Hamzah Bin Mohd Tahir v 1. ) the Rain Maker Mgmt Sdn Bhd (WA-22NCC-543-07/2023)

Schedule

Schedule B of the said Trust Deed. The 2nd Defendant suggests that it is not responsible for the distribution of any earnings from the holding of the Trust Asset and/or any proceeds that are received from the Trust Asset, as well as the management and administration of the Trust Asset. The 2nd Defendant claims that the Plaintiff had authorised the release of the funds for investment with the Plaintiff. 19. The 2nd Defendant agreed that it was a Trustee for the Plaintiff and the beneficiary of the Trust Deed. 20. The 2nd Defendant is not liable as it had acted in accordance with the terms of the Trust Deed and is not liable as all payments made, including its fees, were made correctly. B. The Trial of this Claim 21. This claim was heard on 3-6-2025. The following witnesses was produced by the parties: - (21.1) Plaintiff (i) Hamzah bin Mohd Tahir – Plaintiff (ii) Nursyafiqah binti Abdul Halim (21.2) Defendant (i) Tan Boon Hoong – a director of the 2nd Defendant. 22. It must be noted that Tan Boon Hoong only joined the company in 2024. He was not involved with the 2nd Defendant before 2024, and he admits that his knowledge is based only on the terms of the Deed of Trust and on the documents produced by the parties at trial. 23. I also note that Tan Boon Hong also avers that a similar Trust Deed was also entered with 100 other investors. These investors have also entrusted funds with the 2nd Defendant that were then invested with the 1st Defendant. C. Decision on the merits of this case 24. I find that the Plaintiff has failed to prove a claim for fraudulent misrepresentation and has also failed to prove that the 2nd Defendant did not act in accordance with the terms of the Trust Deed as pleaded in the Amended Statement of Claim. For the said reason, I have no choice but to dismiss the claim. I will explain my reasons for this conclusion in the following paragraphs. (i) Claim for Fraudulent Misrepresentation and Conspiracy to Defraud 25. Firstly, one of the Plaintiff’s claims against the Defendants is premised on the allegation that the Defendants had represented and promised that they were promoting an investment scheme with the 1st Defendant where: - (i) If the Plaintiff agrees to invest the sum of RM 1,000,000.00 with the 1st Defendant, the Plaintiff will receive returns/dividends amounting to RM 240,000.00 in 4 instalments over the course of the year. (ii) The principal sum of RM 1,000,000 invested will be returned within one year. 26. The Plaintiff also pleaded that he had relied on the representations made by Nursyafiqah and the representations made by the 1st Defendant as contained in the Product Disclosure Sheet known as Infinity Growth Fund. 27. However, during the course of the trial, the Plaintiff admitted that he did not rely on the Product Disclosure Sheet known as the Infinity Growth Fund of the 1st Defendant but had instead relied on Nursyafiqah’s alleged representation that the 1st Defendant was in the process of purchasing shares or was allegedly involved in the exercise to list an Australian company on the American Stock Exchange and that this exercise will be profitable. 28. He also suggests that Nursyafiqah had informed him that the returns will be profitable and that the principal sum invested will be repaid within a year. 29. I find that the above evidence by Hamzah is contradictory to what was pleaded by the Plaintiff in its Statement of Claim. The Statement of Claim states that the Plaintiff had relied on the Prospectus produced by the 1st Defendant and that the sums invested will be invested based on the terms of the Prospectus. The said prospectus did not mention any proposed investments in an Australian company or that the proposed plan is for shares of the said company will be listed eventually on the American Stock Exchange. 30. This is totally different from what was alleged by the Plaintiff in its Statement of Claim. 31. Furthermore, I find that any representation made by Nursyafiqah was made in her capacity as the representative of the 1st Defendant and not the 2nd Defendant. The 2nd Defendant is not a party to any investment proposal as claimed. There is no evidence to support that. I find that the 2nd Defendant only acted as the trustee for the scheme, and this came into being after the Plaintiff and the 1st Defendant had agreed to the terms of the investment based on the representations made by Nursyafiqah. 