Lim Siew Kim v Kien Huat Realty Sdn Bhd & 1 Lagi (WA-22NCC-332-09/2016)

TAN SRI LIM KOK THAY DEFENDAN (No. K/P: 510816-10-5615) 25 GROUNDS OF DECISION [1] The present appeal has been brought only by the 2nd Defendant in the light of my decision in dismissing both the 30 Defendants’ application (encl. 6) to strike out the Plaintiff’s claim. Plaintiff’s case [2] The crucial background facts according to the Plaintiff are:

The Plaintiff was the registered owner of 796,250 shares in 35 Genting Berhad (formerly known as Genting Highlands Hotels Bhd) (‘the Trust Shares’) which were gifted to the Plaintiff by her 2 father, the late Tan Sri Lim Goh Tong in consideration for work 5 which she had done for no salary.

(ii) Around 8/7/1978, the late Tan Sri Lim Goh Tong requested the Plaintiff to transfer the Trust Shares to the 1st Defendant in return for which the 1st Defendant would pay her RM3,200,000.00. The late Tan Sri Lim Goh Tong asked her to sign a simple Share 10 Sale Agreement which she did.

(iii) The Plaintiff did not receive any part of the RM3,200,000.00.

(iv) On or about 5/4/1979, the Plaintiff received a copy of a share sale agreement dated 26/3/1979 (‘the Purported Share Sale Agreement’). The Plaintiff realised that it was not the share sale 15 agreement that the Plaintiff had signed on 8/7/1978.

The Purported Share Sale Agreement:

referred to a share sale agreement dated 8/9/1975 which the Plaintiff had no knowledge of. In fact, on that date, the Plaintiff was still in London and could not 20 have executed any documents in Malaysia;

said she had received certain consideration which she had not;

said that the Trust Shares had been transferred from the Plaintiff to the 1st Defendant which the Plaintiff was 25 not aware of;

said that the 1st Defendant had paid RM796,250.00 to an “internal account” for the Plaintiff of which the Plaintiff had no knowledge;

said that a further sum of RM2,000,000.00 would be 30 paid to the Plaintiff on 15/3/1979 and RM404,675.00 3 would be paid on 6/9/1979 neither of which had been 5 received;

revealed as no monies had been paid, the 1st Defendant held the Trust Shares on trust for the Plaintiff, which was affirmed by her late father.

(vi) With that, the Plaintiff was assured that the Trust Shares 10 would always be kept safely for her and had no reason ever to doubt this until 2016 whereby the 2nd Defendant denied the Plaintiff’s rights to the Trust Shares in another suit i.e. Kuala Lumpur High Court Suit No.WA-22NCVC-58-01/2016 in which the Plaintiff was sued by the 2nd Defendant for the recovery of certain 15 monies purportedly owed to him.

(vii) Plaintiff’s action is to recover trust property, it is not barred by limitation and s.6 of the Limitation Act 1953 (‘the Limitation Act’) does not apply. Plaintiff is not claiming for payment of the purchase price but for the shares which are being held on trust for 20 her. In this regard, the Plaintiff is entitled to rely on s.22 of the Act as preventing the application of any period of limitation to the claim.

(viii) Therefore, in the present suit, the Plaintiff prays for -

declaration that the 2nd Defendant is the alter ego of the 25 1st Defendant;

a declaration that the 1st Defendant is holding 796,250 shares in Genting Berhad on trust for the Plaintiff;

a declaration that the Plaintiff is entitled to all benefits arising from the 796,250 shares in Genting Berhad 30 including but not limited to dividends, right issues and 4 bonus shares issued by Genting Berhad to the 1st 5 Defendant as registered holder of the said shares;

an order that the 1st Defendant to provide the Plaintiff with an account of all benefits received by the 1st Defendant arising from 796,250 shares in Genting Berhad including but not limited to dividends, right issues 10 and bonus shares issued by Genting Berhad to the 1st Defendant as registered holder of the said shares;

an order that the 2nd Defendant do cause the 1st Defendant to transfer to Plaintiff the 796,250 shares in Genting Berhad held by the 1st Defendant on behalf of 15 the Plaintiff within 14 days of the Order made herein failing which the 1st Defendant and/or the 2nd Defendant shall be liable to pay to the Plaintiff the sum of RM2.06 billion or such value as assessed by the Court;

an order that the 1st Defendant and/or 2nd Defendant do 20 pay the Plaintiff all benefits derived from the said 796,250 shares from the date that the said shares were transferred to the 1st Defendant to the date of the Order made herein;

an order that the 1st Defendant and/or 2nd Defendant do 25 pay the Plaintiff interest on any amounts found due and owing to the Plaintiff at a rate and for a period to be determined by this Court;

cost and further reliefs this Court deems fit. 30 5 5 Defendants’ arguments [3] The Defendants contended that:

On 8/9/1975, the Plaintiff agreed to sell 796,250 shares in Genting Highlands Hotel Bhd (now known as Genting Berhad) to the 1st Defendant (‘the Sale Shares’).

