Melewar Equities Sdn Bhd v Ezurin Yusnita Binti Abdul Malik (22NCC-293-07/2017)

This is an appeal against my decision dismissing the Plaintiff’s application for summary judgment for the sum RM4,048,069.91 and interest at the rate of 5% on the said sum from the date of judgment to the date of full payment.

Plaintiff, Melewar Equities Sdn Bhd, is a private company incorporated in Malaysia. Its nature of business is stated as an investment holding company. It is a wholly owned subsidiary of Khyra Legacy Berhad a company limited by guarantee. The nature of business of Khyra Legacy Berhad is to provide for the educational needs and for the enhancement of the standards of living of all descendants of Tunku Ya’acob bin Tunku Abdullah and to provide charitable aids to needy person. 3

The Defendant, Ezurin Yusnita Binti Abdul Malik, is an individual.

At all material time –

the Defendant was the wife of Tunku Dato’ Yaacob Khyra bin Tunku Tan Sri Abdullah (TDYK) who is a director in the Plaintiff company (Exhibit LSH-1 of Enclosure 8).

the Defendant was one of the members of the Board of Trustees of Khyra Legacy Berhad (Exhibit LSH-1 of Enclosure 8). Factual Background [5] At the instruction of the Defendant the Plaintiff paid to the various financial institutions, for and on behalf of the Defendant, the expenses incurred by the Defendant for purchases made by the Defendant through her credit cards. The payments were made with the understanding that the said monies are advances and that the Defendant will pay back to the Plaintiff when the Plaintiff request so. The details of the payments made by the Plaintiff is listed at paragraph 4 of the Plaintiff’s Statement of Claim and the payments are in respect of expenses incurred from March 2010 to March 2016 which total up to RM4,048,069.91. 4 [6]

the Defendant had used her status and/or position as the wife of TDYK and her position as member of Board of Trustee in Khyra Legacy Berhad to demand the Plaintiff to 5 pay to the financial institutions for and on behalf of the Defendant the expenses incurred by the Defendant as listed at paragraph 9 of the Plaintiff’s affidavit Enclosure 8.

the Defendant’s email to the Plaintiff requesting the Plaintiff to pay for the Defendant’s expenses, the details of the transactions effected by the Defendant through her credit cards, the cheques, and cheque deposit slip in respect of the payments made by the Plaintiff is produced and marked Exhibit LSH-2 of Enclosure 8. The total amount paid upon Defendant’s request is RM4,048,069.91 in respect of various transactions from year 2010 until year 2016.

the Plaintiff alternatively claim the sum RM4,048,069.91 is monies had and received by Defendant. The monies were paid for and on behalf of the Defendant at the Defendant’s request and into the Defendant’s account which Defendant is required to return the monies.

the Defendant had committed breach of trust and/or misappropriation of the Plaintiff’s funds when she failed to pay back to the Plaintiff the monies advanced. The 6 Defendant is deemed to have received the monies under constructive trust and failure to repay the monies amounts to a breach of the trust.

Plaintiff claims the Defendant is unjustly enriched by the advancements made by the Plaintiff for the benefit of the Defendant. The Plaintiff had fulfilled the requirement of the principle of unjust enrichment as cited in the case Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 CLJ

453.

Plaintiff believed that Defendant has no merit defence and no triable issued could be raised. [10] The Plaintiff further contends as follows –

the Defendant did not deny that she had received the above mentioned sums. The Defendant’s main contention that the monies paid by Plaintiff to the Defendant are for the maintenance and expenses of her and her children needs is her family matter and irrelevant to the Plaintiff’s company. In any event there is no evidence adduced by the Defendant to 7 show that the expenses incurred were expenses for the maintenance of the Defendant and her children as claimed.

Plaintiff refutes the Defendant’s allegation that TDYK is the alter ego of the Plaintiff’s company and/or Khyra Legacy Berhad. This is because contemporaneous documents shows that Defendant’s ex-husband is not the only director in the Plaintiff’s company.

Defendant did not plead fraud or any special circumstance that would justified the lifting of the Plaintiff’s veil of incorporation.

The Defendant had received the monies and Defendant failed to show any consideration moving from Defendant to the Plaintiff Company.

Limitation does not apply as Defendant has received the monies under trust. 8 Defendant’s case [11] In her affidavit (Enclosure 9) resisting the Plaintiff’s application for summary judgment, the Defendant submits –

there is no agreement and/or loan between the Plaintiff and the Defendant. As such the Defendant denies that she had borrowed the sum RM4.048.069.91 from the Plaintiff.

