Desiree Roselyn D'Costa v Kalai Selvan A/L Supramaniam (BA-22NCvC-197-05/2022)

KALAI SELVAN A/L SUPRAMANIAM

METRO ASIAJAYA SDN BHD (COMPANY NO.: 200601002556 [722304-U] …DEFENDANTS GROUNDS OF JUDGMENT

This is the Plaintiff’s action against the Defendants arising from a business arrangement involving the Second Defendant. The Plaintiff claimed, inter alia, for the recovery of monies 23/12/2025 14:44:10 BA-22NCvC-197-05/2022 Kand. 61 S/N Ciqlrh8MbUmgxir5Kbt3OQ transferred for shares, repayment of a friendly loan, unpaid salary, travel expenses, and related reliefs.

The dispute concerns events that occurred between 2018 and 2021, during which the Plaintiff was recorded as a shareholder and director of the Second Defendant and monies were transferred in connection with that shareholding. Issues subsequently arose regarding the transfer of the Plaintiff’s shares and the repayment of sums allegedly advanced to the First Defendant.

After a full trial and upon considering the pleadings, the evidence, and the parties’ written submissions, this Court allowed the Plaintiff’s claim only in respect of the monies transferred for the shares and the friendly loan. All other claims were dismissed.

My reasons are set out below.

The Plaintiff, Desiree Roselyn D’Costa (Desiree), is the daughter of Augustine Gerald D’Costa (Gerald). The First Defendant, Kalai Selvan a/l Supramaniam (Kalai), is a Malaysian citizen and a director of the Second Defendant, Metro Asiajaya Sdn Bhd, a company incorporated in Malaysia in 2006.

Gerald and the First Defendant had known each other since around 2007 and were acquainted through their involvement in the oil and gas industry. Over the years, they communicated and exchanged views on work-related matters within that industry.

In or about August 2018, the First Defendant informed Gerald of a business opportunity in Malaysia, involving the supply of Non-Destructive Testing (NDT) and other engineering services for the oil and gas sector. Gerald expressed interest in venturing into Malaysia and discussed the possibility of participating in this business.

According to the Plaintiff’s case, Gerald informed the First Defendant that the Plaintiff would be the person to enter into the business relationship in Malaysia. The Plaintiff agreed to participate on the basis that she would be a major shareholder and a director of the company to be used for the business, and that the First Defendant would assist in obtaining the necessary visa to reside and work in Malaysia.

The vehicle identified for the business was the Second Defendant, which, according to the Defendants, had been a dormant company prior to these arrangements. The parties’ cases differ as to whether the original intention was for Gerald himself or the Plaintiff to be the substantive investor, but it is common ground that the Plaintiff’s name was later registered as a shareholder and director of the Second Defendant.

In October 2018, Gerald and the Plaintiff travelled to Malaysia. Around this time, the Plaintiff was introduced to the company secretary and signed various company documents in connection with the Second Defendant. An allotment dated 22 October 2018 recorded that the Plaintiff held 750,000 shares, while the First Defendant held the remaining shares in the company.

Between October 2018 and December 2019, several payments totalling approximately RM582,000.00 were transferred into the Second Defendant’s bank account. It is not disputed that these payments were made from Gerald’s account. The Plaintiff’s case is that these funds were paid for her investment, whereas the Defendants’ case is that Gerald himself made the investment.

In 2019, issues arose regarding the Plaintiff’s visa application and the structure of her shareholding. According to the Defendants, the Plaintiff’s holding of 75% of the shares did not comply with regulatory or immigration requirements, prompting discussions about restructuring the shareholding. The Plaintiff disputed that she had agreed to any transfer of her shares to the First Defendant.

Company searches later revealed that the Plaintiff’s shares had been transferred on several dates between 2019 and 2021 and that she was no longer listed as a director of the Second Defendant. The Plaintiff contended that she had never S/N Ciqlrh8MbUmgxir5Kbt3OQ consented to these transfers or to her resignation as a director. Whilst the Defendants’ position is that these changes were carried out with the knowledge and agreement of the Plaintiff and/or Gerald.

In addition to the investment-related dispute, the Plaintiff also claimed that the First Defendant borrowed RM335,000.00 from her, that a loan agreement was executed, and that the sums were never repaid. She further claimed unpaid salary and travel expenses incurred due to visa-related issues.

