Lita Nasyitah Goh Binti Abdullah v Roslan Bin A. Ghaffar (WA-22NCvC-278-05/2018)

Content

1 GUAMAN SIVIL NO.: WA-22NCVC-278-05/2018 ANTARA LITA NASYITAH GOH BINTI ABDULLAH [NO. K/P: 651201-66-5068] …PLAINTIF

Preamble

Pursuant to O.37 r.1(2) Rules of Court 2012, evidence for the assessment of damages was adduced by way of affidavits filed by both sides. The deponents were cross-examined on their respective affidavits. After hearing submissions and reserving decision, I decided that the value of the shares was RM471,500.00 and that General Damages of RM1,000,000.00 ought to be paid by the 1st Defendant to the Plaintiff. [4] My reasons are as set out below. Background and Finding of Facts made by Justice Rozana [5] The Plaintiff was a director and Chief Executive Officer of Straits International Education Group Sdn Bhd (“SIEG”). SIEG was formerly known as SIS Charter Sdn Bhd, and was engaged in the business of running of a private international school. It is necessary to mention the former name “SIS Charter Sdn Bhd” because it appears in some older documents. [6] The 1st Defendant was the chairman, director and shareholder of SIEG. [7] A total of 525,000 shares of SIEG were registered in the 1st Defendant’s name. Sometime in year 2012, the Plaintiff and the 1st Defendant entered into a Trust Deed (“the said Trust”) whereby the 1st Defendant declared that he holds 50,000 shares (“the 50,000 Shares”) out of the said 525,000 shares on trust for the benefit of the Plaintiff. A Power of Attorney was also executed, presumably to confirm and give effect to the said Trust. [8] Trouble started when the 1st Defendant sold and transferred all the said 525,000 shares (inclusive of the 50,000 shares held by him under trust for the Plaintiff) to the 2nd Defendant in year 2015. The Plaintiff’s Claim [9] It was submitted for the Plaintiff that even though the 1st Defendant had surreptitiously sold the 50,000 Shares, he had concealed the sale and refused to disclose the consideration which he had received. [10] Learned counsel for the Plaintiff further submits that damages to be assessed as equitable compensation differs from damages in common law, in that causation, foreseeability, and remoteness need not be considered – as the trustee must restore the trust estate to its proper position, and must bear full damages for failing to perform restoration. [11] He contends that the evidence shows the 50,000 Shares had increased in value because a company by the name of GUH Holdings Berhad paid as much as RM11 million to acquire a 25% equity in SIEG in March 2016, and which was subsequently disposed of for RM52.5 million in July 2021. [12] Learned counsel for the Plaintiff criticised the valuation performed by the accountant appointed by the Defendant who had applied a valuation date of 31st December 2014 and concluded that the 50,000 Shares had zero value. It was contended that the Defendant's valuation ignored actual market transactions and had used inappropriate methodology. [13] Several authorities, including those from other Commonwealth countries, were cited by learned counsel for the Plaintiff, to justify the Plaintiff’s total claim of RM1.5 million. The Defendant’s Position [14] The foremost point to highlight is the opinion given by the accountant appointed by the 1st Defendant, who opined that the 50,000 Shares had zero value. Based on his opinion, the 1st Defendant’s learned counsel submits that there should be no award to be made to the Plaintiff. Zero. [15] Learned counsel for the 1st Defendant raised several other points, one of which is that the Order (issued by Justice Rozana) was for general damages, and that there was no order for punitive damages and exemplary damages to be assessed. [16] He went on to submit that the Plaintiff in this case has failed to establish that she suffered any actual loss arising from the share transfer (of the 50,000 Shares) by the 1st Defendant. It was contended that the Plaintiff “has not shown any shred of evidence that the alleged breach had directly caused losses to her.” [17] In reply to the Plaintiff’s assertion that the 1st Defendant had concealed his sale price of the 525,000 shares (which included the 50,000 Shares belonging to the Plaintiff), the 1st Defendant’s learned counsel attempted to ‘turn the table’ on the Plaintiff by arguing that the Plaintiff is to be blamed for not filing any application for discovery to compel the 1st Defendant to disclose the sale price received by the 1st Defendant from his sale of those shares. [18] It was also contended by the 1st Defendant’s learned counsel that the Plaintiff’s assertion that GUH Holdings Berhad had disposed of its 25% equity in SIEG to Tenby Educare for RM52.5 million is factually incorrect because the reported attempt by GUH to dispose of its SIEG shares “was GUH’s 100% shares in SIEG, and not 25%.” Analysis of the Facts and Evidence adduced during Assessment [19] To recapitulate, the Plaintiff had prayed for a declaration that the 1st Defendant was holding 50,000 shares in SIEG, including additional shares derived therefrom, as trustee for the Plaintiff. In the Judgment dated 26th January 2021 (“the said Judgment”), Justice Rozana issued the declaration of trust (“the Declaration”) sought by the Plaintiff and also granted the Plaintiff the consequential reliefs which she prayed for. [20] No order was made against the 2nd Defendant because the Plaintiff had earlier discontinued her claim against the 2nd Defendant. [21] In my view, the 1st Defendant should not be referring