1. ) Lee Chia Mun v 1. ) Lui Jun (WA-A72NCvC-8638-11/2023)

This Court is presented with a case whereby Plaintiffs, with open arms, embraced into their unchartered journey by buying shares and putting their investment in a business of selling yogurt drinks and dessert allegedly with all Defendants.

Nevertheless, this initial joy, a fleeting mirage in the scorching heat of business dream, has since evaporated. This claims now stands before this court, not with a spirit of business revival, but with a dagger of action against all Defendants claiming that all Defendants had fraudulent Plaintiffs in this conspiracy of share dealing and transaction by all Defendants. 28/03/2025 11:19:38 WA-A72NCvC-8638-11/2023 Kand. 61

The First Plaintiff, Miss Lee Chia Mun (referred as PW-1) had met and discussed with the First Defendant, Mr. Lui Jun (referred as D1) on several occasions before the Plaintiffs decided to buy 20% shares in what they believed is the Fifth Defendant, Insgurt International Sdn. Bhd. (referred as D5). However, their belief is not in line with what D1 believed. D1 is offering a chance to PW-1 to venture into the business with him in the Sixth Defendant, Yougurt Sri Petaling Sdn Bhd (referred as D6). D1 claimed that lacks of due diligence and understanding by PW-1 has led to this confusion between PW-1 and him.

PW-1 testified that on 26 November 2021, she transferred an amount of RM 66,000.00 into D1 personal account being the purchase price of D5 ordinary shares. PW-1 contented that the said amount has been transferred after D1 assured her that the price paid will entitled her to 20% shares of D6’s company (as claimed by the D1).

D1 never disputed that PW-1 had transferred into his account the abovesaid amount, being the purchase price of 20% D6 ordinary shares. Shortly after, as alleged by D1, he transferred RM 59,000.00 into the Second Defendant’s account, i.e Mr Chua Thiam Mann (referred as D2).

D2 and his wife, Mrs. Nyo Zhi Ling (referred as DW-4) in their evidence also admitted that D1 had deposited an amount RM 59,000.00 being the part payment of 60% shares in D6.

D1 also contended that PW-1 has been actively involved in D6 daily operations and was given an opportunity to run the D6 business together with him and his wife, Mrs. Winnie Teo Kah Sin (referred as DW-2). Therefore, it is not proper and right for the PW-1 to seek the whole amount paid to be refunded to her after enjoying the benefit as an investor in D6’s company and operation.

However, as per Suruhanjaya Syarikat Malaysia’s search (page 7-12 in bundle A), the shareholders names are still under the names of Chua Thiam Mann (D2), Lee Chin Siang (D3) and Wan Kim Yuan (D4). No evidence was made available before the Court that D6 shares has been transferred into D1 or Plaintiff’s names except a draft of Shares Transfer Form purported prepared by D6’s Company Secretary given to D1 and subsequently handed over to the PW- 1 by D1. PW-1 refused to endorse the draft form since the particulars in the form is dubious and does not reflect the correct information as she claimed. C. ISSUES TO BE TRIED

In this case, parties had submitted twenty (20) issues to be tried by this Court as per Enclosure 21. Upon perusing those issues, this Court find those issues are better summarised into three (3) main and material issues only.

Summary of the issues to be tried are as follows: i. Whether there is an agreement to purchase shares between Plaintiffs (after this will be referred as PW-1) and Defendants (after this will be referred as D1 and/or D2-D6)? 4 ii. If the answer is in affirmative, the next issue is whether the said agreement is valid and enforceable by the law or a void agreement? iii. If the agreement is void, what are the reliefs or remedies to be ordered and against whom. D. ANALYSIS AND FINDINGS

To begin with, the Contracts Act 1950 explains the difference between a contract, an agreement, and a promise.

In the case of “RAMAKRISHNAN CHELLIAH v. LOTTE CHEMICAL TITAN HOLDING BERHAD & ANOR [2020] CLJU 1701”, the Court explained: “Section 2(h) provides that an agreement that is enforceable by law is a contract. Section 2(e) explains that every promise, and every set of promises, forming consideration for each other, is an agreement. In section 2(b), a promise is said to comprise a proposal that has been accepted.”

In deciding whether there is a concluded agreement to purchase shares between Plaintiffs and Defendants in a given case, the Court will have to examine all the circumstances to see if a party may be assumed to have made a firm offer and if the other may likewise be taken to have accepted that offer a situation often referred to as a meeting of the mind upon a common purpose or consensus ad idem.

As such, an offer must be communicated to the offeree, and the acceptance must also be communicated to the offerer, either by some word spoken or act done by the offeree or by his authorised agent. What constitutes an effective communication must necessarily depend on the circumstances of the case.

Under s. 3 of the Contracts Act 1950 (Act 136), it says: “Communication, acceptance and revocation of proposals The communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any act or omission of the party proposing, accepting, or revoking, by which he intends to communicate the proposal, acceptance, or revocation, or which has the effect of communicating it.”

In the case of “MAJLIS PERBANDARAN AMPANG JAYA v. PROFESSIONAL PORTER SERVICES (M) SDN BHD [2019] CLJU 1144”, it was held by the Court of Appeal: “[31] Section 3 of the Contracts Act 1950 provides, inter alia, that communication of acceptance is deemed to be made by "by any act" by which a party intends to communicate the acceptance, or which has the effect of communicating it.”

