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DALAM MAHKAMAH RAYUAN DI MALAYSIA (BINDANG KUASA RAYUAN)
RAYUAN SIVIL NO: M-02(NCVC)(W)-1142-06/2016
1. SHA KANNAN 2. KAMBARAMAN SHANMUKHAM ...PERAYU – PERAYU DAN 1. ARUNACHALAM A/L VENKATACHALAM 2. VENKATACHALAM @ VENGA A/L KUPPAN juga dikenali
sebagai RM. KP. Venkatachalam (K/P No 290620-71-5233) …RESPONDENT – RESPONDENT
(DALAM MAHKAMAH TINGGI MALAYA DI MELAKA, GUAMAN NO: 22NCVC -10-02/2015)
1. SHA KANNAN 2. KAMBARAMAN SHANMUKHAM ...PLAINTIF-PLAINTIF
DAN
1. ARUNACHALAM A/L VENKATACHALAM 2. VENKATACHALAM @ VENGA A/L KUPPAN juga dikenali
sebagai RM. KP. Venkatachalam (K/P No 290620-71-5233) ... DEFENDAN – DEFENDAN
HEARD TOGETHER WITH
RAYUAN SIVIL NO. M-02(NCVC)(W)-1143-06/2016
BETWEEN
SANKARANARAYANAN PALANIAYAPPA CHETTIAR …PERAYU
2
AND
1. ARUNACHALAM A/L VENKATACHALAM
2. VENKATACHALAM @ VENGA A/L KUPPAN
JUGA DIKENALI SEBAGAI RM. KP. VENKATACHALAM
(K/P NO 290620-71-5233) …RESPONDEN – RESPONDEN
(DALAM MAHKAMAH TINGGI DI MAHKAMAH TINGGI MALAYA
DI MELAKA GUAMAN NO: 22NCVC -11-02/2015)
ANTARA
SANKARANARAYANAN PALANIYAPPA CHETTIAR …PLAINTIF
DAN
1. ARUNACHALAM A/L VENKATACHALAM
2. VENKATACHALAM @ VENGA A/L KUPPAN
JUGA DIKENALI SEBAGAI RM. KP. VENKATACHALAM (K/P
NO 290620-71-5233) …DEFENDAN - DEFENDAN
CORAM:
DAVID WONG DAK WAH, JCA
UMI KALTHUM BINTI ABDUL MAJID, JCA HASNAH BINTI DATO’ MOHAMMED HASHIM, JCA
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JUDGMENT OF THE COURT
Introduction: 1. Before us are two appeals, namely Rayuan Sivil NO: M-
02(NCVC)(W)-1142-06/2016 (Appeal 1142) and Rayuan Sivil NO.
M-02(NCVC)(W)-1143-06/2016 (Appeal 1143).
2. In both appeals, the genesis of the disputes was two Tamil
documents executed by various parties. For the Plaintiffs/
Appellants their main contention was that they can launch their
causes of action premised on the coercion and misrepresentation
exerted on the signatories of the aforesaid Tamil documents. For
the Defendants/Respondents their defence, inter alia, in
substance was that the causes of action (if any) accrued in 1998
and since the suits were commenced only in 2015, the suits were
blantantly caught by the Limitation Act 1953.
3. The learned trial Judge heard both cases together and sustained
the contentions of the Respondents and accordingly dismissed the
claims of the Appellants resulting in the two appeals before us.
4. We heard the appeals and after due consideration to respective
submissions of counsel, we dismissed the appeals and now give
our reasons.
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Background facts:
5. The Appellants (Sha Kannan and Kambaraman) in Appeal 1142
are the executors of the estate of PL Shanmukham who was their
father and all are Indian nationals. PL Shanmukham (the late
father) is the son of the deceased Palaniappa Chettiar.
6. The Appellant (Sankaranarayanan Palaniayappa Chettiar) in
Appeal 1143 is the surviving son of the deceased Palaniappa
Chettier (the late grandfather) and the executor of the estate of the
aforesaid.