(ii) On 26/3/1979, the Plaintiff and the 1st Defendant executed a supplementary share sale agreement (‘the Share Sale Agreement’) which states, among other things, the following:

On 8/9/1975, the Plaintiff sold the Sale Shares to the 1st Defendant for a purchase price of RM2,133,950.00.

It was duly transferred from the Plaintiff to the 1st Defendant and registered in the 1st Defendant’s name.

The 1st Defendant made part payment of the purchase price amounting to RM796,250.00 by crediting the same to the Plaintiff’s internal account held by the 1st 20 Defendant.

As consideration for the 1st Defendant agreeing to pay revised purchase price of RM3,200,925.00 for the Sale Shares, the Plaintiff agreed to schedule for a payment of the balance purchase price as set out in the Share Sale 25 Agreement (Clause 1).

The Plaintiff acknowledged receipt of RM796,250.00 being part payment of the purchase price for the Sale Shares.

(iii) In accordance with the agreement made on 8/9/1975 and the 30 Share Sale Agreement, the 1st Defendant, in fulfilling all its 6 obligations under the Agreement, made full payment of the 5 purchase price for the Sale Shares as follows:

On 30/11/1975, RM796,250.00 was credited to Plaintiff’s internal account held by the 1st Defendant. The Plaintiff was clearly aware of the internal account as monies were paid in and out of it for her benefit, and the Plaintiff 10 acknowledged the payment. Further, the Plaintiff was a director of the 1st Defendant from 24/9/1971 to 3/1/1975.

On 5/3/1979, RM2,000,000.00 was paid by the 1st Defendant.

On 12/4/1979, RM404,675.00 was credited to the 15 Plaintiff’s internal account held by the 1st Defendant. This sum, when added to the outstanding balance in the Plaintiff’s internal account, amounted to RM1,069,884.04 which was paid out to the Plaintiff on or about 16/4/1979, and the Plaintiff’s internal account was then closed.

(iv) Oral representations made by the late Tan Sri Lim Goh Tong were no longer valid because:

It is not conceivable that Tan Sri would make such representations to the Plaintiff or enter into any such agreement when the Sale Shares had been fully paid by 25 the 1st Defendant and the Share Sale Agreement completed;

The Plaintiff’s allegation contradicted her statement that the Sale Shares were transferred on the basis that the shares would be held on trust by the 1st Defendant for 30 7 the Plaintiff. The shares were transferred on or about 5 8/9/1975 before the Share Sale Agreement;

Even if such oral representations were made, this was done without the knowledge and/or authorization of the 1st Defendant. The late Tan Sri did not procure that the 1st Defendant would hold the Sale Shares on trust for the 10 Plaintiff nor did he procure an agreement by the 1st Defendant to invalidate the Share Sale Agreement;

Any such representation made by the late Tan Sri or any purported agreement with him would not bind the 1st Defendant and would be void for absence of 15 consideration;

The 1st Defendant never agreed to hold and has never held the Sale Shares on trust for the Plaintiff.

The present suit was only commenced by the Plaintiff on 23/9/2016. The Plaintiff’s claims are time-barred under s.6 of the 20 Limitation Act. Findings [4] Vide its Notice of Application dated 25/10/2016, the Defendant is essentially seeking to strike out the Plaintiff's Writ of 25 Summons and Amended Statement of Claim dated 13/12/2016 under O.18 r.19(1)(a) or (b) and/or (d) of the Rules of Court 2012 (‘ROC 2012’) and/or s.6 of the Limitation Act and/or the inherent jurisdiction of the Court. 30 8 [5] The principles governing striking out are trite. In Bandar 5 Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36 at p.43 G-H & p.44 C-D, the Supreme Court held - “It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley MR in Hubbuck & Sons Ltd 10 v Wilkinson, Heywood & Clark Ltd), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it ‘obviously unsustainable’ (see AG of Duchy of Lancaster v L & NW Rly Co). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a 15 cause of action or a defence (see Wenlock v Moloney & Ors). ... The Court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable. ... It has been said that so long as the pleadings disclose some cause of action or raise some question fit to be decided by the 20 judge, the mere fact that the case is weak and not likely to succeed at the trial is no ground for the pleadings to be struck out (see Moore v Lawson and Wenlock v Moloney & Ors)". (See also See Thong & Anor v Saw Beng Chong [2013] 3 MLJ 25 235 (CA) at 242[12]; MK Associates Sdn Bhd v Tetuan Ganesan K & Muhammad Ashri (sued as a firm) [2012] 7 MLJ 583 (HC) at 593[30]). Whether there are pleadings alleged to justify the Plaintiff’s 30 claim against the 2nd Defendant as constructive trustee or for lifting the corporate veil? [6] Under this head of argument, the 2nd Defendant submitted there are no circumstances pleaded by the Plaintiff to pierce the corporate veil of D1 - 35

