Ho Hau Wong v Chin Choong Kit @ Joseph Chin (WA-22NCC-14-01/2020)

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RED AND BLUE INVESTMENT CO. LTD … PLAINTIFF

CHIN CHOONG KIT @ JOSEPH CHIN

CHOONG HOONG @ PHILIP CHIN

CHIN PENG SIN

YAP MAY FATT

YAP WAI FOONG (NO. K/P: 850106-08-5980) [sebagai wakil diri, Yap May Fatt, Si Mati]

CHAN YOKE YING (NRIC NO.: 550314-08-5390) S/N 2dZVzYS4UkCpbYin047ucw

LAM PUN YING

BOEY TIN CHEE [NRIC NO.: 460722-08-5462]

EMERALD DEALS SDN BHD [COMPANY NO.: 415399-T]

GLAMOUR IDEALS SDN BHD [COMPANY NO.: 670679-H]

GLAMOUR PORTFOLIO SDN BHD [COMPANY NO.: 725911-T]

GLAMOUR STRATEGY SDN BHD [COMPANY NO.: 725906-M] …DEFENDANTS JUDGMENT Introduction [1] In essence, the Plaintiffs brought this claim against the Defendants for breach of trust and misappropriation of RM30,565,555.20 which the 1st Plaintiff had entrusted to the 3rd Defendant, Chin Peng Sin for the purposes of investing into properties through 4 special purpose vehicles, namely Emerald Deals Sdn Bhd (“EDSB”), Glamour Ideals Sdn Bhd (“GISB”), Glamour Portfolio Sdn Bhd (“GPSB”) and Glamour Strategy Sdn Bhd (“GSSB”), who are the 8th, 9th, 10th and 11th Defendants respectively. S/N 2dZVzYS4UkCpbYin047ucw [2] Notwithstanding that the parties had previously entered into a Consent Judgment dated 24.6.2014 to appoint Messrs KPMG to examine the parties and the accounting books of EDSB, GISB, GPSB and GSSB, the disputes could not be resolved resulting in the Consent Judgment being subsequently set aside for parties to commence this fresh suit. [3] Further, despite an order made by this Court on 9.11.2022 for the Defendants to provide and render a true and complete account of all monies remitted to the 3rd Defendant and or his solicitors from the 1st Plaintiff and or his nominees for the purpose of aforesaid investments in EDSB, GISB, GPSB and GSSB, requiring the production of supporting documents evidencing the flow of the monies including but not limited to relevant bank statements, payments vouchers where relevant or applicable by affirming an affidavit to be filed by Friday 11.11.2022, the Defendants have failed to do so. [4] Instead, at the Trial, the Defendants had sought to rely on the searches from the Suruhanjaya Syarikat Malaysia (“SSM”) and the entries made in the general ledgers of EDSB, GISB, GPSB and GSSB to support their position that the Plaintiffs’ remittances had been properly utilized and accounted for in accordance with the agreements executed by the parties. [5] The questions for determination are whether there is a relationship of trust between the parties and if so, whether the Defendants have accounted to the Plaintiffs on the utilization of the remittances made to the 3rd Defendant and or his solicitors in accordance with the agreed S/N 2dZVzYS4UkCpbYin047ucw purposes stated in their agreements. Further, given that the Defendants have not provided and or are incapable of providing a full and complete account of the utilization of the monies remitted, whether all the shares of EDSB, GISB, GPSB and GSSB held by the Defendants ought to be held in trust for the Plaintiffs and the properties purchased be treated as beneficially owned by the Plaintiffs. Background facts [6] Around 2002, the 1st Plaintiff was introduced to the 3rd Defendant by Dato’ Tan Tiong Hong (“Dato’ Tan”). At the time of introduction, the 3rd Defendant requested assistance from Dato’ Tan because the company owned by him, Orrington Enterprise Sdn Bhd ("OESB") was experiencing financial difficulties. Since Dato’ Tan was a friend of the 1st Plaintiff, Dato Tan requested the 1st Plaintiff to assist the 3rd Defendant in any way possible. [7] After meeting and discussing with the 3rd Defendant, the 1st Plaintiff advised him that the financial problems faced by OESB was not insurmountable. The 1st Plaintiff helped the 3rd Defendant by investing RM1,499,980.00 into OESB and the said sum saved OESB's financial predicament. In return, the 1st Plaintiff was given a 7.5% equity stake in OESB. [8] The result of this introduction yielded a business relationship between the 1st Plaintiff and the 3rd Defendant wherein the 3rd Defendant shared with the 1st Plaintiff his proposal to develop several lands in Malaysia, S/N 2dZVzYS4UkCpbYin047ucw especially in the state of Perak. Owing to the fact that the 1st Plaintiff would not be in Malaysia most of the time, the 3rd Defendant recommended that a number of companies be formed as special purpose vehicles which would be used to acquire the lands for development purposes in Perak. [9]

RM 700,000.00 remains a loan owed by the 1st, 2nd and or 3rd Defendants pursuant to FLA-2 and FLA-3;

RM 150,000.00 remains a loan owed by the 3rd Defendant to the 1st Plaintiff;

RM 1,318,320.00 remains a loan owed by the 1st, 2nd and 3rd Defendants to the 2nd Plaintiff;

RM 2,853,280.00 remains either a loan to the 1st, 2nd and 3rd Defendants or as the 3rd Plaintiff’s and 2nd Plaintiff’s respective S/N 2dZVzYS4UkCpbYin047ucw IFSL to the 9th Defendant of RM1,426,640.00 each and be entered into the 9th Defendant’s ledger; and

RM 680,990.00 remains either as an advance by the 2nd Plaintiff and the 5th Plaintiff to the 8th Defendant or be treated as a loan by the 1st Plaintiff to the 3rd Defendant. [40] Significantly, throughout the trial, the Defendants made no attempts at all to adduce any evidence in respect of their own respective contributions to the SPVs and or the sources of those contributions, if any. The Defendants also did not adduce any evidence on the sources of funds for the purchases of the lands by the SPVs, relying only on the general ledgers of the companies. Court’s Considerations [41] At the outset, it is to be noted that both parties agreed that the 1st Plaintiff had altogether remitted to the 3rd Defendant’s personal accounts and or to his solicitors’ account, a cumulative sum of RM 30,565,555.20. The details of the 1st Plaintiff’s remittances are summarized in a table at pages 7 and 8 of Bundle D3 (“the Plaintiffs’ Remittances”), which are not disputed. The core issue before this Court is whether the Defendants, in particular, the 3rd Defendant, has satisfactorily accounted to this Court the utilization of the Plaintiffs’ Remittances. S/N 2dZVzYS4UkCpbYin047ucw [42] Throughout the Trial and in the Defendants’ submission before this Court, the Defendants sought to answer the Plaintiffs’ claims by matching the Plaintiffs’ Remittances with the terms of the SAs and FLAs. [43] However, in doing so, the Defendants merely relied on the searches made from the SSM’s records of the SPVs to show the shareholdings of the companies and the entries made in the general ledgers of the SPVs as evidence that the Plaintiffs’ Remittances had been properly utilized in accordance with the SAs and the FLAs. [44] More specifically, for each of the SPVs, the Defendants’ contentions can be summarized as follows: EDSB:

(a)

RM140,000.00 for 2nd Plaintiff’s share subscription.

(ii) RM140,000.00 for 3rd Plaintiff’s share subscription.

further, based on EDSB’s general ledgers, a sum of RM 420,000.00 has been classified as a debt due from EDSB to the 2nd and 5th Plaintiffs each, totaling RM 840,000.00. S/N 2dZVzYS4UkCpbYin047ucw

the aforesaid shows that the RM1,120,000.00 remitted by the Plaintiffs to the 3rd Defendant’s personal account had been properly accounted for.

