Ee Kah Fuk v LIM Bee Kua (WA-22NCvC-383-07/2020)

This lawsuit pertains to a dispute regarding stakeholder funds between a solicitor and his client and the utilisation of stakeholder funds. 19/08/2025 18:20:27 WA-22NCvC-383-07/2020 Kand. 159 S/N pxzcxxT/Dkea2K4zztiMvA

Somewhere in 2011, Veheng Global Traders Sdn. Bhd. (“Veheng”), a company owned by Eddie Ng (“Eddie”), appointed the Plaintiff as counsel to represent them in a lawsuit against Kurnia Insurans (M) Bhd (now AM General Insurance Berhad) for insurance claims in the Shah Alam High Court Suit No: 22A NCVC-78-2011 (“Suit 78”).

The High Court ruled in favor of Veheng and ordered AM General Insurance Berhad to pay RM86,799,784.00 in compensation for fire insurance, along with 5% interest per year and RM1,200,000.00 in costs.

A consent judgment dated 01.07.2016 (“Consent Judgment”) pending appeal was entered, where Veheng would receive RM61,006,570.84 (“Stakeholder Money”) within 7 working days of the Consent Judgment. This amount was to be held in trust by the Plaintiff's firm, K.F.Ee & Co., until the appeal was resolved.

However, upon request by Eddie, to assist Veheng in repaying EXIM Bank to avoid a winding-up proceeding, the Plaintiff then entered into a Friendly Loan Agreement (“the FLA”) dated on 2.12.2016 with the Defendant (Eddie’s wife). The FLA mentioned among others: S/N pxzcxxT/Dkea2K4zztiMvA a) a loan sum of RM2 million allegedly lent to the Defendant (“the Alleged Loan Sum”) but paid to Veheng, supposedly at her request; b) the FLA also provides for the pledging of the Defendant’s bungalow house (“the said Property”) as security for the alleged loan sum of RM2 million; c) upon default of the repayment of the Alleged Loan Sum, the Defendant was to enter into a sale and purchase agreement to sell the said Property to the Plaintiff or his nominee; d) it also provides that the sale proceeds are to be utilized to settle the redemption sum owing to the chargee bank, repay the alleged loan sum and the balance thereof to be returned to the Defendant; and e) both the Plaintiff and Defendant agreed for the loan sum of RM2 million to be withdrawn from the Stakeholder Money.

The Court of Appeal later overturned the High Court's decision and decided in favor of AM General Insurance Berhad, requiring Veheng to return the Stakeholder Money. S/N pxzcxxT/Dkea2K4zztiMvA

The Plaintiff claimed that the Defendant only returned RM1,410,000.00 from the RM2 million loan taken from the Stakeholder Money. This leaves a balance of RM590,000.00.

The Plaintiff's firm then sent a demand letter on 3.6.2019 to the Defendant, demanding the repayment of the RM590,005.30 loan. Later, the Defendant's lawyer, Messrs. BB Teh, requested a copy of the FLA. The Defendant also disputed if she had ever signed it to which the Plaintiff's firm responded by providing a copy of the FLA and questioned the Defendant's claim that she had not signed it.

The Defendant had since refused to pay or comply with the FLA. Dissatisfied, the Plaintiff filed this action seeking for an order for specific performance to compel the Defendant to sell and transfer the said Property to the Plaintiff or his nominees. Alternatively, the Plaintiff claimed for the repayment of a loan sum of RM590,005.30.

The Defendant, on the other hand, filed a counterclaim seeking the removal of the private caveat lodged by the Plaintiff against the said Property and seeking for damages against the Plaintiff. The Trial 11. The Plaintiff had called upon four (4) witnesses during trial:

Mr. Ee Kah Fuk (“PW1”)

(ii) Mr. Chong Siew Teck (“PW2”) S/N pxzcxxT/Dkea2K4zztiMvA

(iii) Miss Hiew Yee Peng (“PW3”)

(iv) Mr. Lim Yok Chaw (“PW4”)

Meanwhile, five (5) witnesses were called by the Defendant to support her case during trial:

Mr. Lim Ming Tian (“DW1”)

(ii) Mr. Chua Ah Tee @ Chua Kim Mai (“DW2”)

(iii) Mr. Eddie Ng Boon Liong (“DW3”)

(iv) Madam Lim Bee Kua (“DW4”)

Mr. Wong Kong Yong (“DW5”) Issues to be determined by the Court 13. The main triable issues agreed by both parties before the trial are as follows:

whether the Defendant owes the sum of RM590,005.30 to the Plaintiff; and

whether the private caveat lodged by the Plaintiff on the said Property under Presentation No. PDB6178/2019 is unlawful. Decision and findings of the Court 14. Having appraised the evidence and all testimonies put forward by both parties, and having considered the submissions by the learned counsels, I find that the entirety of the evidence and the inherent probabilities of the case allow for no other conclusion S/N pxzcxxT/Dkea2K4zztiMvA but that the FLA is void ab initio and hence the Court is in no position to enforce the FLA. Herein are my reasons.