There is no claim that the 1st Defendant was set up for fraudulent purposes or that it was a sham or facade; 9

(ii) No circumstances of abuse of corporate personality in respect 5 of the Sale Shares have been pleaded. The 2nd Defendant relied on - Gurbachan Singh s/o Bagawan Singh & Ors v Vellasamy s/o Pennusamy & Ors. (on their behalf and for the 213 sub-purchasers of plots of land known as PN35553, Lot 9108, 10 Mukim Hutan Melintang, Hilir Perak) and other appeals [2015] 1 MLJ 773 where the Federal Court at 811[96] and 812[97] held - “[96] ... we are of the view that it is now a settled law in Malaysia that the court would lift the corporate veil of a corporation if such corporation was set up for fraudulent purposes, or where it was established to avoid an 15 existing obligation or even to prevent the abuse of a corporate legal personality (see Prest v Petrodel Resources Limited and others [2013] UKSC 34). [97] As to what constitutes fraudulent purposes it has been 20 described as to include actual fraud or fraud in equity (see Law Kam Loy & Anor v Boltex Sdn Bhd and others). And fraud in equity occurred in '... cases where there are signs of separate personalities of companies being used to enable persons to evade their contractual obligations or duties, the court would disregard the notional 25 separateness of the companies ...' (see Sunrise Sdn Bhd v First Profile

(M) Sdn Bhd & Anor [1996] 3 MLJ 533 per Chong Siew Fai FCJ (as he then was))”. (Emphasis added) Tenaga Nasional Bhd v Irham Niaga Sdn Bhd & Anor [2011] 1 30 MLJ 752 at 772[48] and [49] where the Court of Appeal held it is untenable for the respondents to impose liability on the appellant, TNB, holding company where the existing cause of action was against TNBT, a subsidiary as - “[49] You cannot simply raise the veil of incorporation just because you 35 feel that it is in the interest of justice. But if there is fraud, then the veil of incorporation may be lifted. But here, there was no fraud at all”. (Emphasis added) 10

(iii) There is no plea of actual or equitable fraud surrounding the 5 corporate structure of the 1st Defendant. The 2nd Defendant cited Solid Investments Ltd v. Alcatel Lucent (Malaysia) Sdn Bhd [2014] 3 CLJ 73 at 92[46] where Hasan Lah FCJ (delivering the judment of the Federal Court) opined - “We agree with the Court of Appeal that the learned trial judge erred in 10 lifting the corporate veil of the defendant to make the defendant liable to account to the plaintiff. The reason given by the learned trial judge was that it was in the interest of justice to prevent associated companies of Alcatel Group including the defendant from "darting in and out with the corporate labyrinth" before the court. We also agree with the Court of 15 Appeal that there must be evidence either of actual fraud or some conduct amounting to fraud in equity to justify the lifting of corporate veil. The position of the law on this subject had been clearly stated by Gopal Sri Ram JCA (as he then was) in Law Kam Loy v. Boltex Sdn Bhd [2005] 3 CLJ 355 at p. 362 as follows: 20 In my judgment, in the light of the more recent authorities such as Adams v. Cape Industries Plc, it is not open to the courts to disregard the corporate veil purely on the ground that it is in the interests of justice to do so. It is also my respectful view that 25 the special circumstances to which Lord Keith referred include cases where there is either actual fraud at common law or some inequitable or unconscionable conduct amounting to fraud in equity ...”. (Emphasis added) 30 [7] Contrary to the 2nd Defendant’s contention, I find the Plaintiff’s pleadings has satisfied the requirement of having to plead “some conduct amounting to fraud in equity” or “some inequitable or unconscionable conduct amounting to fraud in equity” referred to in 35 Gurbachan Singh s/o Bagawan Singh (supra), Tenaga Nasional Bhd (supra), cited Solid Investments Ltd (supra), Theta Edge Berhad (dahulu dikenali sebagai Lityan Holdings Berhad) v Infornential Sdn Bhd (and Another Appeal) [2017] 2 AMR 11 901(CA) at 910[25], [31] & [32] and Law Kam Loy & Anor v. 5 Boltex Sdn Bhd & Ors. [2005] 3 CLJ 355 at p.362 f-h to justify the lifting of the corporate veil. [7.1] This is evident from the Plaintiff’s pleaded case against the 2nd Defendant as reproduced below -

