Citadel Trustees Berhad v Kenaf Trading Global Sdn Bhd (WA-22NCC-870-11/2023)

The Defendant D had appointed the Plaintiff P custodian of an investment Kenaf Development Fund Fund D was the manager of the Fund. On 7.7.2023, P resigned as trustee of the Fund. The said resignation gave rise to the present action.

In this suit, P seeks own admission on how it had utilised the Fund, D ought to repay the trust monies to P. Alternatively, P seeks an indemnity in the sum of RM 138,970,002.00, based on an indemnity provision.

D in turn counterclaims for the return of a sum of RM 1,389,700.02, being the trustee fee paid by D to P. As well as the return of a sum of RM 9,732.00, being documentation fee and expenses. D also seeks a declaration that P is liable to indemnify D against any claim by the investors or third parties.

After a full trial, I dismissed s claim as well as . Here are my reasons. Background facts

On 10.9.2021, the parties herein entered into a Custodian Agreement Custodian Agreement . By the Custodian Agreement, D appointed P to perform custodial services for the assets it is holding in its capacity as custodian of the Fund assets . D to P on the drawdown of the assets.

in addition to this Custodian Agreement be required to execute and sign other agreements, forms, etc. that may be related to the services and in particular for dealing

As contemplated above, on 15.9.2021, the parties herein entered into a Service Level Agreement dated 15.9.2021 Service Level Agreement . The Service Level Agreement details the services that P shall provide to D under the Custodian Agreement. According to paragraph 10 of the statement of claim, the Service Level Agreement is - were to

Under clause 1 of the Service Level Agreement, P shall provide the following services services : Service Level Agreement and the Custodian Agreement are according to relevant laws and guidelines.

In connection with the appointment of P as trustee of the Fund, the parties herein also signed a Letter of Appointment dated 1.7.2022 Letter of Appointment

Asia International Trustee Bhd. The Letter of Appointment, which was issued by P on its letterhead, states : Appointment of Citadel Trustee Berhad (Company No. 202001010278 (1366598 - H)) a Trustee for Kenaf Development Fund ( KDF ) Reference is made to the above - mentioned matter. We would like to express our gratitude and appreciation for giving us the opportunity to become the trustee for KDF. It is understood and agreed that since Asia International Trustee Berhad ( AITB ) had resigned as the trustee on 20th May 2022, we are delighted to be appointed as the trustee for the settlors who were previously with AITB and we undertake to honor our fiduciary duty as a trustee under the Malaysian laws. Termination clause Letter of Appointment 7) Termination of Engagement Either party may terminate this engagement of services by giving 30 days notice in writing. Upon serving on such a notice by either party and in the continuance of our services until the effective date of expiration or termination, we will provide you with reasonable termination assistance to non - interruption or adverse effect to our services and to facilitate the orderly transfer of the services to the new service provider. Where applicable, we will reasonably cooperate with a third - party service provider appointed by you in connection with the preparation and implementation of a transition plan by such third party or yourselves upon the termination or expiration of our services. We shall be entitled to charge our fees during this termination period until our assistance is no longer required and all outstanding invoices owing to us have to be fully settled upon mutual termination. Service Level Agreement 7) This Agreement may be terminated by either party upon service of a termination notice of not less than three (3) months in writing. If there is a material breach by a defaulting party, and the defaulting party fails to satisfactorily remedy the breach within three (3) months of the notice to remedy, then the non - defaulting party may terminate this Agreement by giving three (3) months notice in writing from the last day to remedy the breach. For the avoidance of doubt, material breach shall refer to a serious breach of the terms by one party that is so detrimental to the other party or failure to perform an agreed term that it is an essential element of the agreement or causes substantial harm or damages to the aggrieved party. Custodian Agreement [i.e. perform the services] in the event that the performance of the services are rendered to be illegal or contradictory to any laws or relevant authorities or if, in its opinion, there are reasonable grounds for such refusal (and in which case the Trustee [i.e. P] will promptly notify the Company [i.e. D] Indemnity clause The Trustee [i.e. P] shall indemnify the Company [i.e. D] against all claims, liabilities, damages, costs and expenses of any kind which may be incurred by the Company and all actions or proceedings which may be brought against the Company as a result of the breach by the Trustee of this Agreement, the gross negligence, fraud or willful default of the Trustee, any delegate or other person appointed by it or their respective officers or employees in connection with the provision of the Services provided that the Trustee shall not be responsible for any consequential, or indirect loss or damage. This indemnity shall continue notwithstanding the termination of this Agreement. The Company [i.e. D] shall indemnify the Trustee [i.e. P] and any other person appointed by it and their respective officers and employees against all claims, liabilities, damages, costs and expenses of any kind which may be brought incurred by them and all actions or proceedings which may be brought against them in connection with the provision of the Services except insofar as such results from the breach by the Trustee of this Agreement, the gross negligence, fraud or willful default of the Trustee and its respective officers and employees. This indemnity shall continue notwithstanding the termination of this Agreement. a) The parties herein have a contractual relationship as borne out in the Custodian Agreement and the Service Level Agreements (collectively b)