The crux of the Plaintiff’s case is that he lent RM2 million to the Defendant pursuant to the FLA. The Plaintiff claimed that he was the lender which suggest that he gave the loan in his personal capacity . However, the Defendant submitted that this is far from the truth as it is not disputed that the RM2 million actually came from the Stakeholder Money deposited by AM General with the Plaintiff’s firm to be held as stakeholder pending AM General’s appeal.

The fund was originated from AM General and not from the Plaintiff as an individual. The Plaintiff’s firm was holding it as a stakeholder. The funds never belong to the Plaintiff. This was candidly agreed by the Plaintiff himself during the cross-examination that the RM2.2 million (inclusive of his share of RM200,000.00) withdrawn from the firms’ client’s account was not his personal money. [See NOP, p.36] : Was it your personal money? : No, but I disagree. : It is not your personal money, right? : No, it is not mine. S/N pxzcxxT/Dkea2K4zztiMvA : Because the money from the fixed deposit account? : Yes

It is undisputed that the terms of the Consent Judgment are clear. The Plaintiff’s firm was to open a fixed deposit account to deposit the Stakeholder Money of RM 61,006,750.84 received from AM General. The Plaintiff’s firm was the stakeholder pending the disposal of Suit 78's appeal. In other words, the Plaintiff’s firm must return the money to AM General in the event of a successful appeal. The Plaintiff’s firm was at all material time, a stakeholders for the Stakeholder Money.

This Court, therefore must determined who the actual owner of the monies was when the funds originating from AM General were placed with the Plaintiff's firm as stakeholders and whether the Plaintiff was authorised to execute the FLA and thereafter lend RM2 million in his own capacity? Plaintiff as a Stakeholder 19. The Plaintiff’s pleaded case was that DW3 pestered the Plaintiff to withdraw RM2 million from the Stakeholder Money as a loan to DW3 to pay Exim Bank. This was reaffirmed in the Plaintiff’s witness statement alleging that DW3 harassed and exerted duress on him to enter the FLA and to loan the RM2 million (See Q&A 14 & 40 of PWS1-A). S/N pxzcxxT/Dkea2K4zztiMvA

It is trite law that if a solicitor, lawfully authorised, receives a deposit 'as shareholder', he is obligated to retain it in safekeeping until the resolution of a future event (See Kuldip Singh & Anor v. Lembaga Letrik Negara & Anor [1982] 1 LNS 73).

The Apex Court in Lai Kee Peng v. Tay Hup Lian [2016] 4 CLJ 1 could not be clearer when Abu Samah Nordin FCJ ruled at p.1: “…that the dispute as to who is entitled to the money held by the solicitor as stakeholder ultimately depends on the terms under which the money is held and the due performance by the parties of their respective obligations under the SPA”.

The above principle is further elucidated by the Federal Court in Datuk M Kayveas & Anor v. Bar Council [2013] 7 CLJ 533, where Jeffrey Tan FCJ held: “[31] Solicitor who holds funds which are paid to them as stakeholders hold those funds as trustees for the client, whose property the funds remains at all times. Such funds are not held in a contractual or quasi-contractual capacity, (Halsbury's Laws of England 4th edn reissue vol. 44(1) para. 126. S/N pxzcxxT/Dkea2K4zztiMvA '...the obligations arising under a solicitor's undertaking go beyond contractual effect. They are obligations which a solicitor has a professional duty, as well as a contractual duty, to observe' (Bentley and Another v. Gaisford [1997] 1 All ER 842, 848 per Sir Richard Scott VC). When solicitors hold funds as stakeholders, they hold those funds as trustees and not in a contractual or quasi-contractual capacity (see Alimand Computer Systems Ltd v. Radcliffes & Co, The Times 6 November 1991). 'If an estate agent or solicitor, being duly authorised in that behalf, receives a deposit 'as stakeholder', he is under a duty to hold it in medio pending the outcome of a future event. He does not hold it as agent for the vendor, nor as agent for the purchaser. He holds it as trustee for both to await the evidence: see Skinner v. Trustee of Property of Reed [1967] 2 All ER 1286 a p. 1287, [1967] Ch 1194 at p. 1200) per Cross J. Until the event is known, it is his duty to keep it in his own hands; or to put it on deposit at the bank....' (Burt v. Claude Cousins & Co Ltd [1971] 2 QB 426 per Lord Denning MR in his dissenting judgment, which statement of the law was accepted by the House of Lords in Sorrell v. S/N pxzcxxT/Dkea2K4zztiMvA Finch [1977] AC 728, and referred in Kuldip Singh & Anor v. Lembaga Letrik Negara & Anor (supra), Dato' Seri Au Ba Chi & Anor v. Malayan United Finance Bhd & Anor (supra) and OCBC Bank (Malaysia) Bhd & Ors v. Lee Lee Fah & Ors & Another Appeal (supra), amongst others). 'Once a solicitor holds money in trust for his client or any other party for a purpose, it does not matter whether the amount is sufficient to be utilised for that purpose. The money remains to be in trust' (Selvaratnam Vellupullai v. Dr Jayabalan Karrupiah [2009] 1 CLJ 872; [2009] 1 MLJ 794 per Zaki Azmi CJ, delivering the majority judgment of the court). Therefore, it is beyond argument that a stakeholder is a trustee and that the breach of a stakeholding term is not just a breach of undertaking but also a breach of trust.” [Emphasis added]