to the price which the Plaintiff paid for the 50,000 Shares. It is irrelevant because it was ventilated during the trial before Justice Rozana, and the learned judge had decided to issue the Declaration declaring that the 1st Defendant holds the 50,000 Shares as trustee for the Plaintiff. [22] Following the Declaration of trust issued on 26th January 2021, the 1st Defendant should be either transferring the 50,000 Shares to the Plaintiff or her nominee in accordance with the Plaintiff’s instructions – which the 1st Defendant could not do because he had sold the 50,000 Shares together with the other SIEG shares that were in his name. In other words, the fact that the 1st Defendant had, in breach of trust, disposed of the 50,000 shares, gave rise to the order for assessment of shares value and General Damages to be paid by the 1st Defendant to the Plaintiff. [23] The wording of the said Judgment show that the intention is to order the 1st Defendant to pay the Plaintiff the market price of the 50,000 Shares (see para 5 of the said Judgment) and also General Damages (see para 6 of the said Judgment) which takes into account the profit and loss that the Plaintiff could have made, i.e. had the 1st Defendant not committed breach of trust and had kept the 50,000 Shares on trust for the Plaintiff. For avoidance of doubt, screenshots of those two paragraphs are pasted below: [24] In light of the judgment of Justice Rozana having being upheld by the Court of Appeal, this Court has to proceed with the assessment of the value of the 50,000 Shares and also General Damages, including all profits that could have been derived therefrom if the 1st Defendant had not committed the breach of trust. An issue that arises is the date on which the 50,000 Shares are to be valued. No valuation date was fixed by the learned judge in the said Judgment. [25] As pointed out above, the 1st Defendant’s accountant had valued the Plaintiff’s shares with zero value. With respect, I find this valuation was debunked, inter alia, by the undisputed fact that in 2017, SIEG made a profit of RM979,000 (see page 5 of Enclosure 84). The value of SIEG shares certainly could not have been zero. Further, the goodwill of a company is relevant when valuing the company. [26] Since the evidence shows that the value of SIEG’s shares could not have been zero, the report prepared by the 1st Defendant’s accountant is, with respect, of no assistance to this Court. Fortuitously for the Plaintiff, major transactions by GUH Holdings Berhad are available in the public domain as it is a public-listed company. This Court finds that the news about GUH Holdings Berhad having acquired 1,166,667 SIEG shares at a price of RM11,000,000 in March 2016 to be acceptable, on a balance of probabilities, as evidence. This is because there was subsequent news in July 2021 of GUH Holdings Berhad disposing its 25% stake in SIEG for RM52.5 million. The Plaintiff had exhibited in her affidavit (Enclosure 85) news articles showing news of GUH Holdings Berhad acquiring SIEG shares and also of GUH Holdings Berhad subsequently disposing SIEG shares. Screenshots of excerpts from those articles are pasted below for reference. The first article was on 22nd March 2016: The second article was on 3rd August 2018 in EDGE WEEKLY which confirmed that GUH purchased 25% of SIEG for RM11 million in 2016. [27] When valuation is ordered to be performed, it is necessary to affix a valuation date. It is trite that the price agreed and paid by unrelated parties, i.e. an “arm's length transaction”, is the most accurate definition of “market value”. [28] Since Justice Rozana did not fix any valuation date, this Court ought to assess the evidence adduced by both sides to choose a valuation date which would allow the assessment of a fair and equitable value. On a balance of probabilities, the 1st Defendant had sold the 525,000 shares registered in his name (including the 50,000 Shares) for a substantial sum. Even if he had sold at below market price, this Court finds that the evidence of 1,166,667 SIEG shares being sold to GUH Holdings Berhad for RM11 million in March 2016 is credible evidence relevant to the determination of the value of the 50,000 Shares. The high sale price of RM11 million was probably the reason for the 1st Defendant persisting to refuse disclosure of the amount that he received for selling the 525,000 SIEG shares. Based on the facts of this case, this Court finds that it would be just and equitable to use the transaction of SIEG shares in March 2016 for the valuation of the 50,000 Shares. It requires simple arithmetic to work out the value per share by dividing RM11,000,000 with 1,166,677 SIEG shares: RM11,000,000.00 ÷ 1,166,677 shares = RM9.43 per share. [29] By taking the value of the 50,000 Shares in March 2016 to be RM9.43 per share, the value of the 50,000 Shares as at March 2016 would be known by multiplying 50,000 with RM9.43, which works out to RM471,500. [30] As pointed out above, the said Judgment which has been upheld by the Court of Appeal, requires assessment of General Damages as well as the value of the 50,000 Shares. In other words, the Court of Appeal upheld a judgment which requires the 1st Defendant to pay the Plaintiff damages for breach of trust besides paying the market price of the 50,000 Shares. [31] I find that there are few local cases on damages for breach of trust that are of assistance. The Australian case cited by learned counsel for the Plaintiff, namely, In Dawson (deceased) [1966] NSWR 211, is logical and