QUANTITY SURVEYING DEPARTMENT

FACULTY OF BUILT ENVIRONMENT

SEMESTER II SESSION 2014/2015

COURSEWORK QUESTION

SBEQ 1413(PRINCIPLES OF LAW, CONTRACT AND TORT)

Lecturer : Dr Nur Emma Mustaffa

NAME NO.MATRIC

TANG AI YING A14BE0154

NURAINA HUSNA BINTI TARMIZI A14BE0120

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Contents
1.0 ACKNOWLEDGEMENT ......................................................................................................... 3
2.0 INTRODUCTION ..................................................................................................................... 4
3.0 CIMB BANK BERHAD VS MAYBANK TRUSTEE BERHAD............................................ 5
3.1 The parties involved in the hearing ....................................................................................... 5
3.2 The summary of the judgment of the case ............................................................................. 6
3.3 The hierarchy of the court which hear the matter and the issues discussed by the respective
court ............................................................................................................................................. 7
3.4 The Acts and cases referred to by the courts in making the decision .................................... 9
4.0 INSURANCE CONTRACT .................................................................................................... 10
4.1 The parties in the contract ................................................................................................... 10
4.2 The essential elements to form the contract; for example offer, acceptance, consideration,
capacity, remedies ..................................................................................................................... 11
4.3 The term and conditions of the contract .............................................................................. 13
4.3.1 SECTION A : GENERAL CONDITION..................................................................... 13
4.3.2 SECTION B : BENEFITS UNDER BASIC POLICY ................................................. 14
4.3.3 SECTION C : CONDITIONS GOVERNING THE BENEFITS ................................. 16
5.0 CONCLUSION ....................................................................................................................... 18
6.0 BIBLIOGRAPHY ................................................................................................................... 19
7.0 APPENDIX ............................................................................................................................. 21

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1.0 ACKNOWLEDGEMENT

First of all we would like to express our gratitude to Dr Nur Emma Mustaffa who
is our lecturer for the subject Principles of Law, Contract and Tort. She kindly lends us a
helpful hand during and until the completion of the assignment. Moreover, she gives us
many useful advices and guidelines for implementation of the assignment. By doing this
assignment, we earn the golden opportunity to understand and know more about the case
and contract in Malaysia.

Finally, we would like to thank our partner for giving cooperation to complete this
assignment together. We spent our time to do research, searching useful and vital
information, doing discussion about the title that we are responsible for. We appreciate
all this time and all those who had kindly helped us in completion of the assignment.

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2.0 INTRODUCTION

Tort is tried in civil court. A person who commits Tort is a 'tort feasor'. The remedy
of tort is unliquidated damages or other equitable relief to the injured. Tort litigation is
compoundable. Tort is divided by several type such that trespass to person, trespass to
land, trespass to goods, negligence and others.

Trespass to person can divide into three type. There are Assault, Battery and False
Imprisonment. Trespass to land may takes three forms. There are Entry on the land of
another, remaining on the land of another and placing or throwing any material object
upon the land of another. Trespass to goods can divide into three types. There are
Trespass to goods, Conversion and Detinue.

In this assignment we choose to do tort in negligence. The cases that we choose are
about CIMB Bank vs Maybank Trustee Bhd. its about the negligence in duty of care of
bondholders monies.

Contract is the agreements between two people. The contracts have to be agree in two
person. Example for contract is insurance contract and another.

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QUESTION 1

You are required to find a case law which decision has been decided by the Federal Court.
The case law must be either related to the law of tort or occupiers liability.

Based on the case law chosen, you are to discuss the following matters :-

a) the parties involved in the hearing

b) the summary of the judgment of the case

c) the hierarchy of the court which hear the matter and the issues discussed by the
respective court

c) the Acts and cases referred to by the courts in making the decision.

3.0 CIMB BANK BERHAD VS MAYBANK TRUSTEE BERHAD

3.1 The parties involved in the hearing

The parties that involved in hearing divide by appellant and defendant. The
appellant for this case is CIMB Bank Berhad while the defendant of this case is Maybank
Trustee Bhd.

In Maybank Trustee Bhd, Pesaka entered into a trust deed. Under the trust deed,
Maybank was appointed as the sole trustee to manage and control the Syariah designated
accounts.

