Professional Documents
Culture Documents
Iftikar Ahmed Khan (2018)
Iftikar Ahmed Khan (2018)
C CIVIL PROCEDURE: Pleadings – Issues not pleaded – Writ of action filed for
declarations and refund of fixed deposit receipt (FDR) – Claim based on negligence
– Whether bank at liberty to uplift FDR without consent – Whether there was
cause of action – High Court found bank liable for breach of contract – Court of
Appeal set aside judgment of High Court on grounds that negligence claim was
D abandoned – Whether breach of contract stated in pleadings – Whether parties
bound by pleadings – Whether decision based on issue not raised in pleadings liable
to be set aside
CIVIL PROCEDURE: Appeal – Appeal to Federal Court – Questions of law –
Issues not pleaded – Pleadings – Writ of action filed for declarations and refund of
E fixed deposit receipt (FDR) – Claim based on negligence – Whether bank at liberty
to uplift FDR without consent – Whether there was cause of action – High Court
found bank liable for breach of contract – Court of Appeal set aside judgment of High
Court on grounds that negligence claim was abandoned – Whether breach of
contract stated in pleadings – Whether parties bound by pleadings – Whether
F decision based on issue not raised in pleadings liable to be set aside
The appellant was, prior to his death, the sole proprietor of a firm known
as Omar Khayam Enterprise (‘OKE’). His son, PW2, was substituted as a
party to this appeal. Briefly, the facts were that OKE was given various
banking facilities by the respondent amounting to RM15 million. The
G appellant had authorised PW2 to sign all cheques on behalf of OKE in
respect of OKE’s account (‘the account’). The respondent granted OKE an
additional overdraft of RM300,000 (‘the OD’). Subsequently, the appellant
applied to the respondent to transfer the banking facilities enjoyed by OKE
to Omar Khayam Enterprise Sdn Bhd (‘the company’). A fresh joint and
H several guarantee for RM15,300,000 was duly executed by the appellant and
PW2. The parties to the memorandum of deposit remain unchanged. The
shareholders of the company, namely, PW2 and Rajah Sultan, sold their
shares to one Sallim and two others, for RM550,000. The appellant later
discovered that Sallim had, without his knowledge, used the company’s
I cheque to withdraw RM300,000 from the company’s OD account to
purchase a cashier’s order in the name of the appellant. Sallim then gave the
416 Current Law Journal [2018] 1 CLJ
cashier’s order to the appellant as part payment of the purchase price of the A
shares. As a result of Sallim’s action, the overdraft facilities of RM300,000
given to the company was fully utilised for an unauthorised purpose,
unknown to the appellant. The company’s cheque was signed by Sallim alone
and this was in breach of the directors’ resolution which required that the
company’s cheques must be signed by two signatories, namely Sallim and B
PW2. The appellant filed a writ of action against the respondent for certain
declarations and for the refund of the fixed deposit receipt (‘FDR’), alleging
that the respondent had negligently and without his consent, uplifted his
FDR. The High Court dismissed the appellant’s claim based on negligence,
holding that the appellant had no cause of action in tort against the C
respondent as the overdraft was given to the company and not to the
appellant. The High Court, however, found that the respondent was liable for
breach of contract and accordingly granted the declaration that the
respondent was not entitled to uplift the FDR without the appellant’s consent
and ordered the respondent to refund the FDR. Aggrieved, the respondent
D
appealed to the Court of Appeal. The Court of Appeal allowed the
respondent’s appeal and set aside the judgment of the High Court on the sole
ground that the appellant had abandoned his claim based on the tort of
negligence. The Court of Appeal held that the appellant’s cause of action was
not based on a breach of contract but on the tort of negligence and the parties
were bound by their pleadings. The appellant thus appealed against the said E
decision and was granted leave to appeal to this court on the following
questions of law (i) when evidence was led without objections at trial, could
an appellate court reverse the decision of the High Court on the sole ground
that the cause of action in negligence had been abandoned; and (ii) was the
plaintiff entitled to declarations of rights as pleaded. F
syarikat, iaitu PW2 dan seorang bernama Rajah Sultan menjual saham A
mereka kepada seorang bernama Sallim dan dua orang lagi untuk
RM550,000. Perayu kemudiannya mendapati bahawa Sallim telah, tanpa
pengetahuannya, menggunakan cek syarikat untuk mengeluarkan wang
sebanyak RM300,000 daripada akaun OT syarikat untuk membeli perintah
juruwang bawah nama perayu. Sallim telah memberikan perintah juruwang B
kepada perayu sebagai sebahagian pembayaran harga belian saham-saham.
