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Between Liew Yuan Yin And Great Eastern Life Assurance (Malaysia) Bhd [2011] MYSSHC 358 (30 September 2011)

MALAYSIA

INTHEHIGHCOURTINSABAH&SARAWAK

ATSANDAKAN

CSS 22-19 OF 2009

BETWEEN

LIEW YUAN YIN ... PLAINTIFF

(NRIC No: 511006-12-5193)

AND

GREAT EASTERN LIFE ASSURANCE

(MALAYSIA) BERHAD

(Company No.93745-A) ... DEFENDANT

GROUNDS OF JUDGMENT

BACKGROUND

.

[i] On 30th November 2006, one Mak Ching Choon [Mak]

purportedly submitted a proposal form to purchase the Defendant’s

product known as Great Senior Care Plus. Together with the said

proposal form, 3 documents were submitted to the Defendant’s

underwriting department namely a Customer Fact Find Form, Risk

Assessment Statement and a Confirmation of Advice Form all of

which were executed by DW6 Tsang Tsun Wai @ Frankie [Tsang]

who is the Plaintiff’s son and agent.

[ii] Mak died on 9/12/2006, 9 days later after he purportedly signed

the proposal form in the Duchess of Kent Hospital Sandakan. He

fact that Mak was hospitalized in the Duchess of Kent Hospital

Sandakan on the day he purportedly signed the proposal form, a

fact admitted by the Plaintiff herself.

[iii] It is also undisputed that the Plaintiff and Tsang were issued

show cause letters by the Defendant on 12/10/2007 with regards

to policy number 40520517 of Mak. These letters can be found at

pages 63 & 61 of ABD-1 respectively. The show cause letter to

Tsang was similar to the Plaintiff’s. Prior to the show cause letter,

the Defendant received a letter dated 13/9/2007 from Tsang and

this letter can be found at page 97 of ABD-1. In this letter Tsang

admitted to the Defendant that he did not know Mak and claimed

that Mak was the Plaintiff’s client and was placed in his account.

The Plaintiff replied by way of a letter dated 26/10/2007 (at page

31-32 of ABD-1) and Tsang also replied by a letter dated

26/10/2007 (at page 29-30 of ABD-1).

[iv] From the Plaintiff’s letter in reply to the show cause dated

26/10/2007, she admitted the followings:

[a] she was the one who attended to Mak and the proposal

form.

[b] she admitted that Mak was hospitalized in the Duchess of

Kent Hospital on 30/11/2006 the date of the proposal form;

[c] she admitted that she signed on the proposal form

replicating Mak’s signature purportedly requested by Mak &

[d] she also admitted that Mak’s hand was not steady to sign

on the form.

[e] she apologised for the serious mistake that she

committed by signing as Mak in the proposal form.

[v] The Defendant’s Disciplinary and Agent Termination Committee

found her guilty of forging Mak’s signature on a proposal form

dated 30/11/2006. DW5 has clarified in his re-examination that

there was a mistake in the letter of termination which should read

as proposal form and instead of death claim proposal form as

there could not have been a death claim dated 30/11/2006 as Mak

was still alive at that date.

[vi] In the letter of termination dated 22/5/2008, the Defendant

informed the Plaintiff that by her act of forging Mak’s signature, she

had breached Clauses 17.3, 20.2 and 20.3 of the Agency

Agreement. Clause 17.3 of the Agency Agreement states:

The Agent shall be required to familiarize himself with the

provisions of the Insurance Act 1963 … and the Agents

covenants that:-

17.1 …

17.2 …

17.3 He shall conduct his business in a professional

manner in accordance with the Code of Ethics & Conduct;

Clause 20 states: The Company shall be entitled to

.2 is in breach of any term or condition of this Agreement

and/or prevailing Agency Rules & Regulations;

.3 by any act or omission including any breach of law

brings discredit to the reputation and integrity of the

Company or is guilty of any conduct which in the opinion of

the Company is prejudicial to the Company’s interest.

THE PLAINTIFF’S CLAIM

.

[i] The Plaintiff’s claim against the Defendant is for loss and damages suffered by reason of the wrongful termination of the

Plaintiff’s agency agreement with the Defendant and for several

declarations as prayed in the Statement of Claim.