Following the discovery of changes in shareholding and directorship, the Plaintiff commenced this action, seeking, among other things, the recovery of the investment sums, repayment of the alleged loan, and related relief. The Defendants denied liability and contended that the Plaintiff has no entitlement to the sums claimed and no locus to sue for the investment monies.

The Agreed Issues to be tried are set out in Enclosure 19.

The Plaintiff called two witnesses-a. PW1 - Gerald. b. PW2 - The Plaintiff - Desiree.

The Defendant produced two witnesses-S/N Ciqlrh8MbUmgxir5Kbt3OQ a. DW1 - Vasudevan A/L S Marimuthu. b. DW2 - The First Defendant - Kalai.

The Plaintiff’s case is that she was the true investor, majority shareholder, and director of the Second Defendant under an agreement reached in or about August 2018 between herself, her father Gerald, and the First Defendant.

According to the Plaintiff, although the initial discussions about the Malaysian business opportunity took place between Gerald and the First Defendant, it was always intended that the Plaintiff would be the investor and carry on the business in Malaysia. This arrangement was said to be motivated by the Plaintiff’s intention to establish herself professionally in Malaysia after completing her studies.

The Plaintiff maintained that she agreed to invest on the express condition that she would hold 75% of the shares in the Second Defendant, be appointed as a director, and that the First Defendant would assist in obtaining the necessary visa to remain and work in Malaysia.

The Plaintiff stated that she executed company documents in October 2018, believing she was being registered as the main S/N Ciqlrh8MbUmgxir5Kbt3OQ shareholder and director. An allotment dated 22 October 2018 recorded her as the holder of 750,000 shares, and she relies on this registration as evidence of her legal ownership and interest in the company.

Although the monies for the investment were transferred into the Second Defendant’s account by her father, the Plaintiff contended that these payments were made on her behalf, with her father acting merely as the source or conduit of funds, and that this did not alter her status as the investor and shareholder.

The Plaintiff further contended that she never agreed to transfer her shares, never signed any valid share transfer forms, and never resigned as a director. She asserted that she only discovered, through company searches conducted in 2022, that all her shares had been transferred to the First Defendant and that she was no longer listed as a director.

The Plaintiff alleged that the transfer of her shares was carried out without her knowledge or consent, and that the First Defendant ultimately became the beneficiary of shares for which she had paid, thereby giving rise to claims in money had and received, unjust enrichment, and fraudulent transfer of shares, as pleaded.

In addition, the Plaintiff claimed that the First Defendant borrowed a total sum of RM335,000.00 from her, that a loan agreement was executed in September 2019, and that no S/N Ciqlrh8MbUmgxir5Kbt3OQ repayment was ever made. She also claimed unpaid salary and travel expenses allegedly incurred due to the failure to obtain her employment visa.

On the issue of locus standi, the Plaintiff’s case is that she has the legal right to bring this action because she was the registered shareholder of the Second Defendant, and any interference with her shareholding directly affected her legal and proprietary interests.

The Defendants’ case is that the true investor and contracting party in respect of the business venture was Gerald, the Plaintiff’s father, not the Plaintiff herself. They contended that all substantive discussions, negotiations, and decisions regarding the investment were conducted exclusively between Gerald and the First Defendant from August 2018 onwards.

According to the Defendants, the Plaintiff was not involved in the investment discussions until October 2018, and at the material time she was still a student with no experience in the oil and gas or NDT industries. Therefore, the Defendants argued that the Plaintiff could not have been the genuine investor in the business.

The Defendants asserted that the Plaintiff’s name was used as a nominee or placeholder at Gerald’s request because Gerald S/N Ciqlrh8MbUmgxir5Kbt3OQ remained based in Oman and wanted his daughter to be physically present in Malaysia to oversee the company’s affairs on his behalf.

They emphasised that all payments towards the alleged investment were made from Gerald’s personal bank account and that the Plaintiff did not transfer any monies from her own account. On this basis, the Defendants contended that the Plaintiff suffered no personal loss and therefore has no entitlement to recover the investment sums.

The Defendants further contended that issues arose in 2019 regarding the legality of the Plaintiff holding 75% of the shares and her eligibility for an employment visa. They stated that the Plaintiff and Gerald were informed of these issues and, with their knowledge and agreement, steps were taken to restructure the Second Defendant's shareholding.

Regarding the share transfers, the Defendants denied any fraud. They maintained that the transfers were carried out with the Plaintiff's and/or Gerald's knowledge, consent, and instructions, and that the Plaintiff failed to plead or identify which specific documents were allegedly forged or fraudulent.