Akibat tindakan Sallim, kemudahan overdraf RM300,000 yang diberikan
kepada syarikat digunakan sepenuhnya untuk tujuan yang tidak dibenarkan,
tanpa pengetahuan perayu. Cek syarikat ditandatangani oleh Sallim sahaja
dan ini melanggar resolusi pengarah yang menetapkan agar cek-cek syarikat C
ditandatangani oleh dua penandatangan, iaitu Sallim dan PW2. Perayu
memfailkan tindakan writ terhadap responden untuk beberapa
pengisytiharan dan untuk bayaran balik resit tetap deposit (‘FDR’), dengan
dakwaan bahawa responden telah cuai dan tanpa kebenarannya
mengeluarkan FDR. Mahkamah Tinggi menolak rayuan perayu berdasarkan
D
kecuaian, dengan memutuskan bahawa perayu tidak mempunyai kausa
tindakan dalam tort terhadap responden kerana overdraf telah diberikan
kepada syarikat dan bukan perayu. Mahkamah Tinggi, walau bagaimanapun,
mendapati bahawa responden bertanggungjawab atas pelanggaran kontrak
dan membenarkan pengisytiharan bahawa responden tidak mempunyai hak
mengeluarkan FDR tanpa kebenaran perayu dan memerintahkan responden E
membayar balik FDR. Terkilan, responden merayu ke Mahkamah Rayuan.
Mahkamah Rayuan membenarkan rayuan responden dan mengetepikan
penghakiman Mahkamah Tinggi atas alasan perayu telah meninggalkan
tuntutannya berdasarkan tort cuai. Mahkamah Rayuan mendapati kausa
tindakan perayu bukan berdasarkan pelanggaran kontrak tetapi tort cuai dan F
pihak-pihak terikat dengan pliding mereka. Perayu dengan itu merayu
terhadap keputusan tersebut dan memberi kebenaran merayu ke mahkamah
ini atas persoalan undang-undang (i) di mana keterangan dikemukakan tanpa
bantahan semasa perbicaraan, bolehkah Mahkamah Rayuan mengakas
keputusan Mahkamah Tinggi atas alasan tunggal bahawa kausa tindakan G
berdasarkan kecuaian telah diabaikan; dan (ii) sama ada plaintif berhak atas
pengisytiharan hak seperti yang diplidkan.
Diputuskan (menolak rayuan dengan kos)
Oleh Abu Samah Nordin HMP menyampaikan penghakiman mahkamah:
(1) Kausa tindakan perayu berdasarkan kecuaian dan bukan pelanggaran H
kontrak. Tiada penjelasan yang jelas bahawa kes perayu berdasarkan
kontrak dan bahawa responden telah, dalam melanggar kontrak,
mengeluarkan FDR tanpa kebenaran perayu. Tiada perkataan ‘kontrak’,
atau pelanggarannya, dinyatakan dalam pliding. Pihak-pihak terikat
dengan pliding dan tidak dibenarkan mengemukakan fakta dan isu yang I
tidak diplidkan oleh mereka. Keputusan berdasarkan isu yang tidak
dibangkitkan oleh pihak-pihak dalam pliding mereka boleh diketepikan.
