1. ) Mahadevan a/l K Subramaniam v 1. ) Navamany A/p R Karuppiah (WA-22NCC-430-09/2020)

MAHADEVAN A/L K SUBRAMANIAM [NO. K/P: 590904-10-5909]

SUNDARESAN SUBRAMANIAM [NO. K/P: 640401-10-8561]

JELAINDREN A/L K SUBRAMANIAM [NO. K/P: 671129-10-5995] … PLAINTIF-PLAINTIF

NAVAMANY A/P R KARUPPIAH [NO. K/P: 580322-05-5340]

POOVENESWARAN A/L KUMARESAN [NO. K/P: 820823-14-6689]

KANAKI A/P P MUTHU [NO. K/P: 560507-10-6388]

ORIENTAL VAN LINES (M) SDN BHD [NO. SYARIKAT: 159942-M] … DEFENDAN-DEFENDAN JUDGMENT A. Introduction [1] This is a dispute between the plaintiffs who are brothers and the 1st and 3rd defendants, their sisters-in-law married to their deceased elder brothers, Kumaresan a/l Subramaniam (“Kumaresan”) and Muthukumar a/l Subramaniam (“Muthukumar”). The dispute concerns 100,000 shares in the 4th defendant initially held by Muthukumar (“Shares”). The Shares were transferred to the 1st defendant, her son the 2nd defendant and the 3rd defendant. [2] The plaintiffs sought a declaration that the Shares were held on trust for them, and that the transfers were unlawful and void. The plaintiffs also sought to restrain the 4th defendant from transferring a piece of land which they claimed they played a role in purchasing and which is used as a warehouse for the business of the 4th defendant and the plaintiffs’ related businesses. [3] After a full trial, I allowed the plaintiffs’ claim, as I found that the plaintiffs had proven that the Shares were held by Muthukumar on trust for them. I also found that the transfers of the Shares to the 1st to 3rd defendants had been carried out in a fraudulent matter. It was also sufficiently proven that Lot 14161 was purchased by the plaintiffs and their deceased brothers, and is used as a warehouse for the 4th defendant’s business and the plaintiffs’ businesses. B. Background Facts OSSC Sdn Bhd [4] The plaintiffs and their two deceased elder brothers, Kumaresan and Muthukumar, established OSSC Sdn Bhd (“OSSC”) in 1982. They were the directors of OSSC. [5] I shall refer to the plaintiffs, Kumaresan and Muthukumar as the “Subramanian Brothers”. The 4th Defendant [6] The 4th defendant was established on 5 March 1987. The initial shareholders of the 4th defendant were the 1st plaintiff and Mohamed bin Damaree (“Mohamed”), each holding one share. They were also the directors of the 4th defendant. [7] The 4th defendant had subsequently increased its paid-up capital to RM10,000, and the plaintiffs claimed that the funds were obtained from OSSC, on the understanding that the interests of the Subramanian Brothers in the 4th defendant would always remain protected. [8] In February 1988, Muthukumar became a shareholder of the 4th defendant, holding 7,500 shares. The 1st plaintiff held 2,500 shares. Muthukumar was appointed as a director of the 4th defendant, to replace Mohamed. [9] In May 1992, the 1st plaintiff resigned as the director of the 4th defendant. Kumaresan became a shareholder and director of the 4th defendant. [10] By early 2002, Kumaresan held 50,000 shares of the 4th defendant, while Muthukumar held the remaining 50,000 shares. [11] Two days before the death of Kumaresan on 31 January 2002, Kumaresan’s shares in the 4th defendant were distributed in the following manner: a. Muthukumar received 50,000 shares, holding a total of 100,000 shares, i.e. the Shares. b. The 1st defendant, Kumaresan’s wife, received 20,000 shares. c. The 2nd defendant, Kumaresan’s son, received 80,000 shares. The Shares [12] The plaintiffs claimed that the Shares, held by Muthukumar, who passed away on 6 December 2013, were held on trust for the plaintiffs. [13] However, the Shares were allegedly transferred to the 1st to 3rd defendants on 5 December 2012, without the plaintiffs’ knowledge. The plaintiffs claimed that the transfers were carried out fraudulently. They stressed that it was always the understanding of the Subramaniam Brothers that at least one of them will hold the Shares on trust for the other brothers. Lot 14161 [14] In 2008, the 4th defendant purchased a piece of land under GRN189337, Lot 14161, Mukim Rawang, Gombak (“Lot 14161”). Lot 14161 is used as a warehouse. [15] The plaintiffs claimed that part of the funding for Lot 14161 is from the sale of two warehouses in Batu Caves which were purchased by OSSC sometime in 1985 or 1986 (“OSSC Warehouses”). [16] However, the defendants claimed that Lot 14161 was rented to the plaintiffs. The defendants had taken steps to evict the plaintiffs from Lot 14161. C. The Plaintiffs’ Claim [17] The plaintiffs are seeking the following: a. A declaration that Muthukumar held the Shares on trust for the plaintiffs. b. A declaration that the transfers of the Shares to the 1st to 3rd defendants are unlawful and void. c. An order for the transfer of the Shares to the plaintiffs in equal shares. d. An order to restrain the 4th defendant from selling and/or transferring Lot 14161. D. Issues And Findings Issues [18] From the facts set out above, the main issues to be determined in this case are as follows: a. Whether Muthukumar held the Shares on trust for the plaintiffs. b. Whether the Shares were lawfully transferred to the 1st to 3rd defendants. Did Muthukumar Hold The Shares On Trust For The Plaintiffs? [19] I found that Muthukumar held the Shares on trust for the plaintiffs, after reaching the following findings of fact: a. The 4th defendant was set up to expand the business of the Subramaniam Brothers. b. The 1st plaintiff played an instrumental role in the establishment and initial management of the 4th defendant. c. The Subramaniam Brothers had a close business relationship, and were working together to further their business goals. d. The funding for the purchase of Lot 14161 came from the sale of the OSSC Warehouses. e. Lot 14161 is used as a warehouse for the 4th defendant’s business and the businesses of the plaintiffs. [20] On the first finding of fact, it is the plaintiffs’ case that the 4th defendant was established as an expansion of the business of OSSC. In stark contrast, the defendants alleged that the 4th defendant was set up as a rival company to the plaintiffs’ other companies. [21] There is however no evidence to support the defendants’ allegation. In fact, evidence before this court shows the opposite, that the 4th defendant was set up to expand the business of OSSC. [22] This is evident from the types of business of both companies. OSSC is involved in packing, moving, freight-forwarding and warehousing. The 4th defendant is in the air-freight business. This, as the plaintiffs argued, is an expansion of the business of OSSC. [23] The history of the business of the Subramaniam Brothers also supports the plaintiffs’ version of the reason for the establishment of the 4th defendant. [24] It is not in dispute that the late father of the Subramaniam Brothers started a relocation and moving business under the name Oriental Shipping and Storage Company. This business was a sole proprietorship. Kumaresan, Muthukumar and the 1st plaintiff then incorporated a company, OSSC. The name OSSC is clearly an abridged version of the name of their late father’s business. [25] The 4th defendant was then set up to expand OSSC’s business. The reason for the establishment of the 4th defendant was explained by the 1st plaintiff in his witness statement: “6. Q. When was Oriental Van Lines Sdn Bhd ("OVL") formed? A. Oriental Van Lines was formed in 1987 primarily for the purpose of bidding for the American Embassy relocation contract. I must add here that the "Van Lines" was chosen because it is synonymous with the American relocation industry and therefore is easily recognisable by the American businesses when they want to do business with a relocation/moving company. However, we always maintained the name "Oriental" as it was started by our father when he first opened Oriental Shipping and Storage Company as a sole proprietorship company.

