Raub Oil Mill Sdn Bhd v Dato' Sri Andrew Kam Tai Yeow (WA-22NCC-182-04/2023)

This is the Plaintiff’s application under Order 14A of the Rules of Court 2012 for the determination of questions of law without the necessity of a full trial. The Plaintiff seeks to recover from the Defendant the sum of RM1.5 million remitted from the Plaintiff’s bank account to the Defendant between January 2017 and July 2017, at a time when the Defendant was a director of the Plaintiff. The Plaintiff’s case is that these remittances were loans or advances made without prior approval by way of a shareholders’ resolution, and that the Defendant is not entitled in law to retain them.

The present application arises against the background of earlier litigation between the Defendant and Tan Sri Dato’ Kam Woon Wah and related corporate entities, including Raub Mining & Development Company Sdn Bhd (“RMDC”) and the Plaintiff. The Plaintiff relies, in particular, on decisions of the Court of Appeal and the High Court in Suit 352, which, according to the Plaintiff, have determined or substantially answered the central legal premise upon which the Defendant resists repayment. The Plaintiff says that the Defendant’s pleaded defence is legally unsustainable because it proceeds upon an alleged entitlement to monies or benefits of the Plaintiff and/or RMDC which the courts have already held not to belong to Tan Sri Kam, and which could not in law be channelled to the Defendant as his alleged entitlement.

The Defendant opposes the application. His principal objection is that this is not a proper case for disposal under Order 14A. He contends that the questions raised are dependent upon findings in Suit 352 which are presently under appeal, that the Court of Appeal decisions relied upon by the Plaintiff do not determine the precise issues in this action, and that even if the questions are answered in the Plaintiff’s favour, other pleaded defences would remain for trial.

The Plaintiff’s claim, as pleaded and as summarised in the Plaintiff’s submissions, is for the recovery of RM1.5 million. The Plaintiff says that the said sum was obtained by the Defendant as a director of the Plaintiff between January 2017 and July 2017 without prior approval of the Plaintiff by way of a shareholders’ resolution. The Plaintiff characterises the payments as loans or advances, and seeks repayment from the Defendant.

The Plaintiff’s position is that the Defendant had no legal entitlement to receive or retain monies belonging to the Plaintiff. The Plaintiff emphasises that the sum was remitted from its bank account to the Defendant; that the Defendant was at the material time a director of the Plaintiff; and that the remittances were not approved by any resolution of the Plaintiff’s shareholders or directors.

The Plaintiff further relies on the separate legal personality of the Plaintiff. Its case is that even if the Defendant had any claim against Tan Sri Kam arising from the alleged agreement dated 16 January 2017, such claim could not extend to the assets, profits or monies of the Plaintiff. The Plaintiff says that neither Tan Sri Kam nor the Defendant could treat the Plaintiff’s monies as a means of satisfying the Defendant’s alleged personal entitlement under the alleged agreement.

The Defendant’s amended defence, as summarised in the parties’ affidavits and submissions, is that the sum of RM1.5 million formed part of monies allegedly due and payable by Tan Sri Kam to the Defendant in relation to the Defendant’s alleged entitlement as, inter alia, the true majority shareholder of RMDC, which in turn wholly owns the Plaintiff. The Defendant says that such entitlement included the profits of the Plaintiff and/or RMDC.

The Defendant also pleads the existence of an alleged underlying agreement between Tan Sri Kam and himself made in or about the mid-1980s. According to the Defendant, when the Pan Electric crisis struck Malaysia and the Defendant’s siblings allegedly abandoned Tan Sri Kam, the Defendant remained with Tan Sri Kam, helped to manage and turn around the RMDC group, and thereby became entitled to Tan Sri Kam’s entire interest in RMDC and, by extension, the Plaintiff.

The Defendant further pleads that following the alleged breach of that underlying agreement, he and Tan Sri Kam entered into a purported written agreement dated 16 January 2017, whereby 50% of Tan Sri Kam’s interest in RMDC, and therefore in the Plaintiff, was to belong to the Defendant, with the Defendant in return giving up the other 50%. On this footing, the Defendant says that the RM1.5 million was channelled to him by Tan Sri Kam in affirmation of that agreement.