[2018] 1 CLJ Iftikar Ahmed Khan v. Perwira Affin Bank Bhd 419
JUDGMENT
Abu Samah Nordin FCJ: F
[1] This is an appeal by the appellant, Sadar Mohd Roshan Khan (plaintiff
in the High Court) against the decision of the Court of Appeal which had set
aside the judgment of the Kuala Lumpur High Court given in his favour. He
had since passed away. On 18 March 2013, his son Raja Iftikar Ahmad Khan
was substituted as a party to this appeal. G
[2] The High Court had allowed the appellant’s claims for a declaration
that Perwira Affin Bank Berhad (the respondent) was not entitled to uplift his
fixed deposit receipt no. 049675 (‘FDR’) which was pledged to the
respondent as security for an overdraft facility of RM300,000, without his
H
consent and accordingly ordered the respondent to refund the FDR to him
with interest at 8% per annum from 18 March 1993 until realisation. The
High Court found that the respondent was in breach of contract by uplifting
the FDR without the appellant’s consent. The Court of Appeal, however,
allowed the respondent’s appeal and set aside the judgment of the High Court
on the ground that the appellant’s cause of action was for the tort of I
negligence, which it had abandoned and not for breach of contract.
[2018] 1 CLJ Iftikar Ahmed Khan v. Perwira Affin Bank Bhd 421
A [3] On 27 January 2011 the appellant was granted leave to appeal to this
court against the decision of the Court of Appeal on the following questions
of law:
(a) When evidence is led without objections at trial, can an appellate court
reverse the decision of the High Court on the sole ground that the cause
B of action in negligence has been abandoned?; and
(b) Is a plaintiff entitled to declarations of rights as pleaded?
Background Facts
[4] The undisputed facts of the case are as follows:
C
(a) Sadar Mohd Roshan Khan (PW1) was, prior to his death, the sole
proprietor of a firm known as Omar Khayam Enterprise (“OKE”).
(b) On 18 March 2013 his son, Raja Iftikar Ahmad Khan (PW2) was
substituted as a party to this appeal.
D
(c) OKE was given various banking facilities by the respondent amounting
to about RM15 million as at August 1990.
(d) On 13 April 1990 the appellant informed the respondent that he had
authorised PW2 to sign all cheques on behalf of OKE in respect of
E OKE’s account no. 1102052687 (“the account”).
(e) By another letter dated 16 April 1990 the appellant informed the
respondent that he had authorised PW2, to operate the account and to
do all things necessary to protect the respondent’s interest. The letter
further states that the appellant;
F
agree to be responsible for due repayment of money due to you
on the account or otherwise and purported to have been incurred
on my/our behalf or on behalf of my/our firm by the authorised
person whether such liabilities have been or shall be incurred in
usual course of business or not and notwithstanding any default,
G omission, negligence or fraud on the part of the authorised person.
(f) On 22 December 1990 the respondent granted OKE an additional
overdraft of RM300,000 (“the OD”).
(g) The OD was secured by the FDR of RM200,000 vide FDR No. 049675
dated 15 January 1991; and a personal guarantee of PW2.
H
(h) The terms and conditions of the FDR are contained in the memorandum
of deposit dated 15 January 1991 which was executed by PW1 and PW2
in favour of the respondent. Paragraph 6 of the memorandum of deposit
states:
I You are at liberty at any time to withdraw the deposit made under
the said Deposit Receipt No. 049675 or any Fixed Deposit from
time to time substituted for or replacing the same and to apply the
proceeds thereof in or towards the discharge of my/our accounts
422 Current Law Journal [2018] 1 CLJ
(b) All facilities together with liabilities will be transferred from Omar
Khayam Enterprise to Omar Khayam Enterprises Sdn Bhd.
(j) A fresh joint and several guarantees for RM15,300,000 was duly
executed by the appellant and PW2. The parties to the memorandum of D
deposit dated 15 January 1991 however remain unchanged. The
company, Omar Khayam Enterprises Sdn Bhd, was not substituted as a
party to the memorandum of deposit in place of the appellant and PW2.