Amended Statement of Claim 10 “At Para 3 – “the 2nd Defendant is a director and the real and/or de facto shareholder of the 1st Defendant. The 2nd Defenant is also the directing mind and will and alter ego of the 1st Defendant”. The Defendants are therefore not entitled in all the circumstances to rely upon the veil of incorporation. The Plaintiff contends and will contend that by reason of 15 the matters pleaded herein the corporate veil of the 1st Defendant should be pierced.” At Para 5 – “The 1st Defendant is the trustee of Trust Shares ... for the Plaintiff.” 20 At Para 14 – “as the real shareholders of the 1st Defendant were her family members, at all material times prior to 2016, the Plaintiff was confident that the 1st Defendant was holding the Trust Shares on a manner consistent with her interests as beneficial owner of the shares.” 25 At Para 15.2 – “in the course of the trial of the KT Lim Action, the 2nd Defendant when giving evidence made it clear that he did not acknowledge any other ownership of the shares in Kien Huat Realty Sdn Bhd ... [the 1st Defendant].” 30 At Para 15.3 – “it was obvious from the statement made by the 2nd Defendant that he was in control of the [1st] Defendant and that he was not going to acknowledge that the Trust Shares were held in trust for the Plaintiff .... 35 By reason of the matters pleaded herein, the 2nd Defendant is a constructive trustee of the Trust Shares holding the same through the 1st Defendant.” 40 At Para 15B – “... the Defendants are guilty of equitable misconduct and/or constructive fraud and are therefore precluded from relying on the Limitation Act 1953. The Plaintiff relies upon Section 22 of the Limitation Act 1953 ...”. 45 12 At Prayer (1) – “A declaration that the 2nd Defendant is the real and/or 5 de facto shareholder and the alter ego of the 1st Defendant.””.