In addition to the above, the Defendant relies on other pleaded defences. These include limitation, laches, acquiescence or estoppel, alleged inconsistencies in the Plaintiff’s treatment of the payments as “loans” or “advances”, and abuse of process or collateral purpose. The Defendant says that these matters cannot properly be disposed of by an Order 14A determination and require trial.

By Enclosure 83, the Plaintiff applies for the proceedings to be stayed pending the disposal of the Order 14A application, and for four preliminary questions of law to be determined without a full trial. The Plaintiff also seeks an order that, if the answers to the questions are in its favour, judgment be entered for the Plaintiff for the claim in this action against the Defendant with costs.

The questions raised are these: i. whether the Defendant’s defence that the RM1.5 million formed part of sums allegedly due and payable by Tan Sri Kam to him in relation to his alleged entitlement as the true majority shareholder of RMDC, including the profits of the Plaintiff and/or RMDC, is sustainable in law; ii. whether the Defendant’s defence that the RM1.5 million was channelled by Tan Sri Kam to him in affirmation of the agreement is sustainable in law; iii. whether the Defendant holds the said sum, which was remitted from the Plaintiff’s bank account to him without approval of the Plaintiff’s shareholders or RMDC, on trust and/or as constructive trustee for the Plaintiff; and iv. whether the defence of laches and/or limitation is available to the Defendant in law against any part of the Plaintiff’s claim.

The Plaintiff contends that the above questions are suitable for determination under Order 14A because they are questions of law or construction which may dispose of the substantive dispute without the need for a full trial. The Plaintiff submits that the underlying material facts are either undisputed or have been determined by earlier decisions of the Court of Appeal and the High Court.

The Plaintiff relies first on the Court of Appeal decisions in Civil Appeal Nos. W-02(IM)(NCC)-2007-10/2017 and W-02(IM)(NCC)- 2009-10/2017. The Plaintiff’s submission is that those decisions struck out the Defendant’s claim in Suit 352 against the Plaintiff, RMDC and the corporate shareholders on the basis that the respective shareholdings in RMDC belonged to those corporate shareholders and not to Tan Sri Kam. The Plaintiff says those decisions also establish that Tan Sri Kam had no right to deal with those shareholdings as if they were his own.

The Plaintiff next relies on the Court of Appeal decision in Civil Appeal No. W-02(IM)(NCC)-952-06/2023 dated 29 November 2024, which set aside the injunction obtained by the Defendant in Suit 352 restraining Tan Sri Kam from dealing with shares held by him in the corporate shareholders. The Plaintiff says that this decision reinforces the conclusion that the Defendant’s claim to indirect interests in RMDC had already been rejected by the Court of Appeal.

The Plaintiff further relies on the High Court’s decision after full trial in Suit 352 delivered on 10 February 2025. The Plaintiff says that the High Court found that the alleged underlying agreement did not exist, and that under the written agreement dated 16 January 2017 the Defendant was only entitled to 3½ shares in RMDC held personally or directly by Tan Sri Kam, and not to Tan Sri Kam’s alleged indirect interests. The Plaintiff submits that the RM1.5 million therefore could not be part of the Defendant’s entitlement under that agreement.

The Plaintiff also says that the mere fact that the High Court decision in Suit 352 is under appeal does not make it irrelevant or incapable of being relied upon. Its position is that a judgment remains final and conclusive unless and until set aside, and may constitute res judicata notwithstanding the pendency of an appeal. The Plaintiff therefore submits that the Defendant cannot resist the Order 14A application simply by pointing to the appeal.

As to the constructive trust issue, the Plaintiff submits that the Defendant, as a director of the Plaintiff, owed fiduciary duties to the Plaintiff and could not retain monies of the Plaintiff for his personal benefit. The Plaintiff says that the RM1.5 million is trust property, that the Defendant holds it as a constructive trustee, and that limitation does not bar the Plaintiff’s recovery of such trust property.

In reply to the Defendant’s reliance on estoppel arising from the earlier dismissal of the Plaintiff’s summary judgment application, the Plaintiff submits that the dismissal of an Order 14 application does not bar a later Order 14A application. The Plaintiff says the earlier dismissal merely meant that triable issues had been shown for the purposes of summary judgment; it did not finally determine the questions of law now raised.