[5] On 15 May 1991, the shareholders of the company, namely, PW2 and
Rajah Sultan sold their shares to one Sallim bin Mohamed (‘Sallim’) and two E
others for RM550,000. PW2 was then the majority shareholder, holding
715,001 shares of the company. Rajah Sultan held only 1 share in the
company. A deposit of RM100,000 was paid upon execution of the sale and
purchase agreement.
[6] The balance of RM450,000 was to be paid by 15 July 1991. Sallim F
paid the appellant another sum of RM300,000 by way of a cashiers order
dated 26 July 1991. The cashier’s order was not paid to PW2 as he was
actually holding the shares in trust for the appellant.
[7] The balance of RM150,000 was not paid as Sallim was arrested in
G
Singapore on fraud charges and imprisoned for six years. Sallim’s solicitors
later told PW2 that nothing could be done as her fees and disbursement had
not been paid by Sallim.
[8] The appellant later discovered that Sallim had, without his knowledge,
used the company’s cheque to withdraw RM300,000 from the company’s H
OD account to purchase a cashiers order in the name of the appellant. Sallim
then gave the cashiers order to the appellant as part payment of the purchase
price of the shares. As a result of Sallim’s action, the overdraft facilities of
RM300,000 given to the company was fully utilised for an unauthorised
purpose, unknown to the appellant. The company’s cheque was signed by
I
[2018] 1 CLJ Iftikar Ahmed Khan v. Perwira Affin Bank Bhd 423
A Sallim alone. This was in breach of the director’s resolution dated 25 July
1991 which required that the company’s cheques must be signed by two
signatories, namely Sallim and PW2.
[9] On 4 March 1999 the appellant filed a writ of action against the
respondent for certain declarations and for the refund of the FDR, alleging
B that the respondent had negligently and without his consent uplifted his FDR.
The appellant named PW2 as the second defendant, alleging that PW2 had
consented to the uplifting of the FDR without his authorisation. The
appellant later withdrew the suit against PW2, leaving the respondent as the
sole defendant.
C
[10] The appellant sought the following reliefs against the respondent:
(a) An order and declaration that the respondent should have obtained the
consent from the appellant before uplifting the said FDR No. 049675;
(b) An order and declaration that the respondent was negligent in honouring
D Perwira Habib Bank Malaysia Bhd cheque no. 531000 dated 26 July
1991 when the same had not been countersigned by his son and
accordingly the respondent was not entitled to uplift the said deposit
receipt no. 049675 against the said overdraft facility of RM300,000;
(c) An order and declaration that the respondent refund to the appellant the
E
sum of RM231,155.60 with interest at 8% per annum from 18 March
1993 to date of judgment and realisation; and
(d) Costs.
[11] It is to be noted that in prayer (b), the appellant, quite surprisingly,
F is not asking the respondent to refund the sum of RM300,000 withdrawn
from the overdraft account due to the respondent’s negligence in honouring
the said cheque without being countersigned by PW2. Instead, the appellant
sought a declaration that the respondent was not entitled to uplift the FDR
and for an order that the respondent refunds the FDR.
G
The High Court
[12] The High Court dismissed the appellant’s claim based on negligence,
holding that the appellant has no cause of action in tort against the respondent
as the overdraft was given to the company and not to the appellant. This is
H
what the learned trial judge said:
When the cash cheque of RM300,000.00 was negligently and wrongfully
honoured by the 1st Defendant on 26.7.91 then only the company was
entitled to sue the 1st Defendant for negligence and for the recovery of
the said sum of RM300,000.00. The plaintiff has no cause of action in tort
against the 1st Defendant as the OD was given to the company and not
I to the plaintiff.