In CIMB Bank, in the light of the accounts held by Pesaka. Pesaka used its
existing conventional accounts as the designated accounts. Pesaka utilized the monies in
the designated accounts for its own purposes and failed to redeem the bonds and repay
the bondholders on the maturity date.

There were other parties that hearing such that Pesaka Astana (M) Sdn Bhd that
involved in awarded three government contracts and proposed a financing scheme to
finance the contracts. That scheme involved the issuance of public Islamic bonds to a
primary subscriber with Pesakas government contracts charged as security.

Another parties that involved in hearing is KAF Investment Bank as the lead
arranger, facility agent and issuing agent for the issuance of bonds. This parties also have
to advise Pesaka on how to go about obtaining a loan in a bond market and have to tasked

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with the duty to prepare all the required documentation to obtain the necessary approval
from the Securities Commission.

That parties assisted in the preparation of a documents called the information

memorandum that provided information about the bonds to potential investor. In the
information memorandum has an importance notice to exclude any liability arising from
any claim that may arise from the information memorandum.

3.2 The summary of the judgment of the case

High Court

In the High Court, the bondholders commenced an action against 12 defendants.

The bondholders then entered a consent judgment against all the defendants, except KAF
Investment Bank and Maybank Trustee Bhd. However, the bondholders chose not to
execute the consent judgment. Instead they proceeded to trial against KAF Investment
Bank and Maybank Trustee Bhd.

The High Court found for the bondholders against Maybank Trustee Bhd and
KAF Investment Bank for breach of contracts and negligence. The trial judge also denied
KAF Investment Bank any indemnity against Pesaka and apportioned liability between
KAF Investment Bank and Maybank Trustee Bhd on a 60:40 basis.

Appeal Court

On appeal, the Court of Appeal affirmed the findings of the High Court but re-
apportioned liability between KAF Investment Bank and Maybank Trustee Bhd on a
50:50 basis. Maybank Trustee Bhd filed a Notice of Contribution and a counterclaim
against Pesaka and the directors of Pesaka claiming, inter alia, an indemnity in full. In
addition, Maybank Trustee Bhd also filed a counterclaim against CIMB Bank, in the light
of the accounts held by Pesaka maintained by CIMB Bank.

The Court of Appeal granted Maybank Trustee Bhd an indemnity of 2/3 of the
sum claimed as against Pesaka and its directors. KAF Investment Bank, Maybank Trustee
Bhd, Pesaka, the directors of Pesaka and CIMB Bank have been granted leave to proceed
with the instant five appeals, which were jointly heard.

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Federal Court

In the federal court, CIMB Bank is appealing against the order of the Court of
Appeal to indemnify Maybank Trustee Bhd to the extent of 1/3 of the total liability that
Maybank Trustee Bhd would have to bear, that is after deduction of the sum to be
indemnified by Pesaka.

Federal court also agrees with the Court of Appeal that notwithstanding Maybank
Trustee Bhd breach of duty or negligence, it is no excuse for Pesaka by its fraudulent
misappropriation, to deprive the bondholders of the monies. Pesaka must indemnify
Maybank Trustee Bhd. On the extent of the indemnity, for reasons which we have set out
earlier in this judgment, we order full indemnity against Pesaka. Hence, the Court of
Appeals order on the indemnity by Pesaka is varied to that extent.

3.3 The hierarchy of the court which hear the matter and the issues discussed by the
respective court

The first court that hears the case of CIMB Bank vs Maybank Trustee Bhd is
High court and followed by Court of Appeal and Federal Court.

High Court

The learned judge disagreed that KAF Investment Bank responsibility ended by
receiving the confirmation alone. She held that it is the responsibility of KAF Investment
Bank to see that the condition precedent was fulfilled in real term and not in executrix
stage alone.

She expressed the view that KAF Investment Bank duty was to ensure that the
ring fencing feature of the designated accounts must exist in reality and these features are
to endure till the maturity of the bonds. She concluded that the ring fencing was in fact
not in place and therefore KAF Investment Bank was in breach of its duty under CPU.