[ii] The Defendant’s defence is that the Plaintiff’s act of signing for the said Mak Ching Choon on the proposal form with or without

consent is forgery. Apart from this, the Defendant also contended

that the termination of the Plaintiff’s agency was because of the

Plaintiff’s breaches of the rules and regulations and Code of Ethics

and Conduct of the Defendant that is:

[a] Making a false declaration in the Risk Assessment

Statement;

[b] The Plaintiff acted unprofessionally and was

[d] Breach of the relevant rules and regulations.

[iii] In the course of the trial, the Plaintiff contended inter alia that

the Defendant alleged further grounds [which are not pleaded]

against the Plaintiff as follows:

[a] Aiding and abetting the proposer to defraud the

Defendant;

[b] The Plaintiff attesting his own signature;

[c] Failing to inform the Defendant of the condition of the

proposer.

[iv] The Defendant also denied that the Plaintiff was entitled to the

Deferred Benefit which Deferred Benefit shall be forfeited upon the

Plaintiff’s breach of the Agency Agreement.

ISSUES FOR TRIAL

.

[i] In view of the different stands taken by both counsel, there was

no agreed issues for trial. The Plaintiff proposed her own issues for

trial and having considered them, I find that some of the Plaintiff’s

proposed issues are pertinent and that consideration of them will

effectively covers and disposes off all the pertinent issues for this

case. As such I shall adopt and modify some of the issues and

event?

Ching Choon on the proposal form in the presence of and with the said Mak Ching Choon’s full consent and knowledge amounts to forgery?
[b] Is the Plaintiff estopped from denying having forged the signature when the Plaintiff had made an admission in her letters?
[c] Can the Defendant relied on the “New Grounds” for termination contrary to what was stated in the show cause letter and termination letter issued by the Defendant?
[d] Is the Plaintiff entitled to the Deferred Benefit in any

.

CONSIDERATION OF THE ISSUES

[i] Does the Plaintiff’s act of signing the signature of Mak Ching

Choon on the proposal form in the presence of and with the said

Mak Ching Choon’s full consent and knowledge amounts to

forgery?

[a] The undisputed facts of this case showed that the Plaintiff had

signed the proposal form of the said Mak Ching Choon at his

request, in his and his wife’s presence, with his full knowledge and

consent. The Plaintiff wasrequested by the said Mak Ching Choon

insured’s hand was not steady and could not sign properly at that

material time. PW2, the wife of Mak Ching Choon confirmed in a

letter that they have both requested the Plaintiff to sign for the said

Mak Ching Choon on the said proposal form.

[b] When the Plaintiff was asked to show cause as stated in the

Defendant’s letter dated 12.10.2007, at page 63 Agreed Bundle of

Documents [agreed as to existence but not contents] of Bundle

ABD1. The Plaintiff in her reply dated 26.10.2007 at pages 31 and

32 of Bundle ABD1, stated that she had signed on behalf of the

insured at his request and with his consent and knowledge and in

his presence.

[c] The Defendant contended that this was “forgery” whether the

signing on behalf of the said Mak Ching Choon was with or without

his consent. The Defendant further contended that the Defendant’s

said Code of Ethics and Conduct was breached when the Plaintiff

signed the said proposal for and on behalf of the said Mak Ching

Choon even though it was at the said Mak Ching Choon's request

and with his knowledge and consent and that it amounted to

forgery under items [14] and [34] found at pages 249 and 250 of

Bundle ABD1.

[d] Having perused the Defendant’s rules and regulations, I find

that there has to be forgery as defined by the Malaysian Penal

Code for the act to amount to a misconduct under the Defendant’s

Code of Ethics & Conduct. The relevant section of the Penal Code

is section 463 of the Penal Code. In the case of Razak Abu v PP

page 263 held as follows:

“[24] Forgery' in turn is defined in Section 463 of the Penal

Code as follows:

Whoever makes any false document or part of a document

with intent to cause damage or injury to the public or to any

person or to support any claim or title or to cause and

person to party with property, or to enter into any express or

implied contract, or with intent to commit fraud or that fraud

may be committed commits forgery.