That is to say, how the money is to be released depends on the terms on which it is held, as in our present case, the Consent Judgment. The Plaintiff, being a stakeholder cannot use it for his own or other persons’ benefits and must strictly comply with the terms of the Consent Judgment. S/N pxzcxxT/Dkea2K4zztiMvA

I find the Defendant’s counsel reliance on the case of Selvaratnam Vellupillai v. Dr Jayabalan Karrupiah [2009] 1 CLJ 872 is not baseless. The Federal Court in Selvaratnam Vellupilai (supra) condemned the action of the solicitor for utilising the stakeholders’ money for his own bill for the stakeholders’ mechanism was never meant for the benefit of the stakeholder as in our case herein.

Therefore, the depositing of the funds into the personal joint account under the Plaintiff and DW3, to begin with, was not a departure from the Consent Judgement which required the fund to be placed with the Plaintiff’s firm as stakeholders with two signatories, one from the Plaintiff’s firm and the other, DW3. However, the ultimate transgression of this sacred stakeholders’ duties was when the Plaintiff agreed to take the part of the money out from the stakeholders’ money and paid to Veheng and to himself.

The Defendant’s counsel submitted that during the re-examination, the Plaintiff himself acknowledged that he assisted DW3 by withdrawing RM2 million from the principal amount, but he denied that he benefited from it. He expressed his disgust at the fact that DW3 and the Defendant had now accused him of violating his obligations. S/N pxzcxxT/Dkea2K4zztiMvA [See NOP, p.105] PC : Now, everyone or more accurately Counsel kept questioning you that you benefiting of the FD. What is your explanation for this? : I help up Eddie with Veheng. He took the RM2 million principal amount to repay EXIM bank and enjoyed RM3 million interest. He and his wife want benefiting. The money he paid his housing loan, his car loan, so many big car, luxury car, big bungalow paying, both of them enjoying, not me. And now they are accusing me of breaching my duty for allowing them to enjoy the interest. That is unconscionable. [Emphasis added]

The Defendant’s learned counsel further argued that the Plaintiff conveniently omitted the section in which a portion of the money was transferred to his purse as a result of his assistance to DW3 and Veheng. In any case, his assistance to DW3 and Veheng by withdrawing from the stakeholders’ principal amount would not absolve him of the transgression of stakeholders’ duties and trust in accordance with the principle outlined in Kuldip Singh & Anor (supra) and Selvaratnam Vellupillai (supra), that is, the stakeholders’ fund was not S/N pxzcxxT/Dkea2K4zztiMvA intended to be affected until the agreed-upon outcome was reached, regardless of the reason.

The Defendant asserted that the FLA was a sham device and a façade that was used to “protect” the Plaintiff. This was necessary due to the Plaintiff and DW3's unlawful withdrawal of a portion of the stakeholder sum for their own benefit. The FLA was designed to guarantee that the Plaintiff could reclaim any funds that were withdrawn from the trust account, thereby preventing the repercussions that would result if the trust funds were to be returned.

In essence, the FLA is not valid and enforceable in law as the raison d’etre of the FLA was to cover up a wrong doing and illegal act in which he jointly partook the forbidden fruit. This repulsive act is unbefitting an advocate and solicitor and most probably carries with it criminal sanction as it is a form of misappropriation of funds. In our present case, this is a blutant breach of stakeholder’s trust.

The court find it very concerning when the Plaintiff slyly testified during cross-examination that he could withdraw money from the stakeholder account's principal sum of RM61 million as long as he returned the money later. S/N pxzcxxT/Dkea2K4zztiMvA [See NOP, p.33] : I am not talking about the interest. I am talking about the principal sum of RM61 million. Have you taken out RM61 million or any part of it? : Yes, provided we return. [See NOP, p.94] PC : Was there any subsequent action being disciplinary or a civil suit or criminal action taken by the insurance company? : None. They never make any complaint. Nothing whatsoever. That is why I maintained that I’ve not breach anything because I’ve returned the money to the insurance company as per my undertaking. I’ve never breach anything. The interested party in this case and the insurance company also never complaint that I breach anything.

It is analogous to asserting that it is permissible to steal as long as the stolen item is returned, or that it is entirely within the bounds of the law to receive corrupt money as a “donation” and that the law is rendered impotent if the recipient returns it. Such perversion and travesty would not be permitted or condoned by any court of law. S/N pxzcxxT/Dkea2K4zztiMvA

In the alternative, this would establish a perilous precedent that would permit solicitors to misappropriate their stakeholders’ funds! The public’s trust and confidence in the noble profession of law would be gravely undermined. Obviously, this is contrary to public policy. This court cannot condone the FLA and the breaches of stakeholders’ duties and trust by the Plaintiff by upholding the FLA and/or allowing him to enforce it.