7. The late grandfather owned properties in Malaysia with some
owned as co proprietors with his sons.
8. The 1st Respondent is an Advocate and Solicitor practising under
the name and style of Sault & Co in Melaka while the 2nd
Respondent (since deceased) was the father of the 1st Respondent
and was actively involved in the day to day running of the aforesaid
firm.
9. The 2nd Respondent was a good friend of the late father and hence
the firm of Sault & Co was engaged to handle the estate of the late
grandfather.
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10. It is undisputed that the beneficiaries of the estate of the late father
and grandfather had borrowed monies from the Respondents and
these borrowings are evidenced in two Tamil documents. In
respect of Appeal 1142, the translated English Version is in Ikatan
Teras Perayu – page 16 – 23. As for Appeal 1143, the translated
English Version is in Ikatan Teras Perayu – page 16 – 23. There is
no dispute as to the correctness or accuracy of the translations.
11. In Appeal 1142, the Tamil document is typewritten document and
signed by the late father and witnessed by the Appellants
themselves. In Appeal 1143, the Tamil document is a handwritten
document authored by the Appellant himself.
12. The two Tamil documents contain details of adjustments of monies
and how those owed monies are to be repaid by the beneficiaries.
It was the contention of the Respondents that the monies owed
were to be offset by the properties listed in the two Tamil
documents.
13. Opposing the stand of the Respondents, the Appellants contended
that the two Tamil documents were merely loan documents and
the properties were merely securities to the loans which did not
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give any right to the Respondents to transfer those properties to
themselves.
Pleadings:
14. The Appellants’ claims in Appeal 1142 are set out in paragraph 21
of their statement of claim (Appeal 1142 appeal record – Jilid 1
Bahagian A page 20) as follows:
(a) An order that the 1st Respondent return all the original
titles of all the immovable assets of the deceased of the
Appellants.
(b) An order that the 1st Respondent return all the blank
transfer forms executed in escrow by the deceased and in
his possession to the Appellants.
(c) A declaration that the transfer of the property comprised
Geran Nos 21562, 21563, 21564, 21565, 21566 and
42436 bagi Lot No 932, 933, 934, 935, 936 and 1150
situated in Seksyen 3, Bandar George Town, Negeri
Pulau Pinang (Ayer Hitam Property) to the extent of 1/14
share of the deceased is void and illegal and an order
directing the Pendaftar Hakmilik Tanah Pulau Pinang or
any relevant authorised authority to effect the said
cancellation and restore the deceased as the rightful
owner.
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15. The Appellant’s claims in Appeal 1143 are set out in paragraph 19
of the statement of claim (Appeal 1143 appeal record – Jilid 1
Bahagian A page 24) as follows:
(a) An order that the 1st Respondent return all the original
titles of all the immovable assets of the deceased of
the Appellants.
(b) An order that the 1st Respondent return all the blank
transfer forms executed in escrow by the deceased
and in his possession to the Appellants.
(c) A declaration that the transfer of the property
comprised Geran Nos 21562, 21563, 21564, 21565,
21566 and 42436 bagi Lot No 932, 933, 934, 935, 936
and 1150 situated in Seksyen 3, Bandar George Town,
Negeri Pulau Pinang (Ayer Hitam Property) to the
extent of 1/14 share of the deceased is void and illegal
and an order directing the Pendaftar Hakmilik Tanah
Pulau Pinang or any relevant authorised authority to
effect the said cancellation and restore the deceased
as the rightful owner.