424 Current Law Journal [2018] 1 CLJ
[13] The High Court however found that the respondent was liable for A
breach of contract and accordingly granted the declaration that the
respondent was not entitled to uplift the FDR without the appellant’s consent
and ordered the respondent to refund the FDR. The High Court held that the
appellant has a cause of action for breach of contract and that the cause of
action on contract arose when the respondent uplifted his FDR without his B
consent and in breach of the terms of the memorandum of deposit. The High
Court held that the memorandum of deposit was between the appellant and
the respondent and not between the company and the respondent. The High
Court pointed out that the respondent failed to request the appellant to
execute a fresh memorandum of deposit when the banking facilities were C
transferred to the company. This is how the learned trial judge justified his
finding against the respondent for breach of contract:
Although the plaintiff has pleaded negligence on the part of the 1st
Defendant in honouring the cheque for RM300,000.00 the plaintiff’s
cause of action is for breach of contract and the cause of action only arose
D
when the 1st Defendant uplifted the FD and set it off against the OD
of RM300,000.00 given to the company. Since no monies had been
utilized by the company the 1st Defendant was not entitled under the
terms of the Memorandum of Deposit to uplift the FD. The act of
uplifting the FD on 15.4.1993 was a breach of contract by the 1st
Defendant. E
[14] At pp. 41 and 42 of his judgment the learned trial judge further
explained:
At page 41
The Memorandum of Deposit was a contract by which the plaintiff agreed F
that if any monies were owing by OKE the 1st defendant was at liberty
to withdraw the FD and apply it to settle sums owing by OKE. In breach
of contract the 1st defendant uplifted the FD on 15.4.1993 and set off
same against the OD of the company.
At page 42
G
Since the FD belonged to PW1 the consent of PW1 should have been
obtained and not that of PW2. The FD did not belong to PW2 or the
company. Even if PW2 had agreed to the upliftment of the FD it was not
within his power to do so. The plaintiff’s consent was never obtained.
[15] The respondent, being aggrieved by the decision of the High Court, H
appealed to the Court of Appeal. The principal ground of appeal was that the
learned trial judge erred in law and in fact in holding that the appellant’s
cause of action was for breach of contract (which was not pleaded) whereas
the appellant’s pleaded cause of action was based on the tort of negligence.
I
[2018] 1 CLJ Iftikar Ahmed Khan v. Perwira Affin Bank Bhd 425
12. Despite the 1st Defendant’s above negligence, the 1st Defendant A
then wrote to the 2nd Defendant stating that the 1st Defendant
intended to uplift the said FDR which at that point of time
amounted to RM231,393.00 in order to reduce the said Overdraft
Facility of RM300,000.00.
[28] Not a single word of “contract”, let alone the breach of it, is stated B
in the pleading. The appellant blamed his son (second defendant) and sued
him for unlawfully authorising the respondent to uplift the FDR. He later
withdrew the suit against the son, leaving the respondent as the sole
defendant in the suit.
[29] It is settled law that parties are bound by their pleadings and are not C
allowed to adduce facts and issues which they have not pleaded: Samuel Naik
Siang Ting v. Public Bank Bhd [2015] 6 MLJ 1, State Government of Perak
v. Muniandy [1985] 1 LNS 117; [1986] 1 MLJ 490, Veronica Lee Ha Ling &
Ors v. Maxisegar Sdn Bhd [2009] 6 CLJ 232. In Lee Ah Chor v. Southern Bank
Bhd [1991] 1 CLJ 667; [1991] 1 CLJ (Rep) 239 it was held that where a vital D
issue was not raised in the pleadings, it could not be allowed to be granted
and to succeed on appeal. A decision based on an issue which was not raised
by the parties in their pleadings is liable to be set aside: Yew Wan Leong v.
Lai Kok Chye [1990] 1 CLJ 1113; [1990] 1 CLJ (Rep) 330; [1990] 2 MLJ
152. In The Chartered Bank v. Yong Chan [1974] 1 LNS 178; [1974] 1 MLJ
E
157 the Federal Court set aside the judgment of the trial judge as it was
decided on an issue not raised on the pleadings. In that case, the trial judge
erred in concluding that the pleadings included a claim for breach of contract
as well as a claim for libel.