Q. Were you involved in any other business other than OSSC? A. As stated earlier, along with my other siblings, we established another company known as Oriental Van Lines Sdn Bhd, who is the 4th Defendant, in this suit. The purpose of Oriental Van Lines Sdn Bhd was to further develop our business. This company was established on 5 March 1987.” (emphasis added) [26] The defendants argued that Kumaresan and Muthukumar were the main brothers involved in the set-up and management of the 4th defendant, and as such, the Shares were Muthukumar’s shares, and were not held on trust for the plaintiffs. [27] Documentary evidence before the court shows otherwise. The first shareholders of the 4th defendant were the 1st plaintiff and Mohamed, who were also the first directors of the 4th defendant. It is on this basis that I reached the second factual finding, that it was the 1st plaintiff who was instrumental in the setting up and initial management of the 4th defendant. [28] Muthukumar only became a shareholder and director of the 4th defendant in February 1988, to replace Mohamed. Kumaresan became a shareholder and director of the 4th defendant in 1992, when the 1st plaintiff left to establish another business called Malaysian Van Lines Sdn Bhd. [29] From available evidence, it is clear that the Subramaniam Brothers had taken steps to ensure that the 4th defendant was managed by at least one brother at any one time, in order to protect their interests in the company. [30] This takes me to the next finding of fact, that the Subramaniam Brothers had a close business relationship, and were working together to further their business goals. This is evident from the manner the businesses of the Subramaniam Brothers were run. The plaintiffs were all involved in the moving and packing business, operating from the same warehouse, namely Lot 14161. It is clear also clear that plaintiffs had at all times taken steps to ensure that their stakes are protected in companies that form part of their businesses, with one brother always remaining as a shareholder of each company. [31] Finally, the last two findings of fact relate to the purchase of Lot