TDYK who is the director in the Plaintiff company and Khyra Legacy Berhad has wide control in making decision for the Plaintiff and Khyra Legacy Berhad. Therefore, TDYK is in the position to approve the transaction as maintenance to the Defendant. As TDYK is the alter ego of the Plaintiff and Khyra Legacy Berhad the Plaintiff’s corporate veil ought to be lifted in order for TDYK be made responsible for all the claims made by the Plaintiff.

Defendant’s marriage to TDYK was dissolved vide court order dated 7 August 2017 (Exhibit EY-3 Enclosure 9). Prior to the dissolution of marriage there were no claims made against Defendant. Plaintiff’s action against the Defendant 9 is an afterthought and tainted with mala fide intention. The ulterior motive of TDYK is to seek avenge for the dissolution of marriage by the Defendant as TDYK was reluctant to divorce Defendant and had caused delay in the divorce proceedings. Soon after the court pronounced the dissolution, Defendant received the Writ and Statement of Claim of this action.

Defendant contends that all monies were approved by TDYK as the monies were for the purpose of the maintenance and/or expenses of the Defendant and their children. There was an understanding between Defendant and TDYK that TDYK will provide maintenance to her and their children. TDYK had used the Plaintiff as a medium to provide maintenance to the Defendant.

the credit card was given to the Defendant by her ex-husband TDYK for her daily maintenance and the payments will be paid by the Plaintiff. All the transactions are within the knowledge of TDYK and approved by him as the director of the Plaintiff company. Therefore the Defendant could not be held liable for misappropriating the Plaintiff’s fund. 10

Defendant has no knowledge in respect of the allegation regarding the prohibited transaction. The Defendant had used the monies in good faith for the purpose of her maintenance.

Since the payments made were for the maintenance and living expenses of the Defendant and her 5 children there is no issue of unjust enrichment and constructive trust.

The correspondence emails exhibited by the Plaintiff are for the Defendant’s maintenance.

The principle Monies had and Received is not applicable as the Plaintiff had voluntary made the payments. Plaintiff failed to show the monies were paid as advancement. [12] The Defendant’s personal assistance, Intan Dayana binti Md Rosdi (Intan Dayana) was authorised by the Defendant to affirm an affidavit opposing the Plaintiff’s application for summary judgment. In her affidavit, Intan Dayana deposed the following – 11

She is responsible for the management of the Defendant’s financial matters/household expenses.

The maintenance of the Defendant and the children is provided by TDYK through Winnie Hui and Lee Siew Hong in the Plaintiff company.

At all material time Defendant’s expenses via her credit card are paid through the Plaintiff as the transactions were approved by TDYK who is the director and majority shareholder of the Plaintiff.

A document titled Recurrent Related Party Transaction MAA Group Berhad (Exhibit ID-1 of Enclosure 10) shows that TDYK is the founder and the sole beneficiary owner of Khyra Legacy Berhad. As Khyra Legacy Berhad is the holding company of the Plaintiff, the Plaintiff is indirectly under the control of TDYK. As such TDYK is in the position to approve the payments listed at paragraph 9 of the Plaintiff’s affidavit (Enclosure 8) in support of the summary judgment application.

The monies received were for the living expenses of the Defendant and her five children who stays in London. Without such maintenance the Defendant would not be able 12 to fend for herself and the children because she is not working. [13] The Defendant submits that the Plaintiff is not entitle to resort to the equitable principles of money had and received, restitution and constructive trust as the Plaintiff itself is guilty of breach of trust. [14] It is the Defendant’s contention that some of the monies claimed by the Plaintiff is time barred. [15] Based on the reasons abovementioned, Defendant submit that there are triable issues which must be dealt by way of trial. Witnesses ought to be called to give evidence in respect of the purpose of the monies paid to the Defendant in which could not be dealt by way of affidavits. The law [16] Pursuant to Order 14 rules 1 and 2 of the RoC 2012, in an application for summary judgment, it is incumbent on an applicant seeking the same to prove the following – 13

the statement of claim has been served on the defendant;

