COURT OF APPEAL, MALAYSIA
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www.ipsofactoJ.com/appeal/index.htm [2004] Part 5 Case 8 [CAM] |
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COURT OF APPEAL, MALAYSIA |
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Judgment
Abdul Kadir Sulaiman JCA
(delivering the grounds for judgment of the court)
THE APPEAL
All these three appeals, Civil Appeal Nos. W-02-965-2001, W-02-964-2001 and W-02-90-2001 came up for hearing before us on 13.10.2003. With the consent of the parties it was decided that Civil Appeal No. W-02-965-2001 should be heard first and the decision in this appeal shall be binding upon the other two appeals. This course was taken because the issues in both the appeals No. W-02-965-2001 and W-02-964-2001 have common features and raised common issues and also had identical pleadings. The issues raised in Civil Appeal No. W-02-90-2001 has also been raised in the other two appeals. A similar position was also taken in the High Court below where both cases were consolidated and it was decided that the decision in one case will bind the other case.
These three appeals before us had a historical significance. This panel of the Court of Appeal was the first panel constituted to sit in the new premises of the Court of Appeal in the Palace of Justice in Putrajaya. Hence these three appeals were the first substantive appeals to be heard before us. We had on 16.10.2003 dismissed all these three appeals with costs and we now give our reasons for doing so.
The material facts leading to these appeals before us had been marshalled with clarity by the trial Judge in his judgment which has been reported as Fortune Wealth (Hong Kong) Ltd v Maju Holding Sdn Bhd [2002] 3 CLJ 329. In order to avoid wholesale repetition we will only refer to the brief facts of the case.
BRIEF FACTS
The Appellant and the Respondent entered into a call and put option agreement dated 21.4.1997. Under the terms of this agreement the Respondent had granted to the Appellant during the call option period, the call option to require the Respondent to sell and/or cause or procure the sale by the Respondent to the Appellant 1,646,000 shares in Ipmuda Bhd free from all restrictions and all other encumbrances at the completion date at the option price of RM7.55 per share. The call option action may be exercised by the Appellant by serving an exercise notice on the Respondent during the call option period defined in the agreement which is a period of 12 months from the date of the agreement.
Under the terms of the agreement the Appellant had also granted to the Respondent during the put option period, the put option to require the Appellant to purchase and/or cause the purchase by the Appellant the 1,646,000 shares in Ipmuda Bhd free from all restrictions and all other encumbrances at the completion date at the option price of RM7.55 per share. As provided for in the agreement the put option may be exercised by the Respondent by serving an exercise notice on the Appellant during the put option period which is a period of 7 days commencing from the date of expiration of the call option period.
It is common ground that the Appellant did not exercise the call option to purchase the 1,646,000 shares in Ipmuda Bhd when the call option period of 12 months had expired on 20.4.1998. The Respondent then exercised its put option on 27.4.1998 by serving an exercise notice on the Appellant requiring the Appellant to purchase the 1,646,000 shares in Ipmuda Bhd at the total option price of RM12,427,300.00 based on the price of RM7.55 per share.
The Respondent’s exercise notice was dated 27.4.1997 and it was duly served and acknowledged by the Appellant at 5.35pm under the hand of Suzanna Abdul Rahman. This exercise notice made reference to the agreement dated 21.4.1997. The Appellant did not respond at all to this exercise notice issued by the Respondent. The Respondent’s solicitors then proceeded to serve a letter of demand dated 13.5.1998 upon the Appellant demanding that the Appellant purchase or cause to purchase the option shares at the total option price of RM12,427,300.00. This letter of demand also made reference to the agreement dated 21.4.1997. The Appellant again failed to respond to the Respondent’s solicitors’ letter of demand.
The Respondent had also by letter dated 16.4.1999 addressed for the attention of Abu Sahid Mohamed, the Executive Chairman of the Appellant and notified the Appellant that it will proceed to force sell the options shares if no objections was received in writing from the Appellant within 24 hours. Again the Appellant did not respond. Subsequently the Respondent’s solicitors had by letter dated 9.11.2000 furnished the Appellant’s solicitors with an account of the force selling of the option shares. The Appellant’s solicitors did not again respond to this letter. The Respondent then instituted legal proceedings against the Appellant claiming various reliefs.
It is clear to us that all the above letters made clear and unmistakable reference to the agreement dated 21.4.1997 and the Appellant did not respond at all or challenge or dispute the Respondent’s reliance and claims made upon the agreement dated 21.4.1997.