Appeal Court

In affirming the findings of the High Court, the Court of Appeal held that before
KAF Investment Bank could issue the bonds, KAF Investment Bank had to be satisfied
that CP11 had been complied with. In order to do so, KAF Investment Bank as lead
arranger, facility agent and issue agent, had to independently verify that they were all in

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place. Confirmation by Pesaka was no proof that the required designated accounts with
the mandates had actually been opened.

In its judgment, it held that KAF Investment Bank had to be absolutely sure that
the required designated accounts with Maybank Trustee Bhd in sole control were in place
before the issuance of bonds. The stable door must be first closed.

The accounts into which revenue would be deposited must be in operation and in
the sole control of Maybank Trustee Bhd before bonds could be issued. Only such
accounts could be designated accounts. But even so, those accounts must be Shariah
compliant.

Federal Court

Shariah compliant was not an issue before this court. As it would appear from
submissions of parties, what is critical is the absence of ring fencing in respect of the
designated accounts which was the proximate cause of the loss. Having said that,
therefore, the issue before this court is whether the High Court and the Court of Appeal
were right in their decision in holding that KAF Investment Bank had acted in breach of
CP11 in issuing the bonds.

The Federal Court it is relevant to consider the circumstances which led to KAF
Investment Bank being satisfied that CP11 had been complied with. For this court have to
consider the various correspondences between Pesaka, KAF Investment Bank and the
transactional solicitor. More importantly, the execution of the trust deed on 19 March
2004 in which Maybank Trustee Bhd was appointed as the trustee. The powers and duties
of MTB as trustee may be gathered from the following clauses of the trust deed.

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3.4 The Acts and cases referred to by the courts in making the decision
High Court

The cases that referred by thus court is Wallersteiner vs Moir, Gilford Motors
case to find that the directing mind and controlling minds behind Pesaka and the Amdac
Group of companies is the defendents.

This court held that KAF Investment Bank owed a duty of care to the bondholders
to ensure that the contents of the information memorandum or otherwise known as the
prospectus under the Securities Commision Act 1993 was neither false no misleading.
This court agree that information memorandum had to be submitted to Securities
Commision for its approval under section 38 (4) of the Securities Commision Act 1993.

Under this section it is clear that the information memorandum is not a document
which requires a approval of the Securities Commision.

Appeal Court

The cases that referred by this court is Target Holdings Ltd vs Redferns (a firm)
[1996] AC 421 in supports of its finding. This is the case concerning trust, where the
degree of duty of care is higher than the present case.

The Court of Appeal held that the information memorandum is an agreement

within section 65 of the Securities Commision Act 1993 and for the reason the important
notice was held to be void.

Section 65 of the Securities Commision Act 1993:

65 Agreements to exclude or restrict liability void.

An agreements is void in so far as it purpots to exclude or restrict the liability of a

person for contravention of section 55, 57 or 58 or for loss or damage under
section 153.

Federal Court

The cases that referred by this court is Antaios Cia Naviera SA vs Salen
Rederierna AB, The Antaios [1985] AC 191 in extending the meaning of the word
agreement to include the information memorandum but as rightly pointed out by
learned counsel for KAF Investment Bank, in the case the House of Lord was concerned
with charter party which had an arbitration clause and in particular with the construction
of clause 5 of the charter party.

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QUESTION 2

You are required to find a contract document. From the contract, identified and explain

a) the parties in the contract

b) the essential elements to form the contract ; for example offer, acceptance,
consideration, capacity, remedies etc

c) the terms and conditions of the contract

4.0 INSURANCE CONTRACT

4.1 The parties in the contract

A life insurance policy is a special kind of agreement. It is a contract of adhesion,

meaning that it is written by one party of the contract, the insurance company or insurer,
and must be accepted or rejected by the other party as it is written, policy owner or
insured.

Insurer ( The Insurance Company )

The Insurance Company is Hong Leong Assurance in the contract. The Insurer must be
licensed in every state it does business. The head officiate locate at Level 3, Tower B,
Petaling Jaya City Development, No.15A, Jalan 219, Seksyen 51A, 46100 Petaling Jaya,
Selangor. The number telephone is +603-76501818 and can visit the website
www.hla.com.my to get the more information. Insurer or the insurance company agrees
to pay for the future financial losses of the insured against a regular payment of premium.
The insurance company assumes or accepts the risk of loss and undertakes for a
consideration to indemnify the insured or to pay him a certain sum on the happening of
insured in the contract of Insurance a specified contingency or event.