The Plaintiff further says that the Defendant’s other pleaded defences do not prevent the determination of the present questions. The Plaintiff submits that the four questions posed are determinative of the Defendant’s substantive defence to the claim.

The Defendant submits that the application is misconceived and unsuitable for determination under Order 14A. The Defendant relies on the principle that Order 14A is appropriate only where there is no dispute as to the relevant material facts, and where the question of law can be determined without a full trial. The Defendant submits that where facts and law are interwoven, the Court should not determine isolated questions in vacuo.

The Defendant says that Questions (i) and (ii) are premised substantially upon the High Court’s decision in Suit 352, especially the findings that the alleged underlying agreement did not exist and that the Defendant was only entitled to 3½ shares in RMDC held directly by Tan Sri Kam. Since that decision is under appeal, the Defendant contends that the factual basis of the Plaintiff’s questions has not crystallised and may yet be reversed by the Court of Appeal.

The Defendant further contends that the earlier Court of Appeal decisions relied upon by the Plaintiff do not answer the present questions. According to the Defendant, the Court of Appeal decisions in Appeals 2007 and 2009 only struck out the corporate defendants from Suit 352 on the footing that they were not parties to the 16 January 2017 agreement. The Defendant says those decisions did not determine whether Tan Sri Kam had used the Plaintiff as a vehicle to channel profits due to the Defendant.

The Defendant also submits that Appeal 952 is irrelevant to Questions (i) and (ii). His position is that the setting aside of an injunction against Tan Sri Kam from dealing with shares does not determine whether the RM1.5 million was channelled to the Defendant in affirmation of the alleged agreement.

As to Questions (iii) and (iv), the Defendant says that the issues of constructive trust, limitation and laches are fact-sensitive and unsuitable for summary determination under Order 14A. He contends that the existence of a constructive trust and the availability of limitation or laches require factual evidence and should be determined at trial.

The Defendant also argues that the Plaintiff had previously raised similar arguments on constructive trust, limitation and laches in its earlier summary judgment application under Order 14. That application was dismissed on 3 October 2023. The Defendant therefore contends that the Plaintiff is barred by res judicata or issue estoppel, or that the present application is another attempt to summarily determine matters which the Court had earlier found should proceed to trial.

Finally, the Defendant submits that even if the Court has jurisdiction to determine the questions, it should decline to exercise its discretion. The Defendant says that the trial dates have already been fixed, that the questions will not dispose of all pleaded defences, and that allowing the application may delay rather than expedite the final disposal of the action.

Order 14A Rule 1 of the Rules of Court 2012 permits the Court, upon the application of a party or of its own motion, to determine any question of law or construction of any document arising in any cause or matter at any stage of the proceedings, where it appears to the Court that the question is suitable for determination without a full trial and that such determination will finally determine the entire cause or matter, or any claim or issue therein. The rule, therefore, is directed at the early and efficient disposal of legal questions where the material facts necessary for that determination are not in genuine dispute.

The Federal Court in Thein Hong Teck & Ors v Mohd Afrizan bin Husain and another appeal [2012] 2 MLJ 299 explained the limits of Order 14A in these terms: “It is trite law that O14A of the Rules of the High Court 1980 may only be resorted to if there is no dispute by the parties as to the relevant facts, or that the court, upon scrutinising the pleadings concludes that the material facts are not in dispute… Where the issues of fact are interwoven with legal issues raised, it will be undesirable for the court to split the legal and factual determination for to do so would in effect be to give rulings in vacuo or on a hypothetical ruling, which the court will not do…”

The governing principle is thus not that Order 14A is unavailable whenever a defendant asserts that facts are disputed. The Court must scrutinise whether the facts said to be disputed are truly material to the question posed. If the alleged factual dispute is peripheral, artificial, or legally incapable of altering the answer to the question of law, the Court is not disabled from proceeding under Order 14A.