The Defendant’s also premised that terms of the FLA must be clear and unambiguous for it to be valid and enforceable in law. The FLA requiring the Borrower to enter into a sale and purchase agreement in the event of default lacks material terms such as purchase price, the payment terms, completion date or extended completion date and whether any interest to be imposed on the late payment, delivery of vacant possession and etc. [See NOP, pp.57 & 58] : Clause 4, you agree that there was no price stated for this proposed Sales and Purchase Agreement? : No purchase price. : And also no term of payment, right? How was the purchase price to be paid, it’s not stated here, isn’t? : Agree not stated. S/N pxzcxxT/Dkea2K4zztiMvA : In fact no terms and conditions in respect in this proposed sale, correct? : Agree.

The FLA is thus void and unenforceable due the uncertainty of the terms pertaining to the sale and purchase of the said Property. Clause 4 of the FLA requiring the borrower to enter into a sale and purchase agreement is not dissimilar with an agreement to enter into a contract which would not be enforceable for lack of material terms.

The most befitting precedent dealing with the principle regarding an agreement to enter into a contract was propounded in the decision of Low Kar Yit & Ors v. Mohamed Isa & Anor [1963] CLJU 77, where Suffian J decided that an agreement to enter into another agreement in the future is not legally enforceable.

In our present case, the first set of reliefs sought by the Plaintiff is to enforce the FLA requiring the Defendant to enter into a SPA and a memorandum of transfer to transfer the said Property to the Plaintiff. This is obviously not enforceable.

Besides, the Plaintiff himself agreed during cross-examination that no pledge or charge was executed by the Plaintiff on the said Property based on the FLA . This is despite Clause 2 having provided that the Borrower agreed to pledge and charge the said Property as security for the loan. S/N pxzcxxT/Dkea2K4zztiMvA [See NOP, p.57] : Now, you agree that was no charge executed for this security? : Agree : No charge, no pledge also? : Because there is already existing charge, I put to do so. : So, no pledge also? You’ve said pledge and charge, two? : There is no formal charge document, I agree. : No formal charge document, no formal pledge also? : I agree.

Therefore, the FLA cannot be enforced as the Plaintiff had not taken any steps to have the charge registered over the said Property as required under the National Land Code 1965. The effect of the FLA is to circumvent the necessary provisions of the NLC for registration of Charge and therefore it cannot be enforced (See Global Globe Property (Melawati) Sdn Bhd v. Jangka Prestasi Sdn Bhd. [2020] 6 CLJ 1 & Shim Vui Geh v Dayang Masturah Sahari & Another Appeal [2024] 1 MLRA 392).

The principle of law cited in the case of Global Globe Property (Melawati) Sdn Bhd and Shim Vui Geh, which related to the impugned SPA, is also applicable to the FLA, which mandates S/N pxzcxxT/Dkea2K4zztiMvA the execution of an SPA in the event of default to guarantee the Plaintiff's repayment of the loan sum. The SPA in the cited cases and the FLA in this case share the same objective: to circumvent the necessity of registering a charge over the property pledged as security for a loan. The protection and safeguard that a borrower is afforded under the National Land Code would be rendered illusory if the SPA and the FLA were to be implemented. The Defendant never signed the FLA

In view that the Plaintiff’s cause of action in the entire statement of claim was on the FLA and the key element of the Defence is on the validity of the FLA, sicne this Court have found the FLA illegal and unenforceable, the entire of the Plaintiff’s action must be dismissed on this alone. However, since the Plaintiff is seeking relief for the payment of RM 590,005.30, for the completeness, I shall now discuss the other issue in term.

The vast majority of the rest of the case then focused on the Defendant’s contention that she did not execute the FLA. She was not informed of the FLA until she received a letter from the Plaintiff's firm on 03.06.2019, demanding the repayment of the sum of RM590,005.30.

The Defendant's solicitors sent the Plaintiff a letter dated 28.06.2019 informing her that she did not sign the FLA at her request. Nevertheless, she refrained from filing a police report regarding the dispute, as her husband had assured her that he S/N pxzcxxT/Dkea2K4zztiMvA would attempt to resolve it with the Plaintiff. This is apparent in the solicitors' letter dated 17.07.2019. After the settlement was not forthcoming, the Defendant finally filed a police report on 19.11.2019, denying that she signed the FLA.

The Court would need to look through the entirety of the evidence to determine whether the Defendant had signed the FLA. The ideal way is to conduct a signature comparison in order to determine whether the signature on the FLA pertains to the Defendant under Section 73 of the Evidence Act 1950.

Section 73(1) of the Evidence Act 1950 envisaged that in order to determine whether a signature, writing, or seal is that of the individual by whom it purports to have been written or made, a witness or the court may compare it to the one that is to be proven, even if the signature, writing, or seal has not been produced or proven for any other purpose and has been admitted or proven to the satisfaction of the court to be written or made by that person (See also Siaw Kim Seong v. Siew

The Defendant maintained that the signature appearing in the FLA is not hers. She further testified that she has only one signature which can be found in the facilities agreement , the police report and the hire purchase agreements for the purchase of the Alphard and Mercedes (See pp.239 to 260 of Bundle B1). S/N pxzcxxT/Dkea2K4zztiMvA

Upon examination of the signatures above her name in the FLA and the signatures on the aforementioned documents, it will be evident that they were "materially and manifestly different". It is important to acknowledge that the signatures of the individual in question are present on the documents, which span a seven-year period from 2012 to 2019. It is trite to note that she executed both hire-purchase agreements in 2015 and 2016, respectively, which are in close proximity to the FLA in 2016.