the defendant has entered appearance; and

the applicant has affirmed an affidavit verifying the facts on which the statement of claim is based. The applicant is also required to affirm his belief that the defendant has no defence to the statement of claim. [17] Upon the fulfilment of the above requirements the burden is on the defendant to prove under Order 14 rules 3 and 4 of the RoC 2012 that there is an issue or question in dispute which ought to be tried (National Company For Foreign Trade v. Kayu Raya Sdn Bhd [1984] 1 CLJ (Rep) 283; Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544). An application for summary judgement may also be dismissed by the court if the defendant satisfies the court that there ought for some other reason to be a trial namely there are circumstances that ought to be investigated by the court (United Merchant Finance Bhd v. Majlis Agama Islam Negeri Johor [1999] 2 CLJ 151; [1999] 1 MLJ 657). [18] In this respect it is apt to refer to the principles laid in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 at page 408 – 14 In our view, basic to the application of all those legal propositions, is the requirement under O 14 for the court to be satisfied on affidavit evidence that the defence has not only raised an issue but also that the said issue is triable. The determination of whether an issue is or is not triable must necessarily depend on the facts or the law arising from each case as disclosed in the affidavit evidence before the court. Under an O 14 application, the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an affidavit. Where such assertion, denial or dispute is equivocal, or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable in itself, then the judge has a duty to reject such assertion or denial, thereby rendering the issue not triable. In our opinion, unless this principle is adhered to, a judge is in no position to exercise his discretion judicially in an O 14 application. Thus, apart from identifying the issues of fact or law, the court must go one step further and determine whether they are triable. This principle is sometimes expressed by the statement that a complete defence need not be shown. The defence set up need only show that there is a triable issue. Preliminary requirements [19] With regard to the preliminary requirements as laid down by the Federal Court in Cempaka Finance Bhd (supra), the record shows that the Plaintiff’s Statement of Claim has been duly served on the Defendant on 17 July 2017 (see Affidavit of Service Enclosure 4). The Defendant subsequently filed Memorandum Appearance on 27 July 2017 (Enclosure 5). The Plaintiff had also filed an affidavit (Enclosure 8) 15 verifying the facts upon which reliance is placed by the Plaintiff to support its application for a summary judgment. As such a prima facie case has been established by the Plaintiff and therefore entitled to judgment. [20] Accordingly it is for the Defendant to prove that there are issue or question in dispute which ought to be tried or there ought for some other reason to be a trial, namely, there are circumstances that ought to be investigated by the court. As stated above the Defendant need not raise a complete defence, suffice for the Defendant to show there is a triable issue or question. In South East Asia Insurance Bhd v Kerajaan Malaysia [1998] 1 CLJ 1045 it was held if a defendant in an Order 14 application succeeds in raising even a single triable issue, it will not be a fit and proper case to enter summary judgment. Findings of the court [21] It is noted that the Defendant did not deny the Plaintiff had made payments in the sum of RM4,048,069.91. The Defendant also did not seem to deny that she had requested for the Plaintiff to make such payments. The requests made by the Defendant can be seen from amongst the pages in Exhibit LSH-2 of Enclosure 8. However it is the 16 Defendant’s position that the payments made by the Plaintiff are monies for the maintenance and living expenses of the Defendant and her 5 children. To support this, the Defendant refers to pages 92 (expenses incurred for the family holiday in Lake Tahoe), 187 and 257 (the Defendant and her 2 children trip to Copenhagen and Paris) of the said Exhibit LSH-2. [22] The Defendant also refers to pages 256 – 327 Exhibit LSH-2 of Enclosure 8 where the Defendant’s statement of account of her American Express card which contains the details of her expenses were sent to the director of the Plaintiff company, namely, TDYK who was the Defendant’s husband at the material time. [23] As stated above Plaintiff has produced Exhibit LSH-2 in respect of the various payments made between 2010 up to 2016 by the Plaintiff for the Defendant’s expenses. By those documents the Plaintiff seeks to show that it was the Defendant who had requested for the Plaintiff to pay for the various and numerous transactions the Defendant had effected through her credit cards. My assessment of the said exhibit is discussed below. 17 [24] For the period August 2012 up to March 2016, the request to make payment to the financial institution either comes from the Defendant herself (some of the request can be seen at pages 15, 35, 38 and 41 of Exhibit LSH-2 of Enclosure 8) or her personal assistance Intan Dayana who made such request on behalf of the Defendant (some of the requests can be seen at pages 10, 13, 18, 23, 27 and 30 of the said Exhibit LSH-2). Such requests were made through email. [25] Be that as it may, there is nothing to suggest that the requests per se could be construed as an agreement or understanding that the payments made by Plaintiff are advances which the Defendant has agree to pay back when demanded by the Plaintiff. In fact, the emails exhibited are one way communication on the part of the Defendant, there being no reply to the said request let alone queries by the Plaintiff. Given the circumstances, the Defendant’s denial that there was an understanding that the payments were advances by the Plaintiff is not something which is inherently improbable. [26] The request were made to an individual by the name of Winnie Hui (email address – WinnieHui@maa.my) who then forwarded the message for the action of individuals by the name of Lee Siew Hong and Siah whose email address is lee@melewar.com.my and 18 siah@melewar.com.my. Lee Siew Hong appears to be the deponent of the Plaintiff’s affidavit in support of the summary judgment application. As stated above there is no evidence thus far which shows the above individuals queried the Defendant when Defendant requested for payments to be made to the banking institutions. Based on the emails, the Plaintiff appears to be diligently and promptly making the payments as requested by the Defendant without any qualm. This, together with their inaction of not insisting of the repayment of monies (especially in respect of monies paid way back in 2010 which may be barred under the law on limitation) purportedly to be advances appears to be consistent with the Defendant’s assertion that there is no such understanding or agreement. [27] It is noted for the period between March 2010 to May 2012 (pages 254 – 381 Exhibit LSH-2 of Enclosure 8) there is no document exhibited to show that the Defendant had requested the Plaintiff to pay for the Defendant’s expenses. The Defendant’s statement of account was also not exhibited. It is to be noted for the said period, the statement of account exhibited at pages 254 – 381 appears to be the in the name of TDYK in respect of his American Express Platinum Card. The statement of account was prepared for TDYK and addressed to TDYK at either MAA Group Berhad or Melewar Ind Group Bhd. As can be seen from 19 the statements of account, it contains transactions for TDYK card number 37562-490388-54005 and the Defendant card number 37562- 490388-52025. The Plaintiff paid for the transactions stated in the statement of account of TDYK American Express Platinum Card. [28] The transactions carried out by the Defendant for the period between August 2012 up to March 2016 were similar to the transactions carried out by the Defendant for the period May 2012 way back to March

