Chung Kiat Enterprise Sdn Bhd v 1. ) Ng Ah Lek (KA-22NCvC-70-06/2018)

NG AH LEK

NG CHOON SENG

NG CHOON HOCK (NO. K/P: 720217-02-5061) [(The First to Third Defendants as executors to the estate of Ngu Sui Tin @ Ng Swee Lean, deceased) (No. K/P: 461107-02-5251 [Baru] / 1914541 [Lama])

NG CHOON HOCK (NO. K/P: 720217-02-5061) --- DEFENDANTS 09/10/2025 12:15:18 KA-22NCvC-70-06/2018 Kand. 226 S/N kNssyuF76EiplDQczkWMg GROUNDS OF JUDGMENT

This civil action concerns a dispute over beneficial ownership of a parcel of agricultural land held under H.S.(D) 1/92, PT 2874, Mukim Ayer Puteh, District of Pendang, Kedah (“the said Land”). The Land is registered in the name of Ngu Sui Tin @ Ng Swee Lean (the Deceased).

The Plaintiff, Chung Kiat Enterprise Sdn Bhd (“the Plaintiff”), claims that the Deceased had held the said Land on trust for the Plaintiff and that the Land forms part of the Plaintiff’s assets. The Defendants are the executors and beneficiaries of the Deceased’s estate.

The Plaintiff contends that the Deceased wrongfully treated the Land as his personal property and bequeathed it to his family members by Will, when in law and in equity the Deceased was only a trustee for the Plaintiff. Accordingly, the Plaintiff seeks a declaration that the Deceased held the Land on trust for the Plaintiff and that the beneficial interest belongs to the Plaintiff.

The First and Second Defendants did not oppose the Plaintiff’s claim. The Third and Fourth Defendants contested the claim, arguing that there was no documentary or statutory basis to establish any trust and that the Deceased was the absolute owner entitled to dispose of the Land under his Will. S/N kNssyuF76EiplDQczkWMg

The trial was heard over seven days, on 6 July 2022, 18 March 2024, 8 April 2024, 19 June 2024, 20 June 2024, 26 June 2024, and 26 August 2024, during which the Court heard testimony from the Plaintiff’s and Defendants’ witnesses and considered the voluminous documentary evidence and written submissions of all parties.

After full hearing and careful consideration of the evidence, the Court allowed the Plaintiff’s claim only to the extent of granting a declaration that the Deceased held the said Land on trust for the Plaintiff, with costs of RM 8,000.00 awarded jointly against the Third and Fourth Defendants. All other prayers were dismissed. This judgment therefore disposes of the Plaintiff’s action.

Both sides have filed separate appeals to the Court of Appeal, where the Plaintiff is appealing against the dismissal of the remaining reliefs, and the Third and Fourth Defendants are appealing against the declaration of trust and the costs order. These written grounds are prepared to set out the reasons for this Court’s decision delivered on 10 April 2025.

The material facts are largely undisputed. The Plaintiff company was incorporated as part of a family business previously known as Chong Keat Enterprise. In 1992, the Plaintiff acquired Chong Keat Enterprise together with its assets and liabilities, which included a parcel of land identified as Lot 192. This lot was later S/N kNssyuF76EiplDQczkWMg subdivided into two lots, namely PT 2874 and PT 2875, the former being the Land now in dispute.

At the time of the acquisition, shares in the Plaintiff were allocated to the Deceased, his wife, and their three children (the First to Third Defendants). From the corporate records, the share allocation was intended to reflect the family’s collective participation in the business and to transfer ownership of Chong Keat Enterprise’s assets, including the Land, to the Plaintiff as a corporate entity.

A Directors’ Resolution was subsequently passed declaring that the Land was an asset of the Plaintiff, and the Land was included in the Plaintiff’s audited financial statements. The Land was also used as collateral for a loan facility obtained by the Plaintiff, further confirming that the Land was treated and represented as a corporate asset.