11.1 The Plaintiff would, pursuant to instructions received from the Defendant, prepare a declaration of trust for the benefit of the [i.e. the Fund]. The trust; interchangeably but means Investors).

11.2 The Investor upon the pronouncement of the declaration of trust expressly sets out the amount of monies to be applied to the trust (referred to therein a represents the invested funds by the Investor to be applied to the KDF which was controlled by the Defendant;

11.3 thereafter the Investor would then appoint the Plaintiff as the Trust Company to regulate the Trust in favour of the Defendant as expressly provided in recital C of the Trust Deed and in the manner that is pleaded below.

12.1 that the deposit of monies expressly stated in the Declaration of Trust by the individual Settlors was to be placed in the KDF, which is a fund that was initiated by the Defendant for the purposes of the investment by the individual Settlors for the investment objectives that were disclosed to the Investors / Settlors by the Defendant by virtue of the Information Memorandum;

12.2 collection of the Trust Fund from the Settlors to be released to the Defendant into a fund known as KDF which was collected by the Plaintiff utilising the Collection Mechanism;

dates, and pursuant to the terms and conditions of the Custodian Agreement and Express Trust, the Plaintiff had created 1,919 declarations of trust and Express trusts for the collection of the Trust Fund monies that were deposited with the Plaintiff by the individual Settlors amounting to RM Express Trust. Monies from the individual investors and confirmed the detailed terms of the investment in the said letter in a schedule attached thereto which captured the schedule of repayment and the payment due date. Indebtedness also proceeded to make dividend payments directly to the respective Investors in accordance with the repayment schedule contained in the respective Letter of Acknowledgement of Indebtedness. Defendant and following the issuance of the respective Letter of Acknowledgement of Indebtedness, the Defendant was solely dealing with and communicating directly with the respective Investors to the exclusion of the Plaintiff. Monies to the Defendant into the KDF, the obligations of the Plaintiff under the Custodian Agreement and Express Trust were suspended usurped the role of the Plaintiff as a Trustee and directly communicated with the respective Investors and also made payments of the dividends directly to the Investors in accordance with the terms detailed in the Letter of Acknowledgement of Indebtedness. i) P fully performed its contractual obligations by collecting and transferring instructions. ii) D alone structured, marketed, controlled and managed the investment known as the Kenaf Development Fund (KDF) and therefore bears responsibility for the utilisation of those funds. iii) Performance complete - All monies collected by P had been completely divested to D. iv) - they have at all times fully performed the bargain as contained in the Custodian Agreement and the Service Level Agreement, which is completed upon the written instructions being received from D to pay over to the KDF the amounts collected by P to facilitate investments under that fund which is primarily and solely operated by D. v) Under the Custodian Agreement and the Service Level Agreement, P undertook to:- (a) provide the collection mechanism; (b) receive funds from investors; (c) transfer funds pursuant to written instructions. vi) The evidence establishes without contest from the Defendant that:- (a) funds were received by P; (b) written instructions were issued by D; and (c) funds were transferred and received by D in accordance with those written instructions. P has therefore fully performed its contractual obligations. vii) P did not:- (a) market any investment under the terms of the Custodian Agreement and the Service Level Agreement; (b) advise investors / settlors; D, pursuant to written instructions issued by D. This was in accordance with the Custodian Agreement and the Service Level Agreement.