persuasive in reasoning that where monetary compensation is to be paid in lieu of restoring assets, the compensation ought to be assessed by reference to the value of the assets at the date of restoration, i.e. the date which the Court would have ordered restoration to be performed. I agree with the reasoning because had there been no breach of trust by the 1st Defendant, the Plaintiff would have stood a good chance of selling the 50,000 Shares for a much higher price in 2021. [32] The 1st Defendant’s learned counsel had attempted to raise doubts about the evidence adduced by the Plaintiff. However, logically, GUH Holdings Berhad must have had acquired those shares earlier to be in a position to sell them for a hefty sum of over RM52.5 million in year 2021. In other words, GUH Holdings Berhad’s acquisition of SIEG shares in year 2016 must have been completed successfully, and as reported, at a price of about RM11 million. [33] Now, the date of the said Judgment, which is 26th January 2021, is relevant. The general principle as enunciated in In Dawson (deceased) (supra), requires the court to take into account the restoration date, and logically, damages in lieu of restoration if restoration is impossible. [34] Thus, in all fairness, this Court must bear in mind that this is a case in which the trial judge had decided to issue the Declaration of trust in favour of the Plaintiff after noting that she was put through several years of litigation to obtain the said Judgment. Had it not been for the 1st Defendant’s breach of trust, the Plaintiff stood a realistic chance of selling the 50,000 Shares to the same purchaser who was willing to pay GUH Holdings Berhad a hefty sum of RM52.5 million in July 2021, i.e. just a few months after the said Judgment. Whilst there is no doubt that the Plaintiff is not entitled to any part of the RM52.5 million, it is a relevant factor to be considered. For the purpose of assessing the General Damages payable by the 1st Defendant, guidance could be garnered from knowing the approximate sale price which the Plaintiff stood a chance of receiving as the beneficial owner of the 50,000 Shares in July 2021. By dividing RM52,500,000 with 1,166,677 SIEG shares, we get an indicative price of RM45 per share: RM52,500,000 ÷ 1,166,677 shares = RM44.99 per share. The indicative price of the 50,000 Shares as at July 2021 would be known by multiplying 50,000 with RM44.99, which works out to RM2,249,500. Conclusion [35] Based on the aforesaid reasons, I am of the view that justice would be served by assessing the value of the 50,000 Shares at RM471,500.00 and pursuant to para (5) of the said Judgement, to order judgment to be entered for the said sum, to be payable by the 1st Defendant to the Plaintiff. [36] As for General Damages, I have perused the authorities cited by both counsel but with respect, find that they are of little assistance to this Court. The judgment of the learned judges of the Court of Appeal of New Zealand reported in Bank of New Zealand v New Zealand Guardian Trust Co Ltd [1999] 1 NZLR 664 appear to hold that trustees are strictly liable for losses if the loss would not have occurred but for the breach, regardless of foreseeability, remoteness, or intervening acts. In my humble view, this approach is consistent with the fundamental principle that the trustee is supposed to restore the trust property to the beneficiary – and having put himself in a position of being unable to perform restoration due to his breach of trust, he must bear full damages for failing to perform restoration regardless of causation, foreseeability and remoteness. [37] I bear in mind that in assessing damages, I am constrained to give effect to the said Judgment (which had been upheld by the Court of Appeal). This Court ought to take into account the fact that the 1st Defendant had vehemently refused to recognise the said Trust, blatantly acted in breach of trust and dragging the Plaintiff through litigation for well over 7 years – from the filing of this civil suit in 2018 through a full trial, appealing when there was no merit in his appeal, and still refusing to disclose his sale price of the 50,000 Shares during this assessment stage in year 2025. [38] Since the indicative price of the 50,000 Shares in year 2021 could have been much higher if the 1st Defendant could have transferred the 50,000 Shares back to the Plaintiff after the said Judgment was pronounced by Justice Rozana on 26th January 2021, this Court ought to award General Damages that fully compensate the Plaintiff – as intended by para (6) of the said Judgment. [39] In the circumstances, I am of the view that an award of RM1,000,000 as General Damages would be fair. Interest at 5% per annum on the total judgment sum of RM1,471,500.00 shall be payable, to be calculated from 26th January 2021 until the date of payment. Lastly, costs of RM20,000 to be payable by the 1st Defendant to the Plaintiff. Date of Decision: 13th November 2025 ………………………… Gan Techiong Judicial Commissioner High Court of Malaya at Kuala Lumpur (NCvC9) Counsel for the Plaintiff: Calvin Lim Sin Guan SOLICITORS FOR THE PLAINTIFF: MESSRS GOIK, RAMESH & LOO Advocates & Solicitors Suite N-3-1, Block N, Plaza Damas, 60 Jalan Sri Hartamas 1, 50480 KUALA LUMPUR. Counsel for the Defendant: Vijaya Kumar Raj (Carol Audrey with him) SOLICITORS FOR THE DEFENDANT: MESSRS A. RAJADURAI P. KUPPUSAMY & CO. Advocates & Solicitors No. B-2-19, 2nd Floor, 8 Avenue, Jalan Sungai Jernih 8/1, 46050 PETALING JAYA, SELANGOR. CASES REFERRED TO: