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 1
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 2
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. 3
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 1 st Respondent is an Advocate and Solicitor practising under the name and style of Sault & Co in Melaka while the 2 nd Respondent (since deceased) was the father of the 1 st Respondent and was actively involved in the day to day running of the aforesaid firm. 9. The 2 nd 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. 4
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 5
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 1 st Respondent return all the original titles of all the immovable assets of the deceased of the Appellants. (b) An order that the 1 st 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. 6
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 1 st Respondent return all the original titles of all the immovable assets of the deceased of the Appellants. (b) An order that the 1 st 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: 7
8
9
10
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: 11
12
13
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: 14
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 15
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 16
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 17
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. 18
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 1 st Appellant took the stand and gave testimony. When cross-examined, the 1 st 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 19
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 20
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 2 nd 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. 21
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 22
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 (3 rd 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 23
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 24
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. 25
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. 26
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 longtime 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 27
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. 28