It is pertinent to note that there is no dispute that PW-1 transferred RM 66,000.00 in to D1’s personal account in lieu of purchasing 20% shares in D5 (what she belief) or D6 (what D1 alleged). The act of PW-1 in purchasing 20% shares pricing at RM 66,000.00 and the act of D1 in accepting the payment in exchange of 20% of shares without refusing it does constitute an agreement between PW-1 and D1.

This fulfils the criteria of offer, acceptance, and consideration. However, whether the agreement is valid or not is another issue to be decided later.

In our present case, at the outset, both PW-1 and D2 confirmed that they never discussed or had met before over selling and buying any shares in D5 and D6. PW-1 admitted that throughout the entire event, from the day she met with D1 until Plaintiffs filed this claim in this Court, PW-1 only met, discussed, and transfer the money via D1 only. She never had any personal dealing with D2, D3 and D4 over selling and buying shares in D5 and D6.

D2 also singing the same tune with PW-1. He never met, discussed, or heard about PW-1. D2 testified during cross examination: “THS: Is this the first time you heard about the identity of the First Plaintiff during 2/9/2022? CTM: Yes, I would say that, yes.

D2 further stated that he had no personal knowledge or was informed by D1 over shares dealing between PW-1 and D1. D2, D3 and D4 never appointed D1 as their agent or as an agent to D5 and D6 pertaining to selling and buying of D5 and D6 shares.

The key element is missing, ie. the communication.

Plaintiffs has failed to put forward any evidence or statement that PW1 and D2 have been in communication with each other about selling and buying shares in D5 or D6. PW-1 admitted that she only met with D2 during the grand opening of D6. However, she had never approach and having a conversation with to D2 in order to confirm with him about the share transaction.

In short, they never speak to each other. Whenever Plaintiffs never communicate with D2, D3 and D4, obviously there is no representation made by D2, D3 and D4 towards the Plaintiffs. Thus, it is impossible for this Court to agree with Plaintiffs claims that D2 until D6 have been actively involved in a tort of conspiracy with D1 to defraud Plaintiffs.

In “RENAULT SA v. INOKOM CORPORATION SDN BHD & ANOR AND OTHER APPLICATIONS [2010] 5 CLJ 32”, the Court of Appeal set out the four ingredients for proving the tort of conspiracy to injure. They are:

an agreement between two or more persons;

(ii) the agreement is for the purpose of injuring another;

(iii) acts done in execution of that agreement resulted in damage to the other;

(iv) damage resulted. [26] In respect of an agreement between two or more persons, in Renault SA, supra, KN Segara JCA said: “[33] It is clear that the very first element to be shown must be an agreement between two or more persons for the purpose of injuring Inokom and Quasar. 'Agreement' is not limited to a signed and sealed agreement but any informal agreement, including a combination of efforts of the alleged co-conspirators. After that, it has to be shown or at least alleged that acts were done in execution of that agreement which resulted in damage to Inokom and Quasar.” [27] On the evidence, I find that on the balance of probabilities that Plaintiffs has failed to establish the tort of conspiracy to defraud as against the Defendants 2 until 6. The Plaintiffs relies almost predominantly on the facts that D2, D3, D4 are related as the shareholders in D5 and D6 and D1 is in the same line of business and intended to be the shareholder in D5 and D6. Those two facts alone do not establish the tort of conspiracy to defraud Plaintiffs. Money transferred by D1 into D2 personal account [28] D2 confirmed that D2, D3 and D4 had only agreed to sell 60% of ordinary shares in D5 to D1 and the agreed price is RM 110,000.00. They also agreed to sell to D1 60% of ordinary shares in D6 at the agreed price of RM 150,000.00. They never authorised D1 to transact on their behalf or accepting the purchasing price of any shares in D5 and D6 from anyone else. Whatever dealing made by D1 with other persons including PW-1 is beyond their personal knowledge. [29] D1 in his testimony did mention after he received the money from PW-1 on 26 November 2021, he then shortly after transferred RM 59,000.00 into D2’s account in series of transactions beginning from 10 December 2021 until 6 January 2022. However, at the “Reference” column in the transfer/deposit receipts issued by the bank, it is only stated “Insgurt SP Share” and did not mention any name or any other particular of person in the reference column. [30] The question then arises. [31] Is the money transferred by D1 into D2’s account is actually the shares payment paid by PW-1 or the money transferred is actually D1 money being part payment of his 60% shares in D6? If the money transferred is actually the shares payment paid by PW-1, does it constitute an agreement between PW-1 and D2-D6? [32] Section 103 of the Evidence Act 1950 provides: “The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.” [33] Thus, it is incumbent upon D1 to prove that the money transferred into D2’s account is the shares payment paid by PW-1, and not his part payment of purchasing 60% shares in D6. [34] In my considered view, D1 had failed to prove his allegation. My reasons are as follows. [35] To begin with, there is no evidence presented by D1 that the transferred money is the shares payment by PW-1 to D2, except the bank receipts. However, as mentioned earlier, the receipts does not disclosed any other information/reference except “Insgurt SP Share”. [36] Another unusual feature which presented itself is this. If it’s true that the money transferred is PW-1 money, the D1 would certainly state any other particular (e.g PW-1 name etc) in the reference’s column in order to avoid confusion and to bring to D2’s attention about PW-1 payment of shares. However, this was not done by D1 and no explanation was given by D1. [37] Moreover, D2 consistently denied that he had been informed by D1 that the money is actually paid by PW-1 to buy 20% shares in D5 or D6. D2 never appointed D1 to be his agent or authorised person to deal and transact with D5 or D6 shares. If the payment of RM 59,000.00 is PW-1 payment of shares, certainly D2 will know or be made known about the shares dealing between D1 and PW-1. [38] It was then further agreed between D1, D2, D3 and D4 that D1 would borrow a total sum of RM91,000.00 from D2, D3 and D4 to pay off the outstanding sum owed for the purchase of the 60% shares of D6 after D1 had paid a total of RM59,000.00 earlier. It is crystal clear that this Court is inclined to believe that the payment of RM 59,000.00 is D1 part payment of purchasing 60% shares in D6. [39] Furthermore, according to D2, he came to know about PW-1’s name somewhere in September 2022 when D1 asked him to insert PW-1’s name as 10% shareholder in the draft transfer share form. D2 further testified that D1 told him that D1 will only hold 40% out of 60% shares while remaining 10% will be held by PW-1 and remaining 10% will be registered under another person name as Samuel Tan Ting Wei. [40] D2, D3 and D4 acted in good faith and abide by D1 request. They prepared the necessary share transfer form to affect the transfer of the shares to D1, PW-1 and Samuel Tan Ting Wei. At this juncture, D2 still was never informed by D1 that PW-1 had transferred an amount of RM 66,000.00 to D1, which later D1 only transferred RM 59,000.00 to D2. [41] For the foregoing reasons and based on the cited authorities above, on the balance of probabilities, it was my finding for the first issue that: i) there is an agreement to purchase shares between Plaintiffs and D1; and ii) there is no agreement to purchase shares between Plaintiffs and other Defendants. Second Issue: Whether the said agreement between Plaintiffs and First Defendant is a valid contract and enforceable by the law or a void agreement? [42] I now turn to the second issue on validity of the agreement, i.e whether the said agreement is a valid contract or a void agreement? This issue brings into the meaning to be attached to the word "contract". According to s. 2(h) of the Contracts Act 1950, "an agreement enforceable by law is a contract". [43] Section 10 of the Contracts Act 1950 enacts as follows:

All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. [44] Generally, a contract exists if it is made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and is not hereby expressly declared void. [45] The essential ingredients of a valid contract are described in “LAI FEE & ANOR v. WONG YU VEE & ORS [2023] 4 CLJ 1” where the Federal Court held: “[58] There are, in law, several essential ingredients present in a valid contract. First, there must be an offer ('proposal') which is communicated to the other party (ss. 2(a), 3 and 4(1), Contracts Act). Second, the party accepting the offer must also have communicated his acceptance to the proposer (ss. 4(2), 7 and 8, Contracts Act). Third, the contract must be for a lawful consideration (s. 10, Contracts Act), in the sense that the consideration of a contract must be lawful within the meaning of ss. 24 and 25, Contracts Act. Fourth, all contracts must be made by the free consent of the parties (s. 10, Contracts Act). The parties to a contract are said to consent 'when they agree upon the same thing in the same sense' (s. 13, Contracts Act); this is also known by the Latin phrase 'consensus ad idem ' - which has been defined in the Australian Legal Dictionary as 'agreement to do the same thing. The common consent necessary for a binding contract'. Consent is said to be only free within the meaning of s. 14 of the Contracts Act (This requires a more detailed discussion and will be dealt with below). Fifth, the parties to the contract must be legally competent or have legal capacity to enter into a contract (ss. 10, 11 and 12, Contracts Act). Sixth, all contracts must have certainty - contracts which are vague or where the meaning of which is not certain, or capable of being made certain, are void (s. 30, Contracts Act). Lastly, contracts must be for a lawful object (ss. 10, 24 and 25 Contracts Act). [46] Applying the law to the circumstances of this case, it was thus my finding that, the agreement between Plaintiffs and First Defendant is a void agreement and not enforceable by the law due to: i) Illegality as it is forbidden by law as per section 2 (g) and section 24 (a) of the Contracts Act 1950; and ii) Fraudulent act of D1 as per section 17 and section 24 (c) of the Contracts Act 1950. Illegality [47] At the outset, it must be noted that Section 2(g) of the Contracts Act 1950 provides that an agreement not enforceable by law is said to be void. Reference also being made to section 24 (a) of the Contracts Act 1950 which states the consideration or object of an agreement is lawful, unless it is forbidden by a law. [48] This Court is fully aware that parties are bound with their pleading and the issue of illegality was never pleaded by the Plaintiffs in their pleading. The issue of illegality also was never submitted before this Court by the parties in pleadings, witness statements and also submissions. However, illegality is an issue that the courts can and are bound to deal with, irrespective of whether it is pleaded or not. [49] In “LIM KAR BEE V. DUOFORTIS PROPERTIES (M) SDN BHD [1992] 3 CLJ 1667; [1992] 1 CLJ (Rep) 173; [1992] 2 MLJ 281”, Peh Swee Chin SCJ said: “Courts have always set their face against illegality in any contract. It is very well settled that the courts take judicial notice of such illegality and refuse to enforce the contract, and such judicial notice may be taken at any stage, either at the court of first instance or at the appellate stage irrespective of whether illegality is pleaded or not where the contract is ex-facie illegal.” [50] In “MERONG MAHAWANGSA SDN BHD & ANOR v. DATO' SHAZRYL ESKAY ABDULLAH [2015] 8 CLJ 212; [2015] 5 MLJ 619”, Jeffrey Tan FCJ said: “[21] On pleadings, O. 18 r. 8(1) of the Rules of the High Court 1980 (since replaced by the Rules of Court 2012) required illegality to be pleaded. But the overriding consideration is legality and not pleading. That was settled long ago. ……………………… [28] Thus, "It is well established that if a contract is, on its face, illegal, the court will not enforce it, whether illegality is pleaded or not." Lediaev v. Vallen [2009] EWCA Civ 156 per Aikens LJ). ……………………………… [35] Clearly, therefore, courts are bound at all stages to take notice of illegality, whether ex facie or which later appears, even though not pleaded, and to refuse to enforce the contract. In that regard, we endorse the following statement of law by the Court of Appeal per Hamid Sultan JCA, delivering the judgment of the court, in China Road & Bridge Corp & Anor v. DCX Technologies Sdn Bhd and another appeal [2014] 5 MLJ 1: At the outset we must say that the trial courts must be vigilant not to provide any relief on contracts which is void on the grounds of public policy, or illegality... whether or not it is the pleaded case of the parties or whether the issue was raised during the trial. The case of Blay v. Pollard & Morris [1930] 1 KB 628 where Scrutton LJ observed: Cases must be decided on the issues on the record; and if it is desired to raise other issues they must be placed on the record by amendment. which has been followed in a number of local cases will not stand to tie the hands of judges to deal with the above issues, or arrest impropriety on its own motion at limine...” [51] In our present case, PW-1 on 26 November 2021 had transferred the money amounting to RM 66,000.00 into D1 personal account to purchase 20% shares in D5 whereby D1 is not a shareholder in D5 or D6 at that time. D2 testified that D2, D3 and D4 had only agreed to sell 60% of shares in D5 and D6 to D1, but the transaction was still not perfected since D1 has outstanding amount to be paid to them. [52] As for D1, he accepted the payment without getting prior approval from D2, D3 and D4 being the shareholders in D5 and D6. D2 testified that he never appointed D1 as his agent or has any personal knowledge about the share transaction between D1 and PW-1. D2 also never give any permission to D1 to sell D5 and D6 shares to any other person. [53] I am guided by the decision of the Federal Court in “MAPLE AMALGAMATED SDN BHD & ANOR v. BANK PERTANIAN MALAYSIA BHD [2021] 8 CLJ 409”, where Tengku Maimun Tuan Mat CJ held: "[80] The approach all this while has largely been that when courts interpret ss. 24(a) and 24(b) of the Contracts Act 1950, they do so on the premise that the agreement has contravened some provision of the law. The only thing to do then is to determine the effect of the contravention on the validity of the agreement. Case law has not otherwise been as direct to explain how it ought to be determined in the first place whether the law has been contravened. As such, the approach taken in Goulis (supra) and the general theory of interpreting criminal law in favour of the accused commends itself to us as regards the determination of whether an agreement in the first place breaches any law. ……………….. [85] The overall tenor of the judgments above-cited and the development of the law suggests that in determining whether an agreement in the first place contravenes the law, primacy and due regard must be given to the object and purpose of the law which is said to have been breached. And, where two possible constructions are possible on the law or the facts, that is, one which results in contravention and one that does not, the interpretation which favours commercial sense (the one that avoids the finding of illegality) is to be preferred. The overarching theory behind this thought process, as seen from Lord Devlin's dictum in St John Shipping (supra) for example is that the public and reasonable commercial people will have organised their affairs on the assumption that what they are doing or have done is not prohibited by law. It is only when the force of the law is abundantly manifest (whether expressly or impliedly) that such a commercial transaction is in breach of the law and an illegality. And, even then, the armoury of the law is wide enough to not immediately render the agreement void for illegality even in the face of such contravention. In all situations, this illegality assessment depends on the facts of every case and the policy as well as language of the law said to have been contravened.” [54] I also refer to the decision of the Court of Appeal in “TEKUN NASIONAL v. PLENITUDE DRIVE (M) SDN BHD & OTHER APPEALS [2018] 8 CLJ 686” whereby the Court of Appeal held that: “It is well settled that at Common Law, a contract or transaction in breach of a statutory prohibition and an associated contract is, in general, void for illegality even though the statute is silent as to its consequences and merely inflicts a penalty on the wrongdoers (see Menaka v. Lum Kum Chum (ibid), at pg 94, Phoenix General Insurance Co of Greece SA v. Administratia Asigurarilor de Stat (ibid) but this is subject only to any contrary intention manifested by the statute (see Yango Pastoral Co Pty Ltd v. First Chicago Australia Ltd(ibid) ).” [55] Thus, in our present case, it is an obvious ex facie of illegality appears and had blatantly against the basic law for someone who has no legal right over a property to deal or sell it to the unknown person. Article 8 of the Federal Constitution recognise the rights to property and no person shall be deprived of his property save in accordance with law. [56] Section 70 of the Companies Act 2016 clearly stated that a share or other interest of a member in a company is personal property and transferable in accordance with section 105. In absence of evidence to the contrary, the entry of the name of a person in the register of members as shareholder is prima facie evidence that legal title to the share is vested in that person. (section 101