RM 35,000 for the 3rd Plaintiff’s share subscription;

(ii) RM 35,000 for 2nd Plaintiff’s share subscription;

(iii) RM 2,309,995.00 as the 3rd Plaintiff’s part payment for the IFSL to GISB (leaving behind RM455,005.00 as the 3rd Plaintiff’s owing to GISB for its remainder of the IFSL payment since the agreed IFSL was RM 2,765,000.00);

(iv) RM 2,380,990.00 as the 2nd Plaintiff’s part payment for the IFSL to GISB (leaving behind RM384,000.00 as the 2nd Plaintiff’s owing to GISB for its remainder of the IFSL payment since the agreed IFSL was RM 2,765,000.00). b) based on GISB’s general ledger, a sum of RM2,765,000.00 has been classified as a debt due from GISB to the 2nd and 3rd Plaintiffs each. S/N 2dZVzYS4UkCpbYin047ucw c) the aforesaid shows that the portion of the Plaintiffs’ Remittances to GISB have been accounted for. GPSB-SA a)

RM35,000.00 for the 3rd Plaintiff’s share subscription;

(ii) RM35,000.00 for the 2nd Plaintiff’s share subscription;

(iii) RM434,995.00 as the 3rd Plaintiff’s part payment for the IFSL to GPSB (leaving behind RM230,005.00 for its remainder of the IFSL payment since the agreed IFSL was RM 665,000.00);

(iv) RM465,000.00 for the 2nd Plaintiff’s part payment for the IFSL to GPSB (leaving behind RM200,000.00 as its remainder of the IFSL payment since the agreed IFSL was RM665,000.00) b) based on GPSB’s ledger, a sum of RM665,000.00. has been classified as a debt due from GPSB to the 2nd and 3rd Plaintiffs each. S/N 2dZVzYS4UkCpbYin047ucw c) the aforesaid shows that the portion of the Plaintiffs’ Remittances to GISB have been accounted for. GSSB-SA a)

RM35,000.00 for the 4th Plaintiff’s share subscription;

(ii) RM35,000.00 for the 2nd Plaintiff’s share subscription;

(iii) RM385,000.00 each for the 2nd and 4th Plaintiffs’ as the IFSL payment to GPSB;

(iv) RM1,418,000.00 (including RM10 received as cash from the 4th Plaintiff) as interest free friendly loan to the 3rd Defendant;

RM1,442,000.00 (including RM10 received as cash from the 2nd Plaintiff) as interest free friendly loan to the 3rd Defendant. b) based on GSSB’s general ledger, a sum of RM385,000.00. has been classified as a debt due from GPSB to the 2nd and 3rd Plaintiffs each. S/N 2dZVzYS4UkCpbYin047ucw c) the aforesaid shows that the portion of the Plaintiffs’ Remittances to GISB have been accounted for. [45] With respect, to my mind, the Defendants’ aforesaid account of the Plaintiffs’ Remittances is wholly insufficient for the following reasons:

In each of the SAs, it is clearly spelt out that the increase in the share subscriptions and the purpose for the IFSLs was to raise the capital of the companies to purchase specific lands with the view to developing the same;

by merely referring to the SSM searches on the parties’ respective shareholdings in the SPVs and the respective SPVs’ general ledgers without producing the relevant bank statements of the 3rd Defendant’s accounts (where the Plaintiffs’ Remittances were received) and the corresponding bank statements of the respective SPVs, there is no evidence before this Court that the Defendants had in fact transferred the Plaintiffs’ Remittances into the SPVs at all;

the general ledgers of the SPVs relied upon by the Defendants are mere self-serving documents and to this end, it is not without any significant that the Defendants did not even procure the attendance of the accounts clerk who had recorded the entries to testify on these entries. The fact that the general ledgers are placed in Part B of the Bundle of Documents does not mean that the contents are admitted; S/N 2dZVzYS4UkCpbYin047ucw

the Defendants’ position becomes even more untenable when this Court takes into account the undisputed fact that the land purchases that are referred to in the SAs which were supposed to be made by the respective SPVs, were purchased in the name of the Defendants and treated in the books of the SPVs as beneficially belonging to the Defendants. To this end, the Defendants have not adduced any evidence as to the source of their funds for the acquisition of these lands. Bearing in mind that the Defendants had depended on the Plaintiffs to provide the funds even for the Defendants’ proportionate contributions to the SPVs, the failure to clarify how the Defendants could purchase the lands cries out for an explanation;

further, there is no evidence before this Court that the Defendants had even paid their proportionate contributions to the respective SPVs in accordance with the terms of the SAs, both in terms of their share subscriptions and the IFSLs. [46] As regards the Plaintiffs’ Remittance towards the IFSLs (“IFSL Remittance”) to the SPVs, the fact that the general ledgers of the respective SPVs had reflected the stated sums as debts due from the companies to the Plaintiffs carries no weight without any supporting documents evidencing actual payments made into the respective SPVs in respect of the IFSL Remittances. [47] The entries in the aforesaid general ledgers in fact raise more questions than answers given that: S/N 2dZVzYS4UkCpbYin047ucw

the main purpose of the introduction of IFSLs by parties was for the SPVs to increase their capital in order to purchase lands for development;

instead, IFSL Remittances are now recorded as debts due to the Plaintiffs without the same being utilized by the SPVs towards any of the land purchases, begging the question as to what had happened to the remittances. Instead, the land purchased were stated as beneficially belonging to the Defendants;

the debts recorded are based on the sums agreed in the SAs as the Plaintiffs’ IFSLs even though the Plaintiffs had, in some cases, not remitted the entire amounts agreed e.g. in GISB, the debt recorded was RM 2,765,000.00 when the sum advanced was less;

it is also odd that the IFSL Remittances were reflected as debts due to the Plaintiffs for 17 years without any steps taken to pay the same. The FLAs [48] As far as the FLAs are concerned, there is no dispute that the Plaintiffs had remitted a total of RM11,138,320.00 to the 3rd Defendant’s personal account and or the Defendants’ solicitors’ bank account. S/N 2dZVzYS4UkCpbYin047ucw [49] The purpose of the FLAs as stated therein was to enable the Defendants to fulfil their respective obligations and responsibilities pursuant to the SAs. As an example, in FLA-2, a sum of RM1,418,00.00 was advanced to the 1st and 3rd Defendants towards payment of their subscription of the shares and IFSL to GSSB and to enable the 3rd Defendant to invest in GPSB. The repayments of the advance were to be made from dividends to be declared by these companies and from the repayment of their respective IFSLs from the companies. Similar terms applied for FLA-3, FLA-4 and FLA-5. [50] No evidence has been tendered to this Court by the Defendants that they had in fact applied the sums advanced in accordance with the stated purposes in these FLAs at all. [51] Instead, the Defendants merely referred to the fact that the Plaintiffs had sued and recovered the following sums from these FLAs:

FLA-1 : RM3.1 million;

FLA-2: RM1.08 million;

FLA-3: RM1.08 million;

FLA-6: RM1.22 million. [52] Without showing that the sums advanced were utilized as agreed and relying merely on the repayment of these loan sums without interest after more than 6 years and only after the Plaintiffs had to commence legal actions for the same, what the Defendants had in fact gotten is to secure for themselves interest free loans to invest in properties on their S/N 2dZVzYS4UkCpbYin047ucw own account instead of channeling the same into the SPVs as agreed towards the joint venture with the Plaintiffs. [53] In any case, it is not disputed that there is still remaining a total sum of RM4,658,320.00 that is still owing to the Plaintiffs under the following FLAs that have yet to be repaid: a) FLA-2 or “GPSB/GSSB-FLA1”: the balance sum of RM338,000.00 which was the subject matter of Suit 776 where the repayment was supposed to be made after the auction of the lands sold pursuant to Consent Judgement in Suit 102; b) FLA-3 or “GPSB/GSSB-FLA2”: the balance sum of RM362,000.00 which was a subject matter of Suit 774 where the repayment was supposed to be made after the auction of the lands sold pursuant to Consent Judgement in Suit 102; c) FLA-4 or “EDSB/GISB-FLA”: the sum of RM2,640,000.00 which was a subject matter of Suit 777 where the repayment was supposed to be made after the auction of the lands sold pursuant to Consent Judgement in Suit 102; d) FLA-5 or “GISB/GPSB-FLA”: the sum of RM1,318,320.00 which is not a subject matter in any civil suit and therefore, remains outstanding. S/N 2dZVzYS4UkCpbYin047ucw The lands purchased by the Defendants [54] The Plaintiffs’ Remittances of RM30,565,555.20 were made to the 3rd Defendant with specific instructions to be used as capital for the SPVs to purchase lands with the intention of developing the same. These instructions were spelt out clearly in the SAs and or the FLAs. [55] However, at the Trial, neither the 1st nor the 3rd Defendants who testified could satisfactorily explain and provide documentary evidence as to how the Plaintiffs’ Remittances received were utilized to purchase the lands. The remittances were intermingled with the 3rd Defendant’s own funds but no bank statements of the 3rd Defendant’s personal accounts were produced. [56] From the evidence before this Court, the total purchase prices for the lands purchased by the SPVs was only RM14,491,139.10. The details of these purchases shall now be considered. EDSB [57] From 1997 to 2011, EDSB had purchased a total of nine (9) lots of land, which are Lot 20760, Lot 35786, Lot 35787, Lot 35788, Lot 35789, Lot 35792, Lot 35793, Lot 35794 and Lot 35795. However, it must be noted that Lot 20760 was purchased prior to the Plaintiffs’ Remittances. S/N 2dZVzYS4UkCpbYin047ucw [58] As regards the lands that were purchased by EDSB, each of these shall now be considered. Lot 20760 [59] EDSB had entered in a Sale and Purchase Agreement dated 25.4.1997 with the Titular Roman Catholic Bishop of Penang for the purchase of Lot 20760 at a purchase price of RM1,137,351.60. [60] Although this land was purchased prior to the execution of EDSB-SA1, it can be observed that EDSB-SA1 stated that the share capital and IFSL would be utilized towards the acquisition of Lot 20760: “(B) The shareholders have advanced interest-free special loan to the Company at the rate of RM 5-00 for each ordinary share held by them, totaling RM5,000,000.00. The total investment from the shareholders us RM6,000,000.00 represented by 4 lots of vacant land held under PN 152586, Lot 35786, PN 152587, Lot 35787, PN15288, Lot 35788 and PN 152589, Lot 35789 all in Bandar Ipoh (S), Tempat Ipoh, Daerah Kinta, Negeri Perak and 1 lot of vacant land known as Lot 20670 situated at Ipoh, Perak (“the said Properties”)” [emphasis added] [61] The aforesaid was notwithstanding that in truth Lot 20760 had already been purchased prior to the execution of EDSB-SA1. It is not clear whose money was used to purchase this Lot 20760 bearing in mind S/N 2dZVzYS4UkCpbYin047ucw that the Plaintiffs’ Remittances were received prior to the EDSB-SA1. What is clear is that the Defendants gave no account as to the source of funds used to purchase the Lot 20760. Lot 35786, Lot 35787, Lot 35788 and Lot 35789 (“First Four EDSB Lands”) [62] For the purchase of the First Four EDSB Lands, under the EDSB SA- 1, the Defendants were required to advance IFSL of RM5,000,000.00 and subscribe shares for the sum of RM1,000,000.00. There is, however, no evidence adduced before this Court at the Trial that the Defendants had advanced the IFSL and or had paid to EDSB for their share subscriptions at all (save that the shares were registered to their names). [63] EDSB had entered into 4 Sale and Purchase Agreements all dated 31.12.2003 with Lion Ipoh Parade Sdn Bhd where the purchase prices were stated as follows: Land Purchase Price (RM) Lot 35786 1,139,600.00 Lot 35787 973,560.00 Lot 35788 883,575.00 Lot 35789 803,265.00 Total 3,800,000.00 S/N 2dZVzYS4UkCpbYin047ucw [64] According to Table 45 of KPMG’s Report, the total purchase price for the First Four EDSB Lands were paid by various parties in the following ratios: [65] Based on Table 45 above, it can be observed that the source of monies to purchase the First Four EDSB Lands were derived from: a) EDSB; b) OCBC Term Loan 1; c) 3rd Defendant; and d) 2nd and 5th Plaintiffs. S/N 2dZVzYS4UkCpbYin047ucw [66] Curiously, the OCBC Term Loan 1 was treated as a shareholder loan by EDSB to the 2nd Plaintiff, 5th Plaintiffs, 1st Defendant and the 2nd Defendant, although the loan was taken by the company. These shareholders were required to pay the interest and the principal loan in accordance with an agreed ratio stated in the EDSB-SA-1: EDSB SA-1