32. Therefore, I do not find that the said 2nd Defendant is liable for any alleged fraudulent representations made by Nursyafiqah. On that score, I also do not find that the Plaintiff has proven his alleged claim for fraud and conspiracy to defraud as pleaded in paragraphs 25 to 25A of the Amended Statement of Claim. There is no evidence to support this. Nursyafiqah was only the representative of the 1st Defendant and cannot be equated with the 2nd Defendant. 33. The elements required to prove a claim for conspiracy to defraud, as alleged by the Plaintiff, have clearly not been satisfied in this case. I refer to Global Ventures Network Sdn Bhd v Lokman Dato Mohd Kamal [2018] 7 CLJ 1: - “[18] As the learned judge quite rightly recognised, in order to make out a case of conspiracy, the plaintiff would need to establish that there was an agreement between two or more persons to injure the plaintiff; and that the acts done in execution of that agreement resulted in damage to the plaintiff. However, the learned judge fell into error in not considering further whether the conspiracy alleged was one of "simple conspiracy'' or conspiracy to injure; or conspiracy where unlawful means have been used, often referred to as "wrongful means conspiracy". That is an important and necessary question that the learned judge had to ask himself and of the parties as it will determine the applicable principles. The principles which are applicable depend very much on the specific allegations of conspiracy that are pleaded in the statement of claim.” 34. I agree that this Court may rely on circumstantial evidence to impose liability for the alleged wrong as seen in Manzer Medical Sdn Bhd v Bongso Bina Sdn Bhd [2018] 1 LNS 897. However, I do not believe that the Plaintiff has passed the required threshold to prove the allege claim against the 2nd Defendant. 35. I note that the Plaintiff suggests that this Court could impose such liability on the 2nd Defendant on the ground that the sum of RM 1.2 million was paid to the 2nd Defendant’s account and that all forms was prepared by Nursyafiqah with the assistance of the 2nd Defendant’s employee or at the very least with the 2nd Defendant’s input. The Plaintiff’s counsel also suggests that the application form prepared and promoted by Nursyafiqah also contained the 2nd Defendant’s logo and this suggests that the 2nd Defendant participated in the scheme. The trust instrument was also prepared by the 2nd Defendant allegedly as part of the scheme to defraud in conjunction with the 1st Defendant. 36. I find that the Plaintiff has only proven that it was Nursyafiqah and the 1st Defendant who had promoted the scheme to the Plaintiff. The 2nd Defendant did not participate and only came into the picture after the Plaintiff agreed to invest. There is no evidence that the 2nd Defendant had promoted the scheme or had participated in its setting up. I agree that the 2nd Defendant may have committed breaches of the Capital Markets and Services Act, but as stated below, liability must first be imposed for these wrongs by the Securities Commission, before this Court could make any civil liability for these alleged wrongs against the 2nd Defendant. 37. I also find that the Plaintiff did not successfully show that the reason why he agreed to the scheme promoted by Nursyafiqah and the 1st Defendant is because of the involvement of the 2nd Defendant as trustee. This was not specifically said by the Plaintiff in his witness statement. His evidence shows that he was attracted to the scheme due to the promises of return made by the 1st Defendant and that the 1st Defendant was in the process of purchasing shares or was allegedly involved in the exercise to list an Australian company on the American Stock Exchange, and that this exercise would be profitable. 38. This statement is contrary to what the Plaintiff alleged in his answer to question 7 of his own witness statement. He therefore did not rely on the said prospectus claimed but was attracted by the investment proposals suggested by Nursyafiqah and the existence or possibility of a high return due to a proposed listing of a company in Australia. Therefore, it cannot be said that the 2nd Defendant was a party in any discussion or part of the conversation between Nursyafiqah and the Plaintiff. This allegation, contained in the written submissions for the Plaintiff, is not supported by any evidence and cannot therefore be agreed to by this Court. 