1. Soo Hoi Ling v 1. Khoh Keow Bok (sued as co-administrator of the Estate (PA-22NCvC-58-02/2019)

Soo Hoi Ling (co-administrator of the Estate of Khoh Liak Teng)

Khoh Ching Yi (suing by next friend, Soo Hoi Ling)

Khoh Chia Sze (suing by next friend, Soo Hoi Ling) …Plaintiffs

Khoh Keow Bok (sued as co-administrator of the Estate of Khoh Liak Teng and in his personal capacity)

Goh Chye Choo @ Goh Sai Tiang

Khoh Boon Hua

Khoh Joo Lee

Khoh Hwa Seng

Khoh Seak Lee

Khoh Kim Kok

Chilly Rabbit Food Industries Sdn Bhd (formally

Vin Hua Dyeing & Finishing Sdn Bhd … Defendants 2 JUDGMENT Introduction [1] There are two applications before me, both at the instance of the plaintiffs in this action. The first application is for an interim mandatory injunction [Enclosure 8] directing the 1st plaintiff and the 1st defendant as co-administrators of the estate of Khoh Liak Teng (“the deceased”), who on 17.1.2018 died intestate, to release RM5,000.00 a month from the said estate or from the 8th defendant as maintenance for each of the two minor children of the deceased (the 2nd and 3rd plaintiffs) until the disposal of this civil action. [2] The second application [Enclosure 10] seeks an order for discovery against the 1st and 8th defendants mainly for documents to verify the accuracy, correctness and true positions of the estate’s list of assets and liabilities (“the relevant documents”). 3 [3] The parties in the action are made up as follows. The 1st plaintiff is the ex-wife of the deceased and the mother of the two minor children. The beneficiaries of the estate are the two minor children and the deceased’s mother (the 2nd defendant) each of whom are entitled to 1/3 share of the estate. The 1st, 3rd to 7th defendants are the siblings of the deceased. The defendants together with the deceased before his demise held all the shareholding of the 8th defendant and substantial shares in the 9th defendant. Both the 8th and 9th defendants are private limited companies. [4] On 2.10.2018 letters of administration were granted by the High Court to the 1st plaintiff and the 1st defendant as co-administrators’ of the estate. The co-administrators immediately had differences which resulted in the present action being filed by the plaintiffs. In the action it was alleged that the defendants colluded in excluding the plaintiffs from the management of the companies and suppressed the actual extent of the assets of the estate. It was also alleged that the 1st defendant had committed fraud and deceit, acted mala fide, breached his 4 fiduciary duties and unjustly enriched himself with regard to the property and assets of the deceased. I will deal with each application separately starting with Enclosure 8. Enclosure 8: Application for mandatory injunction [5] Prior to his demise, the deceased had custody of one child while the 1st plaintiff had custody of the other. It is alleged that the deceased provided a monthly allowance of RM2,500.00 towards the maintenance of the child under the 1st plaintiff’s care. The 1st plaintiff has since the death of the deceased taken custody of both the children. It is alleged that since the deceased’s death the 1st defendant had been providing a monthly allowance of RM2,500.00 for the up-keep of the children (“the allowance”). [6] The basis for seeking the interim mandatory injunction is that the 1st defendant, who is also the de facto person controlling the 8th defendant, has since the fall-out with the 1st 5 plaintiff discontinued the monthly allowance to the 2nd and 3rd plaintiffs. [7] The 1st defendant denies the allegation and states that the allowance given to the 2nd and 3rd plaintiffs did not come from the estate or from the 8th defendant but out of his own pocket. He asserts that the allowance he gave to the children was merely a voluntary act of goodwill on his part. [8] Before considering the merits of the application I observed that the order sought is an interim mandatory injunction the terms of which are such that if granted would result in the plaintiffs being granted the whole of the relief sought in the action at an interlocutory stage. It would have the effect of the plaintiffs not needing to proceed to a trial for such an order. This observation has a bearing on the approach and the principles that should be applied in the exercise of discretion in granting the mandatory injunction sought by the plaintiffs. In such instances the courts have as a matter of caution insisted on a high degree of assurance that a plaintiff would be able to 6 establish his right at a trial. Thus, it is only in those exceptional cases where the court feels assured that there is an unusually strong and clear case that the mandatory injunction would probably be granted at the trial that the court would grant the remedy at an interlocutory stage of the proceedings. (see Tinta Press Sdn Bhd v Bank Islam Malaysia Bhd [1987] 2 MLJ 192 (SC), Karuppannan v Balakrishnan (Chong Lee Chin & Ors, third parties) [1994] 4 CLJ 479 (FC), Timbermaster