Abu Bakar Bin Mohd Kassim and 2 Others v Mohd Yusoff Bin Mohd Kassim
Civil Appeal No. N-02(NCVC)(W)-679-04/2014; Court of Appeal
Date of Judgment: 22 March 2016 | Source: Federal Court Registry

DALAM MAHKAMAH RAYUAN MALAYSIA

(BIDANG KUASA RAYUAN)

RAYUAN SIVIL NO: N-02(NCVC)(W)-679-04/2014

ANTARA

1. ABU BAKAR BIN MOHD KASSIM

2. TETUAN HALIM & ISMAIL

3. DINAMIK SINARMAS SDN BHD [NO. SYARIKAT: 647475-V] ...PERAYU-PERAYU

DAN

MOHD YUSOFF BIN MOHD KASSIM ...RESPONDEN

[Dalam Mahkamah Tinggi Malaya Di Seremban

Dalam Negeri Sembilan, Malaysia

Guaman Sivil No: 22NCVC-8-01/2013]

Antara

Mohd Yusuf Bin Mohd Kassim ...Plaintif

Dan

1. Abu Bakar Bin Mohd Kassim ...Defendan Pertama

2. Tetuan Halim & Ismail ...Defendan Kedua

3. Dinamik Sinarmas Sdn Bhd [No. Syarikat: 647475-V] ...Defendan Ketiga

4. Tetuan Lee Boon Peng & Co ...Defendan Keempat

KORUM: ALIZATUL KHAIR BINTI OSMAN KHAIRUDDIN, HMR; ROHANA BINTI YUSUF, HMR; PRASAD SANDOSHAM ABRAHAM, HMR

Keputusan: 28 Oktober 2014

GROUNDS OF JUDGMENT

[1] We heard this appeal on 28th October 2014 wherein we had allowed the appeal, dismissed the cross appeal and set aside the order of the High Court. We append below our grounds for so doing. For the purposes of this judgment we shall refer to the appellant as the 1st defendant and the plaintiff as the appellant.

[2] MATERIAL FACTS

i. The plaintiff and the 1st defendant are siblings;

ii. On or about 2002, a broker by the name of Raju Ponniah A/L Ponnayah informed the 1st defendant, that there was a piece of land about 20 acres available for sale at a price of RM20,500.00 per acre situated at Senaling;

iii. This was the land known as Geran 61146, Lot 2243, Mukim Kuala Pilah, Negeri Sembilan, Darul Khusus (the said Land);

iv. The plaintiff had asked to sight the said Land and after the plaintiff had sighted the Land, the plaintiff was thereafter brought to the office of Tetuan Halim Ismail (the 2nd defendant). There, the plaintiff had issued a cheque for RM41,000.00;

v. The aforesaid amount which represented 10% of the purchase price was issued in the name of the 2nd defendant;

vi. The 1st defendant had introduced the plaintiff to one Encik Rashdan bin Latif who was an advocate and solicitor in the firm of the 2nd defendant;

vii. The plaintiff had deposited the balance of the purchase price with the 1st defendant in cash / bank draft;

viii. The said Land at that point belonged to Ee Ah Kow, Ee Kuang Siong, Ee Ching Tech and Tiong Ah Tee;

ix. The said Land was eventually sold to another party i.e. the 3rd defendant for a consideration of RM1,127,500.00.

THE PLAINTIFF'S CASE

[3] The plaintiff's case as per its pleadings is pivoted essentially on a plea of conspiracy to defraud / cheat the plaintiff by the 1st defendant acting in concert with one Rashdan Latif (the said Rashdan), who was at all material times acting under the control and direction of the 2nd defendant and as an agent of the 2nd defendant. The plaintiff therefore claims the following relief against the defendants:

(a) Damages on the loss of the property known as Geran 61146, Lot 2243 Mukim Kuala Pilah, Negeri Sembilan Darul Khusus.

In the alternative,

(b) A declaration that the sale and transfer of the abovementioned property between Ee Ah Kow, Ee Kuang Siong, Tiong Ah Tee and Ee Ching Teck as the vendors via Sale and Purchase Agreement dated 17.4.2000 and transfer dated 28.7.2000 and the 1st defendant be invalidated and nullified;

(c) A declaration that the 1st defendant is not the owner of the said property and that the sale and purchase transaction between the 1st and 3rd defendant is invalid and therefore null and void;

(d) A declaration that the plaintiff is the true owner of the abovementioned property and the said property is to be registered in the name of the plaintiff and the Deputy Registrar of this honourable court be directed to give effect to the said registration with 7 days from the date of this order.

(e) The plaintiff also claims interest and costs

THE 1ST AND 2ND DEFENDANT'S CASE

[4] The 1st and 2nd defendants' pleaded case appears in (Rekod Rayuan Jilid 1, Bahagian A pg. 61-67).

THE DECISION OF THE HIGH COURT

[5] The learned judge found that the plaintiff has proven its case against the 1st and 2nd defendants on a balance of probabilities and granted order in terms of prayer 41(i) of the statement of claim i.e. the costs of purchase price which was paid by the plaintiff for the purchase of the lands, from the 1st and the 2nd defendants, jointly and severally amounting to RM473, 490.00 together with interest and cost.