(ii) Amended Reply to Amended Defence “At Para 2 – “... the 2nd Defendant is the real and/or de facto shareholder of the 1st Defendant ... the Plaintiff contends and will 10 contend ... that the corporate veil should be pierced.” At Para 3A – “... the Plaintiff was assured by her father who was at the material time in control of the 1st Defendant and by the 2nd Defendant who is now in control of the 1st Defendant that the 1st Defendant would 15 hold the shares in trust for the Plaintiff.” At Para 5.10 – “The Plaintiff agreed with her father that the 1st Defendant would hold her shares on trust for her ... the Plaintiff agreed to keep the trust confidential between the Plaintiff, her father, the 2nd 20 Defendant and Lim Chee Wah. The Plaintiff’s father agreed saying he would tell the 2nd Defendant and Lim Chee Wah.” At Para 5.11 – “As Tan Sri Lim Goh Tong was the directing mind of the 1st Defendant on 11.6.1979, he was in a position to represent to the 25 Plaintiff that the 1st Defendant would hold her shares on trust ...” At Para 5.13 – “Subsequently the Plaintiff met the 2nd Defendant on or about 6.12.1979 ... The Plaintiff asked the 2nd Defendant if their father had informed the 2nd Defendant about the shares that were held on trust 30 by the 1st Defendant for the Plaintiff. The 2nd Defendant confirmed that he was aware of the arrangement of the trust. The issue of the Plaintiff’s shares that were held on trust came up several times in subsequent conversations that the Plaintiff had with the 2nd Defendant prior to filing the KT Lim Action. The 2nd Defendant had full knowledge and 35 appreciated the fact that the Plaintiff has not taken any further action with regard to the fabrication.’ At Para 8 – “... the 1st Defendant had (through the Plaintiff’s father) and the 2nd Defendant had assured the Plaintiff that the Trust Shares were 40 held on trust for her ...””. [7.2] Based on the excerpts found in the Amended Statement of Claim and Amended Reply to Amended Defence, I agreed with the Plaintiff’s submission that the pleaded case of the Plaintiff against 45 the 2nd Defendant is based amongst others on the allegation that 13 he is a “... constructive trustee of the Trust Shares holding the same 5 through the 1st Defendant ...” and also for “...equitable misconduct and/or constructive fraud.” [7.3] Thus contrary to what the 2nd Defendant submitted, I am of the view that the contents of the Plaintiff’s pleadings disclosed a reasonable cause of action and it is not a “plain and obvious” case 10 for striking out under O.18 r.19(1)(a) ROC 2012. Whether there are facts alleged to justify the Plaintiff’s claim against the 2nd Defendant as constructive trustee or for lifting the corporate veil? [8] Based on the affidavit evidence and the documentary 15 evidence exhibited therein, in my considered opinion, the following facts can be gleaned or reasonably inferred. The relevant Affidavits are (i) Defendants’ Affidavit in Support affirmed by the 2nd Defendant on 24/10/2016 (encl.5), (ii) Plaintiff’s Affidavit in Reply affirmed on 28/11/2016 (encl.9), (iii) Defendants’ 2nd Affidavit affirmed on 20 20/12/2016 (encl.12) and (iv) Plaintiff’s 2nd Affidavit affirmed on 17/1/2017 (encl.16). [9] To reiterate the 2nd Defendant averred that even if the late Tan Sri Lim Goh Tong did make oral representations or if there was a 25 purported agreement, the late Tan Sri Lim Goh Tong did this without the knowledge or consent of 1st Defendant. However the Plaintiff has affirmed that she did have such a conversation with her late father. Given such facts, I agreed with the Plaintiff’s submission that whether such a conversation did occur is a question of fact and the 30 14 nature of the relationship of the late Tan Sri Lim Goh Tong and the 5 other shareholders and directors of the 1st Defendant require examination and is not a plain and obvious case for striking out. In this regard I relied on the authority of Meeriam Rosaline a/p Edward Paul & Ors v William Singam a/l Raja Singam (suing as Public Officer of Pertubuhan Persaudaraan Kristian Thaveethin 10 Kudaram, Ipoh, Perak) [2010] 4 MLJ 541 at 547[8] where the Court of Appeal held - “[8] In my judgment, it is not fair for a judge of the High Court to resolve conflicts of evidence on affidavit in a striking out proceeding when an issue of credibility is involved. This is actually the scenario which the 15 learned judge of the High Court had to reckon with. The appropriate time to do so would be by way of a discovery or by way of a cross-examination at the trial proper (Noor Jahan bte Abdul Wahab v Md Yusoff bin Amanshah & Anor [1994] 1 MLJ 156)”. 