The Defendants also contended that the Plaintiff failed to particularise the alleged forgery and share transfers in her pleadings.

As regards the claim for RM335,000.00 for a friendly loan, unpaid salary, and travel expenses, the Defendants disputed the existence of any enforceable loan obligation, denied liability for salary, and contended that responsibility for visa matters did not rest solely with the First Defendant.

On locus standi, the Defendants’ position is that, because the investment funds belonged to Gerald and he negotiated the investment arrangement, the Plaintiff has no standing to sue for the recovery of the investment sums, and that the proper claimant, if any, would be Gerald.

The Defendants initially raised the issue of the Plaintiff’s locus standi to initiate this action in their pleadings and written submissions. However, during the course of oral submissions, learned counsel for the Defendants informed the Court that the issue would no longer be pursued and expressly conceded the point. Accordingly, the Court treats the issue of locus standi as no longer in dispute. Claim for the Sum of RM582,382.60

The Plaintiff sought repayment of the sum of RM582,382.60, being the monies transferred for the acquisition of shares in the Second Defendant.

It was not disputed that, pursuant to the investment, the Second Defendant allotted 750,000 shares to the Plaintiff.

The Plaintiff subsequently discovered that all her shares had been transferred out without her knowledge, consent, or approval. The Plaintiff also argued that she had not resigned as a director of the Second Defendant.

The contemporaneous documentary evidence showed that, through a series of share transfers, all 750,000 shares initially allotted to the Plaintiff were ultimately registered in the name of the First Defendant.

The sequence of shareholding changes was recorded in the corporate records as follows:

On 22 October 2018, the Plaintiff held 750,000 shares, and the First Defendant held 150,000 shares.

On 27 September 2019, the Plaintiff’s shareholding was reduced by 500,000 shares, leaving her with 200,000 shares, while the First Defendant’s shareholding increased by the same amount to 700,000 shares. On the same date, Gayatri a/p Supramaniam’s shareholding was reduced to zero, and Nadia Hanim binti Awang @ Abdul Rahman received 100,000 shares.

On 22 June 2020, the First Defendant’s shareholding was reduced by 140,000 shares, and the Plaintiff received 140,000 shares, increasing her shareholding to 340,000 shares.

On 2 February 2021, Nadia Hanim’s shareholding was reduced to zero, and Haslinda binti Yusof received 100,000 shares. On the same date, the Plaintiff’s shareholding was reduced by 40,000 shares, increasing the First Defendant’s shareholding to 600,000 shares.

On 16 June 2021, both Haslinda binti Yusof and the Plaintiff transferred their remaining shares, reducing their holdings to zero. The First Defendant received 400,000 shares and became the sole shareholder, holding 1,000,000 shares in the Second Defendant.

The corporate information from the Companies Commission of Malaysia (CCM) search of the Second Defendant, dated 15 February 2022, confirmed that the First Defendant was the sole shareholder of the company. The First Defendant did not dispute this.

This Court finds that the Plaintiff’s oral evidence on this issue was consistent with and corroborated by the contemporaneous documentary evidence.

The Plaintiff explained that she claimed the sum of RM582,442.60 because it was the amount invested in the 750,000 shares that were transferred out without her knowledge or consent. She also sought interest from 27 September 2019, the date on which the first significant share transfer occurred.

This Court finds that the First Defendant has not adduced evidence to show that the shares were taken for valuable consideration, or that any agreement or arrangement existed under which the Plaintiff had agreed to transfer her shares to him.

The Defendants contended that a foreigner could not hold 75% of the equity in a Malaysian company under the CCM. However, this was a bare assertion, unsupported by evidence. No regulatory provision or factual basis was adduced at trial to substantiate this allegation. On the contrary, DW1 agreed in cross-examination that a foreigner could hold 100% of the shares in a Malaysian company. This evidence was not challenged in re-examination.

The First Defendant was cross-examined about the transfer of the Plaintiff’s shares and produced a single Form of Transfer document under section 105 of the Companies Act 2016, marked IDD-1. Apart from IDD-1, the First Defendant failed to provide any other share transfer documents. The Plaintiff S/N Ciqlrh8MbUmgxir5Kbt3OQ contested IDD-1, alleging that the signature on IDD-1 was not hers.