39. For the above reasons, I find that the Plaintiff has failed to prove the claim for fraudulent misrepresentation as pleaded against the Defendants. (ii) Breach of the Trust Deed 40. The Plaintiff also claims that the 2nd Defendant had committed breaches of the Trust Deed as pleaded in paragraph 27A of the Amended Statement of Claim: - (1) By causing a part of the or the entire Trust Asset of RM 1,000,000.00 to be transferred from the holding of the 2nd Defendant to the 1st Defendant without instruction. (2) The 2nd Defendant had caused part of or the entire Trust Asset of RM 1,000,000.00 to be transferred from the holding of the 2nd Defendant without informing him. (3) The 2nd Defendant had misused part of or the entire Trust Asset; and (4) The 2nd Defendant had failed/refused to return any of the Trust Asset and/or earnings, avails, and proceeds from the Trust Asset to the Plaintiff. 41. Having considered the evidence before me, the testimony of the Plaintiff’s witnesses and the 2nd Defendant’s witness, as well as the documents filed, I find that the Plaintiff has failed to prove this part of its pleaded claim against the 2nd Defendant. 42. I find that the evidence shows that the investment in the 1st Defendant was undertaken at the instructions of the Plaintiff. This is clear in clause 4.2 of the Trust Deed and Schedule B of the said instrument. I reproduce Schedule B for ease of convenience: - 43. The Plaintiff had also issued an email to the 1st Defendant dated 29-6-2022 stating: - 44. The Plaintiff had also received emails from the 1st Defendant informing him that the company was willing to pay the sum of RM 240,000.00 as a token for the investment that will be paid in 4 tranches, as seen in the letter dated 15-9-2021. The sum of RM 120,000.00, representing the said token sum or dividends promised, was received by the Plaintiff through the 2nd Defendant as seen in the Alliance Bank statement dated 15-1- 2022, 15-5-2022, and even the email dated 7-10-2022. 45. During trial, the Plaintiff admits that the said investment in the 1st Defendant was approved by him. He had authorised the said investment. Otherwise, he would not have been seeking payment of the dividends or promised return from the 1st Defendant or payment of the principal from the 1st Defendant. 46. The above finding, however, does not absolve the 2nd Defendant from its obligations to the Plaintiff. 47. I do note that the Plaintiff has shown that the 2nd Defendant was far from perfect in administering the trust. It had failed to provide information to the Plaintiff at all material times. No information was provided to the Plaintiff as to how the monies were transferred to the 1st Defendant or what investments or shares were held by the trustee on trust for the Plaintiff and the named beneficiary to the trust. 48. In fact, the 2nd Defendant had wrongly assumed that the Trust Deed had come to an end once the monies were paid to the 1st Defendant. The Subject Matter of the Trust, the sum of RM 1,000,000.00, remains with the 2nd Defendant. It was only invested with the 1st Defendant. That investment was undertaken by the 2nd Defendant on behalf of the Plaintiff. This is reflected in the fact that any payments from the 1st Defendant were not paid directly to the Plaintiff but were channelled through the 2nd Defendant. In other words, the trust continued. It was wrong for the 2nd Defendant to believe that its obligations ended once the sums invested were paid to the 1st Defendant. They are trustees and not merely a post office. 49. Therefore, the 2nd Defendant should have ensured that the investments made by the 2nd Defendant with the 1st Defendant were protected and that the identity of the investments made was identified and protected by the trust. This was not done. Nevertheless, as this is not the pleaded case against the 2nd Defendant, I cannot make any finding of liability for such breach by the 2nd Defendant. 50. As stated earlier, I find that the 2nd Defendant had wrongly considered that the Trust Deed had come to an end once the monies were paid to the 1st Defendant. The witness for the 2nd Defendant and the 2nd Defendant’s counsel assume that it is entitled to simply act as a “post office” and that once the sum of RM 970,000.00 is paid to the 1st Defendant, then the Trust Deed comes to an end. 51. That is not what the parties agreed. The terms of the Trust Deed clearly state that the 2nd Defendant is entitled to utilise the Trust Funds to make investments and even comply with instructions to make investments as contained in Schedule B, but the Trust continues until such time as the Trust is ended by way of a notice to the Plaintiff. No such notice was issued by the 2nd Defendant to the Plaintiff. Therefore, the Trust Deed continues. 