(CA) (2016) 9 CLJ 73 - Small Medium Enterprise Development Bank Malaysia V Lim Woon Katt
(CA) (2016) 9 CLJ 73 - Small Medium Enterprise Development Bank Malaysia V Lim Woon Katt
(CA) (2016) 9 CLJ 73 - Small Medium Enterprise Development Bank Malaysia V Lim Woon Katt
For the appellant - Nor Shahadah Saari; M/s Shukor Baljit & Partners A
For the respondent - Surindar Singh; M/s Chong Surindar Su & Assocs
[Editor’s note: For the High Court judgment, please see Small Medium Enterprise
Development Bank Malaysia Bhd v. Champion Growth & Ors [2015] 1 LNS 1320
(overruled).]
B
Reported by S Barathi
JUDGMENT
Hamid Sultan Abu Backer JCA:
C
[1] The appellant/plaintiff appealed against the decision of the learned
High Court Judge who dismissed the appellant’s claim against the fifth
defendant/respondent who on record was a director as well as a signatory to
the joint and several guarantee and indemnity agreement (guarantee) executed
by the respondent.
D
[2] The main line of defence of the respondent was that (i) he was not a
director of the company and in consequence all documents related to his
directorship was forged; (ii) he did not sign the guarantee.
[3] In a 17-page judgment, the learned trial judge had set out the relevant
facts and reasons for his decision. On the face of record, it was a speaking E
judgment but upon hearing the submission of the appellant, we took the view
that the learned trial judge had erred in law as well as fact in coming to the
conclusion to deny the judgment to the plaintiff. In the instant case, the
learned trial judge failed to take into consideration the following, namely:
(a) the respondent did not respond to the appellant’s notice of demand F
related to a claim of RM3,638,518.87;
(b) the respondent did not make a police report when his case is that the
appellant’s documents were forged;
(c) the respondent failed to challenge the appellant’s solicitor who G
witnessed the guarantee;
(d) there was no appreciation of the rule in Browne v. Dunn (1893) 6R 67,
HL;
(e) the expert witness who gave evidence for the respondent did not deal
H
with the guarantee at all and the signatures he was referring to was in
relation to share transfer forms and not the guarantee;
(f) confusion of matters relating to Form 49 and signatures therein;
(g) the letter by the respondent dated 14 September 2011 signed by the
respondent as director of the first defendant, and attaching 12 cheques I
as instalments for payment of debt for the facilities granted to the first
Small Medium Enterprise Development
[2016] 9 CLJ Bank Malaysia v. Lim Woon Katt 77
A (3) The 5th Defendant believes that his signature was forged by one
person named Tan Peng Hin (‘Frank’) [K/P No: 600128-04-5347], the
1st Defendant company’s Chief Executive Officer’s (‘CEO’). Further,
that the said Frank had in his possession the 5th Defendant’s
identification card (‘NRIC’).
B (4) The 5th Defendant had never at any material time been the 1st
Defendant’s Director and has no privity with the 1st Defendant nor
the Plaintiff that authorised him to sign the said Guarantee
Agreement for the 1st Defendant’s loan taken from the Plaintiff in his
purported capacity as the 1st Defendant’s Director.
[9] Defendant 5 alleged that his signature had been forged in the
C
documents material to this claim and contended that, therefore, the onus
lay on him to prove the alleged forgery of his signature on a balance of
probabilities which is the applicable standard of proof for forgery. He cited
in support the case of Yong Tim v. Hoo Kok Chong and Anor [2005] 3 CLJ
229 which stated the law correctly as follows:
D [2] With regard to the standard of proof to be applied in civil
proceedings, a clear distinction must be drawn as between ‘forgery’
and ‘fraud’. The general rule is that proof in civil proceedings of
facts amounting to the commission of a crime (including forgery)
need only be on a balance of probabilities. However, the common
law of Malaysia has developed an exception to this general rule;
E hence, where fraud (as opposed to forgery) is alleged in civil
proceedings, it (the alleged fraud) has to be proved beyond a
reasonable doubt.
[10] Defendant 5 further submitted that the determinant question that
has to be answered in regard to his pleaded defence was whether he had
F proved on the above standard that his impugned signature on the relevant
document that made him a director of the 1st Defendant company had
been forged?
[8] We had read the appeal records and submissions of learned counsel.
We thanked learned counsel for their able submissions. After giving much
G consideration to the submission of learned counsel for the respondent, we
took the view that it was a fit and proper case to allow the appeal. Our
reasons, inter alia, were as follows:
(a) In the instant case, it was not in dispute that the respondent did not
respond to the demand notice of the plaintiff and the defence alleging
H that he was not liable was only raised in the statement of defence.
Evidently, failing to respond to the plaintiff’s letter of demand, that too
when the defence case was related to forgery, as well as the fact that the
respondent did not lodge a police report upon receiving the demand,
weakened the probative force of the defence case. In David Wong Hon
I Leong v. Noorazman Adnan [1995] 4 CLJ 155, the Court of Appeal went
to the extreme end to say that failure to respond on the facts of the case
should lead to entering of judgment. Justice Gopal Sri Ram JCA at
p. 159, had this to say:
80 Current Law Journal [2016] 9 CLJ
A (e) In the instant case, the learned trial judge failed to take into account that
the appellant’s demand notice in a commercial matter was not responded
to. Further there was no reason or justification for not responding to it.