monies transferred to and received by D. as trustee in collection of the monies from the investors to be released to D into the Fund. P so as to enable P to discharge its obligations to the investors (as per paragraph 31 (b) of the statement of claim), case. Perhaps for this reason, P has chosen to abandon this head of claim, as alluded to earlier.

letter to P dated 15.2.2023 reads : Your email dated 8th February 2023 is referred. We take cognizance of your email and would like to take this opportunity to respond to your request accordingly. 2) Utilisation of Funds a) For your information, Kenaf Trading Global Sdn. Bhd. ( KTR ) and Kenaf Venture Global Sdn. Bhd. ( KVG ) have formalized their relationship as strategic partners vide a Strategic Partner Agreement Agreement ). The Agreement provides that KVG shall be KTR's strategic partner to manage the funds from KTR. The funds are to be used operate its kenaf plantation and research and development for technological advancement. KVG is also responsible for the advertisement and promotions of the business to realise the vision of making kenaf as the advanced sustainable material. b) Apart from the above, the funds are mainly used to pay the settlors dividends and redemption as well as the agents commissions. As you are aware, the dividends KTR provides to the settlors are between 24 % to 36 % per annum, whilst the agents commissions are 8 % for the initial Investment and between 2 % for twelve (12) months for every investment brought in. This consists the bulk of the fund utilization. Only some portions of the funds are used for the operational expenses, which includes salaries, overheads, rental and other miscellaneous expenses. 3) Audited Accounts for the Past Two (2) Years and the Management Accounts as at 31st December 2022 As you are aware, KVG is currently having a legal dispute with its former trustee with regards to the shares being held by the former trustee. This has resulted in the difficulty for KVG and the other companies to conduct their restructuring exercise. Therefore, KTR and KVG are unable to consolidate their accounts accordingly as what it supposed to be. It will be not give a fair view of the respective account. 4) In view of the above, we seek your kind consideration to allow us with some time in order for us to prepare the requested documents and we will provide the same in due course. We thank you for your understanding and look forward to your favorable reply.

aforementioned 15.2.2023 letter to P w dated 8.2.2023, which reads : Dear En Jazman,

36.

7.7.2023 reads : Notice of Resignation as Custodian pursuant to the Custodian Agreement dated 10.9.2021 and Service Level Agreement dated 15.9.2021 in relation to the Kenaf Development Fund We refer to the above matter. Further reference is made to your letter dated 16.1.2023, our email dated 8.2.2023 and your letters dated 15.2.2023 and 15.6.2023 respectively. 2)

P contends that this head of claim is 15.2.2023 letter to P. Where D had stated that the funds are mainly used to pay the investors , . During the trial however, no evidence was led to show how such utilisation of funds was wrong. Other than a bare assertion that it contravenes the Financial Services Act 2013 and the Capital Markets and Services Act 2007, P did not explain the alleged contravention.

Moreover, c 131 of the Companies Act 2016. That provision stipulates that distribution However, that provision does not come into play in this case. The payment to the investors were made out of the Fund. But the Fund is not a company under the Companies Act 2016, and the investors are not shareholders of D.

In the circumstances, the head of claim under paragraph 31 (a) of the statement of claim is untenable. Paragraph 31 (b) of the statement of claim - that the Defendant indemnifies the Plaintiff

At paragraph 31 (b) of the statement of claim, P prayed for an alternative relief that D indemnifies P to the total sum of RM 138,970,002.00, based on the indemnity clause contained in the Custodian Agreement.