52. Unfortunately, this is not the pleaded case against the 2nd Defendant. I cannot and should not make my determination of liability against the 2nd Defendant on this ground. I am subject to what was pleaded by the Plaintiff against the 2nd Defendant, and it is not the function of this Court to expand the case beyond the pleaded case. 53. Therefore, I find that the Plaintiff has not proven his pleaded case against the 2nd Defendant. The monies were correctly released to the 1st Defendant, and this was undertaken in accordance with the directions given to the 2nd Defendant. (iii) Breach of the Investment Agreement with the 1st and 2nd Defendants 54. I also find that the Plaintiff has failed to prove that the 2nd Defendant is a party to the Investment Agreement. The evidence produced shows that the Investment Agreement was solely between the Plaintiff and the 1st Defendant. 55. I further find that the allegation that Nursyafiqah was acting as an agent of the 2nd Defendant is also not substantiated. What is shown is that Nursyafiqah did prepare and fill in the form of the Risk Assessment Documents for the onboarding of the Plaintiff as a client for the 2nd Defendant. This, on its own, is not sufficient to prove that the 2nd Defendant is a party to the said Investment Agreement. As it stands and as confirmed by the Plaintiff’s own correspondence, the investment agreement is between the Plaintiff and the 1st Defendant. The 2nd Defendant was only acting as a trustee to hold the trust assets and the investments on trust on behalf of the Plaintiff and his chosen beneficiary. 56. Therefore, I find that the Plaintiff has not proven his claim against the 2nd Defendant for breach of the terms of the agreement to invest. (IV) Breach of the Capital Markets Services Act 57. I do note that the Plaintiff did plead in paragraph 25 sufficient particulars that point to the breach of the financial laws by the Defendants. 58. Even if I am wrong on the above, it is important to remind oneself that this Court has the power and duty to consider and address the issue of illegality in this trial even though it was not specifically pleaded by the litigants. I refer to Merong Mahawangsa Sdn Bhd & Anor v Dato’ Shazryl Eskay Abdullah [2015] 5 MLRA 377 where it was held: - “[26] Therefore, 'the question of illegality would not depend on pleading or procedure, or on who first might or should produce the documents. It would be a question of substance, of which, if necessary, the court would of its own motion take cognisance, and to which the court would give effect' (Vita Food Products Inc v. Unus Shipping Co Ltd (in Liquidation) [1939] 1 All ER 513 per Lord Wright). '... when an allegation of illegality is made, and a suggestion is made to the court that the contract is illegal, notwithstanding the fact that the illegality is not pleaded, the court is bound to take cognisance of the fact that the contract may be illegal, and, if it is illegal, the court cannot enforce it' (Marles v. Philip Trant & Sons Ltd (Mackinnon, Third Party) (No 1) [1953] 1 All ER 645 per Lynskey J). 'A judge is constrained to decide those issues raised by the pleadings in an action. The judge cannot decide issues not contained in the pleading because the judge has jurisdiction only to deal with those matters that the parties have chosen to bring before him in their pleadings. This rule is subject to exceptions where there is a public interest and the judge on his own initiative considers a matter of which he has become aware during the course of a case, although it is not contained in the pleadings, for example, cases of illegality or of conduct contrary to public policy' (Swann, Evans, Ferguson and Crawshay (a firm) v. Hill and another, Court of Appeal (Civil Division) per Roch LJ, 8 March 2000). [27] Most recently, in Les Laboratories Servier & Anor v. Apotex Inc & Ors [2014] UKSC 55, the Supreme Court of England per Lord Sumption (with whom Lord Neuberger and Lord Clarke agreed) affirmed that a judge is bound to take up the illegality defence: The illegality defence, when it arises, arises in the public interest, irrespective of the interest or rights of the parties. It is because the public has its own interest