Ng Kian Tek v Ng Hui Joo (MC-A72-7-04/2025)

This case concerns the Plaintiff’s claim against the Defendant, who, acting on her own volition and without the Plaintiff’s approval, had issued and cashed two cheques amounting to RM63,000.00 from the business partnership known as Kian Ann Poultry Farm. The Defendant, however, failed, neglected and/or refused to repay the Plaintiff. The Defendant, on the other hand, asserts that the Plaintiff was not only aware that the business partnership funds had been used to settle loan for which the bank had a charge on the house of their late mother, Madam Lee Vin Kuan, as loan security, but also had derived benefits from such payment.

There were five witnesses who testified during the trial, as follows, where the Plaintiff called four witnesses, while the Defendant called only one witnesses:- Plaintiff’s case a) PW1: Mr. Wong King Tuck, manager of Public Bank Berhad, Masjid Tanah and also a subpoenaed witness who denied to answer anything from the witness stand; b) PW2: the Plaintiff himself; c) PW3: Ms. Kiew Pei Ei, account clerk; d) PW4: Ms. Choon Joo Ee, the accountant; and Defendant’s case e) DW1: the Defendant herself.

After the full trial, this Court dismissed the Plaintiff’s claim with costs of RM6,000.00.

The Plaintiff is a partner of the Poultry Farm business partnership. He is the younger brother of the late husband of the Defendant, Mr. Ng Kean Huat (“the Deceased”), who was previously a partner in the Poultry Farm business partnership until his death on 13.4.2020. The Defendant replaced the Deceased as a partner in the Poultry Farm business partnership on 13.4.2020, the very same day. Subsequently, the Defendant withdrew as a partner of the said business partnership on 29.12.2021.

On 25.11.2021, the Defendant withdrew a sum of RM30,000.00 from the Poultry Farm business partnership account. Kian Ann Poultry Farm maintained a single bank account with Public Bank Berhad account which is no. 3090922935. On the same date, the sum of RM30,000.00 was deposited into the Deceased’s Loan Account with Public Bank Berhad under account no. 2063418734 (“the Loan Account”).

On 6.12.2021, the Defendant withdrew a further sum of RM33,000.00 from the Poultry Farm business partnership account. The Defendant also withdrew RM16,000.00 from the Kean Ann Drinking Water Refill Station business account, in which the Plaintiff and the Defendant were among the partners. On the same date, a total sum of RM49,000.00 was deposited into the Loan Account.

The withdrawal of RM63,000.00 from the Poultry Farm business partnership account was recorded as a withdrawal by the Defendant in the General Ledger of the Poultry Farm business partnership, and the cheque details are as follows: - No.

PBB Cheque No. 291703 30,000.00 2. PBB Cheque No. 291704 33,000.00 TOTAL 63,000.00

At the same time, the Plaintiff together with two of his siblings, namely Ms. Ng Bee Kian and Ms. Ng Mee Kuan, had filed a claim against the same Defendant under Alor Gajah Sessions Court Case No. MC-A52-1-04/2025, seeking recovery of sums withdrawn by the Defendant by issuing cheques amounting to RM31,000.00 without the approval of the Plaintiffs from the Kean Ann Drinking Water Refill Station business, which includes the sum of RM16,000.00 as above-mentioned: - a) The Kean Ann Drinking Water Refill Station business was established between the Deceased, the Plaintiff and the Plaintiff’s sisters namely Ms. Ng Bee Kian and Ms. Ng Mee Kuan, who are also the younger sisters of the Deceased; and b) They had been partners in the Kean Ann Drinking Water Refill Station business since its establishment on 16.7.2012. After the Deceased passed away on 13.4.2020, the Defendant of the current case had replaced him as one of the partners in the said Drinking Water business from 18.5.2020 until the business was dissolved on 27.12.2021.

The Defendant’s counsel filed Enclosure 22 for consolidation of proceedings between the current Magistrates’ Court cases A72 -7- 04/2025 and A72-5-04/2025 to be heard together in the Sessions Court Case No. MC-A52-1-04/2025. However, this application was dismissed by the learned Sessions Court Judge on 4.8.2025. Without further delay, and in order to preserve the interests of justice for both parties, this Court directed the trial to commence on 11.8.2025 as previously scheduled.