It is clear that under clause 6.3 of the Custodian Agreement, D shall indemnify P against all claims, liabilities, damages, costs and expenses of any kind which may be incurred by them and all actions or proceedings which may be brought against them in connection with the provision of the services

However, what is not clear is whether the said indemnity provision under the Custodian Agreement has been triggered. In this regard, P has not shown what liability they had actually incurred or what damage they had actually suffered, in respect of which the indemnity is sought.

In the statement of claim, P alludes to having received a notice of demand from an investor. P anticipates that other investors might sue P. P stated :

Thereafter on or about 8.9.2023 the Plaintiff received a Notice of Demand from one of the Investors known as Yew Xi who asserted that notwithstanding full disbursement the Trust Monies and placement of the same with the Plaintiff, the Plaintiff has failed to make the dividend payments to Yew in accordance with the scheduled frequency that was confirmed by the Defendant in the Letter of Acknowledgement of Indebtedness which is a breach of the Express Trust executed between the Plaintiff and the Investors and claiming for the repayment of the Principle Invested sum and outstanding

In amplification to the matters pleaded in paragraph 28 above, the Plaintiff anticipates that each and every Investor who entered into the Express Trust with the Plaintiff will pursue the Plaintiff in a similar manner as Yew for the recovery of the principle monies invested which were collected by the Plaintiff from the Investors and completely disbursed to the Defendant as pleaded in paragraph 13 and 14 above.

In similar vein spoke of receiving letters of demand, and regarding an action filed against both P and D by two investors. He also mentioned an application to set aside a judgment in default obtained against P, and fending off a garnishment proceedings.

He stated this in his witness statement : Thereafter on or about September 2023, the Plaintiff started to receive demand letters from the solicitors of the investors, and they would now wish to come after the Plaintiff instead of going after the Defendant who was holding the investment monies. Q28 Can you tell the court then why the Plaintiff had filed this action against the Defendant when the Plaintiff had already the Defendant and the individual investors have ceased already? A28 It is eased once the investment monies that had been collected and paid over to the instructions. These instructions are well captured in the Trust Deed. We have the proof to show that in the Trust Deed, our instructions as the Trustee was to pay over the investment funds to the Defendant for the purposes of investment in the KDF. That is why the investors came to see us, not to place the funds with us for us to invest for them but for them to be able to invest in the KDF (their specific and choice of investment) the pitch of which was done directly between the individual investor and the Defendant using the Information Memorandum. The pitch in the Information Memorandum to the individual investors also had nothing to do with the Plaintiff. That was the arrangement from the inception when the Defendant came to see the Plaintiff. All that was conducted by the Defendant directly with the individual investors, even soliciting the individual investors was carried out by the Defendant and had nothing to do with the Plaintiff. The Plaintiff only received the investment funds that had been placed with the Plaintiff when the individual investors were directed to do so by the Defendant. However, at the moment our concern is that we are receiving letters of demands and recently already have a case where 2 of the investors had filed an action against both the Plaintiff and the Defendant who were cited as the 1st and 2nd Defendant respectively in that suit. I am informed by the solicitors that Judgement in default has already been taken in that suit against the Defendant who has failed to respond to the same and the Plaintiffs solicitors are applying to set aside the Judgement in default unfortunately taken against the Plaintiff and fending off a garnishment proceedings against that judgement currently being enforced against the Plaintiff which is pending before this Honourable Court for a decision whether the Plaintiff should be granted leave to set aside the Judgement in default and defend that action. The matter has been fixed for decision on 31.7.2025. This is the reason that we need to be indemnified, it appears that the against them by the investors and we had just found out that the director of the Defendant was declared bankrupt. This is exactly the reason why we would need the judgement based on the contract to indemnify which was contractually provided in the Custodian Agreement to protect the Plaintiff from exactly this kind of liability and exposure.

During the trial, no documentary evidence was produced in court of the afor case where two of the investors had filed an action against both P and D who were cited as the 1st and 2nd defendant respectively in that suit application to set aside the judgment in default taken against P fending off a garnishee proceeding

It was only subsequently in post - trial written submissions, that P introduced the cause papers pertaining to an action that was commenced against both P and D by two investors vide Kuala Lumpur Sessions Court Summons No. WA - A52 NCC - 4895 - 11 / 2024.