in conduct giving rise to the illegality defence that the judge may be bound to take the point of his own motion, contrary to the ordinary principle in adversarial litigation. ... [34] And in Luggage Distributors (M) Sdn Bhd v. Tan Hor Teng & Anor [1995] 1 MLRA 496, the Court of Appeal per Gopal Sri Ram JCA, as he then was (VC George JCA, Abu Mansor JCA, as he then was, concurring) held that 'the justice of a case will ordinarily lie in favour of permitting a plea of illegality to be taken for the first time on appeal because it is unjust that a party who has broken the law should succeed' (see also Mustafa Osman v. Lee Chua (P) [1996] 1 MLRA 363, where Gopal Sri Ram JCA, as he then was, delivering the judgment of the court, affirmed 'that illegality need not be specifically pleaded'). [35] Clearly, therefore, courts are bound at all stages to take notice of illegality, whether ex facie or which later appears, even though not pleaded, and to refuse to enforce the contract ...” 59. However, for the 2nd Defendant to be liable to the Plaintiff for breaches of the Capital Market Services, there must first be a determination by the Securities Commission of the said wrong committed before any party can institute any civil remedies to recover such losses pursuant to section 357 of the Capital Markets and Services Act. 60. I refer to Lai Soon Onn v Chew Fei Meng and other appeals [2018] 10 CLJ 48: “[43] Gleaning through the provisions of the CMSA, it is the intention of the Act that the bodies established under the Act are regulatory bodies and it is not the function of the court to usurp their function nor to second guess their decisions. In R v. International Stock Exchange of UK and Ireland Ltd, ex parte Else Ltd [1993] 1 QB 534, Lord Bingham observed that "the court will not second guess the informed judgment of responsible regulators steeped in knowledge of their particular market." This court applied the same principle in Shahidan Shafie (supra) in arriving at its decision when interpreting section 153 of the SCA. To interpret otherwise would result in a situation where there would be two decisions, one of the court and the other from the SC. That cannot be the position in law (refer to paragraph 29 of Shahidan Shafie (supra). The courts have shown a reluctance to interfere with the decision of regulatory bodies in carrying out its objective in the absence of mala fide or acting in excess of jurisdiction. A similar stance was taken by this court in Bursa Malaysia Securities Berhad (supra) and also in Khiudin bin Mohd & Anor v. Bursa Malaysia Securities Bhd and another application [2012] 7 CLJ 407; [2012] 6 MLJ 131 which had referred to various commonwealth jurisdictions, which demonstrated the attitude of the courts in reviewing the decision made by the regulators in different jurisdictions. Therefore, it is not within this court's jurisdiction to interfere with the duties mandated to the market regulatory bodies in maintaining and promoting the interests of the public in dealing on the exchange and these bodies should be left to carry out its objective as stipulated under the Act. [44] Therefore, a person who has suffered loss or incurred damage may institute a civil action to recover the amount of the loss or damage after a contravention of any provision or any regulations made under the CMSA has been determined by the SC. It is not necessary for the courts to adjudicate whether there is a contravention of the Act before section 357 (1) of the CMSA can be applied. All that is required is for the SC first to determine whether there was a contravention. It makes more sense if we are to construe that section 357 of the CMSA can only be invoked once there is a ruling from the SC as to whether there is a contravention rather than be left to the civil courts to make such findings. Shahidan Shafie (supra) had addressed the problem that could be encountered if prior ruling from the SC was not obtained as follows: “[29].......Our interpretation reconciles s. with the other provisions in the SC Act and that is the private cause of action for breach of statutory duty is preserved to the extent only after the Securities Commission has made a specific ruling. This would avoid a situation where there would be two decisions, one of the court and the other the Securities Commission. This scenario would bring uncertainty to the business world which must be avoided. Our interpretation allows only one decision at one time and that is