The Plaintiff asserted that he consented to advance the Borrower RM2 million upon the Borrower's request based on Recital E of the FLA. However, I agree with the Defendant that the Plaintiff did not provide any evidence regarding the manner in which the Defendant purportedly made this request. If it was an oral request, did the Defendant meet her? Did the Defendant contact her via telephone? Was the request submitted via email or WhatsApp?

Unfortunately, the Plaintiff failed to present any single piece of evidence to substantiate Recital E, which asserts that the Defendant requested him to advance the money to Veheng. The Plaintiff did not even make a positive assertion regarding this matter in his witness statement.

The Plaintiff's pleaded case, in contrast, was that DW3 repeatedly pressed the Plaintiff to withdraw RM2 million from the Stakeholders' Money as a loan to DW3 in order to pay Exim Bank. This was reiterated in the Plaintiff's principal testimony, S/N pxzcxxT/Dkea2K4zztiMvA which alleged that DW3 harassed and exerted duress on him in order to compel him to enter the FLA and to lend the RM2 million. Recital E of the FLA, which incorrectly implicated the Defendant as the individual who requested the loan, was entirely contradicted by his pleaded case and his own evidence in principal.

Ultimately, the court find merit in the Defendant’s argument that there was no reason for the Defendant to approach the Plaintiff for a loan when all dealings with regards to factual matrix surrounding the FLA and thereafter were between DW3 and the Plaintiff. The whole transaction never involved the Defendant.

Therefore, the court is of its view that Recital E of the FLA does not accurately represent the actual events that occurred, namely that DW3 requested the RM2 million, not his wife.

More importantly, DW3 testified during trial that he knew his wife (the Defendant) would not agree to sign the FLA. So he signed it instead and gave it to the Plaintiff (See Q&A 5 of DWS3).

This is further fortified by the Defendant’s appointed document examiner, DW5, who undertook an examination by comparing the disputed Chinese signature of “Lim Bee Kua” appearing in the FLA with the specimen Chinese signatures provided by DW3 to determine whether the signature on the FLA was written by him. S/N pxzcxxT/Dkea2K4zztiMvA

DW5’s conclusion can be found in his Forensic Examination of Signatures Report [pages 33-61 of Enclosure 92] and he was of the view that the disputed signature on the FLA was “most probably” written by DW3.

It is also apt to note that, the Plaintiff testified that he did not personally observe the Defendant signing the FLA. During cross-examination, the Plaintiff acknowledged that he has no personal knowledge of whether the Defendant actually signed the FLA.

So, the Plaintiff's evidence was based on the testimony of PW2, who stated that he visited the Defendant's residence and observed that she signed the FLA. At the Plaintiff's request, PW2 affirmed a statutory declaration on 14.6.2019 (“the SD”) to that effect. It is noteworthy that the SD was sworn by PW2 approximately two years following the FLA.

During trial, PW2 testified in detail on how he went to the Defendant’s house to have her executing the FLA at the dining area of the house. He claimed that there was a maid present in the Defendant's house and he can even tell the court how long he had spent at the Defendant’s house that day: it took about one hour. All these supposedly occurred in 2016. S/N pxzcxxT/Dkea2K4zztiMvA

Nevertheless, it appeared that he had experienced a memory lapse when he was cross-examined regarding the SD. He experienced a moment of uncertainty. He found it difficult to respond to basic and straightforward enquiries, such as the location where he signed the SD and the individual before whom it was signed. It is perplexing that he was able to vividly recall events that transpired in 2016, yet he was unable to recollect fundamental and basic facts regarding the confirmation of his SD in 2019.

The court was informed by him that he was unable to recall the events that transpired prior to the SD's affirmation, as they occurred in 2019 and were long ago. It is important to remember that PW2 testified that the SD was draughted by the Plaintiff's office, an admission that the Plaintiff refrained from answering during his cross-examination. Therefore, I fully concur the Defendant’s counsel’s argument that PW2’s evidence should be treated with caution. Comparing this with the express admission by DW3 that he had forged the Defendant’s signature in FLA and the expert opinion that the signature in FLA is indeed most likely to be of DW3’s, this Court hae no other option but to agree with the Defendant that the FLA was never executed by her. A. The Plaintiff’s claim of RM590,005.30 under the FLA

Through this action, the Plaintiff is seeking the return of RM590,005.30 in the second set of relief. As the Defendant postulated during trial, it was undoubtedly the RM590,005.30 S/N pxzcxxT/Dkea2K4zztiMvA that he is claiming was not from the FLA since the Plaintiff acknowledged that this is the amount he added to the stakeholder account to cover the deficit, as the Defendant only returned RM1.41 million of the RM2 million they had taken.