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The Policy owner (Insured / Life Assured)

The policy owner or insured of the life insurance policy controls all rights under the
Contract. The Insured is TANG KWANG HUA who are 19 years old and is a male live
at 27-1, Jalan lama 84000 Muar Johor, Malaysia. The policy owner pays premiums every
years. In most cases the applicant, policy owner and insured are the same person. The
policy owner must meet the legal capacity required by their state to engage in contracts.

4.2 The essential elements to form the contract; for example offer, acceptance,
consideration, capacity, remedies

Offer

An offer made by the Hong Leong Assurance company to proposer that the premium
amount will be RM 45243.66 for 66 years. The Hong Leong Assurance company
provided the basic policy of MedGlobal IV 150 can be purchased as a standalone plan. It
is for the proposer to accept the offer or not. An offer may be considered accepted either
when the Insurance company issues the policy or the first premium is paid by the
applicant. Hong Leong Assurance MedGLOBAL IV is a guaranteed renewable
comprehensive global hospital and surgical plan that provides policy owner with the
freedom to choose the most optimal and affordable protection level to keep safety.

Acceptance

In the contract, an acceptance made by the TANG KWANG HUA from commencement
date 02/08/2011 until 01/08/2077 agree to pays the premium with RM685.51 per year
using cash to the Hong Leong Assurance. Premiums are payable on the Policy
Commencement Date and every 12 months until the respective Date of Last Payment as
stated above or until the prior death of the Life Assured.

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Consideration

Which is the act or promise offered by insurer and accepted by insured as the price of his
promise. In Insurance contracts the consideration is the premium that the insured pays to
the Insurer as the price of the promise that the Insurer has made that he shall indemnify
the insured. The Insurer invests received premiums after deducting expenses, and then
credits any interest earned. Hong Leong Assurance MedGLOBAL IV 150 is a guaranteed
renewable comprehensive global hospital and surgical plan that provides policy owner
with the freedom to choose the most optimal and affordable protection level to keep safe.
With worldwide coverage privileges, hassle free hospital admission and bill settlement
procedures and access to 24 hours assistance to look after insured well-being.

Capacity

For an agreement to be binding on all parties, the parties involved must have the legal
capacity to enter into a contract. Notwithstanding anything therein contained, this Policy
shall be applicable only in respect of a Life Assured who is not less than thirty (30) days
of age and not more than sixty (60) years of age as at the Effective Date of Coverage.
The item to consider as satisfactory proof of age are identify card, birth certificate and
passport. In the event that the Life Assured is less than thirty (30) days of age or more
than sixty (60) years of age, the Company shall not be under any liability or obligation
hereunder save that the Company shall refund any premium paid to the Company in
respect of this Policy. With respect to the insured, the person should be sound mind. The
policy owner must meet the legal capacity required by their state to engage in contracts
including paying the premiums and changing any other feature in the insurance policy.

Remedies

If a Life Assured carried other insurance covering any Illness or Injury insured by this
Policy, the company shall not be liable for a greater proportion of such Illness or Injury
than the amount applicable hereto under this Policy bears to the total amount of all valid
insurance covering such Illness or Injury. Insured have to write a notice to the Hong
Leong Assurance stating full particulars of such event, including all original bills and

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receipts and full physical report stipulating the diagnosis of the condition treated within
30 days of the occurrence or commencement of diagnosis, Hospitalisation or Surgery.

4.3 The term and conditions of the contract

4.3.1 SECTION A : GENERAL CONDITION

PAYMENT PREMIUM

The premium insured pay for this insurance is based on the Schedule of Annual
Premiums. The premium is charged according to insured attained age, health status,
occupation, and our fees for administering this class of business. Premiums in future
policy years will increase by insured attained age according to the Age Bands. Generally,
the older you get, the more you will have to pay for the risk of this insurance. If insured
do not pay the premiums or if fail to pay the premiums when due, the plan may lapse.