The Plaintiff submitted that Defendant (DW1), as a partner of the Poultry Farm business partnership, owed responsibilities towards the said business partnership. However, the Defendant had abused her authority as one of the partners by withdrawing a sum of RM63,000.00 to make payment for the personal loan of the Deceased, which had no connection whatsoever with the business partnership. The Defendant acted on her own accord and without the Plaintiff’s approval in withdrawing and encashing the said cheques. It was alleged that the Defendant emptied the partnership’s bank account without the knowledge and/or approval and/or consent of the Plaintiff. Accordingly, there was a breach of duty by the Defendant towards the said business partn ership, in that the Defendant had misappropriated the business partnership funds for her personal benefit.

The Defendant contended that the sum of RM63,000.00 withdrawn by her was utilised to pay part of a loan for which the property of the Plaintiff’s late mother had been charged to Public Bank Berhad. The Defendant further pleaded that the Plaintiff derived benefit from such payment made by the Defendant, as the said property is now registered in the Plaintiff’s name, with the charge having been discharged on 27.8.2024.

The salient issues in the current case before this Court are raised as follows: a) First Issue: whether the sum of RM63,000.00 from the Kian Poultry Farm business partnership was utilised to settle part of the charge over the property of the Plaintiff’s late mother, Lee Vin Kuan, known as Lot 4571, GRN 52576, Mukim Sungai Petai, District of Alor Gajah, State of Melaka (“the Property”); b) Second Issue: whether the Plaintiff, as the executor and beneficiary of the estate of his late mother, has derived benefit from the discharge of the charge over the said Property; and c) Third Issue: whether the Defendant had acted on her own accord and without the Plaintiff’s approval in withdrawing the cheques of RM63,000.00. F. EVALUATION AND FINDINGS BY THIS COURT First and Second Issues 13. The late mother of the Plaintiff, Madam Lee Vin Kuan, was the registered owner of the Property known as Lot 4571, GRN 52576, Mukim Sungai Petai, District of Alor Gajah, State of Melaka (“the Property” as above-mentioned). The Property had been charged to Public Bank Berhad, with the outstanding sum as of 1.11.2021 amounting to RM113,076.23. Between 1.1.2021 and 1.11.2021, the Plaintiff had paid part of the said loan.

For the part of the Defendant, the sum of RM30,000.00 belonging to the said Poultry Farm business partnership was used to partially repay the loan through Public Bank Berhad Cheque No. 291703 on 25.11.2021. Later, on 6.12.2021, the sum of RM33,000.00 belonging to the said business partnership together with RM16,000.00 from the business of Kean Ann Drinking Water Refill Station, of which the Plaintiff was also a partner, was used to repay part of the said loan. The remaining balance of the loan was settled by the Plaintiff himself, who paid RM12,847.87 on 22.2.2022.

The First Issue is obviously intertwined with the Second Issue, namely whether the Plaintiff, as executor and beneficiary of his late mother’s estate, derived benefit from the discharge of the charge over the said Property. Bearing in mind that, the Property is now registered in the Plaintiff’s name and the charge was discharged on 27.8.2024.

This Court favours the Defendant’s position that the withdrawal of RM63,000.00 by the Defendant from the Poultry Farm business partnership was for the Plaintiff’s benefit and interest, and not for the Defendant’s personal advantage. In the event, there is no misappropriation for personal advantage on the part of the Defendant. From the land search (pages 61–62, Bundle B), it is clear that the Property previously owned by the Plaintiff’s late mother that had been charged to Public Bank Berhad on 26.9.2013, a charge securing principal sum by the Plaintiff’s late mother, Madam Lee Vin Kuan, via Presentation No. 0400SC2013012788 registered on 26.9.2013. The charge was created to secure a loan taken by the Deceased.

In this Court’s observation, PW1, who was subpoenaed, was not helpful to the Court as he refused to answer anything from the witness stand. In particular, during cross-examination of the Plaintiff (PW2), he admitted knowing about his Deceased brother’s loan whereby the Property was charged to Public Bank Berhad. The Plaintiff himself had also made instalment payments to the Loan Account to reduce the loan before finally paying off the balance on 22.2.2022. This is evidenced by the statement of account at pages 68–73 of Bundle B, which showed that the Plaintiff himself making payments into the Loan Account amounting to RM41,075.87 between the said period of 2.1.2021 and 22.2.2022, over almost one year.