It seems to me that the proper forum for P to seek an indemnity against D is in those proceedings. Where P could institute third party proceedings against D for a contribution or indemnity under Order 16 of the Rules of Court 2012, if it was so minded. In the event that the court adjudicating the claim filed by the investor decides that P is liable to the investor, the court can then go on to determine whether D should indemnify P in respect of such liability.

By contrast, it would not be appropriate for me in the present suit to grant a blanket indemnity in favour of P against D in a vacuum. To illustrate this point, P in paragraph (b) of the statement of claim asks to be indemnified to the total sum of RM 138,970,002.00

Nevertheless, it has not been established that P is liable to the investors in that amount, or anywhere near that amount. Even in the aforementioned Sessions Court suit which was introduced by P in post - trial written submissions, the default judgment entered against P was for .00 (first investor) and RM 80,000.00 .00 (first investor) and RM 38,400.00 . trustee was validly done

I agree with D that P has breached the termination clause of the Letter of Appointment. By reason of its failure to give 30 days notice in order to terminate its appointment as trustee. From 7.7.2023, it is evident not complied with. Instead, P and immediate.

In addition, P was in breach of its obligation to provide termination assistance and to facilitate a smooth transition process. Recall that under clause 7 of Appendix 1 of the Letter of Appointment, upon issuing the 30 termination notice, and in the continuance of its services until the effective date of termination, P agreed to provide termination assistance. P undertook not to interrupt or cause any adverse effect to the services provided, and to facilitate an orderly handover of the services to a new trustee. P has failed to comply with that obligation.

I am cognizant that the termination clause appears in the Letter of Appointment and the Service Level Agreement, but not in the Custodian Agreement. However, this point does not appear to pose a problem to the parties.

P had accepted that both the Service Level Agreement and the Custodian Agreement agreements are to be read together. Also as pointed out earlier, the Custodian Agreement contemplates that the Service Level Agreement would be entered into.

makes reference dated 10.9.2021 read together with the Service Level Agreement dated and consequently its resignation, is pursuant to both the Custodian Agreement and the Service Level Agreement.

that P resigned from its position as trustee pursuant to the Custodian Agreement and the Service Level Agreement. A26 The Plaintiff did not receive any updates on the payments made so by on or about 7.7.2023, the Plaintiff wrote to the Defendant and informed them that the Plaintiff will be resigning from the position as custodian pursuant to the Custodian Agreement and the Service Level Agreement for the purposes of the KDF.

the resignation on the basis that there was already a default by D in not resolving the repayments to the investors after a period of 90 days. His citing of the is probably with reference to the three months termination notice stipulated under clause 7 of the Service Level Agreement.

He stated this in his witness statement : A26 We had resigned on the basis that there was already a default by the Defendant in that after a period of 90 days they were not able to resolve the dividend and capital repayments to the individual investors who had deposited investment amounts which were paid over to the Defendant and in amplification of that it had now come to light that payment of the dividends out of the fund was fundamentally a breach of the applicable laws in addition to failure to furnish the audited accounts so that we could discern how the fund was properly being utilised.

Undoubtedly, P is entitled to resign. That is not in issue. It is the manner of resignation that is in question. My finding is that P may not resign without giving the requisite notice period, whether it be 30 days as per the Letter of Appointment or three months as per the Service Level Agreement.

required, as per clause 7 of Appendix 1 of the Letter of Appointment. In the statement of defence and counterclaim, D pleaded :

42.4 Perletakan jawatan oleh Plaintif adalah salah, tidak sah dan nyata melanggari terma dan syarat Surat Perlantikan Plaintif bertarikh 1.7.2022 sepertimana berikut : -

42.4.1 Plaintif perlu memberi notis 30 - hari untuk menamatkan perlantikan dengan Defendan;

42.4.2 Apabila notis 30 - hari di keluarkan, Plaintif bersetuju untuk memberikan bantuan penamatan (termination assistance) dan juga tidak akan mengganggugugat (non - interruption) atau menyebabkan kesan buruk (adverse effect) kepada perkhidmatan-nya, dan seterusnya memudahcara (facilitate) pemindahan secara teratur perkhidmatan kepada pihak baharu (new service provider).