Timber Complex (Sabah) Sdn Bhd v Top Origin Sdn Bhd [2002] 1 CLJ 566 (CA)). [9] It is clear from the affidavits that the differences of the co-administrators have delayed the administration of the said estate which is further exacerbated by the present action. There are allegations and counter allegations by both the co-administrators against each other: each blaming the other for dereliction of their duties as administrator. [10] However, this application does not concern the issue of dereliction of the co-administrator’ duties. The issue is whether 7 on the facts and circumstances of the present case this Court ought to exercise its discretion in granting the interim mandatory injunction sought by the plaintiffs. In my judgment the plaintiffs have failed to show an unusually strong and clear case that the mandatory injunction would probably be granted at the trial. A careful consideration of the facts and circumstances does not warrant an exercise of discretion granting the interim mandatory injunction against the co-administrators. My reasons are as follows. [11] Firstly, an administrator’s duty first and foremost is to discharge the debts and liabilities of the estate. The debts and liabilities are paid out of the assets of the estate. The known debts and liabilities are usually found annexed to the letters of administration. In the present case the letters of administration show numerous debts and liabilities of the deceased. In this regard the law is trite: a beneficiary under an intestacy has no interest or property in the personal estate of a deceased person until the administration of the latter’s estate is complete and distribution made according to the law of distribution of the 8 intestate estate (per Mohamed Dzaiddin FCJ in Chor Phaik Har v Farlim Properties Sdn Bhd [1997] 3 MLJ 188 and subsequently followed by the Federal Court in Chong Fook Sin v Amanah Raya Bhd & Ors [2010] 7 CLJ 917). This Court is bound by the legal principle stated in the above cases. The estate in this case is yet to be administered. Therefore, the beneficiaries until such event takes place have no interest or property in the estate. In the circumstances, the 2nd and 3rd plaintiffs are not entitled to any monies until the administration of the estate is complete and distribution of the intestate estate determined pursuant to the law of distribution. The 1st plaintiff and the 1st defendant therefore cannot be ordered to release monies of the estate to the beneficiaries for whatever purpose before the estate is administered. [12] In this regard, I am of the view that the facts do not give rise to any estoppel by conduct regarding the payment of the allowance. There is an express assertion by the 1st defendant that the allowance given by him to the 2nd and 3rd plaintiffs after the death of the deceased came out of his own pocket and not 9 from the assets of the estate or from the 8th defendant. There is no evidence before this court to show that the allowance came from either the estate or the 8th defendant, therefore the contention of estoppel by conduct is not applicable on the facts. [13] Secondly, no payment could be forthcoming from the 8th defendant as a company is a separate legal entity from its shareholders. The property owned by a company belongs to it and not to its shareholders. The shareholders have no right to any property owned by the company but are only entitled to share dividends while the company continues and a share in the distributions of the surplus in the event the company is wound up (Law Kam Loy & Anor v Boltex Sdn Bhd & Ors [2005] 3 CLJ 355 following the established principle in Macaura v Northern Assurance Co Ltd [1925] AC 619). Therefore, the monies in any bank account of the 8th defendant are not assets of the estate to which the 2nd and 3rd plaintiffs as beneficiaries of the deceased have a beneficial interest in. 10 [14] Thirdly, an interim payment under O 22A Rules of Court 2012 means a payment on account of any damages, debt or other sum (excluding costs) which a defendant may be held liable to pay to or for the benefit for the plaintiff. In order to succeed for an order of interim payment in respect of a claim for damages under r 3(1)(c) or a sum other than damages under r 4(1)(c) of O 22A the court must be satisfied the plaintiff would obtain a judgment for substantial damages or monies other than damages against the defendant. The standard of proof required in such an application is that the plaintiff would obtain judgment on the balance of probabilities (see Shearson Lehman Bros Inc v Maclaine Watson & Co Ltd [1987] 2 All ER 181 at 190, David Chelliah v Monorail Malaysia Technology Sdn Bhd & Anor [2005] 1 CLJ 589 at 595 and Jose Engineering Construction Sdn Bhd v TSR Bina Sdn Bhd [2016] 1 CLJ 1 (CA)). [15] Blackstone’s Civil Practice, 2008 at 454 para 36.9 explains the phrase “would obtain judgment” in the context of balance of probabilities and what it entails in the following words: It has to 11 be