PERIOD OF COVER AND RENEWAL

Coverage will commence immediately for Hospitalisation and Surgery caused by

accidents. For all other causes, it will only commence 30 days after acceptance of risk.
Renewal is at the option of the policy owner to the terms, conditions and termination at
each of the anniversary of the Policy date. The renewal premiums may be charged
according to :
1) The original scale if the current environment (claim ratio, inflation rate)
2) The plan is not renewed according to the Portfolio Withdrawal Condition as stated
in the policy contract.

CERTIFICATION, INFORMATION AND EVIDENCE

Policy owner must prepare all certification, information and evidence as required by the
Insurance Company must be in writing and addressed to the Insurance Company. If the
Insurance Company request and expense, submit to a medical examination whenever
such is deemed necessary.

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MISREPRESENTATION OR FRAUD

The law should provide clear remedies for the insurer where a policy owner makes a
fraudulent claim, yet the current law appears confused and contradictory. Where an
insured makes a fraudulent claim, the insurer should not be liable to pay the claim and
should be able to recover any sums already paid in respect of it. The insurer should have
the option to treat the contract as having been terminated at the time of the fraudulent act.

OVERSEAS TREATMENT

If the Life Assured seeks treatment overseas, benefits in respect of the treatment shall be
covered subject to the exclusions, limitations and conditions specified in the Policy.
Overseas treatment of a Disease, Sickness or injury which diagnosed in Malaysia and
nonemergency or chronic conditions where treatment can reasonably be postponed until
return to Malaysia are excluded.

4.3.2 SECTION B : BENEFITS UNDER BASIC POLICY

HOSPITAL ROOM AND BOARD

Reimbursement of the Reasonable Customary Charges Medically Necessary for room

accommodation and meals. The amount of the benefits shall be equal to the actual
charges made by the Hospital during the Life Assureds confinement, the rate of Room
and Board Benefit per days is RM150, and the maximum number of days up to 150 days
per any one disability.

DAILY CASH AS A RESULT OF HOSPITALIZATION DUE TO ROAD

ACCIDENTS ON A MALAYSIAN HIGHWAY
Payment of daily cash allowance if the Life Assured is hospitalized due to road accident
on Malaysian Highway. The amount of the benefits shall be equal to the actual charges
made by the Hospital during the Life Assureds confinement, the rate of Room and Board
Benefit per days is RM150, and the maximum number of days up to 150 days per any one

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disability. The police report accident shall be used to determine whether the accident has
actually occurred at the highway.

ORGAN TRANSPLANT

Full coverage exists for all eligible solid organs such as heart, lung, liver, kidney or bone
marrow resulting from the covered specified diseases. The amount of the benefits is
according to reasonable and customary charges made by the Hospital during the Life
Assureds confinement.

DAY SURGERY

A system in which a insured comes into hospital for a surgical procedure, has the
operation, recovers and is released from hospital in the course of a single day.
Reimbursement of Hospital charges will be made in respect od all charges for services
rendered by the Hospital if confinement is at least 3 hours.

HOME NURSING CARE

If insured cannot live at home independently, a nursing home may be the best possible
option. Medicare generally does not pay for long-term nursing home care, but covers
short-term care while you recover from an illness or injury. Cover is limited to a
maximum amount of RM40 per days and maximum period of 180 days per lifetime. In
addition, treatment for functional disorder of the psychic or mental constitution including
their physiological or psychosomatic manifestations such as neuropsychosis and
schizophrenia will not be covered.

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4.3.3 SECTION C : CONDITIONS GOVERNING THE BENEFITS

LIMITATION

Life Assured shall suffer from a Disability and shall subsequently completely recover and
remain free from such Disability for a period of at least ninety (90) days following the
latest date of discharge from Hospital before suffering the same Disability. No Benefits
or any moneys shall be payable by the Company for any Disability arising out of an
Injury while in the course of employment when benefits are receivable under the
Workmens Compensation Act 1952 or the Employees Social Security Act 1969.

