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DALAM MAHKAMAH RAYUAN MALAYSIA

(BIDANG KUASA RAYUAN)

RAYUAN SIVIL NO: B-02-1076-06/2014

ANTARA

HONG LEONG BANK BERHAD …PERAYU [NO. SYARIKAT: 97141-X]

DAN

1. MOHD RIDZWAN BIN MOHD SIDEKNO. K/P: 720426-14-5617 / A2162421]

2. JUNAIDAH BINTI MOHD SIDEK …RESPONDEN-RESPONDEN[NO. K/P: 551228-10-5820 / 4915719]

[DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAMDALAM NEGERI SELANGOR DARUL EHSAN, MALAYSIA

[BAHAGIAN SIVIL]GUMAN SIVIL NO.: 22-306-2010

ANTARA

1. MOHD RIDZWAN BIN MOHD SIDEKNO. K/P:  720426-14-5617  / A2162421]

2. JUNAIDAH BINTI MOHD SIDEK …PLAINTIF-PLAINTIF[NO. K/P:  551228-10-5820  / 4915719]

DAN

HONG LEONG BANGK BERHAD …DEFENDAN]

KORUM:

DAVID WONG DAK WAH, JCAUMI KALTHUM BINTI ABDUL MAJID, JCA

PRASAD SANDOSHAM ABRAHAM, JCA

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GROUNDS OF JUDGMENT

[1]  We heard this appeal on the 15th of July 2015 and dismissed the

same on the same date. We also dismissed the cross appeal of the 2nd 

respondent / 2nd  plaintiff and made no order as to costs. We append

below our grounds for so doing.

INTRODUCTION TO THE FACTUAL BASIS LEADING UP TO THE

APPEAL

[2]  The suit was at the instance of the respondents for annulment of a

charge instrument pursuant to a bank facility created in favour of the

appellant on the basis the signature of the 1st respondent was forged.

[3]  The respondents are siblings, the 1st  respondent being the

younger brother of the 2nd  respondent. The respondents were and are

the co-registered proprietors in equal shares of a property held under

title No.38521, Lot no 17106, Mukim Damansara, District of Petaling,

Selangor (the property).

[4]  The appellant at the commencement of the suit in the High Court

was originally EON Bank Berhad (“Eon Bank”). By a vesting order dated

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17th  June 2011 entered in the Kuala Lumpur High Court Originating

Summons No: 24NCC-175-2011, all the assets, rights and liabilities of

Eon Bank Berhad were vested upon the appellant.

[5]  For the purpose of this judgment, we refer to the parties as they

were referred to in the High Court.

BACKGROUND FACTUAL MATTRIX COMMON TO BOTH PARTIES

[6]  There appears to be a dispute of facts in almost all aspects of the

suit.

[7]  It is common ground nevertheless the 2nd plaintiff in 2003, obtained

a bank loan from the defendant. The loan was to be secured by a

charge on the said property (charge). The loan documentation was

handled by Messrs Suhaili & Song, a firm of Advocates & Solicitors.

 After having drawn down on the loan, the 2nd  plaintiff defaulted in

repaying the said loan. The defendant then commenced legal action

against the 2nd  plaintiff and judgment was obtained against the 2nd 

plaintiff on 24th December 2004.

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[8]  The 2nd plaintiff was subsequently adjudicated a bankrupt on 13th 

 August 2008. Furthermore the defendant commenced foreclosure

proceedings against the plaintiffs in the Shah Alam High Court vide Suit

No. 24-929-2007 and obtained an order for sale of the property on 3rd 

October 2007.

THE PLEADED FACTS AS PER THE PLAINTIFF’S STATEMENT OF

CLAIM

[9]  On the facts pleaded, the taking of the loan from the defendant

was precipitated by the 2nd plaintiff getting involved with loan sharks to

assist a friend Chong Yoke Cheong (Chong), (see para 7 statement of

claim pg. 31 Rekod Rayuan, Bahagian A).

[10]  The 1st  plaintiff being a co-proprietor of the said property,

maintains that he did not sign any loan application nor signed any

charge instrument.