This Court found that, if the loan was solely for the Deceased’s personal interest or advantage, it would be impossible for the Plaintiff to have known the details and willingly made such payments. As of 1.1.2021, the Deceased still owed Public Bank Berhad for the amount of RM113,076.23. After instalments by the Plaintiff and payments totalling RM63,000.00 by the Defendant from the Poultry Farm business partnership, together with RM16,000.00 from the Kean Ann Drinking Water Refill Station, the outstanding loan as of 6.12.2021 was RM20,387.26. The Plaintiff subsequently settled the balance in January and February 2022, which enabled the discharge of the charge over the Property.

As stressed by the Defendant’s counsel, the Plaintiff had never demanded repayment of the RM63,000.00 from the Defendant until the current suit was filed. This suggests it was a reconsidered attempt to pressurise the Defendant. This is supported by the fact that the Plaintiff had lodged a police report dated 13.3.2025 (page 59, Bundle B) regarding the cheque cashed by the Defendant, occurring nine days after both parties had recorded a consent judgment in the Melaka High Court in cases no. MA-22NCVC-58- 11/2022 and 22NCVC-61-12/2023 concerning other properties arrangement (refer to page 47, Bundle B). It was successfully brought to this Court’s attention that such police report was lodged on 13.3.2025, nine days after the Defendant who had reached and recorded a Consent Order dated 4.3.2025 with the Plaintiff and his family members for their claims relating to her late husband’s (Deceased’s) properties.

It was clear to this Court that the High Court case and the current case clearly involve different facts. The current case concerns the withdrawal of Poultry Farm business partnership funds used to pay a loan taken in the Deceased’s name, with the late mother, Madam Lee Vin Kuan, having charged her Property to Public Bank as security in 2013, when both the Deceased and the late mother were still alive. The Plaintiff had never disputed the purpose of the loan nor claimed that the repayment was for the Deceased’s personal advantage rather than the business partnership. Referring to the Deceased’s Loan Account, it is evident that it was a fixed loan taken by Mr. Ng Kean Huat himself (the Deceased), not a housing loan by Madam Lee Vin Kuan. Nevertheless, the Plaintiff clearly knew the loan details and even made payments to it, as documented, contradicting his own allegation that the loan had nothing to do with the business partnership but was merely for the Deceased’s personal advantage alone.

The Plaintiff’s mother passed away in September 2020, while the Deceased passed away in April 2020. The Plaintiff’s counsel argued that it was a mystery why the Deceased had already died, yet the Defendant continued to make repayments on his behalf. They contended that the loan must have been covered by life insurance, which should have settled the entire loan upon the borrower’s death, and that the Defendant, as administrator of the Deceased’s estate, failed to inform Public Bank Berhad of Mr. Ng Kean Huat’s (the Deceased’s) death for the insurer to redeem the loan.

During cross-examination of DW1 (the Defendant), the Plaintiff’s counsel suggested that after Madam Lee Vin Kuan passed away, insurance had already settled the loan, and that the Plaintiff obtained ownership through probate and a court order. DW1 replied that she could not remember whether the insurance paid it, while the Defendant’s counsel objected and pointed out that the issue of insurance settlement was never pleaded by the Plaintiff in his pleading. This court noted the objection raised by the Defendant’s counsel and concurred that the parties are bound by their pleadings.

Throughout the trial, it was evident from the Plaintiff’s counsel’s line of questioning that they were attempting to establish that the loan would have been redeemed by insurance after Madam Lee Vin Kuan’s death. It was argued by the Plaintiff’s counsel that the page 68 of Bundle B showed the account statement of the Fixed Loan of the Plaintiff’s Deceased brother, which was clearly a personal account. Therefore, it was improper to use the Poultry Farm business partnership funds to make such repayments to the Loan Account. Still, this Court is more inclined to accept the Defendant’s version, given that the Plaintiff himself had made the repayments for a year, with full knowledge of the loan details, and never raised objections about the Property being charged for the deceased’s loan during the seven years between 2013 (when the charge was created) and 2020 (when both the deceased and the mother passed away).

