KPM Khidmat Sdn Bhd v Tey Kim Suie
SUPREME COURT (PENANG) - CIVIL APPEAL NO 02-426-1992
GUNN CHIT TUAN CJ (MALAYA), EUSOFF CHIN AND MOHAMED DZAIDDIN SCJJ
26 MAY 1994
The respondent brought an action against the appellant for the recovery of a sum of RM1,581,870.90
together with interest and costs, which the respondent claimed was the sum due to him for works
done under certain agreements ('the agreements'). The respondent testified that after completing
the works under the agreements, he submitted his claims by way of summary of accounts prepared
by Ah Lian, a clerk. Apparently, the summary of accounts were taken from the respondent's own
record book in which was recorded the actual work completed by him. He was however, unable to
produce the book in court. Based on the above evidence of the respondent, there being no other
supporting evidence except the summary of accounts, the judicial commissioner found on a balance
of probability that the respondent had discharged the burden of proof of his loss and accordingly,
entered judgment for the sum of RM1,581,870.90 with interest and costs.
Held, allowing the appeal:
(1) The judicial commissioner was wrong in law in relying on the summary of accounts prepared by
Ah Lian, who was not called as a witness nor made available to the defendant. Moreover, the record
book of the respondent, which was the source document upon which the summary of accounts was
prepared, was never produced and the respondent had not been called to explain the facts and the
basis of the calculation of the amount claimed.
(2) When documentary evidence si tendered, primary evidence of the said document must be
adduced except fi ti can be shown that the original record had been lost or destroyed. The burden of
proving that the record book had been lost or destroyed lies on the party seeking to adduce
secondary evidence of the contents of the record book. This the respondent had not done.
(3) Here, although the appellant did not challenge the truth of the summary of accounts, the
appellant never agreed to dispense with formal proof of the debt.
(4) Since the summary of accounts were inadmissible, the respondent A could not rely on any
documentary evidence to substantiate his claim. His claim therefore failed. Mohamed Dzaiddin SCJ
(delivering the judgment of the court): This is an appeal from the decision of the High Court, Alor
Setar in a money claim for works done in the clearing, terracing, construction of field roads, etc, of
estate land under five agreements entered into between the appellant and the respondent in 1979
and 1980.
By a writ of summons and the statement of claim filed on 21 March 1984, the plaintiff, who si now
the respondent, alleged that the appellant company was indebted to him in the sum of
RM1,581,870.90, being the balance of the amount due to him for works done pursuant to five
agreements dated 30 June 1979, 12 January 1980, 15 June 1980, 1 August 1980 and 1 October 1980,
respectively ('the said agreements'), particulars whereof had been rendered to the defendant
company. By a notice in writing dated 5 March 1983, the respondent's solicitors demanded payment
of the aforesaid sum which the appellant had failed to comply with. Wherefore, he prayed for
judgment in the sum of RM1,581,870.90 with interest and costs.
By the re-amended defence, the appellant denied owing the respondent the aforesaid amount and
contended that subsequent to the agreement which ti entered into with one Hi Ariffin bin Hi Ismail
on 1January 1980 appointing the latter as its adviser, al payments and advances under the said
agreements were made by the said Hi Ariffin to the respondent. These payments were debited to the
appellant who then reimbursed the said Hj Ariffin. The appellant averred that the said arrangement
was acquiesced and agreed to by the respondent and from 1January 1980, all payments were made
accordingly until December 1984 when the appellant rescinded the said arrangement which was
expressly consented to by the respondent. In the circumstances, the appellant contended that the
respondent was estopped from making any claims against the company on the ground of his A
acquiescing and agreeing to the said arrangement.