20 [10] Whilst the Defendants contended that the late Tan Sri Lim Goh Tong had authority to agree on behalf of the 1st Defendant to purchase the Trust Shares/Sale Shares in 1975 (the existence of which is denied by the Plaintiff) notwithstanding that they did not produce any formal agreement nor Board of Directors’ or 25 shareholders’ resolution from 1975 to authorise the late Tan Sri Lim Goh Tong to enter such agreement save for a resolution to ratify a change in the price to be paid from RM2,133,950.00 to RM3,200.925.00 (exh.D18 in Defendants’ 2nd Affidavit); it begs the question of how the late Tan Sri Lim Goh Tong did not have the 30 authority of the 1st Defendant to agree to hold the Trust Shares/Sale Shares on trust for the Plaintiff given the backdrop in para 9 above. I find there is inconsistency in the Defendants’ defence and Affidavits which require to be ventilated at a trial (see Meeriam 15 Rosaline’s case (supra)). 5 [11] The Plaintiff’s claim against the 2nd Defendant is premised on the allegation that he is the controlling mind and the alter ego of the the 1st Defendant. I find apart from D18, there are no other records to show any active participation by the other shareholders and 10 members in any decision making of the 1st Defendant. However I find there is evidence adduced by the Plaintiff to show that the 2nd Defendant is in effective control of the 1st Defendant through Kien Huat International as is evident from the 2nd Defendant’s testimony at the KT Lim trial (Kuala Lumpur High Court Suit No.WA-22NCVC- 15 58-01/2016) as follows: “PW3 If I can try to summarise it, the Genting shares were held.. are held by Kien Huat Realty Sdn Bhd which in turn is controlled and owned through another company called Kien Huat International which holds those shares for the benefit of the 20 Lim Kok Thay Trust of which beneficiaries are members of my.. certain members of my immediate family and myself. Parkview Management is the manager for the Trust. FBP So, can I just confirm from your answer, that Kien Huat Realty 25 Sdn Bhd holds the shares in Genting on trust for the Lim Kok Thay Trust, you call it the Lim Kok Thay Trust. PW3 That is correct. 30 FBP For the Lim Kok Thay Trust, is that correct? PW3 That is correct. FBP And is Kien Huat Realty Sdn Bhd registered as a trust company? 35 PW3 Kien Huat Realty Sdn Bhd. FBP Yes. 40 PW3 Is registered in Malaysia as a private company. 16 FBP It is a private company. 5 … FBP And all of these arrangements with regards to the companies and the holding of shares on trust et cetera, all of those arrangements 10 were done under advice, would that be correct? PW3 It was done by my late father. … 15 FBP If you were worried about it. My question was purely this, is it important to you not to have anyone challenge Kien Huat’s ownership of the Genting shares? 20 PW3 It is not important because the ownership has already been set. FBP I’ll take it that’s your answer. ...”. (Emphasis added) 25 [12] Based on the search reports and the chart in the newspaper articles shown in the Plaintiff’s Affidavits and the 2nd Defendant’s Affidavits, none of which the Defendants have denied, the following can be gleaned. The corporate structure of Kien Huat Realty Sdn Bhd (1st Defendant), Kien Huat International Ltd and Parkview 30 Management Sdn Bhd are as follows:

Kien Huat Realty Sdn Bhd (1st Defendant)

Shareholders Kien Huat International Ltd - 5.8%; Parkview Management Sdn Bhd - 94.2%.

