Chan Lai Yoke v Chan Seong Phun (AA-22NCvC-60-07/2025)

CHAN LAI YOKE (NRIC No. 731020-08-5734)

CHAN SEONG JIAN (NRIC No. 841219-08-5405) … PLAINTIFFS 15

CHAN SEONG PHUN (NRIC No. 760910-08-5683)

E.S.S. ENGINEERING SDN BHD (Company No. 120725-X)

ESS ENERGY HOLDING SDN BHD 25 (Company No. 1331408-D)

ESS SYNERGY SDN BHD (Company No. 1300825-P) 30

AMANAH RAYA BERHAD (Company No. 344986-V) 03/03/2026 10:55:18 AA-22NCvC-60-07/2025 Kand. 34 (being sued in its capacity as the trustee and executor of the Estate of Loke Ling Sin, NRIC No. 470207-08-5272) … DEFENDANTS 35 GROUNDS OF JUDGMENT Introduction [1]. This is the 1st to 4th defendants’ application under Order 18 rule 19(1)(a) of the Rules of Court 2012 to strike out the 40 plaintiffs’ Writ and Statement of Claim on the ground that the plaintiffs, as beneficiaries, lack locus standi to commence the present action. The defendants rely principally on section 59 of the Probate and Administration Act 1959 and the general rule that only a personal representative may sue in respect of 45 estate assets. [2]. Having considered the pleadings and submissions, this court is not persuaded that the plaintiffs’ claim is “obviously unsustainable”. On the contrary, the action falls squarely within the established exception recognised by the Federal Court in 50 Al Rashidy Kassim & Ors v Rosman Roslan [2007] 1 MLRA 307; [2007] 4 MLJ 297; [2007] 3 CLJ 361. Background facts [3]. The plaintiffs and the 1st defendant are siblings and the only beneficiaries under their late mother’s will. The 5th defendant, 55 Amanah Raya Berhad, was appointed as the sole executor and was granted probate after the mother’s death. Prior to her demise, the mother suffered a stroke, which left her in a prolonged vegetative state and unable to manage her affairs. With the consent of the plaintiffs, the 1st defendant assumed 60 responsibility for administering the father’s estate and managing the family assets for the mother’s benefit. [4]. The present dispute concerns assets said to form part of the mother’s estate, including shares in ESS Engineering, fixed deposits amounting to approximately RM1.6 million, and listed 65 shares. The plaintiffs allege that the 1st defendant transferred and disposed of these assets, including through companies under his control, without authority and in breach of trust. The plaintiffs seek declarations and orders to restore the disputed assets to Amanah Raya for proper administration of the estate. 70 The Governing Legal Principle [5]. The orthodox rule is traceable to Ingall v Moran [1944] 1 KB 160, that a beneficiary is generally a stranger to the estate’s causes of action until administration is complete. That rule is reflected in section 59 of the Probate and Administration 75 Act 1959, which vests the power to sue in the personal representative. [6]. However, the Federal Court in Al Rashidy Kassim & Ors v Rosman Roslan [2007] 1 MLRA 307; [2007] 4 MLJ 297; [2007] 3 AMR 341; [2007] 3 CLJ 361 made it clear that this 80 rule is not absolute. His Lordship Arifin Zakaria FCJ articulated that beneficiaries possess at least a “residuary equity” in the estate. This equity entitles them, in special circumstances, to commence proceedings for the limited purpose of protecting, preserving, or regaining estate assets, even in the absence of 85 letters of administration or notwithstanding the existence of an executor. His Lordship expressed in these words: “[18] We agree with the view … that the special circumstances should not be confined solely to cases where the personal representative had defaulted in recovering the 90 property of the estate. We are of the view that all the circumstances of the case ought to be considered by the court in arriving at a just result… the beneficiary has at least an equity in the estate of the deceased to entitle the beneficiary to seek on behalf of the estate the remedy of a 95 declaratory judgment” [7]. In the light of the Federal Court case, the critical inquiries are therefore to determine these issues: a) the nature and purpose of the relief sought; and 100 b) whether special circumstances are pleaded which justify equitable intervention. 105 Nature of the plaintiffs’ claim is for the preservation, not distribution [8]. A careful reading of the statement of claim demonstrates that the plaintiffs do not seek to bypass the executor or to appropriate the estate assets for themselves. In particular, 110 prayers 47.4, 47.7, and 47.11 expressly seek orders that the impugned shares and/or dividend in ESS Engineering and the alleged misappropriated sum of RM1,636,324.88 be transferred to Amanah Raya Berhad, the 5th defendant, who is the duly appointed executor. 115 [9]. The plaintiffs are not claiming the assets for themselves or asking for distribution. In substance, they are acting to protect the estate by asking the court to return the disputed assets to the estate so that the executor can properly administer them. This brings the present case within the limited protective 120 principle recognised in Al Rashidy Kassim (supra). [10]. Therefore, the present facts are readily distinguishable from Deraman v Mek Yam [1976] 1 MLRA 385; [1977] 1 MLJ 52; [1976] CLJU 20, where the claim was struck out because the beneficiaries sought to have the land registered in their own 125 names, which only a personal representative could pursue with the action. However, no such relief is sought in the present case. The relevant passage from Deraman & Ors v Mek Yam (supra), which reflects that the action failed because the beneficiaries sought to have the land registered in their own 130 names, is as follows: “[48] …they brought fresh proceedings, namely by suing in the High Court claiming against the defendant that their father's share in the land be registered in their name as beneficiaries of their father's estate.” 