the decision of the Securities Commission until the same is either set aside or substituted by the courts.” [65] The Court in Mak Siew Wei (supra) also failed to consider section 41 of the SRA as to the existence of the rights of the Plaintiff therein in seeking for a declaration that the 7 Defendants were acting in concert to obtain control of the 8th Defendant (company), that they had contravened section 218(2) of the CMSA and section 9 (1) of the Take-Over Code for their failure to undertake a MGO for the shares in the 8th Defendant. Like in our present case, the Defendants therein also submitted that the Plaintiff's claim on the tort of unlawful conspiracy could not be sustain premised on the same alleged breach of the CMSA and the Take-Over Code, which, following from Shahidan Shafie (supra) was only actionable if there was a prior ruling of the same by the SC.” 61. I also refer to Shahidan bin Shafie v Atlan Holdings Bhd & Anor [2017] 4 CLJ 587, where the Court of Appeal held: - “[26] It is our view that premised on the aforesaid provisions, it can be said that it is the intention of Parliament for the Securities Commission to be tasked to supervise, regulate, issue rulings from time to time and enforce the practices of companies bound by the SC Act 1993 and the Take-Over Code. The learned judge in the High Court in fact found that the only remedy available to the plaintiff was to complain to the Securities Commission about the conduct of the defendants and if the Securities Commission failed to act or makes a ruling unfavourable to the plaintiff, his only option was to apply to the court for judicial review of the decision of the Securities Commission. In short, the plaintiff's remedy was one of public law". … “[29] If we were to adopt the interpretation of s. 153 of the SC Act of the plaintiff, it would amount to the court stepping into the shoes of the Securities Commission which is tasked to supervise and regulate the conduct of companies. As we have said earlier, that is not and cannot be the intention of Parliament. Our interpretation reconciles s. 153 with the other provisions in the SC Act and that is the private cause of action for breach of statutory duty is preserved to the extent only after the Securities Commission has made a specific ruling. This would avoid a situation where there would be two decisions, one of the court and the other the Securities Commission. This scenario would bring uncertainty to the business world which must be avoided. Our interpretation allows only one decision at one time and that is the decision of the Securities Commission until the same is either set aside or substituted by the courts.” 62. I am aware that the Plaintiff relies on section 58, section 179, section 289, section 300, and section 370 of the Capital Markets and Services Act. The crux of the complaint is the failure by the 2nd Defendant to obtain a license to undertake activities as a trustee in relation to a prescribed investment scheme. The rest of the sections referred to by the Plaintiff are dependent on whether the 2nd Defendant’s activities fall within the purview of section 289 of CMSA and whether any wrongdoing has been committed as alleged. 63. Sections 289, 300, and 370 fall within Part VI of CMSA, and as such, the Plaintiff must first show that there is a determination by the Securities Commission before any person can institute any civil remedies for the said wrongs. I am bound by the decisions of the Court of Appeal, and I find that as the Securities Commission has not made any such determination, this Court is not entitled to impose liability against the 2nd Defendant for these alleged wrongs. 64. Therefore, as this issue has not been determined by the Securities Commission, it is not the function of this Court to overstep that body and make such a determination. D. Orders of this Court 65. For the above reasons, the claim against the 2nd Defendant is dismissed. 66. On the issue of costs, I find that the general rule of awarding costs to the successful party should not be applied in this case. Therefore, I find that there should be no orders as to cost. Each party is to bear their own costs. Dated 22nd October, 2025 (DATO’ INDERA MOHD ARIEF EMRAN BIN ARIFIN) JUDGE HIGH COURT OF MALAYA KUALA LUMPUR NCC 5 FEDERAL TERRITORY OF KUALA LUMPUR Counsel: For the Plaintif : Nicholas Hor Sien Pin together with Chua Shuhui Messrs. Nicholas Hor & Co For the 2nd Defendant : Jacyn Tan Ze Xin Messrs. Gan, Lee & Tan