[30] Learned counsel for the appellant could not pinpoint to us that breach F
of contract was also the appellant’s pleaded case against the respondent. He
candidly admitted in his written submission that the appellant’s “plea of
breach of contract lacked elegance”. Thus the appeal before us is not directly
based on the ground that the Court of Appeal erred in disregarding the
appellant’s pleaded case based on a breach of contract as that is bound to fail.
G
[31] The appellant’s contention is that evidence of contract between the
appellant and the respondent and the breach of it by the latter had been led
at trial without objections and as such the court is duty bound to consider
the said evidence. The opposing party is deemed to have waived the
requirement that the material facts relating to the contract must be pleaded. H
In such circumstance, there was no element of surprise and prejudice.
Learned counsel for the appellant relied on Boustead Trading [1985] Sdn Bhd
v. Arab Malaysian Merchant Bank Bhd [1995] 4 CLJ 283; [1995] 3 MLJ 331,
Perniagaan Kinabalu (S) Sdn Bhd v. Sua Ah Yoke & Ham Jon See [2002] 1 LNS
348; [2002] MLJ 601, Pekan Nenas Industries Sdn Bhd v. Chang Ching Chuen
I
& Ors [1998] 1 CLJ 793; [1998] 1 MLJ 465 in support of his contention.
[2018] 1 CLJ Iftikar Ahmed Khan v. Perwira Affin Bank Bhd 429
A [32] In Boustead Trading (1985) Sdn Bhd’s case the Federal Court at p. 292
(CLJ); p. 342 (MLJ) ruled that:
Thirdly, where there is no pleaded case of estoppel, but there is let in,
without any objection, a body of evidence to support the plea, and
argument is directed upon the point, it is the bounden duty of a court to
B consider the evidence and the submissions and came to a decision on the
issue. It is no answer, in such circumstances, to say that the point was not
pleaded.
[33] In Pekan Nenas Industries Sdn Bhd’s case the plaintiffs ie, Chang Ching
Chuen & Ors (respondents in the appeal before the Federal Court) brought an
C action in the High Court against the defendants, seeking inter alia a
declaration that the sale of the lands to the purchaser, namely Pekan Nenas
Industries Sdn Bhd was null and void. The plaintiffs obtained an injunction
to prohibit the sale. The purchaser was allowed to intervene merely for the
purpose of setting aside the injunction. The purchaser was not made a party
D to the suit between the plaintiffs and the defendants. At the trial, the
purchaser through its chairman gave evidence without objection that the
purchaser was a bona fide purchaser without notice. The High Court allowed
the plaintiff’s claim and set aside the sale but it ruled against the purchaser
holding that the purchaser/intervenor was not a bona fide purchaser. The
Court of Appeal affirmed the decision of the High Court. The defendants did
E
not appeal. But the purchaser appealed to the Federal Court. The respondents
contended that the purchaser/intervenor was never a party to the proceedings
in the High Court and that the evidence on behalf of the purchaser was not
supported by the pleadings. The Federal Court, in response to the contention
that the matter was not pleaded, at p. 823 (CLJ); p. 503 (MLJ) said:
F
No objection was taken to evidence being led on behalf of the intervenor/
purchaser and the case was argued both in the High Court and on appeal
to the Court of Appeal, as though the intervenor/purchaser was a co-
defendant which had filed a pleading and it was on this basis that the case
was heard and determined.
G
[34] Learned counsel for the appellant further stressed the point that
evidence given at the trial could, in appropriate circumstance, overcome
defects in the pleadings where the net result of such evidence is to prevent
the other side from being taken by surprise. One exception to the rule that
evidence given at trial without objection could overcome defects of pleading
H is when such evidence represents a radical departure from the pleadings, and
it is not just a variation, modification or development of what has been
alleged in the pleading in question: See Perniagaan Kinabalu Sdn Bhd’s case.
[35] Learned counsel for the respondent submitted that the law on the
question posed by the appellant is settled and had been adequately answered
I
by this court in Superintendent of Lands and Surveys 4th Division & Anor v.
