HOMECROWD SDN BHD v Kevin Chew Tze Kenn

Case Significance

Illustrates a consultant's dual exposure in contract and for breach of fiduciary duty where he fails to complete contracted deliverables and to hand over his work on termination: applying section 101 of the Evidence Act 1950, the appellate court reversed the Sessions Court's dismissal and allowed the principal's claim.

This High Court decision at Kuala Lumpur, delivered by Judicial Commissioner Suzana binti Muhamad Said, is an appeal by a plaintiff against a Sessions Court decision dismissing its claim for breach of a consultancy agreement. The appellant, Homecrowd Sdn Bhd, had engaged the respondent under an Engagement of Consultancy Agreement and sued him when it contended he had failed to perform his obligations. The Sessions Court dismissed the claim, and the plaintiff appealed. The central questions were whether the plaintiff had proved its case to the civil standard and whether the respondent had breached the consultancy agreement and any fiduciary obligations owed under it.

The court allowed the appeal. It began from the trite principle, reflected in section 101 of the Evidence Act 1950, that a plaintiff must prove its case, and that once the plaintiff has adduced sufficient evidence the evidential burden may shift to the defendant to answer it. On the evidence, the court was satisfied that the respondent had breached the consultancy agreement, pointing to material connecting him to the relevant conduct, and it found that his breaches extended to his fiduciary obligations, including a failure to complete key platform features and a failure to hand over his work properly after the engagement was terminated. Concluding that the Sessions Court had erred in dismissing the claim, the court allowed the appeal with costs. The reasoning is instructive in treating the consultant's obligations as extending beyond the four corners of the written agreement: because the engagement placed him in a position of trust in relation to the principal's platform and work product, his duties carried a fiduciary character, so that his failure to complete the work and to hand it over cleanly on termination sounded not only in contract but as a breach of the trust reposed in him. The judgment illustrates a consultant's exposure both in contract and for breach of fiduciary duty where he fails to deliver contracted deliverables and to effect a proper handover on termination, and the appellate court's willingness to reverse a dismissal where the evidence establishes the breach.