of the Companies Act 2016). [57] Thus, a person is legally recognized as the owner of those shares if he is registered in the members registry. However, in the Companies Commission of Malaysia (SSM) search as exhibited in Bundle A of the Common Agreed Bundle shows that D2, D3 and D4 are the shareholders in D5 and D6, whereas D1 is not a shareholder. [58] Furthermore, section 105(1) of the Companies Act 2016 requires any transfer of shares to happen "by a duly executed and stamped instrument of transfer and shall lodge the transfer with the company. " Section 105(3) CA 16 provides that for "the purposes of effecting the transfer of shares.... the company shall enter the name of the transferee in the register of members... in accordance with this section. " [59] In our case, there is no duly executed and stamped instrument of transfer of shares presented before the Court. The Court was only presented with a draft transfer shares form and does not constitute prima facie evidence of D1 legal title over D5 and D6. [60] At the time the agreement between D1 and PW-1 being concluded (i.e at the time and date money was transferred), D1 has no legal right to sell or accept share transfer payment from PW-1 since D1 is not the shareholder and not an agent to D2, D3 and D4. As a matter of fact, D1 only transferred RM 59,000.00 into D2’s account as part payment of his 60% shares in D6 on 10 December 2021 until 6 January 2022. This series of money transfer are made after PW-1 “purchased” 20% shares in D5 or D6. It is crystal clear that D1 at that time has no legal right or even beneficial interest in D5 or D6. [61] Since the consideration (the shares) is unlawful and forbidden by the laws, it is my considered view that the agreement concluded between D1 and PW-1 is a void agreement and not enforceable. Fraud [62] Should I be mistaken in my determination and finding on the unlawful consideration as I had discussed earlier, I shall now address on the second reason, that is fraudulent act by D1 against Plaintiffs. [63] Section 17 of the Contracts Act 1950 provides an act of fraud includes:

the suggestion, as to a fact, of that which is not true by one who does not believe it to be true;

the active concealment of a fact by one having knowledge or belief of the fact;

a promise made without any intention of performing it;

any other act fitted to deceive; and

any such act or omission as the law specially declares to be fraudulent. [64] O. 18 r. 8(1) of the Rules of Court 2012 read together with r. 12(1)(a) require a specific plea of fraud as well as the particulars of fraud. In the present case, fraud has been pleaded by the Plaintiffs in their pleading and the modus operandi of the alleged fraud also has been narrated by the Plaintiffs in their pleading. [65] Fraud has been extensively discussed by our Federal Court in the case of “LETCHUMANAN CHETTIAR ALAGAPPAN (AS EXECUTOR TO SL ALAMELOO ACHI (DECEASED)) & ANOR v. SECURE PLANTATION SDN BHD [2017] 5 CLJ 418” whereby it was held: “[18] What amounts to 'fraud'? "It is not easy to give a definition of what constitutes fraud in the extensive signification in which the term is understood by civil courts of justice. The courts have always avoided hampering themselves by defining or laying down as a general proposition what shall constitute fraud. Fraud is infinite in variety (Reddaway v. Banham [1896] AC 199, 221). The fertility of man's invention in devising new schemes of fraud is so great, that the courts have always declined to define it, or to define undue influence, which is one of the many varieties, reserving to themselves the liberty to deal with it under whatever form it may present itself (Allcard v. Skinner (1887) 36 Ch D 145, 183). Fraud, in the contemplation of a civil court of justice, may be said to include properly all acts, omissions, and concealments which involve a breach of a legal or equitable duty, trust or confidence, justly reposed, and are injurious to another, or by which an undue or unconscientious advantage is taken of another (Story, Eq Jur 187). All surprise, trick, cunning, dissembling and other unfair way that is used to cheat anyone is considered fraud (Finch 439). Fraud in all cases implies a wilful act on the part of anyone, whereby another is sought to be deprived, by illegal or inequitable means, of what he is entitled to (Green v. Nixon (1857) 23 Beav 530, 535) "(Kerr on Fraud and Mistake 7th edn at p. 1). "The concept of fraud is notoriously difficult to define" (Cavell and Anor v. Seaton Insurance Co [2009] EWCA Civ 1363 per Longmore LJ, Mummery and Toulson LJJ in agreement). We would not hazard to define 'fraud'. We would just say that 'fraud' is a generic term which also covers all manner of cheat, deceit and dishonesty. Given its wide meaning, "an action in fraud will usually include a number of distinct causes of action... " and "claims to trace assets in equity or, perhaps, at common law" (Bullen & Leake & Jacobs Precedents of Pleadings 18th edn, vol. 2 at 57-01). [19] It should be noted that an action in fraud is not limited to the tort of deceit as used in Derry v. Peek (1889) 12 App Cas 377, ie, when it is shown that a false representation has been made knowingly or without belief in its truth or recklessly, careless whether it be true or false.” [66] The Federal Court in “SINNAYAH & SONS SDN BHD V. DAMAI SETIA SDN BHD [2015] 7 CLJ 584” has decided that the standard of proof in proving 'fraud' in civil cases is on the balance of probabilities. [67] Coming back to our present case, it must be noted that PW-1 had come and met with D1 with the intention of purchasing the shares. However, D1 is not a shareholder in D5 and D5. D1 is only an intended purchaser of shares in D5 and D6. He was given the opportunity by D2 to assist and managing the business in D6 until November 2022. (refer to Q&A No. 12 of D1 witness statement). [68] D1 also testified that he had informed PW-1 that he is not a shareholder in D6 at that time. However, D1 promised to transfer the monies received from PW-1 to the D6 shareholders for them to take necessary steps in transferring the shares to them. D1 also claimed that he will get D6 shareholders agreement about the purchasing price and the cost involved. Therefore, D1 alleged that he has not telling lies or committed any fraud in deceiving PW-1 into purchasing the shares. [69] It is my view that this D1 narrative is not acceptable by me. It is indeed at all material time, D2 denied that he was informed by D1 about the shares dealing that took place between D1 and PW1. D2, D3 and D4 has never agreed for D1 to sell on their behalf or gave any commitment to the third party about shares sale. It is indeed D1 who agreed with PW-1 about the dealing and no prior notice or approval was ever given to D1 to do so. [70] What is more interesting is that D1 acted on his own capacity and without any basis has decided that the share price of 10% shares in D6 is RM 33,000.00. This figure was never agreed by any of the shareholders. This figure also was never communicated to the shareholders by D1. D1 fraudulently informed PW-1 that the share price of 10% shares in D6 is RM 33,000.00. [71] According to Section 17(a) of the Contracts Act 1950, any suggestion, as to a fact, of that which is not true by one who does not believe it to be true is tantamount to fraudulent act. In this case, D1 suggested to PW-1 that the share price is RM 33,000.00 and it was made without any basis or approval from the shareholders. [72] D1 admitted that he did informed PW-1 that he will get conformation from the shareholders about the actual price of the shares. However, this promise was not fulfilled by D1. He never asks the shareholders and never revert to PW- 1 to reconfirm the share price. What he did was he transferred the money into D2’s account without informing D2 that the money transferred is actually the money paid by PW-1. D2 reiterate that D1 never informed him about D1 dealing with PW-1. D2 believes that RM 59,000.00 transferred into his account is part payment paid by D1 in purchasing 60% shares in D6 as per agreed price between D1 and the shareholders. [73] The act of D1 in concealing facts pertaining to shares dealing between D1 and PW-1 from the shareholders is clearly an act of dishonesty by D1. He had made a promise