Furthermore, the Plaintiff’s argument regarding insurance is less credible, as there was no evidence to prove that the loan was mandatorily insured to cover the debt upon death. Sensibly, such insurance is optional and depends on the borrower choosing to purchase it. This is further contradicted by the Plaintiff’s own conduct in personally paying instalments to the Loan Account, despite now alleging that such payments were unnecessary because the loan would supposedly have been covered by insurance. This is a bare assertion without proof.

Hence, in such circumstances, the Deceased’s estate is usually responsible for repaying the loan. Section 70 of the Probate and Administration Act 1959 clearly provides that if a person dies owning or entitled to Property subject to a debt (such as a mortgage, equitable charge, or lien for unpaid purchase money), unless the Deceased has expressly stated otherwise in a will, deed, or other document, the Property must first be used to settle the debt. This means anyone inheriting the Property must use the Property or its value to pay the debt before benefitting from it.

During trial, PW2 (the Plaintiff) admitted that he was the executor administering his late mother’s estate and therefore benefitted when the encumbrance on the Property was discharged through repayment of the loan. Importantly, under cross-examination by the Defendant’s counsel, PW2 admitted to having made instalment payments into the Loan Account, and testified that it was the Deceased brother’s account used for business purposes (as recorded by this Court and cross-referred to the Notes of Proceedings prepared at the initiative of the Defendant’s counsel at PDF page 34 of Encl. 37). This showed a material contradiction, as the Plaintiff himself testified that the loan was used for their business, contradicting his earlier allegation that it was solely for the Deceased’s personal advantage.

Between January and November 2021, the Plaintiff himself made monthly instalment payments of RM1,100.00 to RM2,100.00, amounting to RM20,080.00, in addition to the Defendant’s conduct of paying RM63,000.00 from the Poultry Farm business partnership and RM16,000.00 from the Drinking Water Refill Station to settle part of the loan. The Plaintiff later made two further instalments of RM4,074.00 each in January and February 2022, before paying off the final balance of RM12,847.87 on 22.2.2022.

The Defendant’s withdrawals were therefore for the Plaintiff’s benefit, as the monies were used to repay part of the loan secured against the Property, which is now owned by the Plaintiff. Based on the cogent contradictions in the Plaintiff’s own testimony, th is Court acknowledges that the balance of probabilities standard is a flexible test, requiring the Court to be sufficiently satisfied ( HLC v PTL & Anor [2024] 10 MLJ 640, HC).

On the facts, this Court concludes that the Plaintiff is now registered as the owner of the Property. The payments in question, though made as drawings by the Defendant as a partner in the Poultry Farm business partnership, were used to preserve the Plaintiff’s and his family’s interests in the Property. Moreover, the Plaintiff himself admitted that the loan was used by his Deceased brother for business purposes. Thus, this Court finds that the Defendant’s version is more probable and believable (Chai Sin Fah v Atlantis Engineering & Construction Sdn Bhd [2023] 3 MELR 507, Industrial Court).

Next, I move to the third issue, namely whether the Defendant had acted on her own accord and without the Plaintiff’s approval in withdrawing the cheques of RM63,000.00 from the Poultry Farm business partnership, which is the gist of the dispute. As mentioned above, after confirming that the payment for the loan was made for business purpose, it is necessary to examine the nature of the partnership. The partnership relationship is essentially based on an agreement, either expressly agreed upon or inferred by law. Partnership which arises from a written agreement is definite and able to ascertain the relationship between the parties by looking at what is set out in the contract, which generally answers the description of such partnership (Rabiah Bee bte Mohamed Ibrahim v Salem Ibrahim [2007] 2 SLR(R) 655).

In Malaysia, there is a clear statute covered this area of law of partnership known as the Partnership Act 1961. Section 3 of the Partnership Act 1961 defines a partnership as the relation which subsists between persons carrying on business in common with a view of profit. This was affirmed by PW4, who managed the family accounts and was called to testify by the Plaintiff. PW4 stated that there was no written partnership agreement between the Plaintiff and the Deceased, and the same applied when the Defendant took over after the Deceased’s role as no partnership agreement was signed or produced.

It must be conceded by both parties that in a partnership, it is not necessary for the agreement between partners to be in writing. Instead, it may be implied, as in the current case. In my considered view, there must necessarily be cogent proof that such an agreement was made between the parties when they first entered into the partnership. However, that is not the case here, as there was no express agreement either between the Plaintiff and the Defendant or between the Plaintiff and the Deceased.