shown that the claimant will win on the balance of probabilities, but at the upper end of the scale, the burden being a high one. Being likely to succeed at trial is not enough. While in Civil Procedure (2ndEdn) by Paula Loughlin and Stephen Gerlis the learned authors’ state: An interim payment may be made …where the claimant has a very strong claim against the defendant. They are regularly made …where liability is often very easily established. [16] Applying the principles to the facts. In my view the plaintiffs have failed to demonstrate that liability in this case is easily established or that they have a very strong claim against the defendants or that they will win on the balance of probabilities. A careful consideration of the facts shows that there are serious disputes of facts. The allegations of using funds of the estate for the 1st defendant’s own benefit, using the 8th defendant as a vehicle to pass a resolution authorising the use of RM150,000.00 as legal fees for a personal dispute and misappropriating the property of the deceased are allegations that are strenuously in dispute and not something that this 12 Court can determine on affidavit evidence. In my considered view the plaintiffs have therefore, from the contents of the affidavits, failed to meet the evidentiary burden of satisfying this Court that if the action proceeded to trial the plaintiffs would obtain judgment for substantial damages or substantial sums of money against the defendants. [17] Fourthly, the claim for maintenance under s 3(1) of the Inheritance (Family Provision) Act 1971 is barred by s 4(1) of the same Act. The section provides that such an application must be made within six months from the date representation in regard to the deceased’s estate was taken out. In the present case, the letters of administration were issued by this Court on 2.10.2018 and therefore any claim ought to have been made not later than 2.4.2019. In this case the claim was not made in Enclosure 8 but raised on 23.8.2019 in the written submissions of the plaintiffs. Even if such a claim in the written submissions is procedurally acceptable the claim is clearly time barred. Further, the condition precedent for the payment of such maintenance has not met. Section 3(1) expressly requires that 13 any such maintenance must be paid out of the deceased’s net estate. A reading of the definition of “net estate” provided in s 2 reveal the result that any payment under s 3(1) can only be made after settlement of all the debts and liabilities of the deceased. Since the debts and liabilities are yet to be discharged no payment under s 3(1) for maintenance could be made. [18] Fifthly, any payment for maintenance under s 36 or advancement under s 37 of the Trustees Act 1949 can only apply when the trust property has been ascertained and held in trust. In this case the trust property cannot be ascertained as the estate is yet to be administered. Until and unless the estate is administered according to law no property can be vested in an administrator as trustee for any minors who are beneficiaries of the estate. Thus, s 36 which confers power on a trustee to apply income from any trust property towards the maintenance of a minor beneficiary or s 37 which confers power on a trustee to pay or apply any capital money subject to a trust for the advancement or benefit of any person entitled is only triggered 14 after the estate of a deceased has been fully administered. It is only at this stage that the residue property can be ascertained for distribution amongst the beneficiaries including to be held in trust for minor beneficiaries. Until then a beneficiary has no property in investment forming part of the estate or in the income from any such investment. [19] The above principle was enunciated in Dr Barnado’s Homes National Incorporated Association v Commissioners For Special Purposes of the Income Tax Acts [1921] AC 1 in the following terms and which the Federal Court in Chor Phaik Har referred to as a “basic principle”: When the personal estate of a testator has been fully administered by his executors and the net residue ascertained, the residuary legatee is entitled to have the residue as so ascertained, with any accrued income, transferred and paid to him: but until that time he has no property in any specific investment forming part of the estate or in the income from any such 15 investment, and both corpus and income are the property of the executors and are applicable by them as a mixed fund for the purposes of administration. [20] For the above reasons Enclosure 8 is dismissed. Enclosure 10: Application for discovery [21] The application for discovery vide Enclosure 10 is made under O 24 rr 3 and 7 of the Rules of Court 2012. According to the plaintiffs’ written submissions most of the relevant documents have been disclosed in the defendants’ affidavits in opposition to Enclosure 10 and therefore discovery is sought for the remaining documents which were listed as follows:

the 2016, 2017 and 2018 financial statements and all accounts of the 8th defendant; 16

disclosure of all monies and benefits received by the 1st defendant from the estate or the 8th defendant following the death of the deceased;

disclosure of all communications between the 8th defendant and its company secretary for the years 2016, 2017 and 2018;

disclosure of all minutes of all ordinary and extraordinary and annual general meetings of the 8th defendant for the years 2016, 2017 and 2018;

disclosure of all cheque butts, tax invoices, price quotations, order confirmations and all such documents relating to the business transactions of the 8th defendant from the date of the deceased’s death; and

accounts for the contents of the two safe deposit boxes (or the inventory thereof) located in the premises of the 17 8th defendant which were removed by the 1st defendant following the deceased’s death. [22] In considering this application for discovery I kept in the forefront the following principles that are relevant in the exercise of the court’s discretion in granting or otherwise such applications: Firstly, to succeed the applicant must satisfy the following elements: (1) there must be a “document’; (2) the document must be “relevant”’ and (3) the document must be or have been in the “possession, custody or power” of the party against whom the order for discovery is sought. The applicant’s case must be assumed to be true when examining the relevancy of an application for discovery to a fact in issue. (see Yekambaran s/o Marimuthu v Malayawata Steel Berhad [1994] 2 CLJ 581). [23] Secondly, as to the issue of “relevance”, a party is obliged to make discovery of all documents relevant to the matters in question in the action. The matters in question depend on the pleadings. A document relates to the matter in question if the 18 document contains information which may either directly or indirectly enable the party requiring the discovery either to advance his own case or to damage the case of his adversary or which may fairly lead to a train of inquiry which may have either of those two consequences (Manilal & Sons (Pte) Ltd v Bhupendra KJ Shan (T/A JB International) [1981] 1 LNS 204 following Compagnie Financiere du Pacifique v Peruvian Guano Co [1882] 11 QBD 55). [24] Thirdly, is the test of necessity housed in O 24 r 8 of the Rules of Court 2012. The court may dismiss an application if it is satisfied that discovery is not necessary and shall refuse to make an order if it is of the opinion that discovery is not necessary either for disposing fairly of the cause or matter or for saving costs. In Bayerische Hypo-und Vereinsbank AG v Asia Pasific Breweries (Singapore) Pte Ltd and other applications [2004] SGHC 155 the High Court of Singapore when considering a provision in pari materia with our O 24 r 8 stated as follows: 19 The ultimate test is whether discovery is necessary for disposing fairly of the proceedings or for saving costs. An assertion that the documents are relevant will not be good enough. Equally, an assertion that the documents are necessary because they are relevant will not be enough. [25] Fourthly, discovery may be refused if the court is of the view that it is unduly oppressive to the party giving discovery or that the applicant is merely “fishing” for evidence to prop up his case (Nguang Chan aka Nguang Chan Liquor Trader & Ors v Hai-O Enterprise Sdn Bhd [2009] 5 MLJ 40). [26] The contentious element in the application before me is whether the documents sought are “relevant” and “necessary” in the context of an application for discovery. The plaintiff therefore bears the burden to demonstrate that the documents sought are relevant to the action and that the documents are necessary either for disposing fairly the cause or matter or for saving costs. 20 Documents stipulated in Paragraph [21] (a), (d) and (e) [27] The documents stipulated in Paragraph [21] (a), (d) and (e) above are documents relating to the 8th defendant’s financial accounts. The pleadings disclose an issue concerning RM770,139.51 that is allegedly missing when the deceased who was the majority shareholder had total control of the 8th defendant’s finances. The plaintiffs are challenging this debt which the defendants allege was misappropriated by the deceased and which the defendants are seeking to recover from the estate. This act would erode a substantial chunk of the assets of the estate. The audited financial statements are not enough. They are merely summaries and do not show how the figures are arrived at. For this purpose, the source