[25] The definition of 'making a false document' is set out in

S.464 of the Code, The relevant part of the said section

reads as follows:

A person is said to make a false document:

First - Who dishonestly or fraudulently makes, signs,

seals, or executes a document or part of a document,

or makes any mark denoting the execution of a

document, with the intention of causing it to be

believed that such document was made, signed,

sealed or executed by the authority of a person by

whom or by whose authority he knows that it was not

made, signed, sealed, or executed, or at a time at

which he knows that it was not made, signed, sealed,

or executed;...”

that the issue of the forgery of the fifteen cheques may be

ascertained by considering whether the appellant did

'dishonestly or fraudulently' make or sign the subject

cheques, or even a part of those cheques with the intention

of causing it to be believed that such cheques were made by

SP1, when he knew that she did not at any time sign or

make out those cheques. Neither had she at anytime

authorized the issuance or utilization of those cheques.“

[e] In the case of OSK Securities Berhad vs Probo Pacific Ltd &

Anor [2003] 1 LNS 744 his Lordship Mohd Ghazali Mohd Yusoff J

[as he then was] in considering whether there was “forgery”

referred to the followings:

“According to the Concise Oxford Dictionary (9th Ed), the

word "forgery" means "the act or an instance of forgery,

counterfeiting, or falsifying a document, etc."

Section 463 of the Penal Code (“the Code”) entitled

"Forgery" reads:

“Whoever makes any false document or part of a document

with intent to cause damage or injury to the public or to any

person, or to support any claim or title, or to cause any

person to part with property, or to enter into any express or

implied contract, or with intent to commit fraud or that fraud

may be committed, commits forgery”

28 Section 464 of the Code entitled "Making a false document"

“A person is said to make a false document:

(a) ...;

(b) who without lawful authority, dishonestly or

fraudulently, by cancellation or otherwise, alters a

document in any material part thereof, after it has been

made or executed either by himself or by any other

person, whether such person be living or dead at the

time of such alteration; or” It must also be “without

lawful authority”.

11 [f] In the Federal Court case of PP v. Yeoh Teck Chye [1981] 1

LNS 93 the Court held that when a party consented and allowed

another to sign a document on his behalf, the party signing the

documents is not guilty of forgery under section 463 of the Penal

Code. Wan Suleiman FJ said as follows:

“We would respectfully agree with counsel. Once the Court

accepts the testimony of the two prosecution witnesses that

they had consented to the third accused signing their names

on the relevant bank documents, these documents are no

longer “false documents” so both charges against him must

fail.”

[g] Applying the above principles to the present case, I find that the

Plaintiff cannot be said to have committed forgery of the signature

of the said Mak Ching Choon on the proposal form as she had

signed it with his full consent and knowledge and at his request.

The Plaintiff’s signing of the proposer’s signature was with his full

is no element of fraud at all.

[h] DW5 testified that there is nothing in the Insurance Act which

prohibited an agent from signing a proposal form for the proposer

at his request and in his presence. DW5 further confirmed that

under insurance law an agent who fills in a proposal form for a

proposer he is deemed to be acting for the proposer. This is

what DW5 said during his testimony:

“Q471: Any provisions under the insurance act which says

that an agent cannot sign for the policy holder at his request

in the proposal form?

A: I don’t think there is a such provision the insurance act

1995.

Q472: Do you agree with me when the agent fill in a proposal

form for the policy holder under your insurance law the agent

is deemed to be the acting for the policy holder?

A: Yes

[i] I am of the view that the Defendant’s rules and regulations and

Code of Ethics & Conduct stated clearly that definition of forgery

must be forgery as defined by the Penal Code, for the act to

amount to misconduct. I find that the Defendant's contention that

the Plaintiff's act of signing at the request of the said Mak Ching

Choon was “forgery” whether with or without the said Mak's

consent, without merits. The Defendant further contended that the

said Code of Ethics and Conduct was breached when the Plaintiff

signed the signature on the said Mak Ching Choon’s proposal form

as it amounted to forgery under items [4] and [34] respectively at

pages 249 and 250 of Bundle ABD1. Having perused and

examined the said items [14] and [34], I find that forgery here must

bear the meaning as defined by the Penal Code.

[j] The Defendant’s rules and regulations defined “Act of

Misconduct” as those acts which are under the Penal Code for

forgery [Refer to page 252 of Bundle ABD1] which was set out

below for ease of reference.

Acts of Misconduct

Actions Taken

- Act of which are punishable under the Penal Code – deception, forgery, falsification and cheating.

- Such acts of above which are also prohibited in the agency agreement.

- Fraud of any kind which is required to be BNM Reported.

- Fraudulent, fabrication, exaggeration Insurance claims.

- Proxy agency, rebate inducement, misrepresentation,

- Agency termination

- Referred LIAM listing BNM reported under Efids.