The Plaintiff's firm was obligated to return the Stakeholder Money when AM General's appeal was granted, and this top-up was essential to ensure that the terms of the stakeholder trust were met. Otherwise, he would be in violation of the undertaking. According to the Plaintiff only RM1.41 million was returned to him which resulted in a shortfall of RM590,000.00: [See NOP, pp.57 & 58] : I put it to you that you’ve paid this RM590,000 into the fixed deposit account so that your breach of trust won’t be exposed, isn’t? : I disagree. : Otherwise there would be a shortfall of RM590,000, you won’t be able to pay the insurers the RM621 million, correct? : Yes. I took out the money to repay to fulfil undertaking. I disagree I breach. : So, you top it up so they won’t know about it, isn’t, correct or not? : It is not they won’t know. I gave undertaking to repay and I did so undertake to repay. S/N pxzcxxT/Dkea2K4zztiMvA : Otherwise you will be breach for undertaking, right? : Yes.

This Court is convinced that the sum of RM590,005.30 is a different loan from the RM2 million mentioned in the FLA. Several pieces of evidence would indicate this. Firstly, contrary to the stipulations in Recital E of the FLA i.e. that the loan of RM2 million was granted by the Plaintiff at the request of the Borrower, this sum of RM590,000.00 was topped up by Plaintiff on his own accord.

Secondly, in contrast to the total of RM2 million, the amount of RM590,005.30 did not originate from the trust or stakeholder funds. It has been previously shown that the loan amount of RM2 million was sourced from Am General, while the value of RM590,005.30 was contributed by the Plaintiff himself. The Plaintiff affirmed that the stakeholder funds were completely restored to AM General. [See NOP, p.60] : I’m saying when you return the money RM61 million, so there no money left under this friendly loan agreement. It is already fully paid. Correct or not? : No, no. I advance my money … S/N pxzcxxT/Dkea2K4zztiMvA : No, no. That’s a different one. No more money left under this friendly loan agreement. It’s already fully paid. Correct or not? : No. I advance my money RM550,000.00.

The Plaintiff personally paid this payment to AM General, but the FLA said that the RM2 million was sent to Veheng. They are totally independent issues. The FLA did not indicate that any deficiency in the principal amount would be considered a loan from the Plaintiff to the Defendant. The Plaintiff has merged the two distinct loans into a single entity for the purposes of this lawsuit. Therefore, I find his action to initiate a lawsuit based on the FLA is a misnomer.

Thirdly, the Plaintiff’s own pleaded case at paragraph 17 of the statement of claim alluded to this alleged loan of RM590,005.30 being given to the Defendant to be deposited into the Fixed Deposit account on 12.01.2018. This loan given on 12.01.2018 therefore is distinct from the earlier loan of RM2 million under the FLA which was disbursed earlier to Veheng.

The Plaintiff alleged that the Defendant refunded just RM1.41 million of the RM2 million. The court is not convinced on this since this would mean that the Defendant accepted the loan and then repaid a portion of it. The Plaintiff has shown no proof indicating that the Defendant refunded the RM1.41 million. In fact, contrary to his own earlier assertion that RM1.41 million S/N pxzcxxT/Dkea2K4zztiMvA was returned by the Defendant, the Plaintiff confirmed during re-examination that the RM1.41 million was paid by Veheng.

The Defendant’s counsel further submitted that the evidence by DW3 was that he borrowed a sum of RM1,949,856.00 to top up the RM2,700,000.00 sum taken from the principal whilst the Plaintiff top up RM590,000.00 (See Q&A 12 of DWS3). The balance of RM154,100.00 was covered from the interest generated. There was no evidence that this repayment of RM1,949,856.00 by DW3 was done on the Defendant’s instructions.

The subsequent issue to be addressed by this Court is whether the RM590,005.30 constituted a personal loan from the Plaintiff, and if so, whether the Defendant is obligated to repay that sum to the Plaintiff.

The Plaintiff confirmed during cross-examination that he did not inform the Defendant that the RM590,005.30 was also secured by the said Property. I am in total agreement with the Defendant’s counsel that there was no evidence of the alleged loan of RM590,005.30 between the Plaintiff and the Defendant.

It appears that the Defendant was not privy to the unilateral action by the Plaintiff in topping up the RM590,005.30. He only dealt with DW3. The Defendant was unaware of the RM590,005.30 topped up by the Plaintiff. S/N pxzcxxT/Dkea2K4zztiMvA

It is important to emphasize that the RM590,005.30 constituted a distinct new transaction, as asserted by the Plaintiff and supported by the evidence. No evidence exists indicating that the Defendant was aware of the Plaintiff's contribution to rectify the shortfall. He voluntarily paid to prevent the insurer or their attorney from discovering that he had used the Stakeholders' Money. The dealing (the advancement of RM 590,005.30) was done unilaterally by the Plaintiff without any involvement of the Defendant. Therefore, I could not find any good reason for the Defendant to be responsible for this sum either. Deed of termination 72. In the Defence filed, the Defendant argued that in any event, the FLA is no longer enforceable as the Plaintiff has executed a Deed of Termination (“the Deed”) to terminate FLA and cancel the FLA.