After a full trial the trial judge enter judgment in favour of the Respondent for the sum of RM10,138,441.35 with interest thereon at the rate of 8% per annum with effect from 28.4.1998 to the date of realisation and costs. The Appellant’s counterclaim was dismissed with costs. The Appellant then appealed to this Court.
MOTIONS TO ADDUCE FRESH EVIDENCE.
We had on 16-10-2003 dismissed the Appellant’s two Notices of Motion to adduce fresh evidence at the hearing of these appeals. These Notices of Motion were filed by the Appellant after the Appellant’s Counsel had completed his opening submission and the Respondent’s Counsel was in the process of completing his submission in reply.
In the Notices of Motion the Appellant had prayed for an order that the affidavit of Abu Said Mohammed affirmed on 15.10.2003 including all exhibits annexed to his affidavit be admitted as fresh evidence at the hearing of the appeals before us.
We had after hearing both the Appellant’s Counsel and the Respondent’s Counsel dismissed both Notices of Motion with costs. We now give our reasons for doing so. We formed the view that the Appellant’s application to adduce fresh evidence through the affidavit of Abu Said Mohammed did not meet the first condition that it must be shown that the fresh evidence intended to be adduced at the appeal could not have been obtained with reasonable diligence for use at the trial.
It is trite law that there are three conditions which must be fulfilled by the Appellant in order for fresh evidence to be admissible at the appellate stage. The test was succinctly formulated by Suffian FJ (as he then was) in Lau Foo Sun v Government of Malaysia [1970] 2 MLJ 70 in the following terms:-
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This is an application for an order that the plaintiff/appellant be at liberty upon the hearing of his appeal to adduce further evidence.
These were the tests enunciated by Denning LJ (as he then was) at page 748 in Ladd v Marshall. |
The said three conditions are cumulative and conjunctive and not disjunctive in that all the conditions must be fulfilled in order for the fresh evidence to be admissible at the hearing of the appeals in the Court of Appeal. The three conditions were also referred to by Thomson LP in Lam Soon Cannery Co v Hooper & Co (1965) 2 MLJ 148 at page 148:-
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It is common ground that applications of this sort are regarded by this Court with considerable circumspection and the principles that have been applied in relation to them are stated as follows by Lord Denning in the case of Ladd v Marshall:-
I pause to observe that these conditions are not alternative; they are cumulative. |
See also the judgment of the Court of Appeal in Ing Merchant Bank (Singapore) Ltd v Mohamed Anuar Embong [2001] 4 MLJ 461.
Section 69(3) of the Courts of Judicature Act 1964 similarly states that further evidence can be admitted on special grounds only with the leave of the Court of Appeal. The tests formulated in Ladd v Marshall is also enunciated in Rule 7(3A) of the Rules of the Court of Appeal 1994.
It is also an essential requirement that an application to admit fresh evidence must be supported by an affidavit which should explain fully why the evidence was not called in the Court below and why it could not by the exercise of reasonable diligence have been obtained for use at the trial. This requirement is clearly stated in the English Supreme Court Practice 1997 Vol. 1 at page 1004 as follows:-
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59/10/14 Mode of application for leave to adduce further evidence .... .... The Application must be supported by an affidavit deposing to the facts relied upon in support of the application. In particular the affidavit should explain fully why the evidence was not called in the court below, and where the Ladd v Marshall criteria apply, why it could not, by the exercise of reasonable diligence, have been obtained for use at the trial .... |
We found that the supporting affidavit affirmed by Abu Said Mohammed did not contain these relevant facts to fulfill the requirements for the admission of fresh evidence. In this particular case before us we were of the view that the Appellant had failed to satisfy the first test as laid out in Ladd v Marshall. We came to the conclusion that had the Appellant exercised reasonable diligence the fresh evidence now sought to be adduced at the hearing of these appeals could have been obtained from the witnesses concerned at the trial of this action in the High Court below. We found that there was no merit whatsoever in the Appellant’s application to adduce the fresh evidence and we had accordingly dismissed the Appellant’s application with costs.