16. One can note here the claims in both appeals are identical.
17. The substance of the defence of the Respondents for Appeal
1142 are as set out in paragraphs 10 (1) to 10(16) (Appeal 1142
appeal record – Jilid 1 Bahagian A page 53) and the relevant
paragraphs state as follows:
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9
10
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18. The Respondents’ defence for Appeal 1143 are as set out
paragraph 9 (Appeal 1143 appeal record – Jilid 1 Bahagian A
page 45) and the relevant sub paragraphs state as follows:
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13
14
19. The Appellants in Appeal 1142 in their reply set out in paragraph
15 (Appeal 1142 appeal record – Jilid 1 Bahagian A page 67)
states as follows:
The Plaintiffs refer to paragraph 10(14) and verily
believe and state that the document in Tamil was
obtained by coercion and misrepresentation that it
was only a security document for the loan and as such
cannot be treated as an valid agreement/admission for
sale.
20. The Appellants in Appeal 1143 in their reply set out in paragraph
15 (Appeal 1143 appeal record – Jilid 1 Bahagian A page 58)
states as follows:
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The Plaintiff refers to paragraph 9(14) and verily
believes that the said document in Tamil was obtained
by coercion and misrepresentation and that the said
document was only a security document for the loans
and the said document cannot be construed as a valid
sale agreement/admission.
High Court decision:
21. This was how the learned Judge dealt with the allegation of fraud
and misrepresentation:
6. Setelah mempertimbangkan keterangan yang
dikemukakan, lisan dan dokumentar serta fakta-fakta yang
dipersetujui, dan penghujahan kedua-dua pihak, saya
memutuskan bahawa plaintif-plaintif telah gagal, atas
imbangan kebarangkalian, untuk membuktikan dakwaan dan
tuntutan mereka terhadap defendan-defendan. Saya dapati
plaintif-plaintif, dalam kedua-dua kes, telah gagal untuk
membuktikan, atas imbangan kebarangkalian, adanya
penipuan dan frod dilakukan oleh defendan-defendan
sepertimana yang didakwa. Saya catatkan bahawa semua
dokumen bertulisan Tamil dan surat cara yang berkaitan
dengannya telah dibuat dan disaksikan oleh pihak plaintif
sendiri terutamanya si mati bapa. Kesemua saksi plaintif
yang dipanggil di mahkamah tidak mempunyai pengetahuan
terus atau dapat menunjukkan bagaimana dan di mana
perlakuan frod, penipuan atau pengaruh tidak wajar tersebut.
Kebanyakan keterangan yang diberikan merupakan
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keterangan dengar cakap dan secara am sahaja. Fakta
perlantikan seorang yang bernama Aliman Musri, dalam kes
yang berlainan, dan penafian perlantikan peguam Yap Koon
Roy semata, tidak mencukupi untuk membawa ke satu
kesimpulan kemungkinan adanya frod dilakukan. Hakikat
adanya dokumen bertulisan Tamil (oleh pihak plaintif sendiri)
dan perjanjian jual beli bertarikh 3.11.1997 berkenaan
hartanah Ayer Hitam serta disokong oleh fakta persetujuan
(sepertimana dinyatakan di atas) bahawa adanya pinjaman
daripada dan melalui defendan-defendan dan pindah milik
hartanah Ayer Hitam tersebut (ms 117: Ikatan B), dengan
tersendirinya mematahkan dakwaan ini. Dalam hal ini, saya
bersetuju dengan penghujahan peguam defendan.
22. On the issue of limitation pleaded by the Respondents, the learned
Judge found as follows:
8. Saya juga berpendapat pembelaan berkenaan dengan
tindakan plaintif-plaintif dalam kedua-dua guaman tersebut
telah dihalang oleh had masa (setelah lebih 17 tahun
berlalu); dan, mereka juga diestop daripada mengambil
tindakan ini sepertimana yang dihujahkan oleh peguam
defendan. Saya dapati transaksi yang dicabar berlaku pada
tahun 1997 dan 1998 terutama inter alia yang berkaitan
dengan perjanjian jual beli bertarikh 3.11.1997 (ms 98:
Ikatan B), dan urus niaga yang berkaitan dengan dokumen
bertulisan Tamil serta surat-menyurat yang berkaitan
dengannya (seperti ms 111 et seq: Ikatan B), seharusnya
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diambil tindakan dalam masa yang dibenarkan dalam Akta
Had Masa 1985 setelah plaintif meminta berkali-kali
penjelasan daripada defendan berkenaan urus niaga
tersebut dan tidak mendapat apa-apa respons daripada
mereka. Mereka seharusnya mengambil tindakan dalam
masa yang dibenarkan daripada tarikh timbulnya kausa
tindakan atas kegagalan memberi respons tersebut dan
bukan menunggu sehingga 17/18 tahun berlalu. Dalam
keadaan ini, saya berpendapat tindakan mereka telah
terhalang oleh had masa.