This as the Defendant claims were transactions carried out for her maintenance and living expenses of her and the 5 children. The documents exhibited shows for both period the Plaintiff had foot for the expenses. [29] In respect of the transactions for the period March 2010 to May 2012 it is pertinent to note that the Plaintiff had paid for the Defendant’s transactions (details of which is stipulated in the statement of account of TDYK American Express Platinum Card) even though there were no instructions or requests made by the Defendant to do so. [30] This raises serious issues in relation to the Plaintiff’s claim that it was the Defendant who instructed and demand the Plaintiff to pay for the transactions made by the Defendant (through TDYK’s American 20 Express Platinum Card). It also raises serious questions as to the Plaintiff’s claim that the Defendant has used her position as stated in paragraph 4 above to demand Plaintiff to make those payments in light of the fact that the details of transactions done by the Defendant is recorded in TDYK’s American Express Platinum Card statement of account. The said details for the period March 2010 to May 2012 were sent to TDYK a director of the Plaintiff company which paid for the expenses incurred by the Defendant. [31] Since there were no instruction/request made at all by the Defendant for the Plaintiff to pay for the transactions for the period March 2010 to May 2012, the obvious vital question is this - how could such a situation gives rise to the “understanding” pleaded by the Plaintiff, namely, that the payments were made by the Plaintiff with the understanding that it is an advance which Defendant is obliged to pay back. [32] From what transpired and the factual circumstances at the material time one cannot help but to note the common connection or factor is TDYK, in particular his position at the material time. It is not disputed that at the material time TDYK, who is the husband to the Defendant is also a director of the Plaintiff company as well as a member of the Board 21 of Trustees of Khyra Legacy Berhad. It is also important to note the statement of account of TDYK’s American Express Platinum Card which sets out the details of the Defendant’s expenses were sent to TDYK and paid by the Plaintiff. Under such a scenario the Defendant’s assertion that the transactions were approved by TDYK to be paid by the Plaintiff has raise reasonable questions on the Plaintiff’s claim that the monies were advances. [33] It is undisputed fact that the Plaintiff made payments in respect of the Defendant’s transactions for the period March 2010 to May 2012. Based on the facts, it seems such payments were made without being so instructed or requested by the Defendant. The Plaintiff continued to make payments for the period thereafter up to March 2016. With such a scenario and coupled with the fact that the Defendant’s husband (at the material time) being the common connection between the parties (Plaintiff, Defendant and Khyra Legacy Berhad), further investigation is required into the issues raised by the Defendant in particular, the payments made were for the maintenance of the Defendant and the 5 children and that it was approved by TDYK in view of TDYK’s position in the Plaintiff company and Khyra Legacy Berhad. 22 [34] In this respect I note that in so far as the affidavit evidence adduced, there is nothing to support the Defendant’s averment that the Plaintiff is the majority shareholder of the Plaintiff company and TDYK is the sole beneficiary owner of Khyra Legacy Berhad. The Exhibit ID-1 of Enclosure 10 which the Defendant rely on to show that TDYK is the founder and sole beneficiary owner of Khyra Legacy Berhad (which controls the Plaintiff) is doubtful as the source of such document is not known. Furthermore the said document does not seems to make specific reference to TDYK. [35] Nevertheless, taking into account the circumstances referred to above, the issue raised by the Defendant that the payments were for her maintenance and approved by TDYK who is a director in the Plaintiff company appears to be not without substance. It is apparent that the purpose of the payments made whether it is for maintenance or advance is a highly contested factual question which ought to be determined by calling witnesses to give oral evidence and subject to cross-examination in order