We now turn to the substantive appeals. The Appellant’s Counsel had raised two main grounds in the appeals before us. These were also the very same grounds raised by the Appellant in the High Court below. The first is the dating of the agreement. The Appellant submitted that when the agreement was executed by the Appellant under the seal of the Appellant company it was blank as to the material particulars and the particulars were entered by the Respondent without the consent or acknowledgement of the Appellant. It was intended by both parties that the agreement was to come into force on 1.4.1997 and it is immaterial that the agreement was dated 21.4.1997. The Appellant also alleged that the date in the agreement was fraudulently altered by the Respondent from 1.4.1997 to 21.4.1997. The second ground advanced is that the Respondent was not the beneficial owner of the option shares at the material time. The beneficial owner was said to be one Koh Kim Teck who was an agent of the Appellant. The Respondent was therefore in breach of the fundamental term of the agreement.
In our judgment this appeal turns upon pure questions of fact based upon the evidence and the credibility of witnesses who gave their evidence at the trial together with the contemporary documentary evidence. The trial judge had correctly addressed himself by stating that “in making a decision on this case, there is not much law involved but only hard facts are required”. The trial judge had after very carefully evaluating the evidence of the witnesses and the contemporaneous documentary evidence came to a finding of fact that the agreement was in fact dated 21.4.1997 and not 1.4.1997 as alleged by the Appellant. The trial judge also held that there was no evidence of any fraudulent alteration of the date in the agreement. This is what the trial judge had to say at pages 12 to 14 of his judgment:-
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I have even at the close of this trial found no evidence of any such fraudulent alteration as alleged; nor was there produced to Court any other supporting document to the contrary by the Defendants, and took the stand not to refer P3 on the allegation to the Chemistry Department for their opinion; as I could then make an independent finding of fact on the evidence before me of DW3 Christopher Chew to the effect that when he returned the documents to the office of Mr. Koh Kim Teck, they were in blank and also after taking into consideration the evidence more particularly, the evidence of PW2 Mr. Phang Ah Hee – an advocate & solicitor who gave an unchallenged evidence to the effect that P3 was signed at his office on 21/4/1997 and he thereafter attesting and dating the document. In making a decision on this case; there is not much law involved but only hard facts are required; more particularly whether the said agreement – P3 was in fact dated on 21/4/1997 or 1st April 1997. The Defendant’s solicitor Mr. David Morais at the hearing on 4th December 2000 in the making of an application, for the appointment of a Government Chemist to be appointed as a Court expert under O. 40 of the Rules of the High Court rightly said
From the pleadings – the statement of claim; the amended defence; the counter claim and the reply and upon the evidence led by PW1 and PW2, the Plaintiffs case is established in that the said agreement was in fact dated 21/4/1997 and not 1/4/1997 as alleged by the Defendants witneses DW5 Mr. Mohd. Fauzi Yon; and DW6 – Mr. Hamidi Abdullah who were expressing hearsay evidence – not a single document in support – to show that they have a document with them which is dated 1/4/1997 for comparison. In fact DW3 Mr. Christopher Chew – the director who was personally responsible in obtaining the agreements from the office of Mr. Koh Kim Teck and seeing to their execution and sealing by the Directors of the Defendant company; and subsequently returning them to the office of Mr. Koh had said, that the agreements when he returned to Mr. Koh’s office were never dated with the date 1/4/1997.