135 Earlier in the judgment, the court emphasised the lack of standing: “[9] …Furthermore, the appellants have no legal title. They never had. They are only beneficiaries of their father's estate. The only person who could have legal title after their 140 father's death would be the legal representatives of the estate. There was no evidence of any legal representatives having been appointed. On that ground also the appellants have no right to bring an action under s 10(1)(a) of the Ordinance. The action ought to have been dismissed as the 145 appellants have no right or cause of action.” Unlike Deraman’s case, in the present case the beneficiaries act merely to protect or preserve estate assets rather than to obtain ownership directly. 150 Existence of Special Circumstances [11]. The subsequent critical inquiry is whether special circumstances exist. The plaintiffs have pleaded facts that, if established at trial, constitute special circumstances warranting their intervention to protect and preserve the estate. 155 The facts as relied upon by the plaintiff disclosed special circumstances warranting the plaintiffs’ intervention to protect and preserve the estate. The alleged wrongdoing is not by an outsider but by the 1st defendant, who is a sibling and a co-beneficiary. He was also entrusted with the administration of 160 the father’s estate, and the allegation concerns an abuse of fiduciary control from within the family. The impugned transactions are said to have been carried out at a time when the mother was in a prolonged vegetative state and wholly incapable of safeguarding her own interests. In such a 165 situation, if the beneficiaries are precluded from acting, the estate would effectively be left without any meaningful protection. [12]. Further, the alleged transfer of estate assets into related corporate entities under the control of the 1st defendant 170 creates a real risk that the assets may be dissipated, concealed, or placed beyond recovery unless timely intervention is permitted. The position adopted by Amanah Raya Berhad (as executor) is also material. The executor has taken a neutral stance, they are not challenging the plaintiffs’ 175 standing, and have indicated that they will abide by the court’s decision. This absence of active steps to recover or protect the assets leaves the plaintiffs as the only parties presently seeking to safeguard the estate, and such inaction on the part of the executor itself constitutes a further special circumstance 180 justifying plaintiffs’ intervention. Applicability of Al Rashidy Kassim not limited to absence of an executor 185 [13]. Recent High Court authority, including Lee Yee Wuen v Seek Keng Mee & Ors [2023] 9 MLJ 739; [2022] 4 CLJ 268, confirms that the Al Rashidy Kassim principle is not confined to situations where no executor has been appointed. The High Court expressly rejected the argument in these words: 190 “For my part, I did not subscribe to the view that the principle in Al-Rashidy's case was confined only to circumstances where the administrator or executor is yet to be appointed as contended by the Defendants.” 195 [14]. At the very least, the plaintiffs’ standing raises a serious and arguable point of law that cannot be disposed of summarily. The plaintiffs’ claim is grounded in allegations of fraud and fraudulent breach of trust. Such allegations are inherently fact-sensitive. As emphasised in Seruan Gemilang Makmur Sdn 200 Bhd v Kerajaan Negeri Pahang [2016] 3 MLJ 1; [2016] 3 CLJ 1; [2016] 2 AMR 795; [2016] 2 MLRA 263, claims involving fraud ordinarily require “mature consideration” at a full trial and should rarely be struck out at the pleading stage. His Lordship Ramli Ali FCJ states: 205 “…the question as to whether the fraud referred to in s 44 of the Act spoke about intrinsic or extrinsic fraud was an issue of law that required lengthy argument and mature consideration at trial. It was no part of the court’s function at this stage of the litigation to decide difficult questions of law 210 which called for detailed argument and mature considerations.” His Lordship concludes by stating: “The respondents’ action as well as the issue of fraud as 215 pleaded therein, cannot be said to be frivolous, vexatious and an abuse of the process of the court… The respondents should be given their day in court to prove their case. [15]. Applying the “plain and obvious” test in Bandar Builder Sdn 220 Bhd v UMBC Bhd [1993] 3 MLJ 36; [1993] 1 MLRA 611; [1993] 4 CLJ 7; [1993] 2 AMR 1969, this court is unable to say that the plaintiffs’ claim is obviously unsustainable or bound to fail. Conclusion 225 [16]. The principles in Al Rashidy Kassim (supra) apply to the present case. The plaintiffs seek only to restore the disputed assets to the executor for proper administration, and not for personal distribution. They rely on special circumstances, namely the risk of dissipation of estate assets. In these circumstances, 230 section 59 of the Probate and Administration Act 1959 cannot operate as an absolute bar. Accordingly, the application to strike out is dismissed. 235 Dated : 3 March 2026 240 [MOSES SUSAYAN] JUDGE HIGH COURT IN MALAYA AT IPOH, PERAK 245 Counsel For the Plaintiffs : Toi Tee Toen (together with Tong Joe Jye) Advocates and Solicitors 250 [Messrs Munhoe] Kuala Lumpur For the Defendants : Pavendeep Singh s/o Gurbachan Singh Advocates and Solicitors 255 [Messrs Paven & Co] Kuala Lumpur 260 Headnotes: 265 CIVIL PROCEDURE: Striking out – Order 18 r 19(1)(a) – Locus standi of beneficiaries – Whether s 59 of the Probate and Administration Act 1959 is an absolute bar to beneficiaries commencing action on behalf of the estate – Whether beneficiaries possess “residuary equity” under Al Rashidy Kassim to act in special circumstances 270