[11]  The signatures on the loan documents and the charge documents

was for the loan application by the 2nd  plaintiff (see para 8 pg. 37

statement of claim).

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THE PLEADED FACTS OF THE DEFENDANT AS PER STATEMENT

OF DEFENCE

[12]  The defendant contends that it was the plaintiffs on 21st  March

2003 who attended the defendant’s branch at Subang Jaya and applied

for facilities for the 2nd plaintiff.

[13]  Particulars of the various facilities are set out in the statement of

defence (pg. 76-77, Rekod Rayuan, Bahagian A).

[14]  The 2nd  plaintiff liaised with the defendant and the appointed

solicitor to attend to the creation of the charge in favour of the defendant.

[15]  The charge was duly registered on 1st July 2005.

[16]  The defendant contends all was done bona fide and there was no

element of conspiracy and / or fraud as alleged by the 1st plaintiff.

[17]  The issue of the 1st plaintiff’s claim not having signed the charge

document and / or the loan document has been put into issue by the

defendant.

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OUR FINDINGS

[18]  The pivot of this appeal would be to convince us that the learned

Judicial Commissioner misdirected himself when finding that PW1 had

not signed the charge documents in this case and the loan document.

Having found so, the charge became defeasible under section 340 2(b) 

of the National Land Code which we now set out:

“340. Registration to confer indefeasible title or interest, except incertain circumstances.

(2) The title or interest of any such person or body shall not be

indefeasible

(b) where registration was obtained by forgery, or by means of

an insufficient or void instrument” 

[19]  The learned Judicial Commissioner found so and declared the

charge null and void. The learned Judicial Commissioner’s findings on

the point are found in Rekod Rayuan Bahagian A, pgs. 143 – 146 of his

grounds.

[20]  The learned Judicial Commissioner found as a fact that the

differing signature of PW1 in the charge document, and other

contemporaneous documents, and considered the circumstances as a

whole before holding on a balance of probabilities that the signature of

PW1 on the charge document was forged. We say the learned Judicial

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Commissioner adopted the correct approach in law (see para 53, 56 &

58 of the Grounds of Judgment at page 145-146 of the Rekod Rayuan

Jilid 1).

[21]  The learned Judicial Commissioner also made the following

findings.

(i) The learned Judicial Commissioner believed unequivocally

the testimony of PW1 being truthful and that PW1 had not

signed the charge document of the defendant.

(ii) The evidence of PW3 and the role of one Kamarul using the

forged identity card of PW1 (P3) to identify himself as PW1

to deceive the solicitors when signing the charge documents

at their office.

(iii) The learned Judicial Commissioner ’s  comparison of the

thumb print of PW1 imprinted in court compared with PW3

(the forged IC) shows a difference in the signature.

(iv) The solicitors DW4 and DW5 were not certain whether they

had met PW1 at their office at time of attestation of the

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charge document, as opposed to the 2nd  plaintiff who was

orchestrating the whole transaction.

(v) The learned Judicial Commissioner in our view correctly

invoked section 73 of the Evidence Act 1950 in relation to

the alleged signature of PW1 and we do not agree that the

presence of hand writing experts was essential. (See AGS

Harta Sdn Bhd v. Liew Yok Yin [2010] 7 CLJ pg. 142  NB

where it was held in (3):

“(3)  The trial judge found on the balance of probabilities that the

appellant failed to discharge the burden that it was a bona fide 

purchaser for value. He clearly assessed the evidence of the

appellant's witnesses and gave reasons for his finding. There

was no fault or error in the reasons given by him.” 

[22]  We find the learned Judicial Commissioner had critically analysed

the evidence that was before him together with the

contemporaneous documents and considering all the

circumstances, came to a finding of fact that the charge document

in favour of the defendant was not signed by the 1st plaintiff.

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[23]  We have painstakingly sieved through the evidence and we are

unable to find any juridical reasons to interfere with the findings of

fact of the learned Judicial Commissioner.

[24]  We also find that the correct evidential burden was applied by the

learned Judicial Commissioner in his appreciation of the evidence

tendered by the 1st  plaintiff. We refer to the decision of the

Supreme Court in United Asian Bank v Tai Soon Heng

Construction Sdn Bhd reported in [1993] 1 MLJ pg 182 where it

was held :

“(1) A customer who alleges that his banker has honoured forged

cheques drawn on his account need only establish the charge offorgery on a balance of probabilities.” 