The omission of the learned trial judge to do so in our view
compromised the decision making process.
B
(f) In the instant case, it was not in dispute that the respondent did not
challenge the evidence of the witnessing solicitor during cross-
examination. The appellant’s case had been well-captured by the learned
trial judge and it reads as follows:
Plaintiffs case against Defendant 5
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[11] The Plaintiffs claim against Defendant 5 is premised on the
allegation that Defendant 5 together with Defendant 4 had jointly
executed the “Joint and Several Guarantee and Indemnity
Agreement By Individual” dated 06.02.2009 (Ex. P7). It was
contended that Ex. P7 could validly be used as evidence as the
D attesting witness (PW2), the advocate and solicitor who attested
the signatures of Defendants 4 and 5 in Ex. P7, was called as
witness to prove its execution and gave evidence accordingly
confirming the execution of the Guarantee by Defendants 4 and
5. The Plaintiff relied on the testimony of PW2 who had
purportedly witnessed Defendants 4 and 5 affixing their signatures
E on Ex. P7. PW2 testified that, in relation to Defendant 5, she had
inspected his identification card (‘IC’) before execution of the
Agreement and witnessed his signature.
[12] The plaintiff submitted that as defendant five failed to cross-
examine PW2 and thus, had not challenged or rebutted any of the
F evidence given by her against him, that evidence must be deemed
to be accepted as the truth. Reference was made to the trite law
principle on this point as expressed in Wong Swee Chin v. PP [1981]
1 MLJ 213 as follows:
On this point we need only to say there is a general rule that
G failure to cross-examine a witness on a crucial part of the case
will amount to an acceptance of the witness’s testimony
[13] The plaintiff brought to the attention of the court the fact that
the expert witness produced by the defence, ie, the forensic
document examiner (DW2), had not made any examination or
analysis of the signature purportedly that of defendant 5 appearing
H
in Ex. P7. As such, that both defendants 4 and 5 had failed to
prove the allegation that their signatures appearing in Ex. P7 had
been forged. DW2 himself, based on his experience and expertise,
had concluded that there were no elements of cheating or forgery
in respect of the signatures in Ex. P7. His evidence on this issue,
I
it was submitted, should be accepted by the court by reference of
ss. 45 and 46 of the Evidence Act, 1950. (Dr Shanmuganathan v.
Periasamy Sithamharam Pillai [1997] MLJ 61 referred to)
82 Current Law Journal [2016] 9 CLJ
D The words echoed by the Court of Appeal have its roots in Sarkar
on Evidence 14th edn, p. 2006, which reads as follows:
Effect of omitting or not cross-examining a witness on essential
points. The skilful cross-examiner must hear the statements in
examination-in-chief with attention, and when his turn comes,
he should interrogate the witness on all material points that go
E against him. If he omits or ignores them, they may be taken as
an acceptance of the truth of that part of witness’s evidence.
Generally speaking, when cross-examining, a party’s counsel
should put to each of his opponent’s witnesses, in turn, so
much of his own case as concerns that particular witness or in
which he had a share. Thus, if a witness speaks about a
F
conversation, the cross-examining lawyer must indicate by his
examination how much of the witness’s version of it he accepts
and how much he disputes, and to suggest his own version. If
he asks no questions, he will be taken to accept the witness’s
account (Flanagan v. Fahy [1918] 2 IR 361, 388-89 CA; Browne
G v. Dunn, infra; see Odgers’ Pleading, 13th Ed p 261; Powell 9th Ed
p 531: Wig Vol 2 para 1371; Phipson, 11th Ed p 649; see also
Chunilal v. H F Ins Co., A [1958] Pu 440; Babulal v. Caltex (India)
Ld, A [1967] C 205]. Wherever the opponent has declined to
avail himself of the opportunity to put his essential and
material case in cross-examination, it must follow that he
H believed that the testimony given could not be disputed at all.
It is wrong to think that is merely a technical rule of evidence.
It is a rule of essential justice (Carapiet v. Derderiem, A [1961]
C 359. In this case PB Mukharji J, Relied On And Quoted The
Observations Of Lords Herschell And Halsbury in Browne v.
Dunn, 6 R 67, 76-7, reproduced under s 146 post under heading:
I “Testing veracity and impeaching credit”; S v. Bhola, A 1969 Raj
220). Therefore an omission or neglect to challenge the
evidence in chief on a material or essential point by
cross-examination, would lead to the inference that the
84 Current Law Journal [2016] 9 CLJ
A (j) in addition, the letter dated 14 September 2011 which was signed by the
respondent himself (reproduced earlier) destroyed the respondent’s case
and/or his defence.
(9) For reasons stated above, we allowed the appeal with costs of
RM30,000 for here and below and subject to allocatur. Deposit to be
B
refunded.
We hereby ordered so.