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IN THE FEDERAL COURT OF MALAYSIA
AT PENANG
(APPELLATE DIVISION)
CIVIL APPEAL NO. 02-9-2004(A)
BETWEEN
YONG TIM …
APPELLANT
AND
1. HOO KOK
CHONG
2. HOO KOK WONG …
RESPONDENTS
Coram:
ABDUL MALEK AHMAD, PCA
STEVE SHIM LIP KIONG, CJSS
SITI NORMA BTE YAAKOB, FCJ
JUDGMENT OF THE COURT
On 21st June 2004, the Federal Court granted the appellant leave to appeal
on the following questions:-
-
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”?
-
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
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