With that evidence on record, I find as a fact that the agreement was in fact dated 21/4/ 1997; and not as 1/4/1997; and with that; the case is summarily decided on the main issue. The law of evidence is quite clear under s. 103 of the Evidence Act 1950; that he who asserts must prove that fact; and that onus was on the Defendants; which they had failed to do so. In the case of Anderson v Weston [1840] 6 Bing. NC 296 it was held that when a deed is produced (as P3 in this case under the Defendant’s seal) and the execution of the deed (P3) is proved by the subscribing witness (in this case by PW2- an advocate & solicitor of the High Court Kuala Lumpur affirming on Oath his having affixed his signature on 21/4/1997 immediately upon PW1 – representative of the Plaintiff had signed in his presence) the signature; and that deed bears a date - that date has uniformly been taken to be prima facie evidence that the deed (P3 in this case) was executed at the time when it purports to bear the date. |
The judge also came to a finding of fact that the Respondent was at the material time the beneficial owner of the options shares. The judge dealt with this issue in the following terms at pages 15 to 17 of his judgment:-
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The defendants in their amended Defence and the Counterclaim alleged that the Plaintiffs were not at the material time the beneficial shareholders of the Ipmuda Shares. One just has to read Clause. (2) of the Recital (P3) which reads “the grantor is the beneficial owner of the number of ordinary shares .... as set out in the Schedule one; which schedule item 2 shows 1,646,000. The Court of Appeal (per Justice Sri Ram JCA) in the case of Luggage Distributors (M) Sdn Bhd v Tan Hor Teng [1995] 1 MLJ 719 at pages 746 and 747 said,
Further the Annual Report of Ipmuda Bhd was presented to the Ipmuda Board through its Executive Chairman Abu Sahid; who also happens to be the Executive Chairman of the Defendant company; and there said
At p. 14 of the said Annual Report (please see Exh. P12) items (15) and (16) at p. 12 carries the name of the Plaintiff (Fortune Wealth Hong Kong Ltd.) as having a direct shareholding of 1,646,000 shares and by item (16) the Regalion Investment Ltd – (the plaintiffs in Civil Suit D6-22-1634-1998) owning direct share holdings of 1,600,000 shares; and this information was given to Court by DW1 (Miss Chan Lai Choon the Company Secretary). In her evidence under cross-examination she said
To a question by the court – whether the Chairman was aware of those statements, Miss Chan answered – “Yes.” She also confirmed that P11 & P12 the Annual Reports were also sent to the shareholders of Maju Holdings – the Defendants herein; and upon her sending to them no objections from any of the share holders of Maju Holdings were received on the share holdings of Fortune Wealth Hong Kong Ltd. of 1,646,000 shares. Not even Abu Sahid raised any objection on the share holdings as shown in P12 p. 14, item 15. Further confirming that the statement (in the Annual Report) is never wrong. A similar pattern of confirmation on the share holding is noted from the cross-examination of Mr. Christopher Chew – DW3:
This seals the issue of a fact that the Defendants had throughout knowledge of the direct/beneficial share holdings of the Plaintiffs in Ipmuda Bhd. |
We as an appellate court will not readily interfere with the findings of fact arrived by the court of first instance to which the law entrusts the primary task of evaluating the evidence. It is only in cases where we as a Court of Appeal are convinced that there was no judicial appreciation of the evidence adduced at the trial by the trier of fact or that the audio visual advantage reserved to a trial judge had been missed or that the findings made by the trial judge do not accord with the probabilities of the case it would not be open to us to intervene and upset the findings made by the trial judge. The principles of appellate intervention have been laid down by the Supreme Court in the case of Khoo Teck Puat v Plenitude Holdings Sdn Bhd [1993] 1 MLJ 113 at page 117 and 118 in the following terms:-
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As regards the principles on which an appellate court may interfere with a lower court’s findings of fact we would refer to the following passage in the judgment of Lord Guest in Tay Kheng Hong v Heap Moh Steamship Co Ltd in which his Lordship stated as follows:-
Later his Lordship quoted with approval a passage from the speech of Lord Shaw in Clarke v Edinburgh & District Tramways Co Ltd [1919] SC (HL) 35 at p 37:
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The judgment under appeal before us does not contain any misdirection or errors warranting our appellate interference. In fact after carefully scrutinising the appeal record and having heard the rival submissions of the parties counsel we were fully satisfied that the learned judge had properly evaluated the whole body of evidence adduced at the trial and had drawn proper inferences of fact wholly consistent with the contemporary documentary evidence adduced in the case. The learned Judge had come to correct findings of fact on the issues before him and had done all that was required of him by law. Hence we found no merits in the Appellant’s appeals before us.