- Report to the Police for prosecution.

- Civil Recovery &

denial of deferred benefits.

- Agency termination.

- Commission

twisting/replacement of policies

through misrepresentation, fails to comply with the Insurance Act, agency rules & regulations, breach of agency agreement, breach of law bringing discredit to the Company/reputation, using agent’s own address for policyholders’ correspondence unauthorized.

- Such other acts specifically described in the agency rules & regulations that leads to agency termination

recovery.

- Acts of manipulating through policies/agents transfers to maintain position/secure contests award.

- Transfers of policies/agents for the above.

- Mishandling of policyholders’ services/transactions such as late tendering of premium, negligence, non-delivery of late delivery or non-delivery of

- Demotion to the next lower hierarchy.

- Denial of promotion for next year even if fulfils requirements.

- Warning letter (1st

and 2nd instance)

- Denial of next promotion (3rd

policies, complaints that fall short

of concrete evidence being established against the agents where sterner action could be taken.

instance)

- Servicing complaints: Unsatisfactory or poor service and no services followed up when requested.

- Servicing agent may be changed (if agent complained against agrees). Servicing agent may be changed to Immediate Officer.

- Warning letter of poor service.

[k] A perusal of the table of acts of misconduct showed that

forgery must be, as defined by the Penal Code. DW5 confirmed

there was no such clause which states that an agent cannot sign

on behalf of a proposer. DW5 admitted during cross-examination

that the ground for termination was not the forgery but there was a

case that could tantamount to the plaintiff aiding and abetting the

policy holder to defraud the company. This can be seen from the

following cross-examination of DW5:

“Q495: Is it because of the so-called “admission” by the

plaintiff that your committee concluded the allegation of

forgery against the plaintiff was made out?

A: No.

Q496: Can you tell us the grounds?

A: The proposal was made at the end of November 2006

and the policy holder died 9 days after this. As an early claim

we would check for any suspicious circumstances. We

understand that the policy holder was in hospital at the time

the proposal was submitted. We also understand that the

plaintiff has signed the proposal form using the policy

holder’s signature. The proposal form also did not declare

the fact that the policy holder was in hospital. This was

material since this product requires no underwriting in

addition we also have all the letters item 29 to 35 of ABD1.

Based on this the committee discuss whether there was a

case against the plaintiff. It was decided there was a case

that could tantamount to the plaintiff aiding and abetting the

policy holder to defraud the company.”

[l] Thus from the testimony of DW5, the Defendant’s ground of

termination was not the “admission” of forgery by the Plaintiff and

neither was it forgery. It was, in the words of DW5, “there was a

case that could tantamount to the plaintiff aiding and abetting the

policy holder to defraud the company.” In the premises I find that

based DW5's admission that the ground for termination of the

Plaintiff's agency was not forgery. Thus it is my view that the

Plaintiff’s termination by the Defendant on ground of “forgery” was

without basis and merits.

law;

[a] It is undisputed that the Plaintiff admitted to the “forgery”, the Plaintiff in her reply to the show cause letter admitted the “forgery”. The Plaintiff went further to explain the circumstances leading to her signing the signature at the request of the proposer, in his presence, with his full knowledge and consent. The Plaintiff also produced a letter from the proposer’s wife confirming that the Plaintiff had signed the proposer’s signature on the proposal form at his request, in his presence, with his full knowledge and consent.
[b] I find that even if there was an “admission” in law, the Plaintiff can withdraw such admission and ought to be allowed to resile from such “admission” on the following grounds:
[1] An admission can be withdrawn or allowed to resile from such admission if there are circumstances justifying it;
[2] The admission was made on a mistake of the fact and
[3] The admission was made upon the representation by Jane Lai of threat of police report and was induced in that if the Plaintiff admitted it, only internal disciplinary action would be taken.
[c] The Plaintiff contended that Jane Lai met her and her son in

statement that she told the Plaintiff to admit to the forgery failing

which a police report would be made against her. I noted however

that there was no rebuttal by the Defendant of the fact stated by

the Plaintiff, of having been advised by the said Jane Lai not until

almost after a year when the Defendant’s solicitors stated it for the

first time in their letter dated 12/12/2008 at page 46 of Bundle

ABD1, that is the Defendant denied that Jane Lai had coerced the

Plaintiff. I further noted that the denial by the Defendant was Jane

Lai did not coerce the Plaintiff but did not say Jane Lai did not

meet the Plaintiff at all. However it was only in the pleadings the

Defendant stated that Jane Lai did not meet the Plaintiff or her son.