It is trite law that the burden of proving the loss, which in this appeal is the actual amount for works
done, is on the respondent. In this regard, it is of utmost importance to summarize the evidence of
the respondent in the court below. He testified that after he had completed the works for the five B
estates, he submitted his claims by way of summary of accounts (at p 117-121 of the appeal record)
which was prepared by one Ah Lian, a clerk working at Sungai Patani who had some experience ni
preparing accounts for other people. Apparently, the summary of accounts were taken from the
respondent's own record book in which was recorded the actual work completed by him for the five
estates under the said agreements. C Unfortunately, he was unable to produce the book in court
which he claimed he did not know its whereabout due to long lapse of time. Based on the above
evidence of the respondent, there being no other supporting evidence except the summary of
accounts, the learned judicial commissioner found on a balance of probability that the respondent
had discharged the D burden of proof of his loss and accordingly entered judgment for the balance
sum of RM1,581,870.90 with interest and costs.
In his grounds of decision ni Bahasa Melayu, the learned judicial commissioner gave the following
reasons (at pp 19-20 of the appeal record):
Jumlah tuntutan
Plaintif membuat jumlah besar sebanyak RM3,666,603.10 menurut penyata akaun yang
dibentangkan di ms 43 47 Ikatan A yang mana defendan telah menjelaskan sebanyak
RM2,084,704.80 menurut penyata akaun yang dibentangkan di ms 48-49 Ikatan A. Baki sebanyak
RM1,581,898.30 belum dijelaskan dan notis desakan telah dihantar pada 5 Mac 1983 oleh peguam
plaintif kepada defendan menuntut bayaran sebanyak RM1,581,870. Plaintif F mengemukakan
penyata akaun yang disediakan oleh seorang bernama Ah Lian yang menyalinnya dari rekod yang
ditulis oleh plaintif dalam buku catitan yang dirujuk di mahkamah tetapi tidak dikemukakan sebagai
ekshibit. Saya dapati tanpa keterangan defendan yang boleh mencabar kesahihan penyata akaun
plaintif saya berpendapat penyata akaun itu boleh diterima dan dikira benar. Saya diingatkan adalah
beban plaintif untuk membukti tuntutannya, tetapi pembuktian itu adalah atas imbangan G
kebarangkalian. Saya terima keseluruhan keterangan plaintif walaupun plaintif akui terdapat sedikit
kesilapan di sana sini dalam penyata akaun itu. (Emphasis added.)
Before us, the appellant raised seven grounds of appeal. However, one of the grounds which arose
directly from the above passage of the decision of the learned judicial commissioner was to the
effect that the learned judicial commissioner was wrong in fact and ni law in holding that the
respondent had discharged the burden of proving loss and quantum of loss. Encik Anantham,
counsel for the appellant, submitted that the learned judicial commissioner was wrong to rely on the
summary of account for works done (at pp 117-121 of the appeal record) as evidence supporting the
respondent's claim.
Counsel stated that as the record book of the respondent, which was the source of the summary of
accounts, was never produced nor properly explained as to why ti could not be produced, the oral
evidence of the respondent pertaining to the particulars of his claim and upon which the summary of
accounts were prepared was therefore inadmissible. Hence, the respondent had failed to discharge
the burden of proving his loss.
To recapitulate, on the evidence of the respondent, the learned judicial commissioner found the
respondent had discharged the burden of proving the debt due from the appellant on the basis of
the summary of accounts (at pp 117-121 of the appeal record) prepared by Ah Lian which she
collated from the record book kept by the respondent, detailing the works done and completed by
him, although the said book was never produced in court. He further held that in the absence of the
appellant's evidence challenging the truth of the summary of accounts, the latter could be, and
indeed, was admitted as a true statement of account for works done to found a claim for the
respondent.
We agree with counsel's submission that the learned judicial commissioner was wrong in law in
relying on the summary of accounts (at pp 117-121 of the appeal record) prepared by Ah Lian, who
was not called as a witness nor made available to the defendant. Moreover, the record book of the
respondent, which was the source document upon which the summary of accounts was prepared,
was never produced. It is a well-established rule of evidence that when documentary evidence is
tendered, primary evidence of the said document must be adduced except in the cases under s 65 of
the Evidence Act 1950. According to Sarkar on Evidence (14th Ed, 1993) at p 961, when a given
matter has been expressed in writing, the primary evidence of ti is the writing itself and subject to
the provision of s 65, the writing, unless admitted by the other side, must be produced if ti is desired
to prove the matter expressed in it. On the question of a balance sheet, the Indian Supreme Court, in
Petlad Turkey Red Dye Works Ltd v Dyes & Chemical Workers' Union, Petlad &Anor,' has held that
abalance sheet does not by itself prove the facts stated therein. It has to be proved like any other
fact by affidavit or otherwise. Das Gupta J, delivering the judgment of the court, stated (at p 909):
Al that the balance sheet, as submitted, shows is that certain statements were made. The mere fact
that the statements were made can never be taken as proving that the statements were correct.