(F) Pursuant to a shareholder circular resolution dated 16.11.2006, the Shareholders agreed that the Company do lend a sum of RM1,800,000.00 to the 1st,2nd,3rd and the 4th party. [67] Based on the 1st Defendant’s own evidence and OCBC Bank’s letter dated 1.10.2013, the OCBC Term Loan 1 was fully settled on 29.12.2012. The 1st Defendant testified that the said loan was substantially settled by the Defendants. However, no documentary evidence was adduced in support of the same. More pertinently, even if this Court were to accept the 1st Defendant’s testimony that the OCBC Term Loan 1 was ‘mostly settled by the Defendants’, the Defendants have not demonstrated the source of their monies used to settle the same. [68] The aforesaid is pertinent only because the Defendants have not been able to account for a substantial sum of the Plaintiffs’ Remittances. Furthermore, based on the KPMG Report, an excess of RM9,958,670.00 which was remitted by the Plaintiffs was not transferred to the SPVs from the 3rd Defendant’s personal accounts. In S/N 2dZVzYS4UkCpbYin047ucw fact, as stated, PKF also found that an amount of RM9,278,336.42 was paid by the EBSD, GISB and GSSB to the 1st and 3rd Defendants without any supporting documents or company resolutions. [69] The aforesaid also holds true for the payment of RM500,000.00 purportedly made by the 3rd Defendant as recorded in EDSB’s general ledger. No supporting document was produced and the 3rd Defendant had not shown the source for his funds. This Court cannot ignore the fact that the Defendants had depended almost entirely on the Plaintiffs financing their proportionate contributions to the investments in the SPVs. [70] In fact, based on the list of the Plaintiffs’ Remittances at pages 7 – 8 of Bundle D3, the Plaintiffs had remitted almost RM2,999,980.00 to the 3rd Defendant’s bank account by 8.3.2004 and specifically on 12.2.2004, a sum of RM500,000.00 was transferred by the 1st Plaintiff to the 3rd Defendant. This raises the question whether the said RM 500,000.00 was in fact paid by the 3rd Defendant from the sum received from the Plaintiffs. This is quite apart from the fact that the 3rd Defendant was not obliged to pay for the OCBC Term Loan 1 as the obligations for the same rested on the 1st and 2nd Defendants. Lot 35792 [71] EDSB had entered a Sale and Purchase Agreement dated 7.10.2011 with Kwong Hup Cheong (Kampar) Foundry Sdn Bhd for the Lot 35792 S/N 2dZVzYS4UkCpbYin047ucw at a purchase price of RM3,911,139.10. The purchase of this land is not mentioned in any of the SA’s or FLAs. [72] Based on KPMG Report, the sources of the funds for the purchase of the land are as follows: [73] Thus, according to EDSB’s general ledger, on 6.10.2011, EDSB had paid for 10% of the purchase price which was RM391,113.91 via a cheque and the balance 90% of the purchase price was financed by the 6th Defendant amounting to RM3,520,025.19 from monies that the 3rd Defendant had remitted to her. [74] It seems that subsequently, EDSB took out a loan from OCBC Bank