In the considered view of this Court, the most fundamental obligation imposed by law on a partner is the duty to display complete good faith in all partnership dealings and transactions. After considering the first and second issues that the payment made by both Plaintiff and Defendant into the Loan Account under the Deceased’s name was for business purposes, as admitted by the Plaintiff himself when testifying, this Court found that there is no evidence of dishonest misappropriation of partnership funds by either partner. Generally, every partner owes a duty of utmost good faith to every other member and where a dispute arises over a transaction in which one partner seeks to gain an advantage at the expense of the partnership, he must demonstrate not only that the law is on his side, but also that his conduct can withstand the highest standards of honour (Soo Boon Siong @ Saw Boon Siong v Saw Fatt Seong and Soo Hock Seang (as estate representative Soo Boon Kooi @ Saw Boon Koy (deceased) & Ors [2008] 1 MLJ 27, CoA).

Here, as stated in the witness statement WS(SP2), the Plaintiff himself agreed that the Defendant’s role was the same as that of the Deceased, in that she kept the books and held all the bank statements. The Plaintiff also testified that it was his Deceased brother who had signed the cheques for the Poultry Farm busin ess partnership, and that he himself had never signed any. In essence, at all times, the Plaintiff never managed the said partnership account nor signed any cheques and such matters were handled solely by the deceased. The Plaintiff further agreed that the Defendant’s role after the Deceased’s passing remained the same as the Deceased’s in this partnership.

It is therefore apparent to this Court, from the Plaintiff’s conduct, that the partners had an implied agreement on the handling of the partnership’s financial affairs. There was no express agreement specifying whether cheques required a single or joint signature, and thus the Plaintiff’s allegation must be addressed in light of section 21 of the Partnership Act 1961, which provides that the mutual rights and duties of partners may be varied by consent, either express or inferred from a course of dealing. From the evidence, this Court infers that the true nature of the parties’ interaction and relationship was based on trust, conscience and good faith. Since the Plaintiff admitted that he had never signed any cheque to withdraw the partnership funds, it follows that a single signature from one partner was sufficient, and that the Defendant had the proper authority to sign. This practice was carried out with the Plaintiff’s implied consent, and if he had wished to alter it, he should have given notice to the other partner.

By the Plaintiff’s conduct, he acquiesced in or consented to the Defendant managing the financial affairs of the partnership. T his was clearly a positive act on his part, as he made it plain when the Defendant joined the partnership that she was to replace the Deceased in managing its affairs, and he reiterated the same in trial by admitting that the Defendant stepped into the Deceased’s role in the partnership. To constitute such consent or acquiescence, there must be some positive act emanating from the Plaintiff, and the Plaintiff himself demonstrated this when he stated that during the Deceased’s lifetime he had never signed an y cheque and that the Deceased had managed all the partnership business, as affirmed by PW4. The Plaintiff further agreed that the Defendant assumed the same duty and role as the Deceased. (Singapore Finance Ltd & Anor v Mattherhorn (PTE) Ltd & Ors [1989] 3 MLJ 193, HC).

Accordingly, this Court agrees with the Defendant’s counsel that the Plaintiff, having never objected to the established financial practice, cannot now challenge the withdrawal of the two cheques from the Poultry Farm account, without sending earlier notice to request for change of the method of management affair. In the context, the Plaintiff’s conduct amounts to consent to the Defendant’s management of the funds, in continuation of the Deceased’s role. As highlighted in the above, this was also verified by PW4, who confirmed that no approval was required from the Plaintiff, the Deceased, or their father for drawings by the proprietor (see page 43 of the prepared notes of proceedings at Encl. 37).

Nevertheless, to this Court, this is not a case of estoppel raised by the Defendant to prevent the Plaintiff from challenging her withdrawals. Rather, it is a matter of implied consent, evidenced by the Plaintiff’s conduct and the common agreement on how the partnership financial affair was managed. PW4 further affirmed that there had been no issue when the Deceased managed the accounts, and that funds were withdrawn for business purposes.