Notwithstanding this, the registered title to PT 2874 remained in the name of the Deceased. The evidence shows that in 2015, the Deceased intended to rectify this by executing Form 14A transfer documents to transfer PT 2874 and PT 2875 to the Plaintiff. The forms were duly executed before SP2, with the consideration clause expressly stating that the Land was registered in the Deceased’s name “as trustee for Chung Kiat Enterprise Sdn Bhd.” S/N kNssyuF76EiplDQczkWMg

Unfortunately, these Form 14A instruments were never lodged for registration at the Land Office, and consequently, the legal title remained in the Deceased’s name. The Deceased subsequently passed away, and his estate was administered under his Will, where he purported to bequeath the Land to his family members.

The Plaintiff therefore instituted this action against the executors and beneficiaries of the Deceased’s estate, seeking a declaration that the Deceased had held the Land on trust for the Plaintiff and that the Deceased had no authority to dispose of it by Will.

At trial, the Plaintiff called Low Shieh Mei (PW1) and Ng Ah Lek (PW2), among others, to corroborate the corporate records and the execution of the Form 14A. The Defendants called Ng Choon Hock (DW1) and tendered the Will and related documents to argue that the Land formed part of the Deceased’s estate.

It is noteworthy that the First and Second Defendants did not dispute the Plaintiff’s case. Only the Third and Fourth Defendants vigorously opposed it, arguing that no valid trust arose under the law because the Form 14A was never registered and no trust instrument was executed under section 344 of the National Land Code.

The central issues for determination are as follows: S/N kNssyuF76EiplDQczkWMg

Whether the Plaintiff has proven on a balance of probabilities that the Deceased held the Land as a trustee for the Plaintiff, thereby making the Plaintiff the beneficial owner of the Land; and

If so, whether the Deceased was entitled to dispose of the Land by Will as part of his personal estate; and

Whether any relief beyond a declaration of trust — such as direct transfer of title — should be granted in light of the Deceased’s death and the legal title remaining with his estate. D. FINDINGS AND ANALYSIS

Having carefully considered all the oral and documentary evidence, the submissions and authorities filed by all parties, this Court finds that the dispute revolves primarily around whether the Plaintiff has successfully established, on a balance of probabilities, that the Deceased held the said Land as a trustee for the Plaintiff.

It is undisputed that the Land is registered in the Deceased’s name and that no formal transfer of ownership was ever registered in favour of the Plaintiff. However, the Plaintiff’s case is founded not on legal ownership but on equitable ownership, asserting that the Deceased was merely a trustee holding the legal title for and on behalf of the Plaintiff. S/N kNssyuF76EiplDQczkWMg

The Conduct and Intention of the Deceased

The Deceased was a founding director and shareholder of the Plaintiff company. In 1992, when the Plaintiff acquired the business and assets of Chong Keat Enterprise, the Land in question (then forming part of Lot 192) was treated as one of the assets of the business transferred to the Plaintiff. This was reflected in the company’s share allotment, which included the Deceased, his wife, and his three children, thus transferring the beneficial interest of the assets to the company.

The Directors’ Resolution was produced at trial, expressly stating that the said Land formed part of the Plaintiff’s assets. The inclusion of the Land in the Plaintiff’s audited financial statements further demonstrates that the Plaintiff had consistently treated the Land as belonging to it, not to the Deceased personally.

Moreover, the evidence showed that the Land was used as collateral in securing a banking facility for the Plaintiff. Such conduct would have been inconsistent with personal ownership by the Deceased. The Court accepts that this pattern of conduct strongly supports the existence of an understanding and intention that the Land was held for the benefit of the Plaintiff.

Execution of the Form 14A Transfers

The execution of the Form 14A transfer instruments by the Deceased is a key piece of evidence. Two Form 14A documents were produced at trial, one for PT 2874 (the disputed Land) and S/N kNssyuF76EiplDQczkWMg one for PT 2875. Both forms were executed before SP2 and bore the Deceased’s signature as transferor.

The consideration clause in both documents reads as follows: “Sebagai balasan Tanah tersebut didaftarkan atas nama NGU SUI TIN @ NG SWEE LEAN sebagai pemegang Amanah kepada CHUNG KIAT ENTERPRISE SDN BHD (No. Syarikat: 180520-H).”