In the premises I find that the Defendant's contention and rebuttal

is without merit and that Jane Lai did meet the Plaintiff and his son

and did coerce and induce the Plaintiff into admitting the “forgery”.

[d] I find that the Plaintiff was misled by Jane Lai that what she had

done was forgery when in fact it was not and that the Plaintiff,

being threatened with a police report if she did not admit. The

Plaintiff took the easy way out by admitting and then appealing for

forgiveness. Unfortunately, her pleas failed and she was

terminated and all her benefits forfeited. I find that such threat and

inducement by Jane Lai made the Plaintiff admit to the so-called

“forgery” and as such I find that it would be just and equitable that

the Plaintiff ought to be allowed to resile from such admission.

[e] Further the Plaintiff’s son, DW6 [the Defendant's own witness]

and who is still an insurance agent of the Defendant, had

to write down on a piece of paper confirming that he did not sign

the proposal form [see page 97 of Bundle ABD1) which is a

document from the Defendant’s own bundle of documents. This is

further corroboration of the Plaintiff's contention that she did meet

Jane Lai in Sandakan, Sabah, contrary to what Jane Lai

contended.

[f]I find that the Defendant's failure and/or omission to immediately

respond to, refute, deny or dispute what was stated by the Plaintiff

in her letter especially since the Defendant is such a sizable

corporate entity, fatal. See the cases of David Wong Hon Leong

12 v Noorazman bin Adnan [1995] 4 CLJ 155; Sykt. Pakar Kayu &

Perdagangan Sdn. Bhd. v. MAA-SK Sdn. Bhd. [1986] CLJ 694

(Rep).

[g] I find that the admission of “forgery” by the Plaintiff cannot in

law amount to an admission because in our present case, the

Plaintiff in his reply to the show cause letter had stated very clearly

the facts and supported by the insured’s wife’s letter that the

Plaintiff was expressly requested by the insured to sign on his

behalf. This cannot be an admission of forgery, taking into

consideration the definition of fraud under the Malaysian Penal

Code statedearlier.

[h] In the English Court of Appeal case [CCRTI 95/0302/G] of

Kathleen Frances Gale vs. Superdrugs Stores Plc,

[unreported] which referred to another English Court of Appeal

28 case of Birds v Birds Eye Walls Ltd on 21/7/1987 reported in the

"... when a defendant has made an admission the court

should relieve himof it and permit him to withdraw it or

amend it if in all the circumstances it is just to do so having

regard to the interests of both sides and to the extent to

which either side may be injured by the change in front"

[i] In the present case, I find that the Plaintiff had made an

admission based on her erroneous perception of what amounted

to “forgery” and in her letter in reply to the show cause letter stated

the actual facts. Under such circumstances of this case, I am of the

view that this Court ought to exercise its discretion to allow the

Plaintiff to resile from such an erroneous admission arising from

coercion and inducement.

[j] I am in agreement with the Plaintiff's contention on this point that

is since the Plaintiff's admission of forgery ought not to be taken

into account is because it is made on a mistake as to the law,

that is, what amounts to forgery in law. In fact I find that this case is

similar to the said English Court of Appeal case of Bird v Birds

Eye Wall (unreported but quoted in the above quoted case of

Kathleen Frances Gale v Superdrugs Stores Plc, ) because the

Plaintiff was only advised that theso-called “forgery” is not “forgery”

in law or even in fact after she sought legal advice. An admission

made in respect of an erroneous statement of law can be

withdrawn, on the authority of Yap Cheng Kee & Anor v Ow

27 Giam Eng & Anor [1977] 1 LNS 159 (FC) and Che Esah & Anor

v Che Limah [1965] 1 LNS 21 (FC).

[iii] Can the Defendant relied on the “New Grounds” for termination

contrary to what was stated in the show cause letter and

termination letter issued by the Defendant?

[a] The Defendant’s show cause letter 12.10.2007 , at page 63 of

Bundle ABD1, stated as follows: “that you have forged the policy

holder signature to purchase the policy holder number 40520517”.