In the considered view of this Court, this links back to the Plaintiff’s own admission that payments into the Loan Account were made for business purposes. Without a detailed partnership agreement expressly requiring two joint signatories, there is no basis for the Plaintiff’s complaint. PW4 also stated that the Deceased had previously run all aspects of the business, and this role was simply replaced by the Defendant.

The Plaintiff claimed that when the Defendant withdrew from the partnership, she became sole proprietor. At all times, however, PW4 acted as the accountant, preparing the accounts and handing them to the Plaintiff. After reviewing these records, the Plaintiff alleged that the Defendant had issued two cheques totalling RM63,000.00 to herself without his knowledge or approval. Yet, in reality, it was found that these withdrawals were made in continuation of the Deceased’s role, with the Defendant handling business and financial matters. This was consistent with the established practice of the partnership, carried out in good faith.

Another key issue raised by PW2 was that the Poultry Farm business was a partnership with equal shares of 50% each. The Plaintiff emphasised that both parties had equal equity. He further argued that the Defendant (DW1) had been unjustly enriched, having withdrawn over RM1 million compared to the Plaintiff’s RM200,000, and that DW1 had taken advantage of her control of the cheque book and documents. Plaintiff’s counsel argued that DW1’s gains were unfair. In support, they cited Soo Boon Siong (supra), to argue that an alleged arrangement allowing one partner to withdraw large sums goes against the statutory duty under sections 26(a) 1 and 302 of the Partnership Act 1961 to provide true accounts and information.

However, the current case is distinguishable from the fact of Soo Boon Siong (supra) where the Defendant merely replaced the Deceased’s role in managing the partnership’s administration and finances, which necessarily involved the use of partnership funds. In other words, when the Plaintiff claimed that the accounts were false and that the Defendant enriched herself, but he produced no evidence to support this. On the contrary, the Defendant’s version was corroborated as the Plaintiff himself is now the registered proprietor of the Property released from Public Bank’s charge, after the Defendant made the RM63,000.00 payment and with the Plaintiff’s implied consent to the Defendant replacing the Deceased’s role in managing the financial accounts of the business partnership, this is in compliance with section 26 of the Partnership 1 26. Rules as to interests and duties of partners, subject to special agreement. The interests of partners in the partnership property, and their rights and duties in relation to the partnership, shall be determined, subject to any agreement, express or implied, between the partners, by the following rules –

all the partners are entitled to share equally in the capital and profits of the business, and must contribute equally towards the losses, whether of capital or otherwise, sustained by the firm;... 2 30. Duty of partners to render accounts, etc. Partners are bound to render true accounts and full information of all things affecting the partnership to any partner or his legal representatives. Act 1961. The Defendant did not conceal information but disclosed the accounts to PW3 in December 2021, thereby complying with section 30 of the Partnership Act 1961.

It is common in practice that partners contribute unequally in terms of labour. Here, the roles were consented to from the outset, and this was not the first day of the partnership. In the absence of express written agreement, the law provides that capital and profits are to be shared equally. The maxim “equality is equity” applies where the parties fail to stipulate otherwise. Similarly, losses must also be shared equally [Yeo Hwee Ying, Law of Partnerships in Singapore, including LLP and LP (LexisNexis, 2015)].

This Court found that the RM63,000.00 issued by the Defendant was not profit from the partnership but a payment of a family business debt, known to the Plaintiff. Accordingly, there is no basis for the Plaintiff’s claim that the Defendant wrongfully withdrew the sum as a partner of the Poultry Farm business partnership. PW4 also confirmed that such withdrawals were not unusual and did not require the Plaintiff’s approval. The Plaintiff suffered no loss, nor was the withdrawal for the Defendant’s personal advantage.

Based on the aforesaid reasons, this Court found that the Plaintiff has failed to establish his claim against the Defendant on the balance of probabilities. In the circumstances, having assessed the law, the evidence and the submissions of both parties, I find that the Plaintiff’s claim is dismissed with costs of RM6,000.00. Dated this 17 October 2025 SGD ------------------------------ (TEOH SHU YEE) MAGISTRATE MAGISTRATES’ COURT AT ALOR GAJAH FOR THE PLAINTIFF : Mr. Ng Fun Boon, TETUAN NG FUN BOON & CO, MELAKA. FOR THE DEFENDANT : Mr. Choo Wei Sern with Ms. Lim Jia Yi (PDK),