This language is unequivocal. It expressly records that the Deceased recognised himself as a trustee for the Plaintiff and not as the beneficial owner. Although the transfers were never registered with the Land Office, the Court finds that this omission does not defeat the equitable relationship that had been clearly acknowledged by the Deceased.

The intention of the Deceased to perfect the transfer was plain. However, the failure to lodge the Form 14A for registration renders the legal transfer incomplete. Nevertheless, in equity, the Court looks to the substance rather than the form, and the Deceased’s actions clearly manifest an intent to transfer ownership to the Plaintiff.

As the Federal Court in Yew Wan Leong v Lai Kok Chye [1990] 2 MLJ 152 held, where there is clear evidence of an intention to create a trust or to recognise another’s beneficial ownership, the absence of formal registration does not extinguish equitable S/N kNssyuF76EiplDQczkWMg ownership. The equitable title subsists, even if the legal title remains untransferred.

Existence of a Trust

On the facts, this Court is satisfied that a trust relationship existed between the Deceased and the Plaintiff. The evidence cumulatively supports the conclusion that the Deceased was holding the Land as trustee for the Plaintiff. This conclusion is consistent with the principles in Low Tin Yong @ Low Yong Lian v Low Yong Thuan [2016] 3 MLJ 332, where the Court of Appeal recognised that where property is acquired for the benefit of a company or partnership but registered in an individual’s name, equity will treat that individual as a trustee for the entity.

The distinction between legal ownership and beneficial ownership is well established. As observed by the Federal Court in Ong Kong Beng v Ong Kong Leong [2022] 3 MLJ 536, beneficial ownership will prevail in equity whenever the holder of legal title is shown to have no personal entitlement to the property.

Here, the cumulative evidence, i.e, the Directors’ Resolution, the financial statements, the use of the Land as corporate collateral, and the executed Form 14A, all point to the Plaintiff’s beneficial ownership. The Deceased, while holding the legal title, was merely a conduit or trustee for the Plaintiff’s interest. S/N kNssyuF76EiplDQczkWMg

The Third and Fourth Defendants argued that section 344 of the National Land Code requires a trust affecting land to be declared in writing. This Court disagrees. The Form 14A itself, coupled with the supporting corporate records and consistent conduct of the Deceased, satisfies the requirement of written evidence sufficient to infer a trust. Even if the trust were informal, equity would not allow a trustee to assert personal ownership contrary to his own declared intention.

The Court also finds that this is not a case of a resulting trust but rather an express or constructive trust arising from the Deceased’s unequivocal acts and acknowledgment of his position as trustee for the Plaintiff.

Effect of the Deceased’s Will

The Deceased, having held the Land in trust for the Plaintiff, could not lawfully dispose of it by Will. A trustee cannot bequeath property held on trust as part of his personal estate. The act of doing so is ineffective against the equitable owner.

The principle is well settled that a trustee holds only the legal title for the benefit of the cestui que trust. Upon the trustee’s death, the legal title passes to his personal representatives or executors, who then hold it subject to the same trust obligations.

The Deceased’s Will, therefore, could not validly transfer the Land to his family members. The Will could only pass the S/N kNssyuF76EiplDQczkWMg Deceased’s shares in the Plaintiff (if any), not the Land itself. The Land remains an asset held in trust for the Plaintiff and must continue to be treated as such.

Relief and Equitable Limitation

Although the Plaintiff sought, among others, a declaration and a consequential order for transfer of title, the Court confined itself to granting only the declaration. This is because the legal title remains vested in the Deceased’s name, and upon his death, it now vests in his executors under section 346 of the National Land Code.

The Plaintiff, as the equitable owner, must now pursue transfer through the proper legal channel, either by obtaining the executors’ cooperation or, failing that, by seeking an order from the estate court to vest the title in a new trustee. It would not be procedurally appropriate for this Court, in a civil action of this nature, to bypass the estate’s administrative process.