That is a distinction which the courts of law have always been careful to make. Thus, if a person is to
prove that he was il on a particular date, the mere filing of a certificate of a medical man that he was
il on that date is not accepted as evidence to show that he was il. The correctness of the statement
made in the certificate has to be proved by an affidavit or oral testimony ni court by the doctor
concerned or by some other evidence. There is no reason why an exception should be made in the
case of balance sheets prepared by companies for themselves.
It has to be borne in mind that in many cases the directors of the companies may feel inclined to
make incorrect statements in these balance sheets for ulterior
purposes. While that is no reason to suspect every statement made in these balance sheets, the
position is clear that we cannot presume the statements made therein to be always correct. The
burden is on the party who asserts a statement to be correct to prove the same by relevant and
acceptable evidence.
Likewise, in the instant case, the summary of accounts does not prove the facts and particulars
stated therein. The mere fact that the summary of the particulars were made could never be taken
as proving that the contents . were correct. It has to be proved by calling the maker to explain the
facts and the basis of the calculation of the amount claimed.
Moreover, the record book upon which the maker based her summary must be in evidence.
In this case, where the summary was based on the record kept by the respondent, such record must
be produced except if it can be shown that the original record is lost or has been destroyed. The
burden of proving that the record book is lost or destroyed lies on the party who is seeking to adduce
secondary evidence of the contents of the record book. (See s 104 illustration (b) o f the Evidence Act
1950). Here, the evidence of the respondent on the matter is as follows (at p 56 of the appeal
record):
Saya catat dalam buku akaun mengikut kerja sebenar di estate. Mungkin ada sedikit tak sama catatan
saya ada lebih. Ah Lean sediakan kira-kira mengikut buku saya. Buku ini tidak catatkan kerja yang
saya telah sediakan. Saya ada buku lain yang catatkan kerja saya tapi sudah lama saya tak tahu di
mana buku itu. Rekod itu saya sendiri buat.
In order for the court to rely on the summary of accounts (at pp 117-121 D of the appeal record), the
respondent must satisfy the court that his record book was lost to enable secondary evidence
relating to the said book to be given. The relevant part of s 65(1) states:
Secondary evidence may be given of the existence, condition or contents of a document admissible
in evidence in the following cases: E
(c) when the original has been destroyed or lost, or when the party offering evidence of its contents
cannot for any other reason not arising from his own default or neglect produce ti in reasonable
time;
F On the principle and scope of s 65, we respectfully rely on the commentary in Sarkar on Evidence
(at p 964-965):
It has been seen that the contents of a document must be proved by the production of the original
document and secondary evidence of ti is not generally admissible (s 64). There are exceptions to the
rule and this section states the G various class of cases in which secondary evidence relating to
documents may be given. The principle si that so long as the original exists and si available, it being
the best evidence, must eb produced. If it cannot be had on account of its loss, destruction,
detention by the opponent, or third person who does not produce
after notice, physical or legal irremovability, or any other cause, secondary evidence is admissible.
Porter J, in Thomas o T 1 La 166 at p 168:
'(The rule] is only another form of expression for the idea that when you lose the higher proof, you
may offer the next best in your power . . . The rule does not mean that men's rights are to be
sacrificed and their property lost because they cannot guard against events beyond their control; it
only means that, so long as the higher or superior evidence is within your possession or may be
reached by you, you shall give no inferior proof ni relation to that.'