EXCLUSIONS

This Policy does not cover any Hospitalisation, Surgery or charges caused directly or
indirectly of the following occurrences:
a) Pre-existing Illness
b) Dental treatment except as necessitated by Accidental Injuries
c) AIDS and HIV diseases
d) Any treatment or surgical operation for congenital abnormalities
e) Hospitalisation primary for investigatory purposes such as X-ray examination,
general physical or medical examination
f) Psychotic, mental or nervous disorders

This Policy does not cover, and the Company shall not in any circumstance be liable for,
the following:
a) Medical treatment provided outside of Malaysia to a Life Assured who is not a citizen
of Malaysia
b) Medical treatment provided outside of Malaysia to a Life Assured who does not
ordinarily reside in Malaysia
c) Medical treatment provided outside of Malaysia to a Life Assured who travels or
resides outside Malaysia for more than ninety (90) consecutive days

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d) Medical treatment provided in any country (other than Malaysia) to a Life Assured
who is a permanent resident of such country
e) Medical treatment provided outside of Malaysia to a Life Assured pursuing a
course of study outside of Malaysia

CLAIM PROCEDURES

The policy owner give written notice such as original bills and receipts and a full
Physicians report stipulating the diagnosis of the condition treated within 30 days to the
Insurance Company. Failure to furnish such notice with the time allowed shall not
invalid any claim. In the event of Hospitalisation outside Malaysia, bills rendered in
terms of currency other than Ringgit Malaysia shall be converted to Ringgit Malaysia
based on the exchange rate quoted by Maybank Berhad on the last day of period of
confinement.

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5.0 CONCLUSION

In tort assignment in case CIMB Bank vs Maybank Trustee Bhd, the tort have been
found is negligence. Its happen when the owner of account in CIMB Bank, Pesaka do not
want to open a new account in Maybank. The new accounts have to be open to easier the
bondholders to pay. When the bondholders pay the bond in Pesaka accounts, the Pesaka
use the monies for their own purpose and failed to redeem the bonds and failed to repay
the bondholders on the maturity date. With Pesaka negligence, the bondholders
commenced an action in the high court and finish in the Federal court.

Majority of learning contracts we can identify what content will be learned,

specify the type of evidence that will be used to demonstrate, specify how the evidence
will be validated, and by whom. The parties involves in the contract must comply with
rule that have been state in acts Malaysia. For the example, the policy owner must
payment premium ever years. The insurance company also cannot give any statement to
other person.

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6.0 BIBLIOGRAPHY
UTM library information excellence. Retrieved March 6, 2015, from
http://library.utm.my/digital-resources-2/online-databases/

Zakaria, A. CIMB Bank Berhad vS Maybank Trustees Berhad. Retrieved March 7,

2015,fromhttp://www.kehakiman.gov.my/directory/judgment/file/PRESS_SUMM
ARY_02f-27-04-2012W

Brandenberg, D. (n.d.). Examples of Cyber Crime. Retrieved April 1, 2015, from

http://www.ehow.com/list_6307677_examples-cyber-crime.html

plaintiff. (n.d.). Retrieved April 1, 2015, from

http://www.vocabulary.com/dictionary/plaintiff

Status Quo Law & Legal Definition. (n.d.). Retrieved April 5, 2015, from
http://definitions.uslegal.com/s/status-quo/

Malaysia Employment Act 1955. (n.d.). Retrieved April 11, 2015, from
http://www.ilo.org/dyn/natlex/docs/WEBTEXT/48055/66265/E55mys01.htm

Law and Society. (n.d.). Retrieved April 11, 2015, from

http://www.freeessays.cc/db/43/svn156.shtml

Chia, J. (n.d.). New Laws to Protect Personal Data. Retrieved April 11, 2015,
from http://www.skrine.com/new-laws-to-protect-personal-data

(2014). Law of Tort. In Negligent.

Hong Leong Assurance MedGlobal IV Plus. Retrieved April 14, 2015, from
https://www.hla.com.my/product_and_services.aspx?action=product&id=39

Contracts Act 1950. (1 Jan 2006). Malaysia: The Commissioner of Law Revision.

Farlex. (n.d.). Definition of Contract. Retrieved April 15, 2015, from http://legal-
dictionary.thefreedictionary.com/contract

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 Fong, C. K. (1988). An Outline of the law and practice of construction contract
claims. Singapore: Longman.

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7.0 APPENDIX

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