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2012 MarsdenLR 2359
COURT OF APPEAL PUTRAJAYA
OMEGA SECURITIES SDN BHD – Appellant
Versus
LT GEN (B) TAN SRI MOHAMED NGAH SAID – Respondent
[Civil Appeal No: W-02-1891-2009]
Important Points
Subject
Commercial Law - Contract Dispute
Act Referred
Headnote
(B) Contract Law - Breach of contract - Respondent's liability for unpaid shares and judicial scrutiny required in cases of appellants’ claims - Sufficient judicial evaluation must be undertaken. (Paras 10, 14, 15)
Facts of the case:
Appellant entered into an agreement with respondent for a Non-Margin Facility Account for purchasing shares. Respondent failed to pay for the shares as per the agreement after multiple demands for payment were ignored. The High Court dismissed appellant's claim of RM33,258,017.27 on the grounds of insufficient proof and documentation.
Findings of Court:
The appellate court found that the High Court judge erred in dismissing the case by not properly evaluating evidence, including financial documents and testimonies. The established debt was ruled enforceable as the respondent did not adequately counter the claims.
Issues: Whether appellant proved the existence of the Non-Margin Facility Agreement and the respondent's liability for payment.
Ratio Decidendi: The appellate court determined that a lack of adequate judicial appreciation by the High Court warranted intervention, and emphasized that established contracts and relevant evidence must be properly considered in rendering judgments.
Result: Appeal allowed; decision of the High Court set aside, claim allowed with costs of RM25,000.
| Table of Content |
|---|
| 1. contractual obligations and appellant's claims. (Para 2 , 3 , 4 , 5) |
| 2. evidence presented by the appellant. (Para 6 , 7) |
| 3. trial court's dismissal of the appellant's claim. (Para 8 , 9) |
[1] This was an appeal by the appellant, (the plaintiff in the High Court) Omega Securities Sdn Bhd against the decision of the learned High Court Judge who had after a full trial dismissed the appellant's claim with costs. We had, by a majority, allowed the appellant's appeal.
[2] The appellant's claim against the respondent was basically for contra losses arising out of the sale and purchase of UCB shares. The brief facts of the case are essentially as follows:
By a written agreement (the said agreement) between the appellant and the respondent, the respondent had agreed to open a Non- Margin Facility Account with the appellant for the purpose of, inter-alia, purchasing shares through the appellant. Pursuant to the said agreement, the appellant had carried out purchase of the shares on behalf of the respondent and upon instructions by the respondent. Contract notes for each and every purchase of the shares by the appellant on behalf of the respondent had been forwarded to the respondent.
[3] In breach of the terms of the said agreement, the respondent failed to pay for the shares in accordance with the rules of the Kuala Lumpur Stock Exchange (now, Bursa Malaysia).
[4] Vide letter dated 17 July 1998, the appellant terminated the said agreement and demanded from the respondent the immediate payment of the sum outstanding. Despite a second letter of demand, the respondent failed to pay the sum due. The appellant then filed the present suit in the High Court Kuala Lumpur.
[5] In their Statement of Claim, the appellant's claim against the respondent was for the sum of RM33,258,017.27 as at 9 June 1998 together with interest of RM50.00 and further interest at the rate of 18% per annum on the said sum of RM33,258,017.27 from 10 June 1998 until full and final settlement.
[6] At the trial before the High Court, the appellant produced the following evidence in support of their claim:
(1) The oral evidence of their Finance Manager, Lau Jiong Chean (PW1), and one Lim Jit Cheng (PW2) who gave evidence on behalf of the appellant's liquidator.
(2) The following undisputed contemporaneous documents:
(i) Individual Account Application Form signed by the defendant containing the terms and conditions governing the account (ie the said agreement) P-1;
(ii) the Statement of Account showing the indebtedness of the defendant as at 9 June 1998: P-2;
(iii) the Statement of Account showing the report of history transactions of the defendant: P-3;
(iv) the Certificate of Verification pursuant to s 90A of the Evidence Act 1950 : P-4;
(v) the Purchase Contract Notes (PN073119A and PN073193): P-5
(vi) the Certificate of Verification pursuant to s 90A of the Evidence Act 1950 : P-6;
(vii) the Letter of Authorisation given to PW-2: P-9;
(viii) the letter of demand issued by the plaintiff 's receivers and managers dated 17 July 1998: P-10;
(ix) the Certificate of Posting: P-11;
(x) the letter of demand issued by the plaintiff 's solicitors dated 16 September 1998: P-12; and
(xi) the Certificate of Posting: P-13.
[7] The respondent's defence, on the other hand, rested entirely on his oral evidence. In his testimony before the High Court, the respondent alleged that he was given several blank forms by his old friend, Dato' Soh Chee Wen to sign; that he did not know that there was a facility opened under his name with the appellant; that he had not received the statement of outstanding sum due; neither has he received the contract notes for the transaction of the UCB shares; and that he does not know who "DHM" is. (DHM was the remisier). In short the respondent's defence was a bare denial.
[8] At the conclusion of the trial, the learned trial judge found that the appellant had failed to prove its case on a balance of probabilities and dismissed the appellant's claim with costs.
[9
