He Jing V Ta Securities Holdings Berhad

  

Download PDF Here

DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR

 

(BAHAGIAN RAYUAN DAN KUASA-KUASA KHAS) RAYUAN SIVIL NO. R3(1)-12A-21-2008

 

ANTARA

 

HE JING

 

(No. Pasport: P150859075)

 

PERAYU

 

DAN

 

TA SECURITIES HOLDINGS BERHAD

 

RESPONDEN

 

(No. Syarikat: 14948-M)

 

(dahulu dikenali sebagai Botly Securities Sdn Bhd)

 

(Dalam Perkara Mengenai Mahkamah Sesyen Di Kuala Lumpur Dalam Wilayah Persekutuan, Malaysia Saman No: 1-52-22048-2005)

 

ANTARA

 

TA SECURITIES HOLDINGS BERHAD

 

(No. Syarikat: 14948-M)

 

(dahulu dikenali sebagai Botly Securities Sdn Bhd)

 

PLAINTIF

 

DAN

 

HE JING

 

(No. Pasport: P150859075)

 

DEFENDAN

 

2

 

GROUNDS OF DECISION

 

This was an appeal from the decision of the learned Sessions Court Judge who entered summary judgment under Order 26A against the Appellant. I dismissed the appeal since I did not find, on the record, any bona fide triable issue. The Appellant had not shown that he had “a fair case for defence”, or “reasonable grounds for setting up the defence” or “even a fair probability that he has a bona fide defence” on the facts and on the law. See Bank Negara Malaysia v Mohd Ismail & Others [1992] 1 MLJ 400. I found there was no good reason to allow this suit to proceed to full trial.

 

The facts concerned a claim for losses incurred in operating a trading account with the Respondent, TA Securities Holdings Berhad. The Appellant, who is a Chinese national, opened an individual trading account to operate on the basis of a non-margin account. It was a contra trading account which was subject to express terms and conditions in the said individual trading account, exhibited as “Exhibit MN-1” to the Supporting Affidavit filed by the Plaintiff/Respondent. In the “Client’s Declaration”, the Appellant expressly acknowledged that he had read and clearly understood the covenants and undertakings and thereby agreed to abide by these covenants and undertakings as might be amended from time to time. The Client’s Declaration itself was expressed in English, Bahasa Malaysia and in Chinese character. Under the heading “Authorisation”, the Appellant additionally agreed for good consideration to the following:

 

3

 

1. That the Respondent shall not be held liable or responsible to him for any loss or damage however and whatsoever arising as a result of any act, neglect, omission or negligence of his “representative” (ie his Remisier);

 

2. That the Appellant shall at all times fully and effectively indemnify the Respondent against all actions, suits, proceedings, claims, demands, losses, charges, penalties, fees, fines, costs and expenses whatsoever “made, taken, brought, instituted, imposed, suffered, incurred, prosecuted or payable in any manner howsoever (including without limitation negligence, innocent or fraudulent, on the part on the part of your agents, employees or servants)” against or by the Appellant to any person;

 

3. That in the event of any one or more of the provisions contained in the Authorisation shall for any reason be held to be unenforceable, illegal or otherwise invalid, this shall not affect any other provision of the authorisation and the Authorisation shall be construed as if such unenforceable, illegal or invalid provisions had never been contained therein.

 

Needless to unduly stress, these covenants and undertakings are of very wide import and effect.

 

The main thrust of the defence was that the losses incurred arose out of a third-party trading using the account – the third-party being one Francis Ng. Francis Ng had subsequently (a year later) written to the Respondent acknowledging “our company will act as Guarantor for the

 

4

 

above-mentioned loan outstanding by He Jing” and promising to “settle the loan by way of 24 monthly instalment payments effective January 2006.” This letter under the letterhead of a company named Saporiti Resources Sdn Bhd appears as Exhibit – 2 to the Appellant’s Affidavit in Reply affirmed on 6th June 2006.

 

Until the date of hearing the third party who had guaranteed payment had not paid the outstanding sum due. There is no privacy of contract between Francis Ng (or Saporiti Resources) and the Respondent.

 

This defence should be tested against the express terms and covenants earlier quoted. If any loss to the Respondent should result from any negligence or default of the Appellant, the Appellant would still be liable to make good. He can then sue the third party, or the Remisier, as the case may be, provided the facts necessary to support such a claim are present. On the facts here, I agreed with Respondent’s Counsel’s Submission that this particular defence was something of an afterthought, especially since the Appellant had not expressly denied or pleaded he did not receive the contracts notes and contra statements sent to him at his given address. It was only after a year later that this defence was raised. The Appellant appeared to simply rely on an alleged ignorance of the terms and conditions since he is a Chinese national who apparently could only understand the Chinese language. In these circumstances, it would be appropriate to preclude the Appellant from denying liability by reason of estoppel. The Appellant’s silence after immediately receiving the contract notes and contra statements should be taken as according sufficient basis for an estoppel to operate in law. See a somewhat similar fact situation in the

 

5

 

Singapore High Court decision in RHB-Cathay Securities Pty Ltd v Ibrahim Khan [1999] 3 SLR 464, where the Court referred to the Defendant’s stunning silence after receiving the contract notes and contra statements, and thereby upheld the plea of estoppel.

 

The Appellant also raised a defence based on an alleged noncompliance by the Respondent with the Bursa rules requiring forceselling within T+5. I agreed with the Respondent’s position that this particular rule was binding only on Member Companies, and could not be applied to render the transactions here illegal or void. See in particular UMBC Securities Sdn Bhd v Tan Chee Aan [2001] 6 CLJ 341, where the High Court referred to a provision in the relevant “Account Opening Form” which authorised the Plaintiff to deal with the shares “in any manner you deem fit” as allowing the Plaintiff not to force sell at T+8. Clause 11 in the Covenant and Undertakings referred to earlier is similarly worded:

 

“I authorise you to deal, in any manner as you shall deem fit, with all or any securities purchased for my account for which I have not remitted payment.”

 

For these reasons, I dismissed the appeal with costs to be taxed.

 

Sgd.

 

(MOHAMAD ARIFF BIN MD. YUSOF) PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA BAHAGIAN RAYUAN DAN KUASA-KUASA KHAS 3

 

KUALA LUMPUR

 

Dated 16th July 2009.

 

6

 

COUNSELS

 

For the appellant/defendant: Nirmal Jeet Kaur Messrs Lee Kok Heng & Co.

 

For the respondent/plaintiff: Bobby Chew

 

Messrs Chris Koh & Chew.

PDF Source: http://kl.kehakiman.gov.my