I am of the view that the plaintiffs had shown that: a. Lot 14161 was purchased by the 4th defendant from the proceeds of the sale of the OSSC Warehouses; and b. The plaintiffs are using Lot 14161 to manage and operate their businesses, including the business of the 4th defendant. [32] The intention behind the purchase of Lot 14161 is clear from a letter dated 1 October 1993 handwritten by Kumaresan. The letter was addressed to the 2nd defendant. The 2nd and 3rd paragraphs of the letter state as follows: “I have sold the 2 terrace factories at Batu Caves and bought a piece of land at Sungai Buloh (PUTRA INDUSTRIAL PARK) for RM700,000.00 that is 1.02 acres about 44,000 sq. ft. The architects are about to submit the plans to the Authorities for approval and the Warehouse and office should be ready by August 1994. The total cost for construction will be approx 1.5 million. I am taking a big gambel on this project and hope to come out of the loan debts by year 2000. Hope and I will make it. Sundar by now you should know your Elder brother. He is very ambitious and whatever I have dreamt I have somehow full filled it. Well it is now to you all other of my brothers to keep it up and fullfill all my other dreams. to come true.” (emphasis added) [33] The defendants have not disputed the fact that Kumaresan authored the letter. [34] It is clear from the letter that the OSSC Warehouses (referred to in the letter as the “2 terrace factories”) were sold, and Lot 14161 was purchased. [35] The plaintiffs have also established that Lot 14161 is being used for their moving and packing businesses, and that they had spent monies to upgrade the property, installing gates, fencing and a heavy metal racking system. The 2nd defendant had taken out fire insurance on the building on Lot 14161. [36] In contrast to the documentary evidence provided by the plaintiffs and the consistent stand taken by the plaintiffs, the 1st and 3rd defendants were unclear and inconsistent in their testimonies. They were unable to confirm for certain what arrangements were in place in relation to the management of Lot 14161. During cross-examination, the 3rd defendant admitted that Muthukumar had provided a sum of money to the 2nd plaintiff for the installation of the metal racking system, but she changed her testimony and claimed that the amount was given to the 2nd plaintiff as a loan: “PC1 : Dan semua pembayaran untuk Heavy Metal Racking System ini telah dilakukan oleh En. Sunderesan. DW2 : I don’t agree to that because Mr. Muthukumar gave hin couple of two or three hundred thousand. I remember how should I say, I remember he taking out RM200,000 fixed deposit and Mr. Muthukumar cash it and gave it to Mr. Sundaresan. PC1 : Untuk membina Metal Racking System kan. : Yes. And Mr. Muthukumar telah berbuat demikian kerana bangunan itu adalah milik adik-beradik Subramaniam. : No, not for that reason. Kalau tidak begitu Mr. Muthukumar tidak perlu memberi couple of hundreds thousand : He took as loan which was never returned. Setuju dengan saya, tiada apa-apa dokumen yang mengatakan bahawa itu adalah satu perjanjian, di Mahkamah hari ini. : Yeah, there is no document. Saya juga katakan bahawa bila En. Sundaresan berbelanja untuk Heavy Metal Racking System itu, sebagai pemilik saham atau pengarah-pengarah yang lain tidak memberhentikan daripada berbuat demikian, setuju. DW2 : Ya saya setuju because Mr. Muthukumar was incharged and we do not go against him, without he knows about it we just stood back. elements of an implied trust are present in respect of the holding of the Shares by Muthukumar. There is a certainty of intention in that the Shares are to be held on trust for the plaintiffs, a certainty of object which is that the Subramaniam Brothers had agreed that at least one of them should remain as a shareholder of their companies and a certainty of subject And Mr. Muthukumar telah membenarkan perkara itu berlaku kerana bangunan itu adalah milikan adik beradik 11 Subramaniam, setuju. : Tidak.” (emphasis added). [37] With the findings of fact as set out above, I am of the view that the matter, namely the Shares. [38] These are evident from the following facts: a. The 4th defendant was set up to expand the business of the Subramaniam Brothers. b. The 1st plaintiff, not Kumaresan or Muthukumar, was the one who played an instrumental role in the establishment and management of the 4th defendant. He was the initial shareholder and director of the 4th defendant. c. The Subramaniam Brothers had a close business relationship, and were working together to further their Were The Shares Lawfully Transferred To The 1st To 3rd Defendants? to the 1st and 3rd defendants. I found the circumstances surrounding the original copy of the directors’ resolution dated 5 December 2012 on the transfers of the Shares. The company secretary of the 4th defendant, Indrani Sreenivasan (“PW-5”) and the 1st and 3rd defendants could not explain why the original copy was not provided. The 3rd defendant went so far as to confirm that she has the original copy of the resolution, stating during cross-examination that “I will have the asal.” However, no original