documents are required. This is more so in this case as the audited accounts for the financial year ending 31.7.2017 were not finalised due to the missing monies. The account books and the relevant support documents are therefore necessary documents subject to discovery in the circumstances of the present case. In Chip Lam Seng Enterprise Bhd (in liquidation) v Euphoria 21 Technologies Sdn Bhd& Anor [2017] 10 MLJ 796 the court ordered the discovery of the source documents as the audited financial statements in that case were subject to further verification. In such circumstances the argument of “oppression” and “fishing expedition” does not apply. Therefore, the documents sought in paragraphs (a), (d) and (e) are relevant to the action and necessary for disposing fairly the cause or matter and for saving costs. Documents stipulated in Paragraph [21] (b) and (c) [28] The plaintiffs pleaded that after the death of the deceased the 1st defendant committed acts of fraud, deception and acts that are mala fide in relation to the monies and assets of the deceased and achieved this through the suppression of facts, documents and accounts including those in relation to the business dealings of the 8th defendant in which the deceased was a majority shareholder. The particulars in support of the allegations were that: (i) the defendants failed to address the concerns raised by the 1st plaintiff in respect of the entitlements 22 of the beneficiaries in the deceased’s estate; (ii) failed to disclose transactions relating to the estate; (iii) did not allow the 1st plaintiff to participate in the 8th and 9th defendant businesses for the benefit of the 2nd and 3rd plaintiffs; and (iv) the termination of the allowance received by the 2nd and 3rd plaintiff from the estate or the 8th and 9th defendants. [29] In my view the particulars given are not particulars of fraud, deception and acts that are mala fide in relation to the monies and assets of the deceased. The plaintiffs are seeking disclosure of all monies and benefits received by the 1st defendant from the estate or the 8th defendant following the death of the deceased purely based on surmise or conjecture. In my view in absence of particulars of fraud, deception and acts that are mala fide, the application compelling discovery would have the effect of shifting the legal burden of proving the same to the 1st defendant (see Kenwood Electronics (Malaysia) Sdn Bhd v People’s Audio Sdn Bhd [2003] 5 MLJ 276; Hanson Building Materials Malaysia Sdn Bhd v Quah Soon Leong & 2 Ors [2016] 1 LNS 1762). In any event the 23 financial documents of the 8th defendant would reveal if any or the description of monies received by the 1st defendant from the 8th defendant. [30] The disclosure of all communications between the 8th defendant and its company secretary for the years 2016, 2017 and 2018 is clearly a fishing expedition based on suspicion, suppositions and general allegations made against the 1st defendant. It is an attempt to see if the documents reveal any information that could be used against the 1st defendant. In any event all matters concerning the 8th defendant would be reflected in the minutes of the meetings or resolutions passed at the general meeting of the 8th defendant. There is therefore no basis to justify or show how the documents sought are relevant to the issues in the action and/or necessary for disposing fairly the cause or matter or for saving costs. [31] In the circumstances, the grounds that are advanced and the evidence that is produced for the discovery of documents 24 stipulated paragraph [21] (b) and (c) are insufficient for this Court to exercise its discretion to grant the order prayed for. Documents stipulated in Paragraph [21] (f) [32] The plaintiffs pleaded that the 1st defendant had committed theft or “asset stripping” of assets of the estate. Fittings and furniture were removed from the deceased’s house in Taman Seri Segar. The contents of two safes belonging to the deceased situated in the premises of the 8th and 9th defendants were removed by the 1st defendant. The misappropriation of the stipulated assets is certainly an issue in the action. However, the fittings and furniture are not “documents” and therefore does not satisfy the basic requirement for an order of discovery to be made. The contents of the “safes” in so far as they are “documents” would be subject to discovery. Therefore, the documents in the safe are relevant to the action and necessary for disposing fairly the cause or matter. 25 [33] In conclusion Enclosure 10 is partly allowed as follows:

discovery for the following documents are allowed:

financial statements for the year 2016, 2017 and 2018 (if available) and all accounts of the 8th defendant for the years 2016, 2017 and 2018;

all minutes of all ordinary, extraordinary and annual general meetings of the 8th defendant for the years 2016, 2017 and 2018; and

all cheque butts, tax invoices, price quotations, order confirmations and all such documents relating to the business transactions of the 8th defendant from the date of the deceased’s death; 26

(ii) discovery for the following documents are not allowed:

disclosure of all monies and benefits received by the 1st defendant from the estate or the 8th defendant following the death of the deceased; and

disclosure of all communications between the 8th defendant and its company secretary for the years 2016, 2017 and 2018;

(iii) discovery of the documents (if any) found in the two safes belonging to the deceased located in the premises of the 8thand 9th defendants which were removed by the 1st defendant following the death of the deceased. ………………Sgd………………….. Amarjeet Singh Serjit Singh Judicial Commissioner Penang High Court Dated: 18th November 2019 27 Counsel for the Plaintiff: John Khoo, Joel Chan [ ISMAIL KHOO & ASSOC. (PENANG) ] Counsel for the Defendant: Christina Siew, Goh Chek Kang [LIM KEAN SIEW & CO.(PENANG) ] Cases referred to:

Tinta Press Sdn Bhd v Bank Islam Malaysia Bhd [1987] 2 MLJ 192 (SC).

Karuppannan v Balakrishnan (Chong Lee Chin & Ors, third parties) [1994] 4 CLJ 479 (FC).

Timbermaster Timber Complex (Sabah) Sdn Bhd v Top Origin Sdn Bhd [2002] 1 CLJ 566 (CA).

Chor Phaik Har v Farlim Properties Sdn Bhd [1997] 3

Chong Fook Sin v Amanah Raya Bhd & Ors [2010] 7

Law Kam Loy & Anor v Boltex Sdn Bhd & Ors [2005]

Macaura v Northern Assurance Co Ltd [1925] AC 619.

Shearson Lehman Bros Inc v Maclaine Watson & Co Ltd [1987] 2 All ER 181 at 190.

David Chelliah v Monorail Malaysia Technology Sdn Bhd & Anor [2005] 1 CLJ 589 at 595. 28

Jose Engineering Construction Sdn Bhd v TSR Bina Sdn Bhd [2016] 1 CLJ 1 (CA).

Dr Barnado’s Homes National Incorporated Association v Commissioners For Special Purposes of the Income Tax Acts [1921] AC 1.

Yekambaran s/o Marimuthu v Malayawata Steel Berhad [1994] 2 CLJ 581.

Manilal & Sons (Pte) Ltd v Bhupendra KJ Shan (T/A JB International) [1981] 1 LNS 204.

Compagnie Financiere du Pacifique v Peruvian Guano Co [1882] 11 QBD 55.

Bayerische Hypo-und Vereinsbank AG v Asia Pasific Breweries (Singapore) Pte Ltd and other applications [2004] SGHC 155

Nguang Chan aka Nguang Chan Liquor Trader & Ors v

Chip Lam Seng Enterprise Bhd (in liquidation) v Euphoria

Kenwood Electronics (Malaysia) Sdn Bhd v People’s Audio Sdn Bhd [2003] 5 MLJ 276; Hanson Building Materials Malaysia Sdn Bhd v Quah Soon Leong & 2 Ors [2016] 1 LNS 1762)