Protasco Bhd v TPY & Anor and Other Appeals [2021] 6 MLRA 370

Protasco Bhd v TPY & Anor and Other Appeals [2021] 6 MLRA 370

Federal Court (Putrajaya) 

Independent Discovery Tool for Permanent Banking Records

1. The Appellant, Protasco Bhd, a public listed company involved in construction and property development initiated a lawsuit against its former directors, TPY and OKA (the 2nd and 3rd Respondents) and a company they allegedly controlled, PT Anglo Slavic Utama (the 1st Respondent). 
2. The Appellant alleged a conspiracy to defraud the company regarding its acquisition of a 76% share in PT Anglo Slavic Indonesia, which purportedly held oil exploration rights. The claim was also grounded in breaches of fiduciary duties, as the directors allegedly failed to disclose their personal interest in the transaction, causing a loss of USD 27 million.
3. To prove the “money trail” back to the Respondents, the Appellant applied under sections 6 and 7 of the Bankers’ Books (Evidence) Act 1949 (‘BBEA’) for orders to inspect and take copies of bank records from Maybank Bhd and CIMB. These records related to accounts held by the Respondents and several third-party entities.
4. The High Court allowed the discovery application (encl. 307), holding that the BBEA provided an alternative or specific means of discovery for banker’s books. 
5. However, the Court of Appeal unanimously reversed this, ruling that the BBEA was merely intended to facilitate the proving of banking transactions at trial and was not an independent tool for discovery, instead, such discovery should have been sought under Order 24 of the Rules of Court 2012 (‘ROC’). The Appellant appealed the matter to the Federal Court.

1. Whether section 7 of the BBEA empowers a Court to provide orders for discovery independently of Order 24 of the ROC.
2. Whether the definition of “banker’s book” in section 2 of the BBEA is to be construed by taking into account current practices in the ordinary business of a bank.

(1) Whether section 7 of the BBEA empowers a Court to provide orders for discovery independently of Order 24 of the ROC.

(a) The Federal Court held that section 7 of the BBEA empowers a Court to provide orders for the discovery and inspection of banking records independently of Order 24 of the ROC.

(b) The Federal Court reasoned that since the BBEA and the ROC co-exist on nearly identical subject matter, the specific statute governs over general procedural rules. Because the BBEA was enacted specifically to deal with banking documents, it is the primary law governing their production, not the general provisions of the ROC.

(c) Under the ROC, discovery is a multi-stage process involving disclosure, followed by inspection and production. The Federal Court found that section 7 of the BBEA “sidesteps” these initial procedural steps by allowing a party to move straight to inspection and taking copies.

(d) The Federal Court highlighted subsection 130(3) of the Evidence Act 1950, which explicitly states that no bank shall be compelled to produce its books in proceedings where it is not a party, “except as provided by the law of evidence relating to banker’s books”. This law refers specifically to the BBEA, further justifying its status as an independent tool.

(e) While the BBEA provides an independent path, it does not grant a carte blanche for “fishing expeditions”. The Federal Court affirmed that the test of relevancy remains the essential prerequisite for granting such an order, as established in Malaysian cases like GHY v LTG & Ors [1975] 1 MLRH 472 and PKF v Malayan Banking Bhd; Toh Boon Pin (Intervener) [2003] 4 MLRH 230.

(f) The Federal Court noted that similar legislations in the United Kingdom, Singapore, Hong Kong and Ireland co-exist independently with general civil procedure rules, reinforcing the view that the BBEA was intended to be a substantive, self-contained mechanism for obtaining bank evidence.

(2) Whether the definition of “banker’s book” in section 2 of the BBEA is to be construed by taking into account current practices in the ordinary business of a bank.

(a) The Federal Court held that the definition of “banker’s book” in section 2 of the BBEA must be construed by taking into account current practices but only to the extent of technological advances used to maintain permanent records.

(b) Adopting the principle from YKS & Anor v YWK [2014] 4 MLRA 316, the Federal Court in this case held that Parliament is presumed to intend for an ongoing Act to be interpreted in a way that continuously updates its wording to allow for changes in technology since its inception. Therefore, the law must be treated as “always speaking” to remain relevant in a modern context.

(c) The Federal Court applied a purposive approach to recognize that modern banking involves electronic data retrieval, microfilms and magnetic tapes rather than just physical ledgers. This aligns with the UK decision in Barker v Wilson [1980] 1 WLR 884, which held that “banker’s books” include any form of permanent record kept by a bank of transactions relating to its business.

(d) Crucially, the Federal Court ruled that the term “other book” in section 2 must be construed strictly within the same class (ejusdem generis) as “ledger, day book, cash book and account book”.

(e) To qualify as a banker’s book, a document must be a permanent record of transactions regularly kept in the course of the bank’s business. This standard was linked to section 34 of the Evidence Act 1950 and the Supreme Court decision in SSE & Anor v Poh Hua Transport & Contractor Sdn Bhd [1980] 1 MLRA 618.

(f) Consequently, the minority decision in Federal Court (and the Court of Appeal, whose logic on this specific point the Federal Court referenced) noted that documents that do not permanently record transactions such as bank statements (created for customer reference), account opening forms, specimen signature forms or internal correspondence, do not fall under the strict definition of a “banker’s book”.

1. The Federal Court unanimously allowed the appeal (with one judge dissenting on the application but agreeing with the majority’s theoretical framework).
2. The Federal Court answered the first issue in the positive, confirming the BBEA is an independent discovery tool.
3. The Federal Court answered the second issue in the affirmative, but only to the extent that modern “current practices” refer to technological advances for records that functionally serve as banker’s books.
4. The Federal Court set aside the Court of Appeal’s judgment and affirmed the High Court’s decision to allow the inspection of the records.

1. The Bankers’ Books (Evidence) Act 1949 is not merely a procedural shortcut for evidence at trial, it is a substantive law that grants the Court the power to order the discovery/inspection of bank records independently of the Rules of Court.
2. While section 7 provides a “wider power of inspection”, it is not a license for a “roving” or “fishing” expedition. The party must show that the documents are relevant to the issues being adjudicated.
3. Not every bank document is a “banker’s book”. Documents like bank statements, company resolutions or account opening forms were noted by the Court of Appeal (and generally supported by the minority decision of the Federal Court’s ejusdem generis restriction) as not being permanent transaction records of the bank itself.
4. Malaysian law recognizes that “books” and “entries” include electronic data retrieval mechanisms and computer-produced documents, provided they comply with certification requirements under the Evidence Act.
5. Whether applying under the ROC or the BBEA, the primary test remains the relevancy. The Court must be satisfied there is a “good ground” for thinking the records will advance the case or damage the adversary’s case.