without any intention of performing it, i.e to confirm the share price with the shareholders and to revert back to PW-1. This clearly an act of fraud as provided in section 17 (c) of the Act. [74] It can be concluded that D1 had represented himself as a person, in a good and trusted relationship with D2, D3 and D4 and was in the position to honour and comply with his promises and representation that he made to PW- 1 about the share dealing. In fact, D1 knew exactly that he was not been given any authority to deal, sell or transact the shares in D5 and D6 on behalf of the shareholders. [75] Furthermore, this Court also looked into the purported arrangement between D1 and PW-1 and also D1 with D2-D4 in the sense that simple calculation over the share prices also is seems to be weird. [76] To begin with, D2, D3 and D4 agreed to sell their 60% of shares in D6 to D1 with the price tag of RM 150,000.00. A simple calculation would be 10% out of 60% shares equivalent to RM 25,000.00. However, D1 informed PW-1 that she needs to pay RM 33,000.00 for 10% shares in D6. D1 testified that around RM 3000.00 will be deducted as the legal cost for the said transfer. [77] The question remains unresolved. D1 failed to explain why PW-1 needs to pay RM 33,000.00 to purchase 10% of D6 shares, whilst D1 only need to pay RM 25,000.00 only to get 10% shares in D6. Furthermore, D1 also failed to explain why he transferred only RM 59,000.00 into D2 ‘s account whereby PW- 1 had transferred RM 66,000.00 to him to be transferred to D2. [78] If it is true the remaining balance of RM 7,000.00 is for the legal cost, then it is incumbent upon D1 to produce evidence to substantiate his position which he failed to do. Not a single document was produced to show payment receipts, invoices or even the said share transfer agreement as he alleged. [79] Therefore, I reiterate, that on a balance of probabilities, the said agreement between Plaintiffs and First Defendant is a void agreement and not enforceable by the law due to illegality and fraud committed by D1. E. Third Issue: The reliefs and remedies to be ordered &against whom [80] When an agreement is found to be void and unenforceable due to illegality and fraud, the Plaintiffs are entitled to a remedy of restitution under section 66 of the Contracts Act 1950 which read as follows: “When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under the agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.” [81] The Court of Appeal in the case of “SIMCITY-ETE VENTURE SDN BHD v. KOPERASI PEMBANGUNAN KAMPUNG TRADISIONAL TASEK PULAU PINANG BHD [2021] CLJU 1712” held that the claim for restitution based on unjust enrichment is a cause of action by itself and it must be established in the statement of claim within a proper and specific plea. The court held: “[37] On the first matter, the Federal Court in the Dream Property 's case have found that it is necessary to make available the right to restitution of remedy as a response to unjust enrichment, independent of the law of contract and torts. In other words, claim for restitution based on unjust enrichment is a cause of action by itself. Therefore, the cause of action must be established in the statement of claim within a proper and specific plea. Material particulars that give effect to the alleged unjust enrichment must be provided in the pleadings. (emphasis added)” [82] It is my considered view that eventhough the Statement of Claim does not explicitly pleaded restitution under section 66 and unjust enrichment in their pleading, but the facts pleaded in the Statement of Claims and remedies sought by the Plaintiffs are sufficient enough for the restitution under section 66 and unjust enrichment be available to the Plaintiffs. [83] It can be inferred from paragraph 23.3, paragraph 24 and paragraph 25.1 Plaintiff’s Statement of Claim. [84] Furthermore, D1 in his Defence has rejected and defended that the Plaintiffs are not entitled for their monies to be refunded, as can be seen in paragraph 15.6 D1 Defence. Hence, D1 is fully aware that Plaintiffs are demanding from Defendants to refund and make restitution of their monies. While restitution does not need to be explicitly pleaded, the facts supporting a claim for restitution has been included in the pleadings. [85] In the case of “KONG HOI CHIENG v. AK LAND SDN BHD [2021] CLJU 1547; [2021] 1 LNS 1547; [2021] 6 MLJ 725” where the Court of Appeal held as follows: “The plaintiff had not pleaded a claim for restitution by reason of unjust enrichment in the statement of claim against the second defendant [45] It is trite that one needs to plead the material facts and not the law or the evidence. Learned counsel for the plaintiff submitted that the pleadings are sufficient for claiming 'unjust enrichment' against the defendants in respect of the shares in the second defendant and Sabalight Sdn Bhd. The plaintiff had pleaded that the plaintiff had not received consideration for the shares as a result of the first defendant's repudiation of the MOU and that the shares were being held by the defendants. [46] During the trial, it was not disputed that the plaintiff had transferred the shares to the defendants pursuant to the MOU. The plaintiff had transferred 400,000 shares in the second defendant and 250,000 shares in Sabalight Sdn Bhd to the defendants. [47] We are also of the view that the defendants did not plead that it had paid for any of the shares in the second defendant. This was further borne out by the fact that the shares in the second defendant and Sabalight Sdn Bhd were transferred to the first defendant's nominee for a nominal sum of RM1 showed that no payment was made by the defendants. ............. [49] Since the shares were transferred to the defendants pursuant to the MOU and there was a total failure of consideration for the shares due to the first defendant's repudiation of the MOU, therefore the defendants had been enriched with the shares in the first defendant and Sabalight Sdn Bhd and the retention of the shares in the first defendant and Sabalight Sdn Bhd is therefore unjust. [50] We note that in the ground of decision of the learned HCJ, it was stated that the plaintiff did not plead any cause of action for restitution for unjust enrichment against the defendants. However, before coming to the finding that the plaintiff did not plead any cause of action for restitution for unjust enrichment against the defendants the HCJ had held that: [50] We are here dealing with a claim based on restitution for unjust enrichment due to the breach of the MOU by the first defendant. ............ [53] We are of the considered view that the pleadings are sufficient for claiming 'unjust enrichment' against the defendants in respect of the shares in the second defendant and Sabalight Sdn Bhd. The plaintiff had pleaded that the plaintiff had not received consideration for the shares as a result of the first defendant's repudiation of the MOU and that the shares were being held by the defendants. (emphasis added)” [86] Therefore, I am of the view that all material facts disclosed in the pleading, evidence produced before the Court and most importantly the crux of the Plaintiffs claims entirely pertaining to refunding back their monies, are sufficient enough to constitute a plea of restitution under section 66 and unjust enrichment in the Statement of Claim. It is my respectful view that legal consequences and points of law are not mandatory to be pleaded, so long as the material facts are pleaded. [87] But even if I am wrong about the pleading as discussed above, there is another ground on which it can be said that the claim for restitution is bound to exist and pleaded by the Plainitffs. The Statement of Claim at prayer 25.5 contains a prayer for “lain-lain relif Mahkamah yang mulia ini fikir adil dan suaimanfaat”. [88] Now, these phrases are not empty words. In the case of “LIM ENG KAY v. JAAFAR MOHAMED SAID [1982] CLJ Rep 190”, the Federal Court emphasised that: “In any case prayer (e) in para. (7), "Any other relief which this Honourable Court deem fit to grant" must not be treated as a mere ornament to pleadings devoid of any meaning. We think that this prayer and the prayer for "loss of earning" in para. 5(a) should entitle the Court to make such an assessment.” Relief under Section 66 of the Contracts Act 1950 [89] Following from the analysis and my finding above, I now shall look into whether the Plaintiffs are entitled to the remedy of restitution as provided by section 66 of the Act since D1 has received an advantage under the agreement that is discovered to be void. [90] The Federal Court in the case of TRIPLE ZEST TRADING & SUPPLIERS & ORS V. APPLIED BUSINESS TECHNOLOGIES SDN BHD [2023] CLJU 2016” held: “The court will not render assistance to those who come before it with unclean hands and the remedy of restitution under section 66 of the Contracts Act will not avail such litigants. The remedy under that section is only available where the contract is discovered to be void or when it becomes void and not where it is void ab initio as is the case with the loan agreement in the present case." [91] Hence, to invoke this remedy under section 66, the invalidity of the agreement should be discovered subsequent to the making of it and the illegality must be unbeknown to the person invoking it. [92] In our present case, PW-1 testified that she had transferred the money into D1’s account on a good faith basis without having any suspicious over D1’s conduct and promises. D1 allowed her in getting involved in D6 daily operation and management of D6. PW-1 has been told by D1 that D1 has informed D2 and other shareholders about her purchasing the shares, while in fact D1 never informed or updated D2 about her purchased. [93] There are series of conversation between D1 and PW-1. PW-1 keep asking about her shares and D1’s response that the process is still ongoing. She always believes that D1 is an agent or authorised by D2-D4 to perform the share transaction with her since D1 is operating and managing D6 at that time. In fact, D1, D2, D3 and D4 were present when D6 is officially launched which PW-1 also attended. PW-1 is unaware of the illegality and fraud at the time of the transaction [94] However, later she discovered that D1 and other Defendants are actually have not acted in good faith and failed to register her as the shareholder in D6. She demanded D1, D2, D3 and D4 to refund her money via Notice of Demand dated 19 January 2023 since she believes D1 as an agent to the other Defendants and the other Defendants themselves have misrepresented and defraud her from the very beginning. [95] In response to the Plaintiff’s Notice of Demand, D1 stated that he is an agent of the said company and has discharged his duty when he transferred the money RM 59,000.00 into D2’s account. However, in the Defence, D1 changed his stance and never pleaded that he is an agent to other Defendants. Other Defendants also denied that D1 is their agent or authorised person. [96] As decided earlier, this Court has found that D1 is not an agent to other Defendants and has no authority or permission to sell the shares in D6 and accept payment from PW-1. Hence, it is a finding of this Court that the agreement concluded between D1 and PW-1 is discovered to be void due to illegality and fraud and PW-1 is unaware of the illegality and fraud at the time of the transaction. Thus, the relief under section 66 of the Act is available to the Plaintiffs. Relief under Unjust Enrichment [97] Should I be mistaken in my determination and finding on the application of section 66 of the Act as I had discussed earlier, I now turn to address the relief available under the principle of “unjust enrichment”. [98] I am guided by the case of “DREAM PROPERTY SDN BHD v. ATLAS HOUSING SDN BHD [2015] 2 CLJ 453”, it was held by the Federal Court that: “[117] The above passages from the judgments of the House of Lords are instructive and are a significant contribution to the development of the law of unjust enrichment. The principle underlying the cases of Banque Financiere de la Cite v. Parc (Battersea) Ltd. And Others (supra) and Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v. Inland Revenue Commissioners and Another (supra) is that, in the context of the present case, a cause of action in unjust enrichment can give rise to a right to restitution where it can be established that:

The plaintiff must have been enriched;

The enrichment must be gained at the defendant's expense;

That the retention of the benefit by the plaintiff was unjust; and

There must be no defence available to extinguish or reduce the plaintiff's liability to make restitution. [99] Therefore, based on the case Dream Property Sdn Bhd (supra), the relevant inquiry would be whether all four elements set out by the Federal Court have been satisfied. Taking the evidence together, it is apparent to me and I find they are satisfied as follows:

D1 has been enriched;

(ii) D1’s enrichment has been gained at the Plaintiff's expense;

(iii) D1’s retention of the benefit is unjust; and

(iv) D1 has no defence to extinguish or reduce D1 liability to make restitution to the Plaintiffs. [100] Plaintiffs have not only suffered a loss of RM 66,000 and failed to be registered as the shareholder, but D1 has been made richer by the Plaintiff's loss by the same amount. This sense of injustice at the Plaintiff's expense is fundamental to the substance of the relief of restitution based on the law of unjust enrichment. [101] I accordingly find that a remedy of restitution under section 66 of the Contracts Act 1950 and the legal remedy of unjust enrichment are available to the Plaintiffs as against the First Defendant only. F. CONCLUSION [102] In light of the analysis and reasons as discussed in the foregoing, on the balance of probabilities, I make the following orders: i. Plaintiffs have successfully proven their claims against the First Defendant. Therefore, Plaintiffs’ claims against the First Defendant are hereby allowed except prayer 25.2 (general damages) with costs of RM

5000.00. I am guided by the Court of Appeal’s decision in “LIM SWEE CHOO & ANOR v. ONG KOH HOU & ANOTHER APPEAL [2024] 6 CLJ 811” whereby it was held: “Premised on Goh Yew Chew (GOH YEW CHEW & ANOR v. SOH KIAN TEE [1969] CLJU 47), if a party (X) has provided money/benefit/advantage to another party (Y) under the contract between X and Y (contract) and if there is a total failure of consideration of the contract:

X may apply to court for an order to compel Y to restore the money/benefit/advantage to X; and

(ii) X cannot claim damages from Y for Y's breach of the contract. As explained above, the doctrine of total failure of consideration only provides restitutionary (not compensatory) relief for X against Y. It is to be noted that the doctrine of total failure of consideration is not provided in the CA. This is understandable as the CA is not a code of written law which provides a comprehensive set of provisions regarding agreements.” ii. Plaintiffs have not succeeded in proving their claims against other Defendants. Therefore, Plaintiffs’ claims against the Second Defendant, Third Defendant, Fourth Defendant, Fifth Defendant and Sixth Defendant are hereby dismissed with costs of RM 5000.00. [103] I end by expressing the Court’s admiration and appreciation to all Learned Counsel for both parties for all of their fine efforts in the conduct of this matter, which were of great assistance to the Court. Dated 28th February 2025 MUHAMMAD NAJIB BIN ISMAIL Magistrate, Magistrate Court (Civil 9), Kuala Lumpur. For the Plaintiffs : Mr. Tan Han Sam [Law Chambers of Han & Zi] For the First Defendant : Miss. Tee Vun Xin and Mr. Amirul bin Rafie [Koh & Teh Law Chamber] For the 2nd – the 6th Defendant : Mr. Lim Wei Han and Miss Tirasak Chiranakorn Chua [Enho Grace & Partners]