In terminating the Plaintiff’s agency, the Defendant in its letter

dated 22/05/2008, at page 64 of Bundle ABD1, stated as follows:

“Regret to inform you that the Disciplinary and Agent

Termination Committee has found you guilty of forgering one

Mak Ching Choon’s signature on a death claim proposal

formdated 30th November 2006 which was submitted to the

company. By your act, you have breached Clauses 17.3,

20.2 and 20.3 of the Agency Agreement (“the Agreement”).”

[b] I agree with the Plaintiff’s contention that “New Grounds” were

raised which were never raised before the Plaintiff’s agency was

terminated and also during the trial such as “aiding and abetting

the proposer to defraud the company”.

[c] It is trite law that that grounds which are not pleaded, will be

considered at all by the Court and nor can the Defendant submit

on them. DW5 during cross-examination when questioned on the

ground for the termination testified as follows:

“Q495 Is it because of the so-called “admission” by the

plaintiff that your committee concluded the allegation of

Q496 Can you tell us the grounds?

A. The proposal was made at the end of November 2006

and the policy holder died 9 days after this. As an early claim

we would check for any suspicious circumstances. We

understand that the policy holder was in hospital at the time

the proposal was submitted. We also understand that the

plaintiff has signed the proposal form using the policy holder

signature. The proposal form also did not declare the fact

that the policy holder was in hospital. This was material since

this product requires no underwriting in addition we also

have all the letters item 29 to 35 of ABD1. Based on this the

committee discuss whether there was a case against the

plaintiff. It was decided there was a case that could

tantamount to the plaintiff aiding and abetting the policy

holder to defraud the company.

[d] From the above testimony, DW5 said that “there was a case

that could tantamount to the plaintiff aiding and abetting the policy

holder to defraud the company.” I find that since this was the

ground of termination as stated by DW5 during the above cross-

examination, the “New Grounds” raised by the Defendant in its

defence and in the trial was nothing more than an afterthought. I

also find that the Plaintiff was not given any opportunity to answer

or be heard on this New Grounds before the termination of her

agency. The Plaintiff was never asked to show cause to these New

Grounds of termination as admitted by DW5. Thus I find that this is

[iv] Is the Plaintiff entitled to the Deferred Benefit in any event?

[a] Clause 10.3 of the Agency Agreement [at page 17 of Bundle

ABD1]states as follows:

“The Deferred Benefit which has accrued in the manner

provided for hereof shall only become payable provided the

Principal Agreement had been in force for at least 10

continuous years with the Company and the GSM has

attained the age of 55 years irrespective of the status of the

said Agreement...”

[b] To answer this issue, I would need to refer to the various

principles of construction of contracts. In the case of Royal

Selangor Golf Club v. Anglo-Oriental (Malaysia) Sdn Bhd

[1990] 1 CLJ 995; [1990] 3 CLJ (Rep) 37 Lim Beng Choon J said:

“In considering the disputes of the parties I must first all bear

inmind the general principles of construction of contract as

enunciated in the National Coal Board v. Wm Neil; & Son (St.

Helen)[1984] 1 All ER 555 where it is said at p 560:

The first two issues involve the construction of the

contract. I bear in mind the principles of construing a

contract. The relevant ones for thepurpose of this case

parties must be found within the four walls of the

contractual documents; it is not legitimate to have

regard to extrinsic evidence (there is, of course, no

such evidence in this case): (3) a contract must be

construed as at the date it was made: it is not

legitimateto construe it in the light of what happened

years or even days later; (4) the contract must be

construed as a whole, and also, so far as practicable,

to give effect to every part of it.”

[c] Further in the Court of Appeal case of Cipta Cermat Sdn Bhd

v Perbadanan Kemajuan Negeri Kedah [2007] 1 CLJ 498, Sri

Gopal Ram JCA [as he then was] said as follows:

“[15] Over the years, courts have fashioned for themselves

guidelines that are useful to construe contractual obligations.

Sometimes these are referred to as "rules". But they are not

rules at all. They are mere guidelines. Thus, Chitty on

Contracts, (28th edn) vol 1 p 604 says:

... the modern approach to construction is 'to assimilate

the way in which (contractual) documents are

interpreted by judges to the common-sense principles

by which any serious utterance would be interpreted in

ordinary life'. As a result, most rules of construction are

nowadays better regarded merely as guidelines or

assumptions as to what the court may regard as the

normal use of language and which assist judges to

intentions, though subject to examination of the

relevant circumstances surrounding the transaction.”

[16] In Bank of Credit and Commerce International SA v.