Hamit Matusin & Ors [1994] 3 CLJ 567. In that case, the respondents
(plaintiffs) claimed that they have acquired native customary rights over
430 Current Law Journal [2018] 1 CLJ
respondent is for the refund of his FDR which was uplifted to settle the A
outstanding amount in the overdraft account. The monies in the overdraft
account were fully utilised due to the respondent’s alleged negligence in
honouring the cheque presented by Sallim without it being countersigned by
PW2. The appellant explained the nature of his claim in his witness
statement as follows: B
Q40: So what is your claim today?
A. I want the 1st Defendant to refund the monies uplifted on 15.4.1993
amounting to RM233,155.60 and repay the same with interest.
Q41. Why? C
A. Because what the 1st Defendant did was unlawful in that:
a) They should not have allowed Sallim to draw on the
Overdraft Account of the company; and
b) They were negligent.
D
It is patently clear that the claim is not based on a breach of contract.
[42] It was contended that no fresh memorandum of deposit was executed
when the banking facilities were transferred from OKE to the company.
Therefore, the FDR was never pledged as a security for the overdraft facility
of RM300,000 which was transferred to the company. But this is contrary E
to the appellant’s own testimony. He admitted, during cross-examination that
the memorandum of deposit was also transferred to Omar Khayam
Enterprises Sdn Bhd.
[43] This is what the appellant said in cross-examination:
F
Q: So this is the Memorandum of deposit which you gave for the
overdraft facility of RM300,000 is this correct?
A: Yes
Q: Was this Memorandum of Deposit also transferred to Omar
Khayam Enterprise Sdn Bhd? G
A: Yes
Q: Do you know that one of the terms of this Memorandum of
Deposit is that the bank is at liberty to withdraw from the fixed
deposit receipt without reference to you or Raja Iftikar or Omar
Khayam Enterprise? H
A: No
Q: But you sign this agreement?
A: Yes
I
[2018] 1 CLJ Iftikar Ahmed Khan v. Perwira Affin Bank Bhd 433
A [44] The appellant cannot plead ignorance and conveniently said that he
did not know the terms of the agreement which he signed. Clause 6 of the
memorandum of deposit expressly states that the respondent is at liberty at
any time to withdraw the deposit and to apply the proceeds thereof in or
towards the discharge of the appellant’s account without reference to him.
B [45] The finding of the learned trial judge that the respondent was in breach
of the contract in uplifting the fixed deposit receipt without the appellant’s
consent was contrary to the cl. 6 of the memorandum of deposit. It is also
against the weight of evidence. The appellant himself admitted that the
memorandum of deposit was also transferred to the company. It must be
C noted that the memorandum of deposit was signed by the appellant together
with his son. The respondent had, before uplifting the FDR, written to the
son for approval to uplift the FDR and the son consented to it in writing. The
respondent’s letter to the appellant approving the transfer of the banking
facilities from OKE to the company was subject to the condition that, “All
D facilities together with liabilities will be transferred from Omar Khayam
Enterprise to Omar Khayam Enterprises Sdn Bhd”.
[46] We agree with the contention of learned counsel for the respondent
that the first question was framed on the supposition that “evidence is led
without objections at trial”. In truth, we find that there was no evidence
E adduced without objections to support the appellant’s contention that the
respondent was in breach of the contract, namely, the memorandum of
deposit by uplifting the FDR without the appellant’s consent. The respondent
is clearly at liberty to uplift the FDR without the consent of the appellant
by virtue of cl. 6 of the memorandum of deposit.
F [47] For the abovesaid reasons, we do not find it necessary to answer the
first question posed to us. In view of our decision with respect to the first
question, we also do not find it necessary to answer the second question. In
our judgment, the Court of Appeal did not err in reversing the decision of
the High Court on the sole ground that the cause of action in negligence has
G been abandoned.
[48] In the result, the appeal is dismissed with costs.