(ii) Directors 2nd Defendant Dato’ Lai Khee Shin @ Joseph Lai Lim Keong Hui 17

Kien Huat International Ltd 5

Shareholders Aundyr Enmyn Limited - 1 share IFG International (Nominees) Limited - 1 share Parkview Management Sdn Bhd - 1 share

(ii) Directors 10 2nd Defendant Declan Thomas Kenny Lim Keong Hui Charles Hepburn Gerard Lim Ewe Keng 15

Parkview Management Sdn Bhd

Shareholders 2nd Defendant - 1 share Puan Sri Datin Lim (Nee Lee) Kim Hua - 1 share Amaline (M) Sdn Bhd - 1 share 20 Roseline Niap Kam Lian - 1 share Gerard Lim Ewe Keng - 2 shares

(ii) Directors 2nd Defendant Dato’ Lai Khee Shin @ Joseph Lai 25 [13] According to the undisputed statements in the affidavits and newspaper articles -

Puan Sri Datin Lim (Nee Lee) Kim Hua is widow of the late Tan Sri Lim Goh Tong and the 2nd Defendant’s mother;

Lim Keong Hui is the 2nd Defendant’s son; 18

Dato’ Lai Khee Shin @ Joseph Lai is the long standing lawyer 5 for the Genting Bhd Group, the late Tan Sri Lim Goh Tong and the 2nd Defendant;

Gerard Lim Ewe Keng is an employee and Chief Financial Officer of the Genting Group. [13.1] Against this backdrop, it is observed that the only 3 10 Directors of the 1st Defendant are the 2nd Defendant, his son, Lim Keong Hui and Dato’ Lai Khee Shin @ Joseph Lai whom based on his own testimony in the KT Lim Action admitted he is a close friend of the 2nd Defendant in that he “socialise and [s]it on his boards with him.”; in other words had a personal and working relationship with 15 him. [13.2] It is noteworthy that Gerard Lim Ewe Keng is listed as a director of Parkview Management Sdn Bhd and owns 2 out of 6 shares. Working mathematically, since Parkview Management Sdn Bhd owns 94.2% of the 1st Defendant, Gerard Lim Ewe Keng 20 effectively owns 31.4 % of the 1st Defendant and bearing in mind that he is the CFO of the Genting Group the question which arises is whether he is the true owner of 31.4% of 1st Defendant. It is significant that Gerard Lim Ewe Keng has not affirmed any affidavit. [13.3] Hence D2’s evidence on oath in the KT Lim Action (at para 11 25 above) is not only a denial of Plaintiff’s Trust Shares but also does not tally with the contemporaneous record on ownership of KHIL. [13.4] In relation to the Plaintiff’s averment that she agreed with her late father that 1st Defendant would hold the Trust Shares for her and the arrangement be kept confidential between him, the 2nd 30 Defendant, Lim Chee Wah and her and to which he concurred 19 saying that he would tell the 2nd Defendant and Lim Chee Wah 5 (para 22 in Plaintiff’s Affidavit in Reply): I find only the 2nd Defendant has sworn an affidavit to deny that he was informed by his late father that the 1st Defendant would hold the subject shares on trust for the Plaintiff. Whilst the 2nd Defendant said that he was informed by Lim Chee Wah that the latter was not informed by the late Tan 10 Sri Lim Goh Tong of the trust, this is hearsay evidence on a critical point of fact and Lim Chee Wah has not sworn any such affidavit to deny the Plaintiff’s claim. [14] As to the 1st Defendant’s production of the alleged Minutes of 15 Board and Minutes of the EGM of the 1st Defendant (exh.D18), the question arises that in order to prove a consistent pattern of formal Board of Directors and shareholders meetings, it will do well if the entire minute books for both directors and shareholders’ meetings be produced for examination at trial. 20 [15] The Defendants’ Counsel referred to several authorities i.e. Malaysian, English and Singaporean cases listed below to argue that the 2nd Defendant was not a constructive trustee in the sense that he had been in possession of trust property (a ‘Class 1 25 constructive trustee’), if at all, purely for the purposes of establishing a remedy in equity against him so that he could be accountable to the Plaintiff in the event of a judgment (a ‘Class 2 constructive trustee’). The cases cited by the Defendants on the distinction between two categories of constructive trusteeship are as follows: 30 Selangor United Rubber Estates, Ltd. v. Craddock (a bankrupt) 20 and others (No. 3) [1968] 2 All ER 1073 at 1095, 1097; 5 Paragon Finance plc v D B Thakerar & Co (a firm), Paragon Finance plc and another v Thimbleby & Co (a firm) [1999] 1 All ER 400 at 408-409; Williams v Central Bank of Nigeria [2014] 2 All ER 489 at 495 para 9 in the context of Category 2 constructive trustee; 10 Yong Kheng Leong and another v Panweld Trading Pte Ltd and another [2013] 1 SLR 173 at 191-192 para 46 where the Singapore Court of Appeal held as follows: “This is the essence of the distinction between Class 1 and Class 2 constructive trustees. If a person holds property in the position of a 15 trustee … and deals with that property in breach of that trust, he will be a Class 1 constructive trustee; whereas a wrongdoer who fraudulently acquires property over which he had never previously been impressed with any trust obligations, may, by virtue of his fraudulent conduct, be held liable in equity to account as if he were 20 a constructive trustee. But the latter is not a case of someone who had ever in reality been a trustee of that property; and it is only by virtue of equity’s reach that such a person is regarded as a Class 2 constructive trustee”. (Emphasis added) 25 Koh Siew Keng (P) & Anor v Koh Heng Jin [2008] 3 MLJ 822 at 831 and 832[9] where the Court of Appeal stated as follows: “A constructive trustee is to be distinguished from a person who is under a duty imposed by equity to account to the true owner of money or 30 property that he has unlawfully acquired or has dishonestly assisted another to unlawfully acquire. Such a person is neither a fiduciary nor a trustee in the true sense. An important difference between the two is that a constructive trustee holds his title in favour of the beneficiary while a person liable to account in equity asserts a title that is adverse to the true 35 owner …”. [16] In Yong Kheng Leong (supra) which was also relied on by the Plaintiff, the Singapore Court of Appeal at 190-191[45] approved of the dicta of Millet LJ in Paragon Finance (supra) when, among 40 21 others, His Lordship said - 5 “… In the first class of case … the constructive trustee really is a trustee. He does not receive the trust property in his own right but by a transaction by which both parties intend to create a trust from the outset … His possession of the property is coloured from the first by the trust and confidence by means of which he obtained it, 10 and his subsequent appropriation of that property to his own use is a breach of that trust. … The second class of case is different. It arises when the defendant is implicated in a fraud. Equity has always given relief against fraud by 15 making any person sufficiently implicated in the fraud accountable in equity. In such a case he is traditionally though I think unfortunately described as a constructive trustee and said to be ‘liable to account as constructive trustee’. Such a person is not in fact a trustee at all, even though he may be liable to account as if he were. …”. 20 (Emphasis added) [16.1] In this regard I agreed with the Plaintiff’s submission that the 2nd Defendant’s argument in para 15 above is without merit for these reasons -

It is clearly pleaded that the 2nd Defendant is a constructive 25 trustee who is in possession of the Trust Shares through the 1st Defendant (see para 15.3 Amended Statement of Claim).

Further, the Plaintiff has pleaded that the 2nd Defendant is in control of and the alter ego of the 1st Defendant and that the corporate veil should be lifted (para 3 Amended Statement of 30 Claim).

The effect of such a pleading is the 2nd Defendant falls within the category of ‘Class 1 constructive trustee’ as the claim against him is as a constructive trustee in possession and/or control of the Trust Shares following the principle in Paragon Finance which 35 was approved by the Court of Appeal in Koh Siew Keng (supra). 22 Whether s.6 or s.22 of the Limitation Act apply? 5 [17] S.22 of the Limitation Act provides - “22(1) No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action -

in respect of any fraud or fraudulent breach of trust to which the 10 trustee was a party or privy; or

to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use. 15 22(2) Subject as aforesaid, an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of six years from the date on 20 which the right of action accrued: Provided that the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property, until the interest fell into possession”. 25 [18] The 2nd Defendant submitted that the Plaintiff’s claim is time barred under s.6 of the Limitation Act because it is a claim for breach of contract which occurred in 1979 at the latest when the Plaintiff said that the 1st Defendant did not pay for the Sale Shares 30 and more than 6 years have lapsed (para 18.1 and 19.2 of the Amended Defence). [19] With respect I find the 2nd Defendant’s submission is misconceived. The Plaintiff’s claim is substantially for breach of trust 35 and recovery of trust property from a trustee and not for the balance purchase price under the alleged 1975 shares sale agreement or the alleged amendment in 1979. This is evident from the prayers which the Plaintiff is seeking; none on payment of shares. 23 [19.1] Based on the Plaintiff’s case that from the time of the 5 agreement with the late Tan Sri Lim Goh Tong in 1970 which confirmed the trust followed by the conversations with the 2nd Defendant on the trust which she had no reason to doubt until he was put on notice that he and 1st Defendant would not honour the trust during the KT Lim Action. Thus the breach of trust occurred the 10 earliest in 2016 when the 2nd Defendant denied the trust. [20] In any event based on what I have alluded to in para 16 above being the pleaded case of the Plaintiff, in my considered view the Plaintiff has shown that the exception in s.22(1)(b) of the 15 Limitation Act applies in that the 2nd Defendant falls within the category of trustees under the said section and therefore no limitation period applies here. [20.1] Further, the exception under s.22(1)(a) of the Limitation Act applies as the Plaintiff has pleaded that the 2nd Defendant has been 20 a party to constructive fraud as per para 15B of the Amended Statement of Claim. Whether the alleged price for the Trust / Sale Shares was fully paid? 25 [21] The 2nd Defendant submitted that the Plaintiff was paid the full purchase price of the Sale Shares (Plaintiff referred to it as Trust Shares) and that no trust exists. In this regard the 2nd Defendant relied on the Share Sale Agreement of 26/3/1979 and the following payments made to the internal account held by the 1st Defendant 30 referred to in para 3(iii)(a), (b) and (c) above and the following 24 corresponding exhibits:

exh. D2, copy of ledger maintained by the 1st Defendant for the Plaintiff’s internal account from the year 1975 until the time it was settled and closed on 16/4/1979;

(ii) exh.D3, 1st Defendant’s cash payment voucher dated 5/3/1979;

(iii) exh.D2 referred in (i) above and exh.D4, 1st Defendant’s cash payment voucher dated 16/4/1979;

(iv) exh.D5, the 1st Defendant’s cash book entries for its Chung Khiaw Bank Ltd account reflected the cheque payments made on 5/3/1979 and 16/4/1979. 15 [22] With respect I find the aforesaid submission of the 2nd Defendant is untenable for the following reasons. Having perused the Plaintiff’s Affidavit in Reply, I find the Plaintiff -

disputed the authenticity of the purported Share Sale 20 Agreement as “had been tampered with and new clauses inserted which were inconsistent with each other.”

(ii) vehemently denied the truth, existence and accuracy of the internal account and pointed to entries such as relating to tax payments and payments on behalf of a company “Senky Mining Co 25 Sdn Bhd” for the settlement of Lot No. 6826 of which she had no knowledge and no connection as evident from exh.LSK-3;

(iii) has disputed exh.D3 in that it was dated before the date of the purported Share Sale Agreement; it referred to 4 cheques without production of the cheques therein whilst exh.D5 are internal entries 30 which do not prove that the 4 cheques were issued to Plaintiff. 25 Whilst the Defendants have alleged that the 4 cheques of 5 RM500,000.00 were all made on the same day to the Plaintiff to avoid the RM500,000.00 limit on cheques, the Defendants have not explained why the late Tan Sri Lim Goh Tong could not have signed one cheque since he had unlimited mandate; and

(iv) has no knowledge of the payment in exh.D4 which cash 10 payment voucher was not acknowledged by her and there was no production of the cheque of RM1,069,884.04 to show that it was issued to Plaintiff. [23] For the reasons above since I find the Plaintiff’s case is not 15 time barred and neither has the Plaintiff been fully paid, the Plaintiff’s claim is therefore not scandalous, frivolous or vexatious and/or an abuse of the process of Court under O.18 r.19(1)(b) and/or (d) ROC 2012 respectively. 20 Other matters [24] The Amended Statement of Claim was amended on 13/12/2016 and the Amended Defence was filed on 27/12/2016. I accepted the Plaintiff’s objection that it is inappropriate for the Defendants’ Counsel to read and compare the strike through 25 pleadings as under the doctrine of “relation back”, once amendments have been accepted by the Court, the amended pleadings must stand and be read as if they were filed on the same date as the original pleadings and the original pleadings that have been struck through ought to be ignored. 30 26 Conclusion 5 [25] For the foregoing reasons, having considered the submissions of the parties, the Court dismissed the Defendants’ application (encl.6) with costs of RM6,000.00. Dated: 27/11/2017 10 SGD. (LAU BEE LAN) 15 Judge Counsel for the Plaintiff: Encik Lim Kian Leong together with 20 Cik Fiona Bodipalar Messrs Bodipalar Ponnudurai De Silva Advocates & Solicitors D3-1-8, Solaris Dutamas No.1, Jalan Dutamas 1 25 50480 Kuala Lumpur Counsel for the Defendants: 30 Encik Christopher Leong together with Cik Shamala Balasundaram Messrs Chooi & Company Advocates & Solicitors Level 5, Menara BRDB 35 285, Jalan Maarof Bukit Bandaraya 59000 Kuala Lumpur