Bhd and paid the 6th Defendant RM1,600,000.00 and the balance RM 1 odd million was assigned as a debt due from EDSB to the 3rd Defendant. S/N 2dZVzYS4UkCpbYin047ucw [75] Quite apart from the fact that no explanation was proffered for the rather convoluted manner in which the monies were channeled to purchase the lot 35792, the 3rd Defendant also did not tender any evidence on the source of his funds. Lot 35793 [76] EDSB had entered into a Sale and Purchase Agreement dated 15.2.2007 with one Chin Kuen Sin for the lot 35793 at the purchase price of RM1,252,090.00. [77] In EDSB’s general ledger, the source of the payment for the purchase of Lot 35793 was recorded as from the 3rd Defendant who purportedly made payments on 6.2.2007 and 17.5.2007 amounting RM1,252,090.00. KPMG Report regarding the source of funds for the acquisition of Lot 35793 is reproduced herein: S/N 2dZVzYS4UkCpbYin047ucw [78] Significantly, during the 1st Defendant’s cross examination, he admitted that the source of the 3rd Defendant’s funds for the purchase of lot 35793 in fact came from the monies remitted by the 2nd Plaintiff under the FLA-4. [79] The aforesaid is a clear example where the entry in the general ledger cannot be relied upon as reflecting the actual state of affairs as regards the source of funds for the payments in the company’s purchase of lands. Lot 35794 [80] EDSB had entered into a Sale and Purchase Agreement dated 20.6.2007 with one Foong Hon Cheong for lot 35794 at the purchase price of RM1,403,666.50. [81] In EDSB’s general ledger, it is recorded that the 3rd Defendant made the 10% payment of the purchase price, which amount remains as owing to the 3rd Defendant which can be observed from the Table S/N 2dZVzYS4UkCpbYin047ucw below from KPMG Report. The balance 90% for RM1,253,299.85 was stated to be paid by EDSB. [82] There is no account as to the source of funds drawn by EDSB towards the payment of RM1,263,299.85. However, based on KPMG Report, prior to the payment of RM1,263,299.85 made by EDSB, there were three (3) deposits made into EDSB’s bank account being RM300,000.00, RM500,000.00 and RM379,990.00. Based on the report, the 3rd Defendant had remitted RM300,000.00 and 1st Defendant had remitted RM379,990.00. As regards the sum of RM380,000.00, it was recorded in EDSB’s books as amount owing to the 1st Defendant. [83] However, KPMG Report was unable to ascertain if the sums remitted by the 1st and 3rd Defendants were part of the RM3.1 million remitted by the Plaintiffs in accordance to FLA-1 and RM 2.64million in accordance to FLA-4. Yet, the Defendants have not adduced any evidence that the payments recorded as paid by them were paid from their own funds. Lot 35795 [84] EDSB had entered into a Sale and Purchase Agreement dated 27.11.2006 with one D.I Motel Sdn Bhd for lot 35795 at the purchase price of RM1,036,800.00. S/N 2dZVzYS4UkCpbYin047ucw [85] Based on the KPMG Report, in EDSB’s general ledger, it was stated that 42.1% of the purchase price was from the 3rd Defendant and 57.9% of the funds came from the OCBC Team Loan 2: [86] In this case, the 3rd Defendant had used the Plaintiffs’ Remittances to pay the sum of RM436,800.00. This was the testimony from the 1st Defendant during his cross examination. This means that the entry in the general ledger that it was the 3rd Defendant that had paid the RM436,800.00 towards the acquisition of Lot 35795 is wrong. Lands Purchased in the names of the 1st and 3rd Defendants [87] The Plaintiffs had remitted a total of RM3.1 million to the 3rd Defendant for the 1st and 3rd Defendants to purchase the following lands on behalf of EDSB: S/N 2dZVzYS4UkCpbYin047ucw a) 120 lots of vacant land known as Lot 136408 until Lot 136527; b) Lot 39023; and c) Lot 9920. [88] Pursuant to recital (H) of FLA-1, the intention of the remittance was stated to purchase the vacant lands under lots 35790, 35796, 2900 and 2901: “(H) The 1st party, 2nd party and 3rd party intended to invest RM4,500,000.00 in EMERALD DEALS SDN BHD (Co.No. 415399- T) …….. to purchase 4 lots of vacant land known as Lots 35790,35796, 2900 and 2901 all in Bandar Ipoh (S), Tempat Ipoh, Daerah Kinta, Negeri Perak”. [89] However, these lands were purchased in the names of the 1st and 3rd Defendants instead. No satisfactory explanation has been proffered. Unaccounted remittance of RM680,000.00 on 30.04.2009 [90] Based on the list of the Plaintiffs’ Remittances, there was a remittance made for EDSB on 30.04.2009 for RM680,990.00 with a description stating “Emerald Deals purchase 4 lots of land beside Parson”. [91] No account has been given by the Defendants on the fate of the said sum. The lands intended for the purchase were never purchased by EDSB. S/N 2dZVzYS4UkCpbYin047ucw GISB [92] In total, GISB purchased 290 lots from Golden Dragon Garden Sdn Bhd (“GDG”) via Sale and Purchase Agreement dated 5.7.2006 for a total purchase price of RM12,637,760.00 (upon receiving a RM1,862,240 discount): a) Lot 130535 to Lot 130674; b) Lot 130704 to Lot 130714; c) Lot 130755 to Lot 130792; d) Lot 130819 to Lot 130836; e) Lot 130881 to Lot 130887; f) Lot 130457 to Lot 130492; and g) Lot 130715 to Lot 130756. [93] Based on the GISB-SA dated 16.11.2006, GISB had raised additional capital and IFSL amounting to RM20,000,000.00 to purchase the 290 lots. Recital (D) of GISB-SA is reproduced herein: “The purpose for the additional capital and interest free special loan is for the Company to purchase 290 lots of vacant land all situated at … with a view for development. The total investment expected from the shareholders of the company is RM20,000,000.00”. [94] The 3rd Plaintiff remitted RM2,344,995.00 on 10.4.2006 and the 2nd Plaintiff remitted a total of RM2,415,990.00 on 1.12.2005 and 8.12.2005 to the 3rd Defendant pursuant to the GISB-SA. S/N 2dZVzYS4UkCpbYin047ucw [95] However, in KPMG Report, the payment for the 290 lots were stated to be derived from a loan from OESB in the form of 28 units of condominium valued at RM12,638,800.00. This debt was subsequently assigned from OESB to the 3rd Defendant. No reason was given for the assignment nor is there any testimony regarding the consideration given by the 3rd Defendant for the assignment of debt. [96] Whatever it is, the remittances by the 3rd and 2nd Plaintiffs aforesaid were not paid into GISB to purchase the 290 lots and no account has been proffered as to the fate of the said remittances. The accounts clerk who had prepared the entries in GISB’s general ledger was not in Court to testify on the same. Lot 129 [97] Based on KPMG Report, GISB’s general ledger shows that the 3rd Defendant had made a payment of RM459,600.00 towards the deposit for the purchase of Lot 129 from GDG: [98] Further in KPMG Report, it is noted that pursuant to a discussion on 24.10.2018, the 1st Defendant had represented to Messrs KPMG that said transaction in the ledger was in respect of a deposit for Lot 129 and that this deposit was not a cash deposit. Instead the 3rd Defendant had used a unit of OESB’s condominium as deposit. The 1st Defendant S/N 2dZVzYS4UkCpbYin047ucw also mentioned that although the acquisition was unsuccessful, the condominium used as a deposit was not returned. [99] In this connection, pursuant to FLA-4, the 2nd Plaintiff had requested the 3rd Defendant to utilize a sum of RM840,000.00 from the Plaintiffs’ Remittances made as the 2nd and 3rd Plaintiffs’ investments of RM420,000.00 each in GISB for the purpose of purchasing and later developing Lot 129. [100] As is disclosed to this Court, the purchase of Lot 129 by GISB did not materialize but the sum of RM 840,000.00 remitted for the purpose has not been accounted for. Lot 171A [101] Again, based on KPMG Report, Messrs KPMG had a discussion with the 1st Defendant wherein he confirmed that the 3rd Defendant had made a cash deposit of RM400,000.00 for the purchase of Lot 171A. [102] In GISB’s general ledger, it was stated thus: S/N 2dZVzYS4UkCpbYin047ucw [103] Based also on KPMG Report, this RM400,000.00 transaction was subsequently reversed during an audit adjustment for the year ended 31.12.2009. During cross examination, the 1st Defendant took the stand that he was unaware of the reversal that took place and said that the accounts clerk would be able to answer. However, the account clerk did not testify. [104] Significantly, the sum of RM1,246,490.00 that was remitted by the Plaintiff for the purpose of the purchase of lot 171A was not accounted for. 51 Lots of Land [105] In GISB-SA, the 51 lots of land intended to be purchased from GDG was mentioned. The 3rd Plaintiff, 2nd Plaintiff, 1st, 2nd and 3rd Defendants were required to cumulatively contribute RM6,000,000.00 for this purpose. In this regard, the 2nd and 3rd Plaintiffs had remitted RM1,606,790.00 to the 3rd Defendant’s bank account. [106] However, in KPMG Report, it is stated that Messrs KPMG was informed by the Defendants that the purchase of the 51 lots of land did not materialize. When the 1st Defendant was cross examined on this point, he stated that there was a sale and purchase agreement entered into but failed to produce the same and once again, the 1st Defendant testified that his accounts clerk would be the right person to explain. S/N 2dZVzYS4UkCpbYin047ucw [107] But the account clerk did not testify. Thus, no explanation was proffered for GISB’s failure to purchase the 51 lots of land despite receiving RM1,606,790.00 from the Plaintiffs, which sum has remained unaccounted for. Lot 1 & Lot 2 (Simpang Pulai Land) [108] These lands were not part of any SAs or FLAs nor were there mentioned in KPMG Report of the same. However, sale and purchase agreements were entered between the following parties: a) Lot 1: Simpang Pulai Business Centre and GISB and Mass Effort Investment Company Limited dated 20.4.2009 for the purchase price of RM1,701,000.00; and b) Lot 2: Simpang Pulai Business Centre and GISB and Kent Plan Limited dated 20.4.2009 for the purchase price of RM1,332,000.00. [109] Significantly, from the list of the Plaintiffs’ Remittances, the Plaintiffs had made the following remittances towards the acquisition of Lot 1 and Lot 2: a) RM762,290.00; b) RM600,590.00; c) RM610,865.00; and d) RM473,540.00 S/N 2dZVzYS4UkCpbYin047ucw [110] However, to date, despite making almost 80% of the payment towards the purchase price, it is unclear what are the status of the purchase for the Lot 1 and Lot 2. GPSB [111] GPSB had successfully purchased 3 plots of land from GDG, namely, Lot 134, Lot 135 and Lot 136. Lot 134 and Lot 135 [112] GPSB and GDG entered into a Sale and Purchase Agreement dated 5.7.2006 for Lots 134 and 135 at the purchase price of RM1.5 million. [113] Under GPSB-SA dated 16.12.2006, the shareholders agreed to subscribe for additional shares and to contribute via IFSL for the purpose of financing the purchases. Pursuant thereto, the Plaintiffs had made the remittances of RM469,995.00 and RM500,000.00 to the 3rd Defendant: “1.3 The parties herein confirm prior to the execution of this Agreement, the 1st Investor has on the 31st day of March 2006 through its agent JERARD NOTHERN STAR HILL LTD (Company No. 995841) remitted a sum of HKD1,000,000.00 then equivalent to RM469,995.00 to the 5th Investor’s bank account … S/N 2dZVzYS4UkCpbYin047ucw

1.4 The parties herein confirm that prior to the execution of this Agreement, the 2nd Investor has on the 12th day of February 2004, through its agent CHAK WOON MAN (HK ID No. E037205(A)) remitted a sum of HKD1,050,000.00 when equivalent to RM500,000.00 to Messrs Ferida, Hassan, Low & Ng’s clients account …” [114] Based on KPMG Report, the source of funds for the purchase price was from a loan obtained from OESB in the form of (4) units of condominium valued at RM1,498,960.00. Thereafter as provided in the “remarks” section, the 3rd Defendant had repaid the said amount on 18.2.2013 and in GPSB’s general ledger, the said amount was recorded as due and owing to the 3rd Defendant: [115] What remains a question is the source of funds used by the 3rd Defendant to pay the RM 1.5 million to OESB. [116] When the 1st Defendant was asked about the RM969,995.00 remitted by the Plaintiffs, he stated that the said sum is captured as additional capital and interest free special loans. However, not only are there no documents adduced in support of this, it is also inconsistent with the entries in the general ledger and the KPMG Report. S/N 2dZVzYS4UkCpbYin047ucw Lot 136 [117] GPSB and GDG had entered into a Sale and Purchase Agreement dated 5.7.2006 for Lot 136 at a purchase price of RM1.95 million. [118] The source of funding for the acquisition of Lot 136 was mentioned in FLA-2, FLA-3 and FLA-5. In FLA-2: “3 (ii) RM338,000.00 to Glamour Portfolio Sdn Bhd …… towards part payment of the purchase of 1 lot of vacant land known as Lot 136 situated at …” [119] Pursuant to FLA-2, the Plaintiffs remitted RM1,837,990.00 wherein RM338,000.00 ought to have been used for the aforesaid purpose. [120] Thereafter, pursuant to FLA-3, the Plaintiffs remitted RM1,861,990.00 with the intention that a sum amounting to RM362,000.00 would be utilized for the purchase of Lot 136. [121] And pursuant to FLA-5, the Plaintiffs remitted a sum of RM1,318,320.00.00 wherein only RM208,800.00 was utilized for GPSB as mentioned in KPMG Report. [122] Despite receiving a total of RM908,000.00 from FLA-2, FLA-3 and FLA- 5 to purchase Lot 136 from the Plaintiffs, inexplicably, the 3rd Defendant had issued his cheque for RM1,950,000.00 for the purchase of Lot 136. Further, in GPSB’s general ledger, the sums of RM810,000.00 and S/N 2dZVzYS4UkCpbYin047ucw RM1,140,000.00 were stated as owed by GPSB to the 1st Defendant and the 2nd Defendant respectively. [123] No evidence was tendered to show that the source of fund for the RM1,950,000.00 was from the 1st, 2nd or the 3rd Defendants. GSSB The Menglembu Land [124] On or about year 2006, the 1st Plaintiff was shown a piece of land located at Lot 69878, Menglembu, Perak ("Menglembu Land") by the 1st, 2nd and 3rd Defendants and was told that they intended to buy the land and to develop it. [125] The 1st, 2nd and 3rd Defendants represented to the 1st Plaintiff to provide a sum of money to purchase the Menglembu Land through a special purpose vehicle company. The 1st Plaintiff would be given an equity S/N 2dZVzYS4UkCpbYin047ucw stake in the said company. GSSB was identified as the company to raise funds for that specific arrangement. [126] Based on that representation, the 1st Plaintiff transferred a sum of RM1,838,000.00 on 10.5.2006 and a further sum of RM1,862,000.00 on 2.6.2006 to the 3rd Defendant to carry out the acquisition of the Menglembu Land. [127] The total sum of RM3,700,000.00 was remitted by the 1st Plaintiff to the 3rd Defendant to be used for subscription of shares and as IFSL to GSSB for the purpose of acquiring the Menglembu Land. More specifically: a) a sum of RM880,000.00 was to be the 1st Plaintiff’s investment in GSSB; and b) the balance sum of RM2,160,000.00 was to be used by the 3rd Defendant to enable the 1st and 2nd Defendants to subscribe for shares and to provide their IFSL to GSSB. [128] The money was remitted to OCBC bank account No: 7201108647 owned by the 3rd Defendant. Following the remittance, the 1st Plaintiff then entered into three agreements, namely GSSB-SA, FLA-1 and FLA-2. [129] However, notwithstanding what was represented to the 1st Plaintiff in these agreements, i.e that the Menglembu Land had been purchased S/N 2dZVzYS4UkCpbYin047ucw by GSSB, the 1st Plaintiff subsequently found out that GSSB never, at any material times, purchased the Menglembu Land at all. [130] Upon probing the Defendants, the 1st Plaintiff was only given a Sale and Purchase Agreement dated 2.5.2006 between GSSB and a company called Sinaran Restu Sdn Bhd which was stated as the beneficial owner of Menglembu Land. Further, although the Sale and Purchase Agreement was executed on 2.5.2006, the deposit payment of RM450,000.00 or 25% of the purchase price of RM1,800,000.00 was paid on 20.4.2006. [131] More disturbingly, there was an agreement between GSSB and one named Lim Yit Ming ("Lim") stipulating that a fee of RM666,000.00 was paid as “consultancy fee” whereby Lim was tasked to acquire Menglembu Land on behalf GSSB. The payment for the consultancy fee was paid notwithstanding that under the agreement, it ought to be made only upon the successful completion of the Sale and Purchase Agreement. [132] The payment of such “consultancy fee”, was never stated in the GSSB-SA, FLA-1 and FLA-2. [133] At the Trial, the 1st Defendant admitted that Sinaran Restu Sdn Bhd was never the owner of Menglembu Land and that Ipoh City Council had given a Development Order giving the permission to plan and develop the Menglembu Land to a company called Mega Planners through a letter of approval dated 5.1.2000. S/N 2dZVzYS4UkCpbYin047ucw [134] It seems that although Sinaran Restu Sdn Bhd was given permission by the Land and Mines Office Ipoh ("PTG Ipoh") to develop the Menglembu Land for residential and mixed development scheme by the letter dated 30.8.1999, nevertheless, in the letter, PTG Ipoh clearly stated that Sinaran Restu Sdn Bhd was not allowed to carry out any work and make any transactions on the land until the title has been issued. [135] Quite clearly, the money entrusted by the 1st Plaintiff to the 3rd Defendant for the purpose of purchasing and developing the Menglembu Land had not been used as represented and no account has been proffered by the Defendants on the remittances made in respect of the same. Defendants’ failure to comply with the Order To Account [136] Based on the entirety of the facts observed above, the Defendants have woefully failed to satisfactorily shown how the Plaintiffs’ Remittances were actually applied from the 3rd Defendant’s personal accounts. [137] It must be noted that the Defendants were ordered by this Court to give a full and complete account of the Plaintiffs’ Remittances that were remitted to the 3rd Defendant for the purpose of investing in the SPVs requiring the production of supporting documents evidencing the flow of the monies including but not limited to relevant bank statements and payments vouchers through the Order to Account. The Defendants S/N 2dZVzYS4UkCpbYin047ucw have steadfastly failed to comply with the Order to Account even up to the time of the Trial. The Order to Account was an opportunity to the Defendants to shown that they had in at least some of the times, utilized their own monies towards the subscriptions of the shares in the SPVs and or in providing the IFSLs to the SPVs. They have utterly failed to avail themselves of the opportunity afforded. [138] No explanation, let alone a satisfactory explanation has been proffered by the Defendants for their failure to comply with the Order to Account. This adds credence to the Plaintiffs’ claims that the Defendants had not applied the Plaintiffs’ Remittances as instructed and as agreed under the SAs and the FLAs. [139] Thus, the Plaintiffs’ claim that the land purchases which amounted to only approximately RM14,491,139.10, were in fact made by the SPVs using the 1st Plaintiff’s Remittances (in excess of RM30 million), notwithstanding what the general ledgers may have stated, has not been contradicted at all by the Defendants. [140] Significantly, based on the KPMG Report, there is an excess sum of RM9,958,670.00 remitted by the 1st Plaintiff which was not transferred to the SPVs from the 3rd Defendant’s personal accounts. [141] Further, PKF found that an amount of RM 9,278, 336.42 was paid by the EBSD, GISB and GSSB to the 3rd Defendant and the 1st Defendant without any supporting documents or company resolutions. S/N 2dZVzYS4UkCpbYin047ucw [142] The aforesaid coupled with the fact that the Defendants have failed completely to show that they have their own sources of funds to subscribe to the shares of the SPVs and to provide their portions of the IFSLs to the SPVs for their respective land purchases lend credence to the contentions by the Plaintiffs that the entire funding for the SPVs and the land purchases had come from the Plaintiffs’ Remittances. [143] The Defendants’ reliance on the entries in the general ledgers of the SPVs have very little evidential value, if at all. In Popular Industries Limited v Eastern Garment Manufacturing Sdn Bhd [1989] 3 MLJ 360, Justice Edgar Joseph Jr adopted with approval the following passage in the judgment of Wadegaonkar J in Beni v Bisan Dayal Anor AIR

Nag 445 at p 446 precisely on this point: “… Mere entries in books of account are not by themselves sufficient to charge any person with liability (vide s 34 of the Evidence Act). The reason is that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of third parties. There must be independent evidence of the transaction to which the entries relate and as no such evidence has been adduced in this case the court below was wrong in holding that defendant no 1 had paid the money to plaintiff for payment of the kist for January 1921 …” [emphasis added] S/N 2dZVzYS4UkCpbYin047ucw Trust Relationship [144] It cannot be disputed that Plaintiffs remitted monies into the 3rd Defendant’s and or his nominee’s bank accounts for specific purposes as provided in the SAs and FLAs. [145] In Takako Sakao (f) v Ng Pek Yuen (f) & Anor [2009] 6 MLJ 751 (‘Takako’), the appellant and first respondent were business partners who decided to acquire a shop lot in order to operate their restaurant business. The Appellant had transferred RM194,610.00 as her contribution towards the purchase price. Instead, the first respondent had purchased the property for a sum of RM950,000.00 and registered it in her sole name. Thereafter, the first respondent sold the property to the second respondent company for a sum of RM1,930,000.00. The Federal Court held as follows: “[15] The fact pattern of the appellant’s case falls squarely within the parameters of a constructive trust. The cumulative circumstances such as the pre-existing fiduciary relationship and the arrangement to jointly own property in equal shares show an intention to create a trust from the outset.” [emphasis added] [146] In Takako, the court discussed that a fiduciary relationship exists between business partners: [11] With that we turn now to consider the second issue. The question here is the legal consequence of the mutual understanding S/N 2dZVzYS4UkCpbYin047ucw between the appellant and the first respondent, including the payments made by the former to the latter. It is, as we have earlier said, clear from the totality of the circumstances that the appellant and first respondent were essentially partners in a business venture. Here we find it appropriate to quote from the judgment of Dixon J in James Birtchnell v The Equity Trustees, Executors and Agency Co Ltd (1928–30) 42 CLR 384: The relationship between partners is, of course, fiduciary. Indeed, it has been said that a stronger case of fiduciary relationship cannot be conceived than that which exists between partners. ‘Their mutual confidence is the lifeblood of the concern. It is because they trust one another that they are partners in the first instance; it is because they continue to trust one another that the business goes on’ (per Bacon VC in Helmore v Smith (1890) 15 App Cas 223 at p 225;

35 Ch D436 at p 444). The relation is based, in some degree, upon a mutual confidence that the partners will engage in some particular kind of activity or transaction for the joint advantage only. [12] As partners the appellant and the first respondent owed each other a duty to act with utmost good faith towards each other. See Blisset v Daniel (1853) 68 ER 1022. The mutual understanding that both partners would purchase in their joint names, with financial contributions from each of them the building in which the business of their restaurant was being conducted and hold it in equal shares formed an integral part of the partnership” S/N 2dZVzYS4UkCpbYin047ucw [147] Applying the principle in Takako, in the present case, this Court finds that the relationship between the 1st Plaintiff and the 3rd Defendant was built on mutual trust and confidence and there exists a fiduciary obligation imposed on the Defendants, in particular, the 3rd Defendant as trustee and business partner to the 1st Plaintiff, to use the Plaintiffs’ Remittances in accordance with the intentions and purposes as agreed and subsequently reflected in the SAs, IFSLs and the FLAs. [148] In blatant breach of this trust and their fiduciary duties, the Defendants had wrongfully used the Plaintiff’s monies in a manner contrary to the terms of the SAs and FLAs and without being able to and refusing to give any proper account of the Plaintiffs’ Remittances despite the Order to Account made by the Court. [149] Even if there was no express trust, it is my judgment that the circumstances of this case are such that a constructive trust will be imposed by the Court that the Defendants are to hold all properties and shares in the SPVs in trust for the Plaintiffs since the Defendants have not been able to demonstrate that they have in fact contributed any of their own money for the same. [150] In case of Paragon Finance Plc v DB Thakerar & Co [1999] 1 All ER 400, Millet LJ defined constructive trust as follows: “A constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of property usually but not necessarily the legal estate to S/N 2dZVzYS4UkCpbYin047ucw assert his own beneficial interest in the property and deny the beneficial interest of another. In the first of case and this is the class with which we are presently concerned, however, the constructive trustee really is a trustee. He does not receive the trust property in his own right but by a transaction by which both parties intend to create a trust from the outset and which is not impugned by the plaintiff. His possession of the property is coloured from the first by the trust and confidence by means of which he obtained it, and his subsequent appropriation of the property to his own use is a breach of the trust. Well known examples of such a constructive trust are …” [emphasis added] [151] Constructive trust doesn’t owe its existence to the parties’ intention, but by operation of law, therefore making the intention of parties irrelevant. In Perbadanan Kemajuan Pertanian Selangor v JW Properties Sdn Bhd [2017] MLJU 1107; [2017] 8 CLJ 392, the Court held: “[57] It is to be noted that a constructive trust is a creature of equity. By its very nature, whether or not a constructive trust arises in the absence of the consent at the State Authority to transfer the land is very much dependent on the facts cf the case. As regards the present case a relevant factor to consider is whether there was any unconscionable conduct on the part of the appellant which would attract the intervention of equity [58] From decided case authorities it has been established as a principle of law that constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of the property (usually but not necessarily the legal owner) to assert his own beneficial interest S/N 2dZVzYS4UkCpbYin047ucw in the property and deny the beneficial interest of another. (See the cases of (1) Takako Sakao v Ng Pek Yuen & Anor [2009] 6 MLJ 751; [2010] 1 CLJ 331 (FC) and (2) Veliasamy Pennusamy & Ors v Gurbaufiart Singh Bagawart Singh & Ors. [2010] 5 MLJ 437; [2012] 2 CLJ 712 (CA)). [59] It has also been held that a constructive trust is a trust which is imposed by equity in order to satisfy the demands of justice and good conscience without reference to any express or presumed intention of the parties. [See the case of Hassan Kadir & Ors. v. Mohamed Moidu Mohamed & Anor. (2011) 5 CLJ 136 (FC)]. A constructive trust is a remedial device that is employed to prevent unjust enrichment. It has the effect of taking the title to the property from one person whose title unjustly enriches him, and transferring it to another who has been unjustly deprived of it. [See the case of Tay Choo Foo @ Tay Chiew Foo v. Tengku Mohd Saad @ Tengku Ahmad bin Tengku Mansur & Ors. (all acting as administrators of the estate of Tengku Mansur bin Tunku Yaacob, deceased) & Another Appeal (2009) 1 MLJ 289 CA]. [emphasis added] [152] In the case of Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67 (‘Ng Hoo Kui’), the first appellant was a shareholder and director of the second appellant, AVD while the 1st respondent was the shareholder and director of AVD and AV. AVD was incorporated to develop a mixed housing project wherein the appellant agreed to invest with the respondent and the appellant had invested RM10.49 million personally for paid-up capital in AVD. These monies were transferred to AVD’s (RM 4.29m) and AV’s bank account (RM6 S/N 2dZVzYS4UkCpbYin047ucw million). The sum in dispute was the RM6 million whereby the respondents claimed was paid as premium to participate in the development project and not for share capital of AVD. [153] The appellant claimed amongst others for the respondent to transfer the ownership of the shares in AVD to the appellant. The High Court decided that the respondents were constructive trustees for the shares and ordered for it to be transferred back to the appellant (which was reversed in the Court of Appeal but subsequently upheld in Federal Court). The Federal Court held at para [113] as follows: “[Applying the principle as aforesaid, from the evidence of TEK’s personal account and his failure to explain his source of income, we are of the view that TEK was financially incapable of acquiring the shares in AVD. TEK’s acquisition of the shares was made possible based on the monies obtained from payments made by Ng. These monies (claimed by TEK to have been paid as premium), for the said acquisition of the AVD shares, are monies paid by Ng. The learned trial judge found that this act on the part of TEK (acquiring AVD’s shares using monies paid by Ng on one hand and claiming the monies were for payment of premium on the other) amounts to a dishonest and an unconscionable conduct, as TEK was not entitled to the shares legally as there is no evidence to show that he paid for it (refer to para 61 of the learned trial judge’s judgment). Clearly, the Court of Appeal erred in law and fact in failing to hold that the defendants had not contributed any monies into AVD towards the capital of AVD. It is clear that TEK, the second and the third defendants are holding the 1.75 million shares registered in their names as constructive trustees as they had obtained the said shares S/N 2dZVzYS4UkCpbYin047ucw without making any contribution [2020] 12 MLJ 67 at 108to the capital of AV and had obtained the same as a result of the dishonest, unconscionable and inequitable conduct on the part of TEK in that TEK had claimed that the monies paid by Ng into AV was part of premium due to him personally or to AV and therefore he was entitled to utilise the same. This constitutes a dishonest, inequitable/unconscionable conduct to deprive Ng of his beneficial interest in shares in AVD. The Court of Appeal erred in not appreciating that constructive trust is imposed by law and does not arise as a result of any intention to create it unlike express trusts”. [154] Applying the principles in Ng Hoo Kui, the Plaintiffs had remitted approximately RM30,565,555.20 to the 3rd Defendant for the purpose of share capital and providing IFSLs to the SPVs to be used towards the acquisition of lands for development. However, the Defendants had wrongfully utilized the funds and had wrongly recorded in the general ledgers of the SPVs to reflect that the funds to purchase the lands acquired were from the Defendants. [155] Given that the Defendants had clearly relied on the Plaintiffs to provide the funding even for their subscription of shares and for the IFSLs to the SPVs and due to the lack of explanation and documentary evidence as to the source of funds of the Defendant to purchase the lands, in particular, the refusal by the Defendants to provide any account despite the Order to Account, it can be reasonably inferred that the Defendants had in actuality utilized the Plaintiffs’ Remittances for the entire joint venture involving the SPVs with the 1st Plaintiff. As such, it is the judgment of this Court that the Defendants are holding S/N 2dZVzYS4UkCpbYin047ucw their respective shares in the SPVs and further that the lands that were purchased by the SPVs are all held by the Defendants as trustees for the Plaintiffs. Conclusion [156] In the premises, this Court grants to the Plaintiffs the following orders:

a declaration that the 1st Defendant, the 2nd Defendant and the 3rd Defendant are the trustees for monies that were remitted by the 1st Plaintiff and his nominees namely, the 2nd Plaintiff, the 3rd Plaintiff and the 4th Plaintiff to the 3rd Defendant’s following personal accounts and his solicitors, Messrs Ferida, Hassan, Low & Ng’s clients’ account:

OCBC Bank (Account No.: 7201108647);

(ii) Public Bank (Account No.: 3122430203); and

(iii) Maybank Berhad (Client Account) (Account No.: 5123166048780)

a declaration that the 1st Plaintiff is the ultimate beneficiary to the all the shares held by the Defendants in the 8th Defendant, 9th Defendant, 10th Defendant and 11th Defendant;

an order that the 1st Defendant, the 2nd Defendant, and the 3rd Defendant breached their duties as trustees of the 1st Plaintiff by S/N 2dZVzYS4UkCpbYin047ucw using the Plaintiffs’ Remittances against the terms of the trust and or otherwise for their own interests;

a declaration that the 8th Defendant, 9th Defendant and 10th Defendant hold the following lands as trustees for the Plaintiffs;

for the 8th Defendant:

PN 152586 Lot 35786

PN 152587 Lot 35787

PN 152588 Lot 35788

PN 152589 Lot 35789

Geran 59538 Lot 35792

Geran 59539 Lot 35793

Geran 59541 Lot 35794

PN 153141 Lot 35795

(ii) for the 9th Defendant: (As set out in Annexure 1)

(iii) for the 10th Defendant: No. No. PT No. H.S.(D) No. Lot Mukim Daerah 1. 19600 166903 Lot 134 Sungai Raya Daerah Kinta S/N 2dZVzYS4UkCpbYin047ucw

19601 166904 Lot 135 Sungai Raya Daerah Kinta 3. 19602 166905 Lot 136 Sungai Raya Daerah Kinta (collectively referred to as “the Lands”)

an order that the 8th Defendant, 9th Defendant and 10th Defendant do transfer the Lands to the 1st Plaintiff within 14 days from the date this order is given;

in the event the 8th Defendant, 9th Defendant, and 10th Defendant fail(s) to transfer the Lands as stipulated above, the Registrar of the High Court is authorized to sign the Form 14A of the National Land Code to effect the transfers to the 1st Plaintiff on behalf of the 8th Defendant, 9th Defendant and 10th Defendant;

the Defendants to pay the Plaintiffs costs fixed at RM150,000.00 subject to allocator. Dated the 12th day of January 2024 ONG CHEE KWAN Judge of the High Court of Malaya High Court of Kuala Lumpur, NCC2 S/N 2dZVzYS4UkCpbYin047ucw Counsel:

Dato’ C. Vignesh Kumar together with P.G. Cyril, D. Yasinthra and

Messrs. Vignesh Kumar (Kuala Lumpur) Dato’ K. Kirubakaran together with Cheong Jun Yeng, Lim Wei Wen and Sharbin Abisheg Raj A/L Rajendran (PDK) for Defendant

Takako Sakao (f) v Ng Pek Yuen (f) & Anor [2009] 6 MLJ 751 2. Paragon Finance Plc v DB Thakerar & Co [1999] 1 All ER 400 3. Perbadanan Kemajuan Pertanian Selangor v JW Properties Sdn Bhd [2017] MLJU 1107; [2017] 8 CLJ 392 4. Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67 S/N 2dZVzYS4UkCpbYin047ucw ANNEXURE 1 S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 1 130457 134706 Sungai Raya Kinta 2 130458 134707 Sungai Raya Kinta 3 130459 134708 Sungai Raya Kinta 4 130460 134709 Sungai Raya Kinta 5 130461 134710 Sungai Raya Kinta 6 130462 134711 Sungai Raya Kinta 7 130463 134712 Sungai Raya Kinta 8 130464 134713 Sungai Raya Kinta 9 130465 134714 Sungai Raya Kinta 10 130466 134715 Sungai Raya Kinta 11 130467 134716 Sungai Raya Kinta 12 130468 134717 Sungai Raya Kinta 13 130469 134718 Sungai Raya Kinta 14 130470 134719 Sungai Raya Kinta 15 130471 134720 Sungai Raya Kinta 16 130472 134721 Sungai Raya Kinta 17 130473 134722 Sungai Raya Kinta 18 130474 134723 Sungai Raya Kinta 19 130475 134724 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 20 130476 134725 Sungai Raya Kinta 21 130477 134726 Sungai Raya Kinta 22 130478 134727 Sungai Raya Kinta 23 130479 134728 Sungai Raya Kinta 24 130480 134729 Sungai Raya Kinta 25 130481 134730 Sungai Raya Kinta 26 130482 134731 Sungai Raya Kinta 27 130483 134732 Sungai Raya Kinta 28 130484 134733 Sungai Raya Kinta 29 130485 134734 Sungai Raya Kinta 30 130486 134735 Sungai Raya Kinta 31 130487 134736 Sungai Raya Kinta 32 130488 134737 Sungai Raya Kinta 33 130489 134738 Sungai Raya Kinta 34 130490 134739 Sungai Raya Kinta 35 130491 134740 Sungai Raya Kinta 36 130492 134741 Sungai Raya Kinta 37 130535 134784 Sungai Raya Kinta 38 130536 134785 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 39 130537 134786 Sungai Raya Kinta 40 130538 134787 Sungai Raya Kinta 41 130539 134788 Sungai Raya Kinta 42 130540 134789 Sungai Raya Kinta 43 130541 134790 Sungai Raya Kinta 44 130542 134791 Sungai Raya Kinta 45 130543 134792 Sungai Raya Kinta 46 130544 134793 Sungai Raya Kinta 47 130545 134794 Sungai Raya Kinta 48 130546 134795 Sungai Raya Kinta 49 130547 134796 Sungai Raya Kinta 50 130548 134797 Sungai Raya Kinta 51 130549 134798 Sungai Raya Kinta 52 130550 134799 Sungai Raya Kinta 53 130551 134800 Sungai Raya Kinta 54 130552 134801 Sungai Raya Kinta 55 130553 134802 Sungai Raya Kinta 56 130554 134803 Sungai Raya Kinta 57 130555 134804 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 58 130556 134805 Sungai Raya Kinta 59 130557 134806 Sungai Raya Kinta 60 130558 134807 Sungai Raya Kinta 61 130559 134808 Sungai Raya Kinta 62 130560 134809 Sungai Raya Kinta 63 130561 134810 Sungai Raya Kinta 64 130562 134811 Sungai Raya Kinta 65 130563 134812 Sungai Raya Kinta 66 130564 134813 Sungai Raya Kinta 67 130565 134814 Sungai Raya Kinta 68 130566 134815 Sungai Raya Kinta 69 130567 134816 Sungai Raya Kinta 70 130568 134817 Sungai Raya Kinta 71 130569 134818 Sungai Raya Kinta 72 130570 134819 Sungai Raya Kinta 73 130571 134820 Sungai Raya Kinta 74 130572 134821 Sungai Raya Kinta 75 130573 134822 Sungai Raya Kinta 76 130574 134823 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 77 130575 134824 Sungai Raya Kinta 78 130576 134825 Sungai Raya Kinta 79 130577 134826 Sungai Raya Kinta 80 130578 134827 Sungai Raya Kinta 81 130579 134828 Sungai Raya Kinta 82 130580 134829 Sungai Raya Kinta 83 130581 134830 Sungai Raya Kinta 84 130582 134831 Sungai Raya Kinta 85 130583 134832 Sungai Raya Kinta 86 130584 134833 Sungai Raya Kinta 87 130585 134834 Sungai Raya Kinta 88 130586 134835 Sungai Raya Kinta 89 130587 134836 Sungai Raya Kinta 90 130588 134837 Sungai Raya Kinta 91 130589 134838 Sungai Raya Kinta 92 130590 134839 Sungai Raya Kinta 93 130591 134840 Sungai Raya Kinta 94 130592 134841 Sungai Raya Kinta 95 130593 134842 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 96 130594 134843 Sungai Raya Kinta 97 130595 134844 Sungai Raya Kinta 98 130596 134845 Sungai Raya Kinta 99 130597 134846 Sungai Raya Kinta 100 130598 134847 Sungai Raya Kinta 101 130599 134848 Sungai Raya Kinta 102 130600 134849 Sungai Raya Kinta 103 130601 134850 Sungai Raya Kinta 104 130602 134851 Sungai Raya Kinta 105 130603 134852 Sungai Raya Kinta 106 130604 134853 Sungai Raya Kinta 107 130605 134854 Sungai Raya Kinta 108 130606 134855 Sungai Raya Kinta 109 130607 134856 Sungai Raya Kinta 110 130608 134857 Sungai Raya Kinta 111 130609 134858 Sungai Raya Kinta 112 130610 134859 Sungai Raya Kinta 113 130611 134860 Sungai Raya Kinta 114 130612 134861 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 115 130613 134862 Sungai Raya Kinta 116 130614 134863 Sungai Raya Kinta 117 130615 134864 Sungai Raya Kinta 118 130616 134865 Sungai Raya Kinta 119 130617 134866 Sungai Raya Kinta 120 130618 134867 Sungai Raya Kinta 121 130619 134868 Sungai Raya Kinta 122 130620 134869 Sungai Raya Kinta 123 130621 134870 Sungai Raya Kinta 124 130622 134871 Sungai Raya Kinta 125 130623 134872 Sungai Raya Kinta 126 130624 134873 Sungai Raya Kinta 127 130625 134874 Sungai Raya Kinta 128 130626 134875 Sungai Raya Kinta 129 130627 134876 Sungai Raya Kinta 130 130628 134877 Sungai Raya Kinta 131 130629 134878 Sungai Raya Kinta 132 130630 134879 Sungai Raya Kinta 133 130631 134880 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 134 130632 134881 Sungai Raya Kinta 135 130633 134882 Sungai Raya Kinta 136 130634 134883 Sungai Raya Kinta 137 130635 134884 Sungai Raya Kinta 138 130636 134885 Sungai Raya Kinta 139 130637 134886 Sungai Raya Kinta 140 130638 134887 Sungai Raya Kinta 141 130639 134888 Sungai Raya Kinta 142 130640 134889 Sungai Raya Kinta 143 130641 134890 Sungai Raya Kinta 144 130642 134891 Sungai Raya Kinta 145 130643 134892 Sungai Raya Kinta 146 130644 134893 Sungai Raya Kinta 147 130645 134894 Sungai Raya Kinta 148 130646 134895 Sungai Raya Kinta 149 130647 134896 Sungai Raya Kinta 150 130648 134897 Sungai Raya Kinta 151 130649 134898 Sungai Raya Kinta 152 130650 134899 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 153 130651 134900 Sungai Raya Kinta 154 130652 134901 Sungai Raya Kinta 155 130653 134902 Sungai Raya Kinta 156 130654 134903 Sungai Raya Kinta 157 130655 134904 Sungai Raya Kinta 158 130656 134905 Sungai Raya Kinta 159 130657 134906 Sungai Raya Kinta 160 130658 134907 Sungai Raya Kinta 161 130659 134908 Sungai Raya Kinta 162 130660 134909 Sungai Raya Kinta 163 130661 134910 Sungai Raya Kinta 164 130662 134911 Sungai Raya Kinta 165 130663 134912 Sungai Raya Kinta 166 130664 134913 Sungai Raya Kinta 167 130665 134914 Sungai Raya Kinta 168 130666 134915 Sungai Raya Kinta 169 130667 134916 Sungai Raya Kinta 170 130668 134917 Sungai Raya Kinta 171 130669 134918 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 172 130670 134919 Sungai Raya Kinta 173 130671 134920 Sungai Raya Kinta 174 130672 134921 Sungai Raya Kinta 175 130673 134922 Sungai Raya Kinta 176 130674 134923 Sungai Raya Kinta 177 130704 134953 Sungai Raya Kinta 178 130705 134954 Sungai Raya Kinta 179 130706 134955 Sungai Raya Kinta 180 130707 134956 Sungai Raya Kinta 181 130708 134957 Sungai Raya Kinta 182 130709 134958 Sungai Raya Kinta 183 130710 134959 Sungai Raya Kinta 184 130711 134960 Sungai Raya Kinta 185 130712 134961 Sungai Raya Kinta 186 130713 134962 Sungai Raya Kinta 187 130714 134963 Sungai Raya Kinta 188 130715 134964 Sungai Raya Kinta 189 130716 134965 Sungai Raya Kinta 190 130717 134966 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 191 130718 134967 Sungai Raya Kinta 192 130719 134968 Sungai Raya Kinta 193 130720 134969 Sungai Raya Kinta 194 130721 134970 Sungai Raya Kinta 195 130722 134971 Sungai Raya Kinta 196 130723 134972 Sungai Raya Kinta 197 130724 134973 Sungai Raya Kinta 198 130725 134974 Sungai Raya Kinta 199 130726 134975 Sungai Raya Kinta 200 130727 134976 Sungai Raya Kinta 201 130728 134977 Sungai Raya Kinta 202 130729 134978 Sungai Raya Kinta 203 130730 134979 Sungai Raya Kinta 204 130731 134980 Sungai Raya Kinta 205 130732 134981 Sungai Raya Kinta 206 130733 134982 Sungai Raya Kinta 207 130734 134983 Sungai Raya Kinta 208 130735 134984 Sungai Raya Kinta 209 130736 134985 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 210 130737 134986 Sungai Raya Kinta 211 130738 134987 Sungai Raya Kinta 212 130739 134988 Sungai Raya Kinta 213 130740 134989 Sungai Raya Kinta 214 130741 134990 Sungai Raya Kinta 215 130742 134991 Sungai Raya Kinta 216 130743 134992 Sungai Raya Kinta 217 130744 134993 Sungai Raya Kinta 218 130745 134994 Sungai Raya Kinta 219 130746 134995 Sungai Raya Kinta 220 130747 134996 Sungai Raya Kinta 221 130748 134997 Sungai Raya Kinta 222 130749 134998 Sungai Raya Kinta 223 130750 134999 Sungai Raya Kinta 224 130751 135000 Sungai Raya Kinta 225 130752 135001 Sungai Raya Kinta 226 130753 135002 Sungai Raya Kinta 227 130754 135003 Sungai Raya Kinta 228 130755 135005 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 229 130756 135004 Sungai Raya Kinta 230 130757 135006 Sungai Raya Kinta 231 130758 135007 Sungai Raya Kinta 232 130759 135008 Sungai Raya Kinta 233 130760 135009 Sungai Raya Kinta 234 130761 135010 Sungai Raya Kinta 235 130762 135011 Sungai Raya Kinta 236 130763 135012 Sungai Raya Kinta 237 130764 135013 Sungai Raya Kinta 238 130765 135014 Sungai Raya Kinta 239 130766 135015 Sungai Raya Kinta 240 130767 135016 Sungai Raya Kinta 241 130768 135017 Sungai Raya Kinta 242 130769 135018 Sungai Raya Kinta 243 130770 135019 Sungai Raya Kinta 244 130771 135020 Sungai Raya Kinta 245 130772 135021 Sungai Raya Kinta 246 130773 135022 Sungai Raya Kinta 247 130774 135023 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 248 130775 135024 Sungai Raya Kinta 249 130776 135025 Sungai Raya Kinta 250 130777 135026 Sungai Raya Kinta 251 130778 035027 Sungai Raya Kinta 252 130779 135028 Sungai Raya Kinta 253 130780 135029 Sungai Raya Kinta 254 130781 135030 Sungai Raya Kinta 255 130782 135031 Sungai Raya Kinta 256 130783 135032 Sungai Raya Kinta 257 130784 135033 Sungai Raya Kinta 258 130785 135034 Sungai Raya Kinta 259 130786 135035 Sungai Raya Kinta 260 130787 135036 Sungai Raya Kinta 261 130788 135037 Sungai Raya Kinta 262 130789 135038 Sungai Raya Kinta 263 130790 135039 Sungai Raya Kinta 264 130791 135040 Sungai Raya Kinta 265 130792 135041 Sungai Raya Kinta 266 130819 135068 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 267 130820 135069 Sungai Raya Kinta 268 130821 135070 Sungai Raya Kinta 269 130822 135071 Sungai Raya Kinta 270 130823 135072 Sungai Raya Kinta 271 130824 135073 Sungai Raya Kinta 272 130825 135074 Sungai Raya Kinta 273 130826 135075 Sungai Raya Kinta 274 130827 135076 Sungai Raya Kinta 275 130828 135077 Sungai Raya Kinta 276 130829 135078 Sungai Raya Kinta 277 130830 135079 Sungai Raya Kinta 278 130831 135080 Sungai Raya Kinta 279 130832 135081 Sungai Raya Kinta 280 130833 135082 Sungai Raya Kinta 281 130834 135083 Sungai Raya Kinta 282 130835 135084 Sungai Raya Kinta 283 130836 135085 Sungai Raya Kinta 284 130881 135130 Sungai Raya Kinta 285 130882 135131 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw No. Lot Mukim Daerah 286 130883 135132 Sungai Raya Kinta 287 130884 135133 Sungai Raya Kinta 288 130885 135134 Sungai Raya Kinta 289 130886 135135 Sungai Raya Kinta 290 130887 135136 Sungai Raya Kinta S/N 2dZVzYS4UkCpbYin047ucw