Our grounds of decision:
23. After having heard submissions from respective counsel and
perused the pleadings of respective parties we formed the view
that the determinative issues before us were these:
1. Whether the Appellants had proved their case premised
on fraud and misrepresentation?
2. Whether the causes of action of the Appellants were
timed barred by the Limitation Act 1953?
3. What were the intentions of the parties when they
executed the two Tamil documents?
Issue 1 – Have the Appellants discharged their burden of proof?
24. The burden of proof is always on the party who asserts the
affirmative. Terrel Ag CJ in the much-quoted case of Selvaduray v
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Chinniah [1939] MLJ 253, at page 254, said as follows:
“The burden of proof under section 102 of the Evidence
Enactment is upon the person who would fail if no
evidence at all were given on either side, and
accordingly the Plaintiff must establish his case. If he
fails to do so it will not avail him to turn around and say
that the Defendant has not established his. The
Defendant can say ‘it is wholly immaterial whether I
prove my case or not. You have not proved yours’ (
see the Judgment of the Privy Council in Raja
Chandranath Roy v Ramjai Mazumdar 6 bengal Law
Reports, page 303).”
25. In the recent case of U Television Sdn Bhd and Tan Sri Dato
Seri Vincent Tan Chee Yioun v Comintel Sdn Bhd Civil Appeal
No: 02(f)-12-03/2016 (W), the Federal Court made the following
observations on what the “burden of proof” entails:
35. On the meaning and application of the term “burden
of proof” section 101 of the Evidence Act 1950 [“the Act”]
states that it is the burden to establish a case which rests
throughout on the party who assert the affirmative of the
issue. The “burden of proof” in section 102 of the Act is
the burden to adduce evidence, to make out or rebut the
claim. The “burden of proof” in section 102 of the Act
shifts from one side to the other according to the weight
of the evidence.
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26. With the aforesaid principle of law at the foremost of our minds, we
examined what had transpired at the trial. In Appeal 1142, it was
not disputed that both the Appellants were present at the trial and
only the 1st Appellant took the stand and gave testimony. When
cross-examined, the 1st Appellant conceded that he had no
personal knowledge of the transactions fashioned out by his late
father and it was only his late father who knew what really
transpired. By this very concession, the law is quite clear and that
is those evidence were at best hearsay evidence which in law has
no evidential value. Lord Normand in Teper v Are [1952] AC 480,
486 explained the value of hearsay evidence in this way:
“The rule against the admission of hearsay evidence is
fundamental. It is not the best evidence, and it is not
delivered on oath. The truthfulness and accuracy of
the person whose words are spoken by another
witness cannot be tested by cross-examination and
the light which his demeanour would throw on his
testimony is lost.”
27. In Appeal 1143, it was also not disputed that the Appellant did not
take the stand but instead sent his grandson to tender a statement
sworn before a notary public in India. His reason for his absence
was that he had a medical issue but no evidence was produced to
prove that medical impediment. Again, when cross-examined, the
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grandson witness conceded that he had no personal knowledge of
the transactions fashioned by his grandfather. Again, that
concession in fact did not enhance the case for the Appellant. On
the contrary, the Appellant had failed miserably in discharging his
burden of proof.
28. In the circumstances, we were in full agreement with the learned
Judge when he found that the Appellants had failed badly in
discharging their burden of proof.