The Defendant premised that she was unaware of nor was she privy to the Deed and the circumstances leading to the signing of the Deed. It was DW3 who wanted the Plaintiff to sign the Deed as evidence that the FLA was cancelled in consideration of DW3 topping up his portion towards the RM2,700,000.00. [See Q&A 16 and 17, DWS-3, pp.11 & 12]

Q: Please refer to page 233 to 235 of CBD. What is this document? S/N pxzcxxT/Dkea2K4zztiMvA A: This is the same Friendly Loan Agreement which I signed. When the Plaintiff asked me to top up the money taken from the stakeholder sum, I insisted he cancelled the Friendly Loan Agreement first. He agreed.

Q: Please look at pages 236 to 238 of CBD. What is this document? A: This is Deed of Termination. When I asked the Plaintiff to cancel the Friendly Loan Agreement, I asked him to sign this. I ask Chuah Ah Tee to bring it to the Plaintiff for him to sign. Chuah Ah Tee used to help me with buying and selling of scrap.

Notwithstanding the Defendant did not sign the Deed of Termination, this Deed, would serve to establish the arrangement between the Plaintiff and DW3 before they agreed to the Plaintiff breaching his stakeholders’ duties for their mutual benefit. The arrangement would refer to their agreement that they must top up their respective portions to enable the return of the principal sum of RM61 million should AM General succeeded in its appeal.

DW2, in his witness statement narrated the events leading to the Plaintiff signing the Deed. He mentioned PW3 who was the Plaintiff’s legal assistant, showed him to the Plaintiff’s office where he witnessed the Plaintiff signing on the Deed. S/N pxzcxxT/Dkea2K4zztiMvA

The Plaintiff then called PW3 to the stand. Her evidence can be found in PWs3. In PW3 and during testimony, she denied knowing DW2 and that she did not show DW2 to the Plaintiff’s room.

The Defendant’s learned counsel then filed notice of application at the end of the Trial to recall witnesses (“the Application”), in particular DW2 and PW3 by virtue of Section 138 (4) of Evidence Act.

This Court granted the Application in order to ascertain the credibility of the witnesses, despite the fact that the WhatsApp messages were not made available earlier and the Application was filed after the close of defence.

Although it is highly unusual, for ascertaining the truth and to examine the credibility of the witnesses, this Court allowed the Application. The main contention over the Application was concerning the WhatsApp messages between DW2 and PW3 between September 2016 to March 2018. DW2 testified that he witnessed the Plaintiff signing the Deed which terminated the FLA. He was led to his office by PW3 where he witnessed the signing. PW3, however, claimed that she did not know DW2.

The Court find that the most glaring omission in the affidavits exchanged by the parties concerning the Application is that there is no affidavit affirmed by PW3 denying the WhatsApp messages. The WhatsApp messages are contemporaneous S/N pxzcxxT/Dkea2K4zztiMvA documentary evidence and without any affidavit by PW3, the conclusion is that there is no denial from PW3 on the WhatsApp contents.

It is the finding of the court that the WhatsApp messages evidenced the following: a) PW3 and DW2 knew each other since Suit 78; and b) PW3 and DW2 were not strangers as they were in constant communication from 2016 to 2018. She liaised with him with regards to the boxes of documents for Suit 78, they kept each other updated on Suit 78, exchanged festive greetings and jokes; and c) PWS3 addressed DW2 as “Mr Eddie Chua” or “Mr Eddie”.

The WhatsApp messages were contemporaneous records that undermined PW3’s credibility when she had earlier denied under oath of knowing DW2. In her effort to absolve herself from the potential of having committed perjury, she averred during the recall that she was unaware that Eddie Chua and Chua Ah Tee @ Chua Kim Mai were the same person.

This desperate explanation by her was preposterous. PW3 had clearly forgotten that she had during her earlier testimony in this very Court, consistently denied knowing Chua Ah Tee. She also denied knowing Eddie Chua. When suggested to her that Chua S/N pxzcxxT/Dkea2K4zztiMvA Ah Tee and Eddie Chua were the same person, she maintained her ignorance. [See NOP, p. 183] : In your witness statement you says you do not know who is this Chua Ah Tee. : Ya, I don’t know him. : Do you know of anyone named Eddie Chua? : Not that I know of. [See NOP, p.185] … Now, so you claimed you do not know who is Mr. Chua you do not know who is Mr. Eddie Chua. I don’t know. [See NOP, p.188] My instructions are they are the same person. Do you know? I don’t know

Only when faced with the prospect of being jailed for contempt, she finally admitted during recall that she knew Eddie Chua. Her explanation that there were many people by the name of Eddie Chua does not hold since there was only one Eddie Chua who S/N pxzcxxT/Dkea2K4zztiMvA was assisting in Suit 78. It is lamentable that PW3 continued to be evasive in her response, despite the court's warning of potential contempt. [See NOP, pp.7 & 8] : Adakah kamu mengenali Eddie Chua? : Yes or no? : That is why we ask for identification witness, Yang Arif. : Can you please answer the question or you want me to put you into jail for contempt? : No, Yang Arif. : Answer the question now. Yes or no? : Yes.