to determine the veracity of evidence. [36] In relation to the position of TDYK as stated above, I am of the view further investigation is also required for purpose of determining whether TDYK is the alter ego and mind and will of the Plaintiff which 23 determine the act and decision of the Plaintiff company. Again, this issue is primarily an issue of fact which is material and relevant in determining the legal issue whether the corporate veil of the Plaintiff ought to be lifted. [37] The claim by the Defendant that TDYK is the alter ego of the Plaintiff in turn relate significantly to the claim by the Plaintiff that the Defendant ought to return the payments made by the Plaintiff on the basis of moneys had and received due to failure of consideration. In this respect I am of the view the issue of want of consideration and unjust enrichment may be relevant if it is established as a matter of fact that there is an understanding between the Plaintiff and the Defendant that the payments made by the Plaintiff were advances to the Defendant which the Defendant is required to pay back. At this juncture whether there is such an understanding, is predominantly a question of fact, and thus it could not be appropriately determined by way of affidavit evidence. This issue ought to be judiciously determined by viva voce evidence. [38] My perusal of pages 255 – 381 of Exhibit LSH-2 of Enclosure 8 shows the transactions recorded in the American Express statements of account consists of transactions carried out by TDYK (in particular at 24 pages 365 – 368 and pages 379 – 381 of the said Exhibit LSH-2) for which the Plaintiff had paid (see page 364 and page 378 Exhibit LSH-2 of Enclosure 8). It would appear that the Plaintiff is also claiming from the Defendant the payments that the Plaintiff made for TDYK transactions. This certainly lead to the question of the validity of the Plaintiff’s claim for the sum RM4,048,059.91 against the Defendant. [39] In the Plaintiff’s Statement of Claim, it was pleaded by the Plaintiff that the Defendant had violated the Companies Act 1965 because the Plaintiff is prohibited from giving loan to the Defendant who is a related director of the Plaintiff. The Plaintiff further pleads that the transactions carried out by the Defendant as listed in paragraph 4 Statement of Claim and paragraph 9 of Plaintiff’s affidavit Enclosure 8 was not duly authorised by the Plaintiff. It appears to me the Plaintiff is blowing hot and cold. On one hand the Plaintiff says the transactions effected by the Defendant was not duly authorised by the Plaintiff but on the other hand the Plaintiff actually paid for the transactions not duly authorised by them but yet claim it to be advances payable by the Defendant. And on top of it all, the Plaintiff put the blame on the Defendant for alleged violation of the Companies Act even though the Plaintiff appears to be part of the alleged violation. 25 [40] It would appear that the Plaintiff could be estop from seeking the equitable principles moneys had and received, restitution and constructive trust because the Plaintiff’s own hand is tainted. However whether there is indeed a violation of the Companies Act on the part of both Plaintiff and Defendant requires further investigation by gathering evidence from oral testimony of relevant witnesses. Conclusion [41] Based on the aforesaid I am of the considered opinion the issues raised by the Defendant, in particular the circumstances under which the sum RM4,048,059.91 were paid by the Plaintiff company and the purpose of such payment are serious triable issues which ought to be determined in a trial of oral evidence rather than affidavit evidence. The denials and allegations made by the Defendant in relation to the Plaintiff’s claim are not merely bare denial or assertions. The Defendant has provided some basis and explanation which is sufficient for purpose of further investigation which ought to be carried out so as to determine the validity of the Plaintiff’s claim as well as the Defendant’s defence. As such this matter is not fit and proper to be disposed of summarily. I 26 accordingly dismissed the Plaintiff’s application for summary judgment with costs. ( KHADIJAH BINTI IDRIS ) JUDICIAL COMMISSIONER HIGH COURT (COMMERCIAL DIVISION) DATED 23 MARCH 2018 Counsel: Plaintiff : Ng Keng Yang of Messrs B H Lawrence & Co. Defendant :