Issue 2 – Limitation:
29. The relevant factual matrix here is this. The two Tamil documents
and the memorandum of transfers were signed in 1997 and 1998
respectively. The Limitation Act 1953 prescribes that a period of
six years to commence any legal suit to challenge the validity of
the aforesaid documents. In the cases at hand, the legal actions
were commenced some 17 to 18 years later.
30. The response of the Appellants to this plea of limitation was that
they did not discover the fraudulent transfers until recently. Here
the claims were premised on coercion and misrepresentation on
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the signatories of the two Tamil documents. In respect of Appeal
1142, the signatory was the late father, PL Shanmukham while in
Appeal 1143, the signatory was the Appellant himself. The acts of
coercion and misrepresentation must have been exerted on those
two persons who signed the two Tamil documents and allegedly by
the 2nd Respondent. In both cases, there was not one iota of
evidence to show such coercion or misrepresentation. Nor was
there any evidence in writing that there were compliants by the late
father and the Appellant in Appeal 1143. Even if there were verbal
complaints as alleged in the pleadings, no action was taken by the
late father and the Appellant in Appeal 1143. This inaction can
only lead to one irrefutable conclusion and that is they knew what
they had signed and they had no complaints on the two Tamil
documents.
31. Further, it should be noted that if there were causes for complaints,
they were personal to the people privy to the two Tamil
documents. And when they did not take out any legal suit,
limitation sets in and in this case there had been a delay of 17 to
18 years and no explanation by anyone privy to the transactions to
explain why there was inaction.
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32. Further we also found that the doctrine of laches to be applicable
in view of the unexplained delay in launching the two legal actions.
The doctrine of laches is based on the maxim that "equity aids the
vigilant and not those who slumber on their rights." This is
succinctly explained by Lord Selborne in the landmark case of
Lindsay Petroleum Co v. Hurd 874 LRPC 221:
But in every case if an argument against relief which
otherwise would be just is founded on mere delay, that
delay of course not amounting to a bar by any Statute
of Limitations, the validity of that defence must be tried
upon principles substantially equitable. Two
circumstances always important in such cases are the
length of the delay, and the nature of the acts done
during the interval, which might affect either party and
cause a balance of justice or injustice in taking the one
course or the other so far as relates to the remedy.
33. In the Malaysian context, we have the case of Alfred Templeton
& Ors v. Low Yat Holdings Bhd & Anor [1989] 2 MLJ 202 where
Edgar Joseph Jr. J of the High Court of Penang held as follows:
Laches is an equitable defence implying lapse of time and
delay in prosecuting a claim. A court of equity refuses its
aid to a stale demand where the plaintiff has slept upon
his rights and acquiesced for a great length of time. He is
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then said to be barred by laches. In determining whether
there has been such a delay as to amount to laches the
court considers whether there has been acquiescence on
the plaintiff's part and any change of position that has
occurred on the part of the defendant. The doctrine of
laches rests on the consideration that it is unjust to give a
plaintiff a remedy where he has by his conduct done that
which might fairly be regarded as equivalent to a waiver of
it or where by his conduct and neglect he has, though not
waiving the remedy, put the other party in a position in
which it would not be reasonable to place him if the
remedy were afterwards to be asserted: 14 Halsbury's
Laws of England (3rd Ed) paras 1181, 1182. Laches has
been succinctly described as 'inaction with one eye's
open'.
34. In the present case, in our view there can be little doubt that the
delay had highly prejudiced the Respondents’ position in properly
defending the claim. A span of 18 years is a long time to say the
least. Equity demands that litigants on both sides are not put in a
position where one side is put in a unfavourable position by the
delay of the other side. The Courts must ensure that the playing
field is fair to all.