We also quote the judgment of Anuar JJ (as he then was) at pg

188 para B-G-

“In the first place, the disputed cheques were referred to Mr Phan

pursuant to two orders of court dated 23 July 1987 and 28 October

1987 (produced in the court below as exhs P29 and P30) which

required him to examine the cheques and say whether the signatures

upon them were genuine or not. This he did. Secondly, having

examined the record of appeal, we are satisfied that the respondent

had in Mr Phan's evidence-in-chief adduced sufficient evidence to

support his conclusions. That being the case, it was up to the appellant

to challenge the evidence of Mr Phan under cross-examination by

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attacking the reasons for his conclusions. From the record it is

apparent that Mr Phan was subjected to searching and strenuous

cross-examination. The learned judge nevertheless accepted his

evidence and we are unable to find any misdirection by the learned

 judge on this point.

 Another important matter has been raised by the appellant in

connection with the issue of forgery. It was argued for the appellant

both in the court below and before us that the standard of proof

required in cases such as this should be beyond a reasonable doubt

and Syarikat Perkapalan Timor v United Malayan Banking Corp Bhd 2

was cited in support. We have examined this decision with some care

but we are unable to agree with the appellant's counsel that it is

authority for the proposition that is put forward for the appellant. In our

 judgment, a customer who alleges that his banker honoured forged

cheques drawn on his account need only establish the charge of

forgery on a balance of probabilities and in this respect, we agree with

the statement of the law by Gunn Chit Tuan J (as he then was) in

Syarikat Islamiyah v Bank Bumiputra Malaysia Bhd where at p 220 the

learned judge said:

“In this case although it would appear that there was no or

insufficient evidence to prove beyond reasonable doubt for

purposes of criminal proceedings that the signatures on the

cheques concerned were forged by the said Awang alias

Che Mah bin Che Lob, yet I was satisfied that there was

evidence adduced to prove on a balance of probabilities in

this case that the signatures on the cheques were not those

of the plaintiff's but were forged or placed thereon without

the plaintiff's authority and were therefore wholly

inoperative.” 

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[25]  It is for the aforesaid reasons, as the 1st  plaintiff being a co-

proprietor of the said Land had not signed the charge documents

creating a charge over the whole of the said land, the learned Judicial

Commissioner was correct in his findings and we would dismiss the

appeal accordingly.

[26]  In the light of those findings we do not see the need to address the

issues raised in the cross appeal. As to allegations of fraud, conspiracy

and negligence, the learned Judicial Commissioner had painstakingly

gone through the evidence and dismissed the plaintiff’s claim and we

find the learned Judicial Commissioner had committed no appealable

error in that regard.

[27]  We therefore dismissed the appeal and the cross appeal with no

order as to costs.

Dated: 17th March 2016

Signed

[DATUK DR. PRASAD SANDOSHAM ABRAHAM]Judge

Court of Appeal Malaysia

Putrajaya

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Counsel for Appellant

Datin Jeyanthini Kannaperan[with Ms. Izahairani Izahani]Messrs Shearn Delamore & CoTingkat 7, Wisma Hamzah – Kwong Hing50100 Kuala Lumpur[Ruj: SD (DR) 3290749 (JK/IZI]

Counsel for Respondent

Mr. Joseph Iruthayam[with Ms. Syafiqah Zuhairah]Messrs Joseph Iruthayam & Co3A-3A (4th Floor) No. 30 Jalan Thambylillai Brickfields50470 Kuala Lumpur(Ruj: JI/L-719/RS2010]

Cases Referred To:

1. AGS Harta Sdn Bhd v. Liew Yok Yin [2010] 7 CLJ pg. 142 NB(referred)

2. United Asian Bank v Tai Soon Heng Construction Sdn Bhd [1993] 1MLJ pg 182 (referred)

Legislation Referred To:

1. The National Land Code section 340 2(b)

2.  The Evidence Act 1950, section 73