JUDGMENT

Jamhirah Ali J:

Introduction

[1] This is an appeal by the Appellant, Ali Said Hamdan Al Rawahi, against the decision of the learned Sessions Court Judge (SCJ) dated 10 May 2024, which dismissed the Appellant's claim against the Respondent, Ahmad bin Hassan, following a full trial.

Background Facts

[2] The material facts are largely undisputed.

[3] The Appellant, a citizen of Oman, invested RM960,000.00 in Bidara Flour Sdn Bhd pursuant to a Share Purchase Agreement dated 28 July 2016, under which he was to hold 48% of the company's ordinary shares. Payment was made into the company's account, and the Appellant was appointed as a director.

[4] In March 2022, the Appellant discovered through a Companies Commission of Malaysia (SSM) search that his shareholding had been reduced to 32%, while the Respondent's shareholding had increased to 68%. He claimed that this reduction occurred without his knowledge or consent, and that the Respondent had fraudulently misrepresented his entitlement to 48% of the shares.

[5] The Respondent's defence was that the Appellant had voluntarily executed a Members' Resolution and Circular Resolution dated 5 April 2019, approving an increase in paid-up capital from RM2,000,000.00 to RM3,000,000.00, and agreeing that the Respondent be allotted an additional 1,000,000.00 shares, thereby diluting the Appellant's shareholding to 32%.

[6] After hearing evidence from both parties, the Sessions Court dismissed the Appellant's claim, finding that the Appellant failed to establish the elements of fraudulent misrepresentation as laid down in Megat Abdul Munir Megat Abdullah Rafaie & Ors v. Mohd Nasri Abdul Rahim & Ors.

Appellant's Submissions

[7] The Appellant argued that the learned Sessions Court SCJ misdirected herself by focusing on the company's financial status rather than the essence of the misrepresentation. According to the Appellant, the fraudulent misrepresentation was the Respondent's assurance that he would own 48% of the company's shares, which led him to pay RM960,000.00, not any assertion regarding the company's profitability.

[8] The Appellant argued that the Defendant's conduct, continuing to state in the letter dated 9 March 2022 that the Appellant still held 48% shares, demonstrated clear deceit, as the Respondent was aware by then that the shares had already been reduced to 32%.

[9] It was also argued that the Respondent's reliance on the 5 April 2019 Resolution was unfounded. The Appellant provided documentary evidence, including his passport, visa, and travel tickets, demonstrating he was in India for medical treatment on that date, and therefore could not have signed the Resolution.

[10] The Appellant contended that the company secretary, Salmi binti Salleh (SP2), stated in her statutory declaration that she had never seen the Appellant's signature and that the Respondent had deceived her into believing the Appellant was in Malaysia, which was not the case.

[11] The Appellant referred to Sarawak Building Supplies Sdn Bhd v. The Director of Forests & 2 Ors; [2009] 9 MLJ 224, to argue that unchallenged evidence must be accepted as true on a balance of probabilities. The Appellant emphasised that the Respondent failed to rebut the testimony of the Appellant and his witnesses, and even admitted in cross-examination that he had induced the Appellant to believe he would own 48% of the shares.

[12] Finally, the Appellant argued that the Defendant's subsequent criminal charge at the Sessions Court in July 2024 regarding the alleged forged Resolution further supported the inference of fraudulent conduct and falsity in the Respondent's defence.

Respondent's Submissions

[13] The Respondent argued that the learned SCJ, having observed the witnesses, was correct to conclude that the Appellant failed to prove fraud or forgery to the required standard. The Respondent maintained that the Appellant merely made bare assertions unsupported by cogent evidence.

[14] The Respondent contended that allegations of f