IN THE FEDERAL
COURT OF MALAYSIA
AT PENANG
(APPELLATE DIVISION)
CIVIL APPEAL NO. 02-9-2004(A)
YONG TIM … APPELLANT
1. HOO KOK CHONG
2. HOO KOK WONG … RESPONDENTS
Coram: ABDUL MALEK AHMAD, PCA
STEVE
SHIM LIP KIONG, CJSS
SITI
NORMA BTE YAAKOB, FCJ
On 21st June 2004, the Federal Court
granted the appellant leave to appeal on the following questions:-
1.
Should the standard of proof
in civil cases for “forgery” as expressed to be on a balance of probabilities
in the decision of the Federal Court in Adorna Properties Sdn Bhd v Boonsom
Boonyanit @ Sun Yok Eng (2001) 1 MLJ 241 be applied also to the case of
“fraud”?
2.
Whether the inclusion of
further evidence under Rule 7(3A) of the Rules of the Court of Appeal 1994
precludes the plaintiffs/ respondents from particularizing the incidents of
fraud in the statement of claim as prescribed by Order 18 Rule 12 of the Rules
of the High Court, 1980?
In the memorandum of appeal, the
appellant has advanced 13 grounds but they appear to relate only to the first
question. This is hardly surprising
since the second question is quite inconsequential to the issues in dispute
between the parties. It is in that
context that our consideration must fall.
Now,
this case involved a dispute over 2 pieces of land known as EMR 1265 Lot 1346
and EMR 1266 Lot 1347 Mukim of Selama, Perak (the said lands). They belonged to one Hor Choy, the
grandfather of the respondents. On 30
December, 1966, Hor Choy executed a deed of trust over the said lands. He was to hold them on trust for the
respondents, who were then minors, until they reached the age of majority. In the meanwhile, Hor Choy was conferred the
power of sale of the said lands.
However, Hor Choy died on 26th November, 1969. As the respondents were still minors, the
administration of the said lands was entrusted to their father Ho Too Onn. In 1974, Ho Too Onn allowed the appellant to
use the said lands for 10 years after which they were to be handed back to the
respondents. In 1984, upon attaining the
age of majority, the respondents asked the appellant for the return of the said
lands. The appellant refused claiming
that he had actually purchased the said lands from the late Hor Choy in June
1969 for RM10,400/-. He also claimed to
be the legal owner since 1969 and had applied for and obtained titles in
continuation in respect of the said lands in 1976. The respondents thereafter took out an action
seeking inter alia a declaration that the transfer of the said lands from Hor
Choy to the appellant was null and void; that the appellant was to execute a
proper transfer of the said lands to the respondents or alternatively, that the
land office be required to execute the said transfer. The basis of the respondents’ action was that
the appellant obtained the said lands by fraud and falsification of
documents. After a full hearing, the
High Court found against the respondents.
However, on appeal by the respondents, the Court of Appeal reversed the
decision of the High Court.
In
connection with the first question, the following passage in the judgment of
the Court of Appeal is relevant. It
states:-
“The learned Judge held that the Plaintiffs
failed to prove fraud beyond reasonable doubt against the Defendant. He relied on the authority of SAMINATHAN v
PAPPA (1981) 1 MLJ 121, a Privy Council case. With due respect, the learned judge applied
the wrong standard of proof on fraud.
The proper test is that on a balance of probabilities [see ADORNA
PROPERTIES SDN BHD v BOONSOM BOONYANIT @ SUN YOK ENG [2001] 1 MLJ 241), F.C.”
Given the position taken by the Court of Appeal, it
is, we think, appropriate to examine in some detail the two cases cited
above. In Adorna Properties Sdn Bhd, the
Federal Court said inter alia:-
“For proof of forgery, such as the one under
appeal, whether the standard of proof is on a balance of probabilities or
beyond reasonable doubt?
