Kanagasabai

- vs -

United Malayan Banking Corporation Bhd

Judgment

Abdul Hamid FJ

(delivering the judgment of the Court)

1. The High Court at Seremban entered judgment in the sum of $13,174.59 against the appellant for the balance on the overdraft account.

2. The facts reveal that the appellant bought and sold shares using overdraft facilities on the security of the shares deposited with the respondent bank. Things did not fare well for the appellant when the stock market crashed in the later part of 1973.

3. On 12 January 1974 the respondent demanded payment. The appellant was unable to pay and asked for time hoping that the share value would appreciate. Judging from the correspondence that ensued between the appellant and the respondent it is evident that the appellant was playing for time.

4. Presumably the respondent was also hoping that the appellant would settle the balance outstanding for no action was taken either to sell the shares or to commence legal proceedings to recover the sum owed until some months later. Finally the respondent sold the shares for $46,945.20 leaving a balance of $13,174.59 on the overdraft account.

5. In the court below one of the questions raised by the appellant was that there was an oral agreement between him and the respondent requiring the respondent to sell the shares when their value dropped to $98,000. The learned judge found as a fact that there was no such agreement and there was therefore no breach of contract as alleged by the appellant. This finding of the learned judge is not contested in this appeal.

6. The appellant’s case is that, in substance, the learned judge had failed to consider the defence and had erred in law in treating the case as a simple claim for balance of overdraft. It is the appellant’s contention that the manager of the respondent bank who purchased the shares was acting as the agent of the bank and the appellant. There was therefore the question of pledge and duty of the bailee that called for determination by the court.

7. It is submitted that the bailee or ‘pawnee’, namely the respondent was under a duty to ensure that the sale of shares was a provident one. Reliance is placed upon ss 125 to 129 of our Contract Act, 1950. It is further submitted that as this question was not considered by the learned judge, the appeal should therefore allowed and a retrial ordered.

8. First and foremost the question that must necessarily be considered is whether the question raised by the appellant was an issue disclosed by the pleadings. It is a cardinal principle of law that a judge is bound to decide a case on the issues on the record (see Hj Mohd Dom v Sakiman [1956] MLJ 45).

9. The question therefore is whether the appellant specifically and distinctly pleaded in his statement of defence the point which he now desires to raise.

10. The relevant paragraph of the statement of defence relied upon by the appellant is para 9 which is reproduced hereunder for easy reference —

    9.

    The plaintiffs are guilty of negligence and breach of their duty to the defence. PARTICULARS OF PLAINTIFFS’ NEGLIGENCE AND BREACH OF DUTY (i) They failed to sell the said shares when their value dropped to $98,000. (ii) They failed to sell the said shares when instructed to do so in April 1974. (iii) They grossly and unreasonably delayed the selling of the said shares. (iv) They failed to take any or sufficient care in the handling of the said shares. (v) They failed to take any or sufficient steps to protect the interest of the defendant.

11. It was pointed out by Mrs. Oliveiro, counsel for the respondent that the question of pledge was not pleaded and it is raised for the first time in this appeal.

12. In consideration of the language used in para 9 and to describe the particulars of negligence and breach of duty we form the view that on a fair construction the reference to the respondent’s negligence was clearly in relation to the allegations contained in paras 5 to 8 of the statement of defence and that the particulars in (i), (ii), (iii) and (iv), in para 9 are nothing more than repetitions of the earlier allegations.

13. There is clearly no specific or distinct allegation made in the statement of defence on the question of agency or of pawnor and pawnee. Nowhere too is it alleged that the manager of the respondent bank was engaged in the share purchase transaction either as agent of the respondent bank or of the appellant and in that capacity had breached his duty.

14. In Selangor United Rubber Estates Ltd v Cradock [1965] Ch 896 it was held that “where a plaintiff alleged a breach of duty arising from any given relationship, he had to specify with precision the relation under which that duty arose.”

15. This was an action brought by a company against nine defendants including the applicant bank where the plaintiff alleged, inter alia, negligence against the bank as banker.

16. In the instant case we find no issue on record before the learned judge on the question raised in the appeal upon which he had to adjudicate. In our view the learned judge properly decided the case on the issues disclosed by the pleadings. This appeal must necessarily fail and it is accordingly dismissed with costs.

Cases

Haji Mohamed Dom v Sakiman [1956] MLJ 45; Selangor United Rubber Estates Ltd v Cradock [1965] Ch 896

Representations

G Sri Ram for the appellant.

Jean Oliveiro (Mrs.) for the respondent.