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Zul Rafique and Partners succeeds in civil claim for misappropriated fund amounting to MYR1,605,137.50 million

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Ms. Idza Hajar Ahmad Idzam (assisted by Ms. Bailey Leong Pui Yee,  Ms. Lee Sheen Yee and Yap Jia Cheng) from Zul Rafique & Partners’ Litigation Practice Group acted for Telekom Sales and Services Sdn Bhd (“Plaintiff”) and succeeded in a civil claim which commenced since October 2015 at the Kuala Lumpur High Court of Malaya (“Court”). The judgment after full trial was handed down on 3 June 2021 where the ex-employee of the Plaintiff  (“Defendant”) was found liable for the unauthorized transfer of funds amounting to a total of MYR1,605,137.50 (“the Funds”). It was inter alia held that the Defendant was a constructive trustee holding the Funds on behalf of the Plaintiff and by transferring the Funds to his spouse’s and his own personal accounts, he had breached his fiduciary duty owed to the Plaintiff. 

BRIEF FACTS
The Defendant was an employee of the Plaintiff between the year 2000 to 2013 and had held various positions at the finance division of the Plaintiff. At all material times, when the Defendant was working in the finance division, one of his duties was to attend to the remittance of the Funds.

Given the said duty, the Defendant was granted full access to the Plaintiff’s account. By taking advantage of the system implemented at that material time, the Plaintiff misappropriated the Funds by making 70 unauthorised transactions from December 2007 up until September 2010.

The 70 unauthorised transactions made by the Defendant went unnoticed by the Defendant’s colleagues and the Plaintiff up until March 2014 after an investigation was conducted due to a shortfall in the Plaintiff’s account.

The Plaintiff had then commenced a civil claim against the Defendant in October 2015 premised on inter alia fraud, breach of trust, tort of unjust enrichment etc.

DEFENCE RAISED BY THE DEFENDANT
In defending the allegations raised and evidences adduced by the Plaintiff during the course of the trial, the Defendant had amongst others raised the elements of conspiracy, the impossibility of 70 unauthorised transaction made by only Defendant himself, the safety features of the security system on the remittance process at the material time and the issue of limitation pursuant to the Limitation Act 1953. In addition, the Defendant had also tried to rely on the fact that he was not found guilty of the criminal charges brought against him for the same transactions made in support of his contention that he ought not to be found liable for this civil claim.

However, the Defendant himself was not called to testify as a witness during the trial.

FINDINGS OF THE HIGH COURT
Upon assessing the demeanour and testimonies of the witnesses and all the documentary evidences made available to the Court (including bank statements etc evidencing the transactions made), the Court had amongst others held that due to the absence of the Defendant who was and is a material witness in this matter, a presumption of adverse inference under section 114(g) of the Evidence Act 1950 was to be invoked against him. The Court then proceeded to allow the Plaintiff’s claim against the Defendant and allowed all the relief sought by the Plaintiff including but not limited to the return of the Funds misappropriated, interest and costs of MYR50,000 to be paid by the Defendant.

COMMENTARY
With the Defendant’s election to remain silent and not testify during the trial, the Court had once again reaffirmed the principle of the presumption of adverse inference in that the testimony of other witnesses must be presumed to be true in the absence of any explanation provided by the Defendant. The Plaintiff’s case and/or testimonies adduced were strengthen and/or cemented and to borrow the words of Lord Lowry in R v IRC ex parte; TC Coombs & Co [1991] 2 A.C 283 – ‘a strong or even an overwhelming case’ as a result of the Defendant’s silence.

For more insight into this area of law, please contact our Partners in the Litigation Practice Group:
P Jayasingam
Wong Keat Ching
Thavaselvi Pararajasingam
Idza Hajar Ahmad Idzam
Farah Shuhadah Razali
Bailey Leong Pui Yee

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