[6] The court did not make any order on the declaratory reliefs prayed for as the plaintiff had indicated at the outset of the trial that given the circumstances of the case. These reliefs are no longer viable.

THE APPEAL

[7] Bearing in mind, the burden of proving conspiracy to defraud / cheat the plaintiff in attempting to sell the said Land without being owners of the said Land and that the 1st defendant had later transferred the said Land to the 3rd defendant.

[8] The question is, what was the standard of proof to be applied to the case of the plaintiff? The 1st defendant's counsel drew our attention to the case of SCK Group Bhd & Anor v Sunny Liew Siew Peng & Anor [2010] 9 CLJ 389, a decision of this court wherein the court held that the tort of conspiracy to defraud attracted a standard of proof beyond reasonable doubt where the court held:

(3) As the tort of conspiracy to defraud involved an element of fraud, the standard of proof required was very high. It was proof beyond reasonable doubt.

And we refer to the judgment of His Lordship Justice Low Hop Bing (as he then was) at para 13, 14 and 15 of the judgment and we quote:

Conspiracy To Defraud: Burden And Standard Of Proof

[13] The plaintiffs, who desire the court to give judgment as to the legal right or liability, dependent on the existence of facts which he asserts in relation to the tort of conspiracy to defraud the plaintiffs, bear the burden of proving their case. Section 101(1) and (2) of the Evidence Act 1950 merit reproduction as follows:

101 Burden of proof

(1) Whoever desires any court to give judgment as to any legal right or liability, dependent on the existence of facts which he asserts, must prove that those facts exist.

(2) When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person.

(See eg, MBF Finance Bhd v. Sim Peng Bee & Anor [2003] 1 CLJ 690; Tenaga Nasional Bhd (formerly Lembaga Letrik Negara Tanah Melayu) v. Perwaja Steel Sdn Bhd (formerly Perwaja Terengganu Sdn Bhd) [1995] 4 CLJ 670, Nuri Asia Sdn Bhd v. Fosis Corporation Sdn Bhd[2006] 5 CLJ 307; and Koh Jui Hiong & Ors v. Ki Tak Sang & Ors [2009] 10 CLJ 205).

[14] The tort of conspiracy is not constituted by the conspiratorial agreement alone. For conspiracy to take place, there must also be an unlawful object, or, if not in itself unlawful, it must be brought about by unlawful means: See Davies v. Thomas [1920] 2 Ch 189 per Warrington LJ, and Seah Siang Mong v. Ong Ban Chai & Another Case [1998] 1 CLJ Supp 295 HC per Ghazali J (now FCJ). There must be a co-existence of an agreement with an overt act causing damage to the plaintiffs. Hence, this tort is complete only if the agreement is carried into effect, thereby causing damage to the plaintiffs. In order to succeed in a claim based on the tort of conspiracy, the plaintiffs must establish:

(1) an agreement between two or more persons;

(2) for the purpose of injuring the plaintiff; and

(3) acts done in the execution of that agreement resulted in damage to the plaintiff: Marrinan v. Vibart [1962] 1 All ER 869, 871 per Salmon J; and Halsbury's Laws of England (4th edn.) Vol. 45 p. 271, as applied by Ghazali J (now FCJ) in Seah Siang Mong, supra

[15] As the tort of conspiracy to defraud involves an element of fraud, the standard of proof required is very high. It is proof beyond reasonable doubt. In Yong Tim v. Hoo Kok Chong & Anor [2005] 3 CLJ 229 at pp. 233a-g, 234a-h & 235a-d, Steve Shim CJ (Sabah & Sarawak) (as he then was) applied the Privy Council advice given by Lord Diplock in Saminathan v. Papa [1980] 1 LNS 174 and held that the standard of proof for fraud in civil proceedings is proof beyond reasonable doubt. This high standard of proof was reaffirmed by the Federal Court in Asean Security Paper Mills Sdn Bhd v. CGU Insurance Bhd [2007] 2 CLJ 1 where Nik Hashim FCJ (as he then was) said at p. 19 [12] that "It is now settled law that the standard of proof required where there is allegation of fraud in civil proceedings must be one beyond reasonable doubt and not on a balance of probabilities". (See also Seah Siang Mong, supra )

[9] We are mindful of the recent decision of the Federal Court in Sinnaiyah & Sons Sdn Bhd v. Damai Setia Sdn Bhd [2015] 7 CLJ 584 wherein the Federal Court ruled that in all civil cases where the plea is one of fraud the standard of proof was on a balance of probabilities. We also note that the Federal Court held that their judgment only applied to the instant appeal before them and to future cases and should not be utilised to set aside or review past decisions involving fraud in civil claims. Therefore as our case in the present appeal arose in 2013 the applicable standard of proof in this case beyond reasonable doubt (see SCK Group Bhd & Anor (Supra)).