The same arguments which the parties had put before both the High Court
and the Court of Appeal were again argued before us. The High Court held that forgery must be
proved beyond reasonable doubt, while the Court of Appeal held that it should
be on a balance of probabilities. For
the reasons given by the Court of Appeal – see [1997] 2 MLJ 62 at pp 73-77, we
entirely agree that the standard of proof required to prove ‘forgery’ in civil
cases is one on a balance of probabilities.”
It is quite obvious that the Federal Court in Adorna
Properties Sdn Bhd was concerned with forgery. That was the central issue in dispute between
the parties involved. In this regard,
the Federal Court adopted the approach taken by the Court of Appeal in the same
case as to the requisite standard of proof in establishing forgery. Therein, the Court of Appeal said as
follows:-
“Now, it is a general rule of the common law
that, in the absence of a statutory provision to the contrary, proof in civil
proceedings of facts amounting to the commission of a crime need only be on a
balance of probabilities. The general
rule finds expression in the judgment of the High Court of Australia (Barwick
CJ, Kitto, Taylor, Menzies JJ in Rejfek v McElroy (1965) 112 CLR 517, a
case of fraudulent misrepresentation).
The
common law of Malaysia has provided an exception to this rule in one case
alone. Where fraud is alleged in civil
proceedings, it must be proved beyond a reasonable doubt. The exception rests upon the following
observation of Lord Atkin in Narayanan Chettyar v Official Assignee, Rangoon
AIR 1941 PC at p 95:
‘There are other difficulties in the plaintiffs’ way which have been sufficiently considered in the judgments of the High Court. Fraud of this nature, like any other charge of a criminal offence, whether made in civil or criminal proceedings, must be established beyond reasonable doubt. The High Court were justified in holding that the trial judge’s finding was largely based on suspicion and conjecture. (Emphasis added.)’
This passage was applied by Rose CJ in the Singapore High Court in Nederlandsche Handel-Maatschappij NV (Netherlands Trading Society) v Koh Kim Guan (1959) MLJ 173 which in turn was applied by the former Federal Court in Tan Chye Chew & Anor v Eastern Mining & Metals Co. Ltd (1965) 1 MLJ 201. It has also been applied by our courts in later cases. See for example, Tai Lee Finance Co. Sdn. Bhd v. Official Assignee & Ors (1983) 1 MLJ 81, per Abdul Hamid FCJ (as he then was) at p 84.
The Privy Council has recognized the departure made by our common law upon the question of proof of fraud in civil proceedings. In Saminathan v Pappa [1981] 1 MLJ 121 at p 126, Lord Diplock when delivering the advice of the Board said that, ‘The onus of proof of fraud in Malaysia is proof beyond reasonable doubt.’
The Court of Appeal went on to state that the Atkin
Test established in Narayanan Chettyar (supra) was not followed by
the High Court of Australia in Rejfek v McElroy (supra). It then made the observation that proof
of forgery in civil proceedings, unlike fraud, came within the general rule
i.e. that it need only be established on a balance of probabilities. This observation, as we have said earlier,
was accepted by the Federal Court in Adorna Properties Sdn Bhd. Clearly, fraud was not the issue before the
Federal Court in that case. Where fraud
has been raised, we agree with the Court of Appeal in Adorna Properties Sdn
Bhd, that the Malaysian courts have consistently applied the Atkin Test.
In Saminathan v Pappa (supra), a major issue
in dispute was whether there was fraud or misrepresentation involved in the
transfer of certain land to the respondent.
Therein, the Federal Court held that as the respondent was the
registered proprietor of the land, her title was indefeasible and the burden
was on the appellant to prove fraud or misrepresentation. The Federal Court held that the appellant had
failed to prove the allegation beyond reasonable doubt. The respondent’s appeal was therefore
allowed. Against that decision, the
appellant appealed to the Privy Council.
