assessing witness credibility, expert evidence, and the procedural correctness in dealing with recantations and impeached testimony as well as the standards for determining the onus of proof. (Paras 14, 20-23, 80, 84-86, 104-124)

Facts of the case:
These appeals deal with a series of litigation among family members regarding shareholdings and alleged fraudulent transfers related to family-owned properties. The disputes center around the validity of a Share Sale Agreement (SSA) and claims of forgery and constructive trust involving various family members and their lawyers. (Paras 4-9)

Findings of Court:
It was concluded that the trial judge correctly assessed the existing shares and determined the validity of the SSA, placing the burden of proof concerning forged signatures upon the claimant. The appellate court's reversal was deemed inappropriate. (Paras 153-154)

Issues: The key issues addressed relate to the existence and validity of the SSA, the impact of witness recantation on the trial's integrity, and the burden of proof in allegations of forgery or fraud. (Paras 12-13, 32, 78, 153)

Ratio Decidendi: The court established that recantation does not automatically entail the rejection of all prior testimony; rather, a careful assessment of the entire body of evidence is necessary. The appellate court should afford considerable deference to trial judges who assess credibility based on direct witness testimony. (Paras 77, 124, 142)

Result: Appeals are allowed, the decisions of the Court of Appeal are set aside, and the decisions of the High Court are affirmed. Costs orders are detailed for the appellants and modifications decreed regarding share transactions. (Paras 154-156)

Table of Content
1. introduction of overlapping appeals. (Para 1 , 2 , 3)
2. dispute between siblings over family company shareholding. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11)
3. consent on ssa's validity affects appeals. (Para 12 , 13 , 14)
4. trial court deemed final on factual findings. (Para 15 , 16 , 18 , 19)
5. procedural issues of witness recantation. (Para 20 , 21 , 30 , 38 , 41)
6. significance of 'plainly wrong' test in appeals. (Para 22 , 23 , 42 , 43)
7. legal standards for fraud and burden of proof. (Para 79 , 84 , 86 , 104)
8. onus of proof lies with the party asserting forgery. (Para 100 , 101 , 102)
9. comparison of expert witness reliability. (Para 126 , 127 , 128)
10. appellate court reinstates trial court's decisions. (Para 154 , 156)

JUDGMENT

Introduction

[1]There are four appeals that were heard together involving a total of 12 questions of law (“QOLs”) as granted at the leave stage. They are 8 QOLs in cases no. 23 & 25 and 4 QOLs in cases no. 24 & 26. There are, however, overlapping in some of the QOLs which will be dealt with together based on the issues as will be enumerated below.

[2]We heard oral submissions by all learned counsel representing the respective parties, and at the end of those submissions, we were not able to come up with a decision on that day, and we therefore indicated to all learned counsel that we needed a bit of time to consider the respective submissions and that they would be informed once a decision is reached pertaining to each of these appeals, in due course. We have now reached our decisions and what follow below are our deliberations of the issues raised and our reasons as to why we have so decided.

[3]My learned sisters Justice Hasnah binti Dato’ Mohammed Hashim and Justice Rhodzariah binti Bujang have read this judgment in draft and they had indicated to me that they agreed with the same and that it becomes the judgment of this Court.

Background facts and the antecedent proceedings

[4]These appeals emanate from three suits at the High Court which essentially involve a dispute between two siblings on shareholding in family companies. Theow Say Kow @ Teoh Kiang Seng (“Henry”) is the eldest brother and Teoh Kiang Hong (“Gary”) is the youngest brother.

[5]Chronologically, on 1.2.2008 (case no 22-58-2008), Henry filed a claim against Gary, his wife, their parents and others, on the basis of fraudulent transfer of the 4 landed properties held by the family companies wherein Henry was one of the shareholders who claimed to have invested about RM6.1 million for the purchase of the said lands in 1994/1995. It was on the basis of his alleged contribution that Henry claimed that Gary/wife/parents to have held those properties on constructive trust (“Case A”).

[6]Following this Case A, on 25/2/2008, Gary sent a demand letter to Henry for the performance of the Share Sale Agreement (“SSA”) allegedly entered into orally and informally in 2001/2002 by way of a split agreement which was formalised in 2005, for the sale of Henry’s share in the family companies to Gary. Henry denied the existence of any such an agreement and subsequently filed a police report on 8/3/2008, claiming that was the 1st time he saw the unstamped SSA. Henry further claimed to have never instructed the solicitor, Khor Gaik Thiam (“Khor”) to prepare the said SSA, and that he never signed the same. Henry alleged forgery of his signature and questioned the validity of the SSA. This led to the filing of the High Court suit by Gary against Henry in case no 22-121-2008 (“Case B”).

[7]Henry then filed another suit against the solicitors – Khor, Latsmanan Ponnusamy and their legal firm – on the grounds of conspiracy and fraud in respect of the sale and purchase agreement (“SPA”) of the 4 lands of the family companies; and in respect of the preparation of the SSA. This is the High Court suit no 22-610-2008 (“Case C”).

[8]Following a shareholders meeting on 19/10/2009, the SPAs for the sale of those lands to Gary’s 2 companies were cancelled, whe

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2024 MarsdenLR 341

The court clarified that recantation of testimony requires substantial scrutiny, and the burden of proof for fraud allegations lies with the one asserting forgery, underscoring the trial judge's broad discretion in witness assessment.

Cases Referred (4)