[10] The learned judge in her grounds of judgment clearly approached the same by applying the test on a balance of probabilities (see pg. 40 Rekod Rayuan Jilid 1 Bahagian A). This amounts to an error of law. A part from this, having evaluated the evidence and documents, we find that the plaintiff had adduced insufficient evidence to establish beyond a reasonable doubt the plaintiff's claim against the defendant on the tort of conspiracy to defraud the plaintiff.

[11] The prerequisites to proving conspiracy would be:

(i) an agreement between the 1st defendant and the said Rashdan involved has to be proven;

(ii) and it was predominant for the purpose of injuring the plaintiff;

(iii) the act done resulted in damages to the plaintiff.

(I) AN AGREEMENT BETWEEN THE 1ST DEFENDANT AND RASHDAN INVOLVED HAS TO BE PROVEN

[12] Looking at the statement of claim and in particular para 33, 34 and 35 (see page 56 to 57 of the Appeal Record Vol. 1) it is clear that the plaintiff's plea was that the 1st defendant and the said Rashdan bin Latif (hereinafter referred to as "Rashdan") had conspired to defraud the plaintiff. However we note that Rashdan was not made a party to the suit initiated by the plaintiff against the 1st defendant. It is our view that parties to a conspiracy are jointly and severally liable for all loss flowing from the conspiracy and should be named as parties, unless the names of all the conspirators are not known. In which case, the plaintiff could plead "1st defendant and another person whose name is presently unknown to the plaintiff". Since Rashdan had not been made a party and the alleged agreement to conspire is between him and the 1st defendant, how could it be said that there was an agreement between Rashdan and the 1st defendant to defraud the plaintiff. (See Bullen & Leake & Jacob's Precedents of Pleadings at page 222).

[13] We note that in any event Rashdan was never called as a witness by the plaintiff despite contemporaneous documents implicating him. In that event where he did not attend as a witness, whether there existed an agreement between the 1st defendant and Rashdan has not been established beyond reasonable doubt. The plaintiff in 2012 well after he had entered into a Sale and Purchase Agreement with the 1st defendant and after he discovered the 1st defendant had transferred the said Land to himself, lodged a police report (see page 492 of the Appeal Record Vol. 2, exhibit ‘P19'). We observed that nowhere in the police report is there a reference to the allegation of conspiracy nor is the name of Rashdan, the alleged co-conspirator mentioned at all. The learned Judge failed to give due consideration to establish that the money paid by the plaintiff was to be used for the purchase of the land. This can be seen in the plaintiff's evidence at (pg. 171 of the Appeal Record Vol. 2) which we produced below:

S: Witness is referred to page 73 Ikatan B. In this report you said, on 28.2.2000 saya telah membuat satu perjanjian jual bell dan menandatangani satu perjanjian antara saya dan Ee Ah Kow, Ee Kuang Siong, Tiong Ah Tee & Ee Ching Tek' di pejabat peguam dan bayaran yang telah dibuat adalah RM41,000.00 melalui cek no. 419785.' This is your statement. Do you agree?

J: Ya, ini adalah statement saya, dan saya perlu nak terangkan sedikit.

....

(II) FOR THE PURPOSE OF INJURING THE PLAINTIFF

[14] The predominant purpose of the agreement (if at all) was for the purpose of injuring the plaintiff and this has to be established. The learned judge in considering all the evidence on a balance of probabilities erred in not making a specific finding that the predominant purpose of the conspiracy was to injure the plaintiff. Apart from this ingredient not being pleaded specifically, there has been in our view no evidence to show that the predominant purpose was to inflict damage on the plaintiff and this must be established failing which the plaintiff's claim would be dismissed. This would also deal with the 3rd ingredient i.e. damages resulting from the conspirational act. We find that apart from it not being specifically pleaded, the evidence of the alleged conspiracy being for the predominant purpose of injuring the plaintiff had not been proved beyond reasonable doubt. (See pg. 472 to 473, Law of Torts in Malaysia, 3rd Edition; Nurcahaya Talib). In the event as it is in this instant appeal, the learned judge in our view erred on the correct standard of proof to be applied to the evidence tendered. On this ground alone, it would constitute a juridical error which would require appellate intervention.

[15] So we accordingly allowed the appeal and dismiss cross appeal with costs.

Dated: 22nd March 2016

Signed
DATUK DR. PRASAD SANDOSHAM ABRAHAM
Judge
Court of Appeal Malaysia
Putrajaya

Cases Referred To:

1. SCK Group Bhd & Anor v Sunny Liew Siew Peng & Anor [2011] 4 MLJ 393 (referred)

2. Sinnaiyah & Sons Sdn Bhd v. Damai Setia Sdn Bhd [2015] 7 CLJ 584 (referred)

Books Referred To:

1. Law of Torts in Malaysia, 3rd Edition; Nurcahaya Talib

2. Bullen & Leake & Jacob's Precedents of Pleadings

For Appellant: Satwant Singh, Shalini Balan Pillai,Messrs Prema, Parameswaran & Associates,No. 31-2, Jalan S2 B17 Biz Avenue,Seremban 2,70300 Seremban

For Respondent: K. Subajeyanthi (with Joseph Methews),Messrs Mathews & Associates,89, (1st Floor, 2nd Floor, Jalan Seng Meng Lee,70200 Seremban

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