On the issue of fraud, Lord Diplock who delivered the judgment on behalf
of the Board (comprising Lord Hailsham, Lord Diplock, Lord Edmund-Davies, Lord
Russell and Lord Roskill) said inter alia:-
“Their Lordships accordingly now turn to the
three findings of fraud on which the learned judge relied as defeating the
registered title of Miss Pappa under s 340(2)(a). Only one allegation of fraud was made in
Saminathan’s pleading viz. that Miss Pappa had misrepresented to the Collector
of Land Revenue that Saminathan desired the transfer of the title of the
disputed land to her. There is a
sentence in the trial judge’s judgment which suggests that he found this
allegation proved but counsel for Saminathan has been unable to point to even a
shred of evidence that any such representation, whether true or false, was ever
made to the Collector. The onus of
proof of fraud in Malayisa is beyond reasonable doubt. In the circumstances, the Federal Court were
clearly entitled, if not bound, to reject, as they did, the judge’s finding on
the matter.” (emphasis added)
Clearly therefore, the Privy Council has found it
fit to follow the Atkin Test concerning the standard of proof for fraud
in civil proceedings in Malaysia.
In
the circumstances, the Court of Appeal in the instant case is misconceived in
holding that the proper test to establish fraud is on the balance of
probabilities. In our view, the Court of
Appeal has obviously misdirected itself in rejecting the proposition of law
applied in Saminathan v Pappa (supra) that the standard of proof for
fraud in civil proceedings is one of beyond reasonable doubt which has been
consistently applied by the courts in Malaysia.
We see no reason to disturb that trend.
That being the position, the answer to the first question postulated has
to be in the negative.
Now,
at the hearing of the appeal, the respondents applied successfully to tender
fresh evidence in the form of two documents: (1) a letter dated 6.2.2002 from
the Assistant District Officer in Selama confirming that the original titles to
the said lands had been removed from the land register and had been lost; that
the transfer of the said lands to the appellant was registered only on 7.3.1975
and that Form 14A relating to the transfer has been removed and was lost; (2) a letter dated 11.2.2002 from the
Director of Survey & Mapping, Perak, stating that the department could not
trace the original file on the first survey done on the said lands in 1915 and
that an extract of the Confirmed Plan of the said lands dated 19.11.95 was
attached to the letter which disclosed that the appellant had declared the
original titles as lost for the purpose of the issuance of the titles in
continuation. The reception of fresh
evidence was made under r.7(3A) of the Rules of the Court of Appeal 1994. The Court of Appeal considered the
application to adduce further evidence in the light of the established facts
before the High Court. The court also
considered the effect or effects of such further evidence as reflected in the
following passage of its judgment:-
“With regard to further evidence as stated in
para 3(1)(a)(i) above, this is merely a confirmation of PW1’s evidence already
adduced at the trial. And the further
evidence as stated in para 3(1)(b) above is just a confirmation of what the
defendant (‘DW1’) deposed at the trial.
Having regard to the uncertainties in the evidence aforesaid and the
aforesaid reasons for the uncertainties we are also satisfied that reasonable
diligence would not have made this new evidence available to the Plaintiffs at
the hearing before the High Court. Next,
we have to consider whether the new evidence, if true, would have had or would
have been likely to have had a determining influence upon the decision of the
learned judge. As stated earlier, the
Defendant claimed that he bought the Lands from the deceased in June 1969 and
that he was the legal owner of the Lands
since then; and PW1, who checked all the entries in the Presentation
Book for the whole year of 1969 found no record of such dealing in respect of
the lands. However, from the new
evidence as stated in para 3(1)(a)(ii) and (iii), it is manifestly evident that
the alleged transfer of the Lands to the Defendant was registered only on
7.3.1975 @ 10.15 a.m. nearly some six years later. To our mind, the extract of the relevant
Presentation, being a public document which was produced from proper custody,
bears the stamp of truth, that is to say, the alleged transfer was registered
on 7.3.1975. Therefore, the claim by the
Defendant as deposed in evidence that he bought the Lands in 1969 and that he