The rationale for a termination notice period is not hard to appreciate. It is to allow time for a replacement trustee to be appointed. This will ensure that the services are not interrupted, and there will not be a situation where the Fund is left without a trustee. That is why clause 7 of Appendix 1 of the Letter of Appointment imposes an obligation on P to provide termination assistance, and to facilitate an orderly transition of the services to a new trustee.

It is well - established that termination clauses must be strictly complied with. This includes pre - termination conditions and the content of the notice. In SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464, the Federal Court emphasised that :

where a contract mandates the terminating party to provide a period of rectifying the breach, it must be strictly complied with;

the notice of termination shall also consist of reasons to support the termination; and

particularised reasons had to be provided, since they were there to provide the opportunity to meaningfully remedy any unsatisfactory performance or situation.

The Federal Court held : Nonetheless, we do recognise that there are certain circumstances in which, as a matter of construction of contract, the recipient of the aforementioned notice is entitled to have the reasons for termination communicated to it by the terminating / non - defaulting party where the contract provides for a its allegedly defective performance to the satisfaction of the non - defaulting party. This is clearly because a party that is afforded the opportunity to remedy deficiencies in performance cannot do so unless it has notice of the deficiencies, either actual or constructive. This stands to reason. [80] In our view, the latter interpretation makes more commercial sense. One may well ask why. Well, it is because it is conceivable that matters will begin as earlier stage, one cannot reasonably understand the contract to mean that the dead, and then wait for it to escalate so as to deprive the appellant of the isfactory. That would not be the way the contract would be understood by the reasonable person, having knowledge of the material facts. Clause 9 would be understood as giving an opportunity to remedy, which would be illusory if the respondent could deprive the appellant of that, simply by waiting. [94] What can be concluded from the above is that, upon a true construction of the contract, cl 9 must be invoked and satisfied before termination under cl 8.1(b) may be validly exercised. This is to ensure that the meaning and purposes of the two clauses are not lost or rendered nugatory by operation of the other. [95] Thus, particularised reasons have to be provided for cl 9, since they are there to provide the opportunity to meaningfully remedy any unsatisfactory performance or situation. Therefore, termination under cl 8.1

would require these particularised reasons to have been expressed earlier (ie 30 days before) and with the notice of termination since the failure to remedy would be the basis upon which cl 8.1(b) is relied upon. Thus we find that the said cl 8 termination was not valid.

The Federal Court echoed these principles in Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLJ 374 at 392 - 393, 395 - 396 : The Federal Court in SPM Membrane emphasised that there must not only be a valid reason to terminate but communication of that reason to the other party to the agreement .. [60] The judicial observations in the authorities as we have stated above represent a clear, consistent and principled approach that termination clauses in a contract must be interpreted strictly. [63] Reading the terms of the SSA in its entirety, we find that there is no latent ambiguity; the obligations of the parties are specifically defined. Termination is not permitted unless as expressly stipulated under SSA. Notice must be given to the appellant to rectify the identified breach and take steps to rectify that breach within the prescribed time as agreed. There must be strict adherence to the clauses in an agreement which relates to termination.

In the circumstances, I find that its contractual obligations. P failed to comply with the required notice period and the attendant duties upon termination. Which included providing termination assistance during the handover, so as to ensure no interruption or adverse impact to the services.

In post - trial written submissions, P argued that the termination clause in the Letter of Appointment dated 1.7.2022 cannot be referred to. P submitted : The following matters excludes references to the Letter of Appointment : a) The letter dated 1.7.2022 itself was not part of the documents that had been presented in the Common Bundle of Documents jointly filed by the parties; and b) The CA which was executed later contained an entire agreement clause which excludes all previous agreements in clause 17.

submission is incorrect. Firstly, the Letter of Appointment (dated 1.7.2022) was executed later, after the Custodian Agreement (dated 10.9.2021). And not the other way round, as submitted by P.

