SUHAILI BIN ABDUL RAHMAN v MARA CORPORATION SDN. BHD.

Case Significance

Illustrates a director's fiduciary duty over company property entrusted to him — a corporate credit card for official use only — and the rule that relief must be confined to the pleaded case, an unpleaded unjust-enrichment finding being an error that did not disturb the sound fiduciary-breach outcome.

This decision of the High Court of Malaya at Kuala Lumpur concerns an appeal by a defendant against a Magistrate's decision, given after a full trial, allowing the plaintiff company's claim with costs for the defendant's misuse of a corporate credit card. The defendant had been the Executive Director of the plaintiff, MARA Corporation Sdn Bhd, and had been provided with a corporate credit card on the condition that it be used only for official purposes. The plaintiff discovered that the defendant had used the card for personal expenses, notified him by various letters, and, receiving no satisfactory justification, informed him that his salary would be applied against the misused sums; the plaintiff then sued for the balance owed after deducting his salary and withholding his final salary.

On appeal the High Court substantially upheld the Magistrate's findings. It agreed that the defendant, as Executive Director entrusted with a corporate card for official use only, had breached his fiduciary duty to the company by using it for personal purposes, and that the plaintiff was rightly awarded the sum claimed representing the excess owed after crediting his salary. The court did, however, correct one aspect of the reasoning below: the Magistrate had accepted the plaintiff's submission that the defendant had been unjustly enriched, but unjust enrichment had not been pleaded in the statement of claim. Applying the principle that a party is bound by its pleadings and cannot lead evidence or make submissions on an unpleaded cause of action, the court held that the Magistrate had erred in deciding the case on unjust enrichment. That correction did not disturb the outcome, which rested soundly on the breach of fiduciary duty and the contractual condition attaching to the card. The court dismissed the appeal and upheld the Magistrate's decision, with costs. The judgment illustrates both a director's fiduciary duty over company property and the rule that relief must be confined to what has been pleaded.