became the legal owner of the Lands since then could not have been true. Even on the assumption that Form 14A was
executed for the purpose of the transfer in June 1969, as the Defendant
claimed, he could not have been the legal owner but only the beneficial owner
of the Lands since 1969 because the non-registration of the transfer under the
NLC does not confer on him the legal ownership to the Lands. However, by reason of (i) the fact that the
relevant Form 14A had been removed from the Register of Documents in 1975 and
hence, its loss from the possession of the Land Office, (ii) the non-existence
of any sale and purchase agreement in respect of the purchase of the Lands by
the defendant and (iii) the absence of any receipt for the payment of the
consideration, we are inclined to belief (sic) that the transfer of the Lands
to the Defendant could not have been transacted in June 1969, as claimed by the
Defendant but sometime later, on or about 7.3.1975. We are fortified in our belief by the fact
gathered from Presentation No. 71/75 (re-extract mentioned in para 3(1)(a)(ii)
above) that only the registration fee of RM20/= was charged for the two titles
but not the penalty for late registration as compared to Presentation No. 75/75
in the same extract where it is shown that the registration fee of RM10/= was
charged for one title, and a further RM10/= was charged for “Bayaran
Lambat’. That being the case, the
deceased could not have been a party to the execution of Form 14A, as the
vendor, because he had died about six years earlier. On the issuance of the title in continuation,
the Defendant deposed that after the payment of the purchase price he waited
about three years in order to get the titles to the Lands but PW3 did not hand
over the land titles to him and thereafter, he made a statutory declaration and
applied for new land titles from the Land Office. However, as revealed by the extract or the
Gazette Notifications as mentioned in para 3(1)(b) above, the Defendant
declared that the issued original titles to the Lands had been lost. This could not be true because he ought to
have been aware that the land titles must have been kept by PW3 otherwise he
would not have waited for three years for PW3 to hand them over to him. Further, there is no evidence that he had
verified with PW3 that the land titles were lost before he made such
declaration. Therefore, for the
aforesaid reasons we are satisfied that the new evidence, had it been available
at the trial, would have had a determining influence upon the decision of the
learned Judge.”
In the High Court, the respondents’ action was
dismissed because they were unable to prove fraud beyond reasonable doubt,
relying on the case of Saminathan v Pappa (supra). On appeal, the respondents successfully
applied to tender fresh evidence. The
Court of Appeal held that had such fresh evidence been available in the High
Court, it would have had a determining influence upon its decision. Thus, when the evidence disclosed at the High
Court is considered in the light of the fresh evidence aforesaid, there is, in
our view, sufficient justification for the Court of Appeal to come to the
findings and/or inferences adverted to in the passage cited above. Here, the Court of Appeal held that fraud was
proved on the balance of probabilities.
The standard of proof applied by the Court of Appeal, as we have
indicated earlier, is misconceived.
Notwithstanding the misconception, it seems evident that had the Court
of Appeal adopted the correct standard i.e. proof beyond reasonable doubt, it
would have nonetheless found fraud against the appellant. In the circumstances, when the leave question
is examined in that context, we find it appropriate to dismiss this appeal with
costs. Deposit to the respondents to
account of taxed costs.
We
also grant the following consequential orders:-
(1)
That vacant possession of
the said lands be made forthwith;
(2)
That the Titles to the said
lands be released to the Respondent’s solicitors within 30 days from date
hereof;
(3)
That the Registrar of Titles
is to effect the memorials for the name change to that of the Respondent;
(4)
That the accounts and
inquiry from 10.3.75 until to-date to be assessed by the Registrar; and
(5)
That damages from 10.3.75
until today to be assessed by the Registrar, High Court.
(STEVE SHIM
LIP KIONG)
Hakim Besar
Sabah & Sarawak
Date of delivery of judgment: 3.2.05
Date of Hearing: 22.11.04
Counsel for the Appellant: Tan Lip Gay (Ng Poh Tat with him)
Messrs Ng Poh Tat & Co. Advocates & Solicitors
Ipoh
Counsel for the Respondent: A. Silvanathan (M. Mathialagan with him)
Messrs Madhi Param & Co. Advocates & Solicitors
Ipoh