Accordingly, while the Plaintiff has established its beneficial ownership, the relief is restricted to a declaratory finding. This approach ensures consistency with the principle laid down in Simcity-ETE Venture Sdn Bhd v Koperasi Pembangunan Kampung Tradisional Tasek Pulau Pinang Bhd [2022] 2 MLJ 195, where the Court of Appeal held that equitable ownership may be recognised by declaration even if the legal transfer remains incomplete. S/N kNssyuF76EiplDQczkWMg

The Court therefore finds that the Deceased held the said Land on trust for the Plaintiff, and that such trust continues notwithstanding the Deceased’s death. The Plaintiff, as beneficial owner, retains its equitable interest, and the Land cannot be distributed under the Deceased’s Will.

E. Decision and Orders Having considered the totality of evidence, the submissions and authorities, this Court is satisfied that the Plaintiff has proven its case on the balance of probabilities that the late Ngu Sui Tin @ Ng Swee Lean held the said Land, being H.S.(D) 1/92, PT 2874, Mukim Ayer Puteh, District of Pendang, Kedah, as trustee for the Plaintiff.

The evidence demonstrates a consistent course of conduct showing the Deceased’s recognition of the Plaintiff’s beneficial ownership, namely –

the inclusion of the Land in the Plaintiff’s audited financial statements;

the use of the Land as corporate collateral;

the Directors’ Resolution acknowledging the Land as a company asset; and S/N kNssyuF76EiplDQczkWMg

the executed Form 14A explicitly describing the Deceased as pemegang amanah (trustee) for the Plaintiff.

These facts, viewed collectively, lead to the inescapable conclusion that the Deceased never held the Land for his own benefit but for that of the Plaintiff. Equity, therefore, regards the Plaintiff as the beneficial owner, and the Deceased’s legal title as bare or nominal.

The Court finds that the Deceased’s purported disposition of the Land by Will is ineffective in law. A trustee cannot devise or bequeath property held in trust, and the said Land does not form part of the Deceased’s estate available for distribution. The Will could only operate to pass the Deceased’s shares in the Plaintiff, if any, but not the Land itself.

The Court also finds that while the Plaintiff is entitled to the declaration sought, no direct order for transfer of title can be made in this proceeding. The legal title presently vests in the executors of the Deceased’s estate, who must hold it subject to the same trust. The Plaintiff may take appropriate steps, if necessary, in the estate proceedings to have the title vested in its name or in a trustee to be appointed for that purpose. S/N kNssyuF76EiplDQczkWMg

In the premises, the Court grants the following orders:

A declaration is hereby made that the late Ngu Sui Tin @ Ng Swee Lean held the said Land under H.S.(D) 1/92, PT 2874, Mukim Ayer Puteh, District of Pendang, Kedah, as trustee for the Plaintiff, Chung Kiat Enterprise Sdn Bhd.

Costs of RM8,000.00 are awarded to the Plaintiff, payable jointly by the Third and Fourth Defendants.

All other reliefs claimed by the Plaintiff are dismissed.

For clarity, the effect of this judgment is as follows:

The Plaintiff’s beneficial ownership of the said Land is recognised in equity;

The legal title remains in the name of the Deceased, now vested in his executors, who must hold it subject to the trust;

The Will of the Deceased is ineffective in so far as it purports to dispose of the said Land; and S/N kNssyuF76EiplDQczkWMg

The Plaintiff may, if necessary, seek a vesting order or appropriate direction from the estate court for formal transfer of the title. Dated : 9th October 2025 ……………………………………………… (YA PUAN MAHAZAN BINTI MAT TAIB) JUDGE HIGH COURT OF MALAYA ALOR SETAR, KEDAH For The Plaintiff : Eric Augustin & Elson Beh Hong Shien Messrs. Jodia Poh & Associates Advocates & Solicitors For The 1st & 2nd : Tay Hong Huat Defendants Messrs. Tay & helen Wong Advocates & Solicitors For The 3rd & 4th : Benjamin Tan & Ng Sze Wei Defendants Messrs. Lim Tan & Co Advocates & Solicitors S/N kNssyuF76EiplDQczkWMg S/N kNssyuF76EiplDQczkWMg