Munawar Ali [2002] 1 AC 251 at 281 Lord Clyde said that

the exercise of contractual interpretation:

is not one where there are strict rules, but one where

the solution is to be found by considering the language

used by the parties against the background of the

surrounding circumstances

[17] In Union of India v. M/s D. N. Revri & Co and

Others AIR [1976] SC 2257 Bhagwati, J said:

It would not be right while interpreting a contract,

entered into between two lay parties, to apply strict

rules of construction which are ordinarily applicable to

a conveyance and other documents. The meaning of

such contract must be gathered by adopting a common

sense approach and it must not be allowed to be

thwarted by a narrow, pedantic and legalistic

interpretation.

[18] It is a guideline to contractual interpretation that a court

is not confined to look only at the formal contract. It is entitled

to take into account the circumstances surrounding the

making of the contract, including the factual matrix that forms

the background to the contract. See, Keng Huat Film Co Sdn

Bhd v. Makhanlall (Properties) Pte Ltd [1983] 2 CLJ 187;

[1983] CLJ (Rep) 186. Essentially the approach is objective.

the parties. It is their imputed intention that is relevant. Lord

Clyde in Bank of Credit and Commerce International SA v.

Munawar Ali put the approach in this way:

The knowledge reasonably available to them (the

parties to contract) must include matters of law as well

as matters of fact. The problem is not resolved by

asking the parties what they thought they intended. It is

the imputed intention of the parties that the court is

concerned to ascertain. The parties may well have

never applied their minds to the particular eventuality

which has subsequently arisen, so that they may never

in fact had any conscious intention in relation to that

eventuality. It is an objective approach which is

required and a solution should be found which is both

reasonable and realistic. The meaning of the

agreement is to be discovered from the words which

they have used read in the context of the

circumstances in which they made the agreement.”

[d] In any event if the clause is ambiguous then the contra

proferendum rule applies, that is, the clause must be construed

against the person who prepared the agreement. In the present

case, the agency agreement is prepared by the Defendant and as

such must be construed against the Defendant. In the Court of

Appeal case of MBf Insurans Sdn Bhd vs Lembaga Penyatuan

Dan Pemulihan Tanah Persekutuan (Felcra) [2007] 6 CLJ 639,

his Lordship Datuk Gopal Sri Ram JCA [as he then was]held:

having more than one meaning, it must be treated as being

ambiguous. And since it is the appellant who seeks to rely on

the terms of the ambiguous endorsement to defeat the

respondent's claim, its terms must be construed contra

proferentum against it and be given the third meaning I have

ascribed to it.”

[e] Applying the above stated principles of construction of contracts

to the pertinent contract at hand, my findings are as follows.,As

regards the interpretation of the phrase “..irrespective of the status

of the agreement”, my construction of the aforesaid phrase is as

follows:

[1] that whether the agreement is whether terminated or not,

the agent will still be entitled to the payment of the Deferred

Benefit as long as the agent has reached the age of 55; and

[2] that when the agent has ten years’ service or otherwise

as long as the agent reaches the age of 55 the agent would

be entitled to payment of the Deferred Benefit.

[f] It is an undisputed fact that the Plaintiff has reached the age of

55 before her agency was terminated. It is also undisputed that the

Plaintiff had withdrawn RM50,000.00 after she had reached 55

years old.Under the agency agreement, the Plaintiff cannot

withdraw or be entitled to the Deferred Benefit until the Plaintiff has

reached 55 years old. I hold that once the Plaintiff reached 55

years old, the money become payable to the Plaintiff and it

Defendant and earn interest at the rate paid by the Employees

Provident Fund and the Defendant has no right to forfeit the money

belonging to the Plaintiff.

ORDER

.

In the premises, I find that the Plaintiff has proved its case against

the Defendant and I therefore order judgment to be entered

against the Defendant in terms as prayed for in the Statement of

Claim.

Dated 30th day of September, 2011

……………………………………….

Y. A. Tuan Lee Heng Cheong

Judicial Commissioner

Sandakan, Sabah

Plaintiff’s Counsel : Mr. Francis Wong

Of Messrs William Liaw Chan & Co

Sandakan.

Defendant’s Counsel : Ms. Connie Willie

Of Messrs Lind, Willie, Wong & Chin

Kota Kinabalu.

Notice: This copy of the Court’s Grounds of Decision is subject to

formal revision.

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