business goals. In this regard, they had taken steps to ensure that their interests in their businesses were protected by placing one brother as a shareholder and director of each company. d. The funding for the purchase of Lot 14161 came from the sale of the OSSC Warehouses. e. Lot 14161 is used as a warehouse for the 4th defendant’s business and the businesses of the plaintiffs, and the plaintiffs had expended monies to upgrade Lot 14161. [39] The next issue arising is in relation to the transfers of the Shares transfers of the Shares to be highly suspicious. [40] There are a few reasons why I reached this finding. [41] The first reason is the failure of the defendants to provide the document was forthcoming. [42] In view of the failure to produce material documentary evidence, I have drawn an adverse inference against the defendants pursuant to section 114(g) of the Evidence Act 1950, and have presumed that there was never an original company resolution signed in respect of the transfers of the Shares. [43] The second reason for my finding is the defendants’ failure to call the 2nd defendant as a witness during the trial. The 2nd defendant was a signatory to the resolution and to the share transfer form on the alleged transfer of his portion of the Shares. He did not appear to give evidence to confirm his signing of these documents. [44] I am guided by Takako Sakao (f) v Ng Pek Yuen (f) & Anor [2009] 6 MLJ 751, where the Federal Court held as follows: “[4] In our judgment, two consequences inevitably followed when the first respondent who was fully conversant with the facts studiously refrained from giving evidence. In the first place, the evidence given by the appellant ought to have been presumed to be true … [5] The second consequence is that the court ought to have drawn an adverse inference against the first respondent on the amount of the appellant's contribution to the purchase price as well as the existence and the terms of the mutual understanding or agreement that she had with the first respondent. Where, as here, the first respondent being a party to the action provides no reasons as to why she did not care explained. The 1st defendant in her testimony merely stated that he was via remote communication technology, on the Zoom platform. There was no need for the 2nd defendant to be present in Malaysia to give evidence. resolution and the transfer form on the transfers of the Shares on 5 December 2012 is material to the defendants’ case. His evidence is especially essential as PW-5 could not confirm if the person who she alleged to have seen signing the documents was in fact the 2nd defendant, as she had not met the 2nd defendant before. As the 2nd defendant had failed to appear in court to confirm whether he signed the documents, following Takako Sakao, I have assumed as correct the plaintiffs’ case share transfer forms. Although the share transfer forms were alleged to a year in the stamping of the forms. The forms were only stamped on 13 January 2014, approximately a month after Muthukumar’s death on 6 December 2013. PW-5 and the 1st and 3rd defendants could not explain to give evidence the court will normally draw an adverse inference …” [45] In this case, the 2nd defendant’s absence was not sufficiently out of the country. It is important to note that the entire trial was conducted [46] The evidence, namely whether or not he signed the directors’ that the 2nd defendant did not sign the documents on 5 December 2012. [47] The third reason for my finding is the delay in the stamping of the have been signed on 5 December 2012, there was a delay of more than why there was a delay. explaining the events during the signing of the share transfer form to be unconvincing and contradictory. When asked to explain the events leading up to the signing of the documents, the 1st defendant’s version of the events changed, and she gave inconsistent accounts of what had transfers of the Shares has led me to find on a balance of probabilities, that the transfers were carried out in a fraudulent manner, and are for the plaintiffs; that the transfers of the Shares are unlawful and void; and that Lot 14161 was purchased from funds from the sale of the OSSC [48] Finally, I found the evidence of the 1st defendant and PW-5 in transpired. [49] My assessment of the totality of the evidence in relation to the therefore unlawful and void.

[50] Having found that the Shares were held by Muthukumar on trust Warehouses and is used as a warehouse for the 4th defendant’s business and the businesses of the plaintiffs, I am of the view that the plaintiffs have proven their case against the defendants. [51] I allowed the plaintiffs’ claim, with costs. Dated 28 October 2022 - sgd - Adlin Abdul Majid Judicial Commissioner High Court of Malaya Commercial Division (NCC6) Kuala Lumpur Counsel: Plaintiffs : Ravi Nekoo (together with Sarah Anthony) of Messrs. Nekoo Defendants : Murali Velautham (together with Muhammed Zahid Hazim Kasim of Messrs. Murali Velautham & Associates Legislation referred to: Evidence Act 1950, section 114(g) Case referred to: Takako Sakao (f) v Ng Pek Yuen (f) & Anor [2009] 6 MLJ 751