The Plaintiff positively pleaded and gave evidence that she did not sign any share transfer documents. Since the First Defendant presented IDD-1, the burden lay on the Defendants to rebut this allegation by producing the relevant documents and evidence. This was not done. The First Defendant failed to take steps that would reasonably be expected of him to prove that IDD-1 was not forged and that the signature was the Plaintiff's.

50.

The Court noted that the Plaintiff’s signatures appeared consistently in her passport, in witness statements signed in Court, and in the friendly loan agreements. These genuine signatures were clearly distinct from the signature attributed to the Plaintiff in IDD-1, thereby reinforcing the Plaintiff’s pleaded case of forgery.

Furthermore, during cross-examination, the First Defendant also agreed that the signature attributed to the Plaintiff on IDD- 1 did not match the Plaintiff’s signature as it appeared in her passport for the relevant period.

The Court also rejected the Defendants’ contention that, because IDD-1 was stamped, stamping a document necessarily proved the Plaintiff’s execution. I agree with the Plaintiff’s argument that stamping concerns admissibility and revenue, and does not prove the authenticity or truth of a document’s contents. I find the Defendants’ argument misconceived.

The Court accepted the Plaintiff’s contention on the legal principles governing the execution and proof of documents under sections 67 to 73 of the Evidence Act 1950, and the authorities cited, including RHB Bank Bhd v Dominance Timber Industries Sdn Bhd [2009] 7 CLJ 654.

The Court further finds that IDD-1 was inadmissible and that the First Defendant’s assertion in re-examination that the document was signed in the presence of the Company Secretary was hearsay. The Company Secretary was not called as a witness. In these circumstances, the Court drew an adverse inference against the Defendants under section 114(g) of the Evidence Act 1950.

The First Defendant's explanation for the non-production of the relevant documents, namely that they were unavailable due to flooding and short notice, was not supported by evidence. The Court further noted that the documents could have been obtained earlier from the CCM.

In these circumstances, the Court was entitled to draw an adverse inference under section 114(g) of the Evidence Act 1950, as the Plaintiff contended.

The Defence further alleged that the Plaintiff knew of the transfers and that they were carried out on Gerald’s instructions. The Court finds that no evidence was adduced to support this allegation. Gerald was not cross-examined on this point, nor was the Plaintiff challenged on this assertion.

It is trite that he who asserts must prove. The Defendants’ failure to challenge the Plaintiff’s witnesses or to adduce evidence on this material allegation weighed against them.

The Court further observed that even if regulatory issues had arisen (which was not proven), this would not explain the elaborate sequence of transfers involving third parties, ultimately resulting in 100% of the shares being vested in the First Defendant.

The Court accepted the Plaintiff’s argument that the failure to cross-examine the Plaintiff’s witnesses or to adduce affirmative evidence in support of the alleged justification for the transfers meant that the Plaintiff’s evidence on this issue went unchallenged.

The Court finds as a fact that the 750,000 shares were allotted to the Plaintiff in consideration for RM582,442.60. It is a S/N Ciqlrh8MbUmgxir5Kbt3OQ fundamental principle that where shares are transferred, consideration must flow unless the contrary is proven.

The evidence showed that although the Plaintiff paid consideration for the allotment of the shares, the shares were later transferred out and registered in the name of the First Defendant without any consideration being paid to the Plaintiff. It is significant to note that the First Defendant, in his oral evidence before the Court, admitted receiving the shares and admitted not paying for them. The Defendants failed to adduce any evidence that the Plaintiff had signed any transfer documents.

It is trite that in civil cases, including those involving allegations of fraud, the standard of proof is the balance of probabilities, as affirmed by the Federal Court in Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd [2015] 7 CLJ 584.

Thus, there is no evidence before this Court to support the First Defendant’s contention that the Plaintiff had voluntarily transferred the shares to the various persons before they were transferred into the First Defendant’s name.

On the totality of the evidence, the Court finds that the Plaintiff has proven, on a balance of probabilities, the allegations pleaded regarding the transfer of the Plaintiff’s shares to the First Defendant without the Plaintiff’s knowledge and without valuable consideration.

Given the evidence that the First Defendant failed to rebut the Plaintiff’s allegations regarding the surreptitious transfer of her shares without consideration, the Court finds that the elements of unjust enrichment, as pleaded, have been established, in line with the principles set out in Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 CLJ 453.