However, PW3’s credibility was ultimately impeached when the Defendant's counsel revealed the contents of the WhatsApp messages between her and DW2, which indicated otherwise. She then progressively altered her response and acknowledged that she had encountered him, although she maintained that she had only encountered him twice.

PW3 then tried to exonerate herself but pinning the blame on the Defendant for not producing DW2 for her identification. This dubious attempt is pathetic as PW3 herself confirmed during the cross examination (during recall) that she did not request for the S/N pxzcxxT/Dkea2K4zztiMvA identification of DW2 and she did not know who instructed the Plaintiff’s solicitors to made the request.

In short, the court is convinced that PW3 and DW2 were acquainted with each other. PW3 testified during trial that the Plaintiff had previously instructed her to bring some documents to DW2 for him to be taken to court. She also testified that she had met DW2 twice and on each occasion, it was in the Plaintiff’s presence. The credibility of PW3 is therefore impeached.

I have to agree with the Defendant that both the Plaintiff and PW3 were prepared to fabricate evidence. To suppress the Defendant’s case that the Plaintiff did sign the Deed of Termination. B. Validity of the private caveat 89. The last issue standing is with regard to the private caveat lodged by the Plaintiff which the Defendant in their counterclaim sought to remove. In Form 19B of the National Land Code (Application to Enter Private Caveat), the Plaintiff has stated the grounds for the entry of the private caveat as follows: “…mengikut satu “Friendly Loan Agreement” bertarikh 2.12.2016 yang ditandatangani oleh saya bersama Lim Bee Kua (No. K/P: 550726-04-5280) [selepas ini dirujuk sebagai “Peminjam”] adalah seorang warganegera Malayia yang beralamat di No. 3, Jalan Setia Murni 8, Bukit Damansara, S/N pxzcxxT/Dkea2K4zztiMvA 50490 Kuala Lumpur, Peminjam telah bersetuju untuk memasukki suatu Perjanjian Jual Beli dengan saya dan saya ada hak untuk memasukkan kaveat ke atas Harta yang dikenali sebagai……”

Clearly, the Plaintiff entered the caveat premised on the FLA and that the Defendant had agreed to enter into a sale and purchase agreement with the Plaintiff. However, the sale and purchase agreement referenced in the FLA was never executed by the parties.

It is the court’s finding that the caveat should be removed for: a) the caveat was lodged to secure the repayment of the alleged loan in the FLA which the court recognized as illegal; b) the FLA is also not valid due to its uncertain terms and the ‘agreement to contract’ nature; c) there is not caveatable interest as the Plaintiff’s rights if any is in personam and not in rem; d) the Plaintiff has no caveatable interest to lodge the private caveat based on the FLA; and e) there are no charge instruments executed by the Plaintiff to charge or pledge the said Property as security. S/N pxzcxxT/Dkea2K4zztiMvA Conclusion 92. The Plaintiff’s claim is hereby dismissed with cost. The Defendant’s counterclaim is partially allowed with no damages awarded. The private caveat lodged by the Plaintiff is ordered to be removed. Date : 18th August, 2025 ------------------------------------------------------------ DR JOHN LEE KIEN HOW @ MOHD JOHAN LEE JUDGE HIGH COURT MALAYA KUALA LUMPUR For The Plaintiff : Dhanaraj A/L Vasudevan & Arun Ganesh A/L Boopalan Messrs. Preakas & Partners Advocates & Solicitors For The Defendant : Joseph Yeo, Kelvin Ng Sin Huat & Loke Wei Lun Messrs. Bb Teh Advocates & Solicitors S/N pxzcxxT/Dkea2K4zztiMvA Table of Authorities Cases Bentley and Another v. Gaisford [1997] 1 All ER 842, 848 Burt v. Claude Cousins & Co Ltd [1971] 2 QB 426 Datuk M Kayveas & Anor v. Bar Council [2013] 7 CLJ 533 Global Globe Property (Melawati) Sdn Bhd v. Jangka Prestasi Sdn Bhd. [2020] 6 CLJ 1 Kuldip Singh & Anor v. Lembaga Letrik Negara & Anor [1982] 1 LNS 73 Lai Kee Peng v. Tay Hup Lian [2016] 4 CLJ 1 Low Kar Yit & Ors v. Mohamed Isa & Anor [1963] CLJU 77 Selvaratnam Vellupullai v. Dr Jayabalan Karrupiah [2009] 1 CLJ 872; [2009] 1 MLJ 794 Shim Vui Geh v Dayang Masturah Sahari & Another Appeal [2024] 1 MLRA 392 Siaw Kim Seong v. Siew Swee Yin & Anor. [2008] 5 CLJ 441 Skinner v. Trustee of Property of Reed [1967] 2 All ER 1286 a p. 1287, [1967] Ch 1194 at p. 1200) Sorrell v. Finch [1977] AC 728 Statute Rules of Court 2012 Evidence Act 1950 S/N pxzcxxT/Dkea2K4zztiMvA