Now, ti was alleged by the plaintiffs that both the oral testimony of the accountant Mr So (regarding
their financial operations) and the statement P76 prepared by him, were based upon the results of
his examination of the accounts books of the plaintiffs for the relevant period. However, the accounts
books themselves were never produced and the defendants never dispensed with formal proof of
the loss of profits alleged or at al. In my opinion, the result of this glaring omission, was to render
such oral evidence of Mr So and P76 inadmissible in evidence and ti makes not the slightest
difference that Mr and Mrs Segal confirmed the accuracy of P76. I take the law on this point ot be
correctly stated by the Vice-Chancellor in Johnson v Kershaw 63 ER 1059. In that case, the evidence
of an accountant was tendered containing the results of his examination of certain partnership
books, but the accounts books themselves upon which he based his statement were not in evidence.
The Vice-Chancellor said:
'If the account books had been in evidence, the accountant's statement of the results of his
examination of those books, as the evidence of a person of skill, might be receivable; but, inasmuch
as the books were not in evidence, I must decline to receive the deposition of Mr Peet as to their
contents.'
[But] secondary evidence of an ordinary document is admissible only when the party desirous of
admitting ti has proved that he has not possession or control of it and further that he has done what
can be done to procure the production of .ti He has to account for the non-production ni one of the
ways indicated in this section [Krishnakishori uKishori 14 IA 71, 14 C486; Shambati vFogo 29 C749;
Bhubaneswari v Harisaran 6 C 720]. When original account books are available copies are not
admissible (Fainarain v Zubeda A 1972 A494].
Exceptions (a) and (c) rest upon the principle that a party tendering a copy has done all that lies in his
power to produce the original.
Thus, basically, secondary evidence of the contents of a document is inadmissible, until the non-
production of the original si first accounted for, so as to bring it within one or other of the cases
provided for in the section (Krishnakishori v Kishori;? and Bhubaneswari v Harisaran').
In the present case, based on the evidence of the respondent which we t h e e n r o t e an of te aer
adi ofod ht e responsen had no hou had for so as to bring ti within s 65(1)(c) of the Evidence Act
1950. The respondent had also led no evidence to suggest that the non-availability of his record book
was through no fault of his.
From the record, it would seem to us that the appellant's counsel in the court below did not dispute
the contents of the summary of accounts (at E
pp 117-121 of the appeal record). The learned judge held that as the appellant did not challenge the
truth of the summary of accounts, he was of the view that the contents were true and admissible
despite the fact that the appellant never agreed to dispense with formal proof of the debt. On this
issue, we were referred by counsel to the decision of Edgar Joseph Jr J in F
Popular Industries Ltd v Eastern Garment Manufacturing Sdn Bhd.* The learned judge addressed the
issue ni the following manner (at p 368):
That case commended itself to Dixon J in Potts v Miller (1940) 64 CLR 282 at A p 303.
Nor, does ti make any difference that counsel for the defendants never called
for production of the accounts books, since the defendants never agreed to dispensewith formal and
proper proof of the loss of profits (see Guan Soon Tin Mining Co v Ampang Estate Ltd [1973] 1 MLJ
25 ta p 30).
B We would adopt with gratitude the above statement of the law to the present case.
Looking at the matter as a whole, we have come to the conclusion that
the learned judicial commissioner was wrong in relying on the summary of accounts (at pp 117-121
of the appeal record) as sufficient proof of the debt due to the respondent bearing ni mind that the
burden of proof always C lies on the respondent to prove his claim. We hasten to add that since the
summary of accounts is inadmissible for reasons which we have adverted to above, it is our further
conclusion that as there is no documentary evidence before the court which the respondent can rely
to substantiate his claim, his case against the appellant must accordingly fail. Moreover, his oral
evidence D regarding the works undertaken in the five estates was most unsatisfactory.
He never submitted the particulars of works to the appellant, but merely relied on the summary of
works as in pp 117-121 of the appeal record. Therefore, based on the above grounds, the appeal
must be allowed with costs here and below. The judgment of the learned judicial commissioner si
set aside. Lastly, we order the deposit of the appeal be refunded to the E appellant.
Appeal allowed.