Accordingly, the Court allowed the Plaintiff’s claim of RM582,442.60, as set out in paragraphs 45(a) and (b) of the Statement of Claim. Claim for the Sum of RM335,000.00 (Friendly Loan)

In this issue, the Plaintiff claimed repayment of the sum of RM335,000.00, which was alleged to have been advanced to the First Defendant as a friendly loan.

The Plaintiff’s case was that between 24 May 2019 and 24 September 2019, she advanced a total of RM335,000.00 to the First Defendant under five friendly loan arrangements, the details of which were as follows: No. Date Amount (RM) 1 24.05.2019 180,000.00 2 30.05.2019 50,000.00 3 29.08.2019 50,000.00 S/N Ciqlrh8MbUmgxir5Kbt3OQ No. Date Amount (RM) 4 10.09.2019 25,000.00 5 24.09.2019 30,000.00 Total 335,000.00

The individual loan agreements, together with the corresponding stamp receipts, were produced and marked as exhibits in Bundle C-2, pages 3 to 17.

The Plaintiff further contended that after the agreement dated 24 September 2019 was signed, the parties consolidated all the loans into a single consolidated loan agreement, which appeared at pages 18 to 20 of Bundle C-2.

The Plaintiff explained the circumstances surrounding the loans and confirmed that the First Defendant had made no repayments.

As the First Defendant denied the loans in his pleading, the Plaintiff also produced her bank statements, which showed the transfer of the loan sums during the relevant period, as exhibited at pages 180 to 182 of Bundle B. In contrast, the Defence was only a general denial of the friendly loan. The Plaintiff’s documentary and oral evidence directly addressed and rebutted this bare denial.

However, at the hearing, in his oral evidence, the First Defendant admitted signing all the agreements but denied knowledge, stating that he did not know what he was signing because he had signed many documents. I find this reason unacceptable. There was no pleading of fraud or undue influence by the Defendant. Hence, when he signed the said documents, he was bound by them (see: Polygram Records Sdn Bhd v Hillary Ang & Ors (collectively known as The Search) [1994] 3 CLJ 806).

The Court also finds that the First Defendant’s explanations for his failure to repay the loan and for the transfer of shares were unsupported by evidence and inconsistent with the documentary records, including the audited accounts of the Second Defendant, which showed profits for the relevant years.

The Court noted that the Plaintiff, on the other hand, had lodged a police report regarding the unlawful transfer of shares and the failure to repay the friendly loan, which was consistent with her pleaded case.

On the totality of the evidence, the Court is satisfied that the Plaintiff has proven the following: a. The sum of RM335,000.00 was advanced to the First Defendant as a friendly loan. S/N Ciqlrh8MbUmgxir5Kbt3OQ b. The loan agreements were duly executed by the First Defendant. c. The loans were consolidated under the agreement dated 24 September 2019. d. No repayment had been made.

Accordingly, the Court allowed the Plaintiff’s claim of RM335,000.00 in respect of the friendly loan against the First Defendant.

As for the outstanding salary amount of RM383,000.00 and the expenses of RM40,000.00 incurred by the Plaintiff for travel to and from Malaysia, this Court finds that these items are not proven by the Plaintiff.

Except for documents relating to the Plaintiff’s expatriate application at page 21 of Bundle C2, there is no evidence that the Plaintiff was employed by the Second Defendant. Hence, there is insufficient evidence to prove her employment.

As for the expenses incurred on leaving Malaysia, apart from air tickets, there is no other evidence to substantiate the sum claimed.

Having considered the evidence adduced before this Court in its entirety, I am satisfied that the Plaintiff has proven her claim on a balance of probabilities, for RM582,442.60 in respect of her 750,000 shares transferred to the First Defendant, and for RM335,000.00 in respect of the friendly loan from the Plaintiff to the First Defendant.

For the foregoing reasons, I ordered that the Plaintiff’s claim be allowed in respect of prayers (a) and (c) of Paragraph 45 of the SOC. I further ordered that the Defendants pay the sum of RM582,442.60, and that the First Defendant pay RM335,000.00, with interest at 5% per annum from the date of filing this suit until full realisation. The Defendants are also to pay the Plaintiff RM40,000 in costs. Dated 23 December 2025 -sgd-JAMHIRAH ALI JUDGE HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN S/N Ciqlrh8MbUmgxir5Kbt3OQ To the parties’ solicitors: For the Plaintiff : Avinder Singh Gill (Messrs Manmohan Manjit & Co) For the Defendant : Atifah Binti Muhammad (Messrs Aravind Atifah & Associates)