35. Finally on this aspect of the appeal, we agreed with the learned
counsel for the Respondents where it was submitted that if there
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were in fact coercions or misrepresentations, they would be
exerting coercions and misrepresentations on themselves as the
signatories were witnessed by the Appellants themselves in
Appeal 1142 while in Appeal 1143, the Appellant himself had
written the Tamil document himself and signed the same. In
anyone’s view, the contentions of the Appellants were without
merits.
Issue 3: Intentions of the two Tamil documents
36. The complaint here by the Appellants was that the two Tamil
documents were only loan documents with the properties used as
securities and cannot be treated as a licence to convey the
relevant properties.
37. In constructing any contract, it is settled law that the Courts must
give it a meaning reflective of the words employed by the
contracting parties. The contract must also be read as a whole and
interpreted in a manner consistent to the commercial reality.
38. Having perused the two Tamil documents in their entirety, we
formed the view that they were much more than mere loan
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agreements. They contain in detail terms as to how the loan
amounts were to be repaid to the lenders plus terms giving the
Respondents the requisite powers to implement the terms
contained therein. The intentions of the parties were amplified in
two common clauses of the documents which read as follows:
(9) In order to carry out the matters mentioned in this
document, I agree to sign in and give all required document
and otherwise render all co-operation.
(10) As per the above accounts, all my credits and debits
with you have been settled, I confirm that I have no claims,
demands whatsoever now or in the future against you.
39. Giving the plain and natural meaning to the above two clauses in
the context of the entirety of the two Tamil documents, there can
be only one meaning ascribed to them and that is that the parties
had intended to allow the Respondents to do what had been and
being done to implement the terms of the two Tamil documents. To
sustain the meaning ascribed to by the Appellants would be bluntly
rewriting the terms of a written contract by this Court which
obviously cannot be done under any circumstances.
40. Further we agreed with learned counsel for the Respondent in
submitting that the defence of settled account should be sustained.
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The case of Bishun Chand v Girdhari Lal and another [1934]
AIR PC 147 states, at page 151, left side, the nature of an account
stated in the following manner:
…
“ the essence of an account stated is not the character of the
items on one side or the other but the fact that there are
cross items of account and that the parties mutually agree
the several amounts of each and, by treating the items so
agreed on the other side as discharging the items on the
other side pro tanto, go on to agree that the balance is only
payable. Such a transaction in truth bilateral, and creates a
new debt and a new cause of action. There are mutual
promises, the one side agreeing to accept the amount of the
balance of the debt as true … and to pay it, the other side
agreeing the entire debt as at a certain figure and then
agreeing it has been discharged to such and such an extent,
so that there will be complete satisfaction on payment of the
agreed balance.. The account stated is accordingly binding,
save that it may be reopened on any ground – for instance,
fraud or mistake – which would justify setting aside any other
agreement.”
41. The two Tamil documents read as a whole in our view equated to
an account stated and the law is clear in that an account stated
can only be reopened on the ground of fraud which in this case
had not been proved at all.
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Conclusion:
42. This was a case where the Limitation Act 1953 had also applied
with its full force. Not only that, the factual matrix also demanded
us to apply the doctrine of laches for the simple reason that a long-
time span had elapsed and to allow the Appellants to ventilate their
grievances would be wholly unjust on the Respondents in
defending the claims. And finally, the intentions of the parties were
also clearly set out in writing and the Courts had no choice but to
give effect to those clear intentions.
43. For reasons set out above, we dismissed the two appeals with
costs in the sum of RM10,000.00 each subject to payment of
allocatur fees. We also ordered that the respective deposits to be
refunded to the Appellants.
Dated: 6 October 2017
(DAVID WONG DAK WAH) Judge
Court of Appeal Malaysia
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For the Appellants : C. Megalai
With her KM. Nachammai
Messrs. Meg, Nacha, ahir & Co.
For the Respondents : Krishna Dallumah
With him YH. Yong & Farhan Mirza
Messrs. Sault Scott & Co.
Notice: This copy of the Court's Reasons for Judgment is subject
to formal revision.