We had also taken a second hard and careful look at the entire case before us. We are satisfied that the Appellant had benefited from the call and put option agreements entered into with the Respondent. In fact the evidence of the Appellant’s own witness DW3 Mr. Christopher S. Y. Chew who was the Managing Director of IPU Sdn Bhd in the Maju Group of Companies had testified under cross examination as follows:-
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All the 23,030,000 shares under the call and put option agreements offered by Maju Holdings to the Investors at RM6.50 sen per share were all taken up by the various investors. Eventually all the investors who took up the option under the call and put option agreements paid RM6.50 sen per share. I confirm that the total transaction price was at RM5.50 sen per share but the total consideration of about RM150,000,000 was worked on the basis of RM6.50 sen per share. The total about RM150 Million came from the various investors who took up the Ipmuda 23,030,000 shares, under the call and put option. By this call and put option exercise, Maju Holdings did not have to come up with any money up-front; because Maju Holdings have to purchase the shares from the investors at RM7.55 sen per share at the end of 1 year. The difference in the price of RM6.50 sen – the offered price; and RM5.50 sen per share the transacted price, was paid to Abu Sahid; who then paid to Ipoh Garden Bhd; as told to me by Tan Sri. I confirm that a sum of RM23,030,000 was paid directly to Abu Sahid. I don’t know whether Abu Sahid paid the sum to IGB. The official contract notes were at RM5.50 sen per share and I have seen the contract notes for the whole 23,030,000 shares. I have not seen any contract notes or any documentary evidence showing the purchase per share at RM6.50 sen. I know that the sum of RM23,030,000 was paid to Abu Sahid; because I am the one who requested Mr. Koh Kim Teck from Seagroat & Campbell to pay directly into Abu Sahid’s Account. Now shown enclosure 28 – pages 72/73. The fax dated 12th May 1997 and 13th May 1997. Mr. David Morais objects to this line of question and to the documents on the ground that whether or not a payment was made to Abu Sahid and for what purpose – are issues irrelevant to the trial and do not arise out of the pleadings or asserted at the Order 81 – summary procedure. Court – Objection over-ruled as the Plaintiff is entitled to the tracing of payment being the difference of the RM1/- towards the price and the Plaintiffs are entitled to cross-exam on the relevant payments made! Mr. Christopher Chew – I agree that this fax was sent by me to Mr. Koh Kim Teck of Seagroat & Campbell on 12th May 1997. This was the second payment payable on the RM23,030,000; because the RM23,030.00 was payable in two installments. The first installment in the sum of about RM16 million had been paid earlier to and this was a call (Fax) asking for the second payment that was payable. Referred to enclosure (28) page 73 – the second installment was for RM7,308,507.50 sen. I confirm that this sum of RM7,308,507.50 sen being the second installment was paid to Abu Sahid. The Funding was successful by call and put option arranged by me and Mr. Koh Kim Teck. |
It was manifestly clear to us that under the various call and put option agreements the Appellant had the benefit of 23,030,000 shares in Ipmuda Bhd worth about RM150,000,000.00 without having to come up with any money upfront. Abu Sahid Mohamed also received the payment of RM23,030,000.00. In these circumstances it will be wholly unjust and unconscionable for the Appellant not to honour its obligations to purchase the options shares under the call and put option agreements entered into with the Respondents. The parties must honour their commercial bargain entered into.
The trial judge had rightly entered interlocutory judgment in favour of Regalion Investments Ltd, the Respondent in Civil Appeal No. W-02-964-2001 and also ordered that the Senior Assistant Registrar or the Deputy Registrar of the High Court to proceed to formally assess the general damages and/or other ancillary relief as prayed for by the Respondent. Since interlocutory judgment has been entered the question of liability of the Appellant to Regalion Investments Ltd has been conclusively determined with finality and therefore the issue of liability of the Appellant cannot be re-opened or re-agitated by the Appellant during the assessment of damages. The duty of the Senior Assistant Registrar or Deputy Registrar of the High Court is strictly confined to assess the quantum of damages that is payable by the Appellant to Regalion Investments Ltd. This is strictly a mathematical exercise involving the calculation of the total option price of the option shares and deducting the value of the force sold shares, if any.
We had therefore dismissed the above three appeals with costs. We also affirmed the judgments of the Learned Judge below and the orders made by him.
My learned brothers, Hashim Yusoff and Tengku Baharudin Shah Tengku Mahmud JCAs have read the draft and consented to it.
Cases
Fortune Wealth (Hong Kong) Ltd v Maju Holding Sdn Bhd [2002] 3 CLJ 329
Lau Foo Sun v Government of Malaysia [1970] 2 MLJ 70
Lam Soon Cannery Co v Hooper & Co (1965) 2 MLJ 148
Ing Merchant Bank (Singapore) Ltd v Mohamed Anuar Embong [2001] 4 MLJ 461
Khoo Teck Puat v Plenitude Holdings Sdn Bhd [1993] 1 MLJ 113
Legislations
Courts of Judicature Act 1964: s.69
Rules of the Court of Appeal 1994: Rule 7(3A)
Authors and other references
English Supreme Court Practice 1997 Vol. 1
Representations
David Morais & Khabir Dhillon (Messrs Mohamad Illiayas & Co) for appellant.
VK Lingam, V Sithambaram & VK Lakshmi (Messrs VK Lingam & Co) for respondent.
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