Secondly, clause 17 of the Custodian Agreement, which was relied upon by P, contemplates that the parties may execute other agreements that are related to the services. It reads :

17.1 This Agreement supersedes and replaces any previous agreement between the parties in relation to the Services.

17.2 The parties may in addition to this Custodian Agreement be required to execute and sign other agreements, forms etc. that may be related to the Services and in particular for dealing in the Assets.

Thirdly, although the Letter of Appointment was not presented in the Common Bundle of Documents, it had been adduced in evidence through the affidavits that were exchanged between the parties in the course of certain pplication for summary judgment in Enclosure 13. (See Exhibit -

11.1.2024 in Enclosure 10 and

Notably, the Letter of Appointment was issued by P on its own letterhead. It even appears that the termination provision in paragraph 7 of Appendix 1 of the Letter of Appointment was proposed by P itself. P therefore cannot feign ignorance and now seek to exclude reference to the Letter of Appointment. In any event, as discussed earlier, the relevant agreements (i.e. the Custodian Agreement, the Service Level Agreement and the Letter of Appointment) are to be read together. for trustee fees and expenses

D counterclaims for the return of a sum of RM 1,389,700.02, being the trustee fees paid by D to P. As well as the return of a sum of RM 9,732.00, being documentation fee and expenses.

The counterclaim is baseless. There is no provision in the relevant agreements for any refund of the trustee fees and expenses. In addition, D does not dispute that P had performed the services. P subsequent resignation does not detract from of the services, prior to the resignation.

D had paid the trustee fees and expenses because it is contractually obligated to do so. That is apparent from the following provisions of the relevant agreements.

Under clause 9.1 of the Custodian Agreement, D shall pay fees to P . Dividends received from the investment shall be distributed to D within 5 working days after netting off 1 % out of the dividend amount for the fees.

Under clause 9.2 of the Custodian Agreement, D shall also pay to P all other expenses incurred by P in the provision of the services. A certificate as to the nature and amount of such expenses produced by P, shall be conclusive evidence against D of the expenses.

Under clause 9.3 of the Custodian Agreement, P shall be entitled to debit automatically or set off against the amount of such fees and expenses, any credit balance on any account of D with P in or towards settlement.

As per clause 6 of the Service Level Agreement, the charges and terms of payment are stated in Appendix A.

transaction (in and

Under item 2 of Appendix A, all administration expenses and out of pocket expenses will be borne by D.

Under clause 2 of the Service Level Agreement, actual costs and expenses incurred by P on behalf of D shall be reimbursed by D.

Under paragraph 1 of Appendix 1 of the Letter of Appointment, the trustee fee is as follows : annual administration fee per investor (based on value of trust fund) - 2 % of the value of the trust fund .

Under paragraph 2 of Appendix 1 of the Letter of Appointment, there is a professional fee for preparing and drafting the relevant documentation pertaining to the custodian arrangement. Such fee is to be borne by D.

Under paragraph 3 of Appendix 1 of the Letter of Appointment, the above fees do not include out - of - pocket expenses, and other expenses and disbursements incidental to the services.

If wa damages for breach, not for restitution of the trustee fees and expenses. During the trial, D did not adduce any evidence on the loss it allegedly suffered. D simply made a bare allegation that without notice or transitional arrangements caused prejudice and operations. That is not enough. Damages must be proved and particularised.

D also seeks a declaration that P is liable to indemnify D against any claim by investors or third parties. an indemnity against D will similarly apply here. For those same reasons, I likewise reject D

For the reasons above, I dismissed counterclaim. Since neither party succeeded, I made no order as to costs. Dated 1 April 2026 Quay Chew Soon Judge High Court of Kuala Lumpur (Commercial Division NCC 2) Counsels Jeffrey John (Messrs. Jeffrey John) for the Plaintiff Zahidah binti Md Zaman (Messrs. Shaikh Harun & Co.) for the Defendant Case reference 1. SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464 2. Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLJ 374 Legislation reference 1. Financial Services Act 2013 2. Capital Markets and Services Act 2007 3.