Similarly, in Director of Forests, Sarawak & Anor v Racha ak Urud @ Peter Racha Urud & Ors and other appeals [2017] 4 MLJ 42, the Federal Court approved the commentary in the Malaysian Court Practice that the question must be suitable for determination without trial, and that this requires that all necessary and material facts relating to the subject matter of the question have been proved or admitted. The relevant passage states: “The test of whether the question of law or construction is ‘suitable’ to be determined under this order is whether all the necessary and material facts relating to the subject matter of the question have been duly proved or admitted, and this postulates that there is no dispute or no further dispute as to the relevant facts at the time when the court proceeds to determine the question.”

The same passage also recognises that where all relevant evidence is before the Court, and the point of law depends on the construction of documents in their context, it is appropriate for the question to be dealt with under Order 14A rather than to allow the matter to go to trial.

The Court’s power under Order 14A remains discretionary. In Dato’ Sivanathan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122, the Court of Appeal stated: “It is obvious that the power of the court under this order is discretionary, as clearly evident by the use of the word ‘may’ therein. The power… is only exercisable where the determination of any such question of law or construction of any document… appears to the court to be suitable without the full trial of the action and will finally determine the entire cause or matter or any claim or issue in such action. This is a required prior condition or a prerequisite which must be fulfilled before this order can be invoked.”

Thus, the Court must be satisfied not merely that a legal question exists, but that its determination serves the procedural purpose of Order 14A.

The purpose of Order 14A was also considered in Ong Siang Pheng v Millennium Mall Sdn Bhd & Ors [2021] MLJU 1019, where the High Court emphasised that the rule is intended to facilitate the “just, expeditious and economical disposal” of civil proceedings. The Court said: “ …the primary objective of O.14A is to confer upon the Court a discretionary power to finally dispose of the action without a full trial by way of determination on the suitable question(s) of law… the determination of a question of law is to be resorted only where it would or is likely to result in substantial saving in time and costs of full trial.”

The Court further cautioned that if the determination of a selected issue will not render trial unnecessary in respect of the remaining substantial issues, the Court may decline to proceed under Order 14A.

The Plaintiff, however, correctly submitted that the dismissal of an earlier summary judgment application does not, without more, bar a subsequent Order 14A application. The distinction is important. In Danaharta Managers Sdn Bhd v Melewar Leisure Sdn Bhd & Ors [2008] 4 MLJ 448, the High Court recognised that the court’s inquiry under Order 14 is different from its inquiry under Order 14A in the following manner: “…under O 14 of the RHC, the court needs only be satisfied whether there is a triable issue before it can determine to allow a summary judgment… However, under O 14A of the RHC the court will determine the issues of laws and/or the construction of documents whenever it appears to the court that such question can be determined without a full trial… even if the plaintiff has failed in its application to enter a summary judgment under O 14 there is nothing to stop the plaintiff to proceed with O 14A application when facts are not disputed and the determination of issues raised will dispose of the case finally.”

This Court accepts the distinction. The earlier refusal of summary judgment is not, by itself, res judicata on questions of law which were not finally determined.

The Plaintiff also relied on Rockwin Enterprises Ltd v Shui Yee Ltd & Ors [2003] 3 HKC 174 for the proposition that an Order 14A application need not dispose of every factual controversy in the suit, provided the question posed is a core legal issue which may be determinative of the claim or issue. That approach is consistent with the language of Order 14A itself, which refers not only to the entire cause or matter, but also to “any claim or issue therein”.

Drawing these authorities together, the applicable principles may be stated shortly. i. First, the question must be a true question of law or construction. ii. Secondly, the material facts necessary to answer it must be admitted, proved, or otherwise not genuinely in dispute. iii. Thirdly, the question must not require the Court to decide contested primary facts. iv. Fourthly, the answer must finally determine the whole action or a substantial claim or issue in it. v. Fifthly, even where these conditions are met, the Court retains a discretion whether the Order 14A procedure will serve the just, expeditious and economical disposal of the proceedings.

I turn to apply those principles to the present application. In my judgment, this is a proper case for the invocation of Order 14A. The questions raised are not an invitation to this Court to embark upon a factual trial by affidavit. They are directed at the legal sustainability of the Defendant’s pleaded defence, on facts which are either admitted, not seriously disputed, or already determined by prior decisions which remain operative unless and until set aside.

The starting point is the undisputed receipt of the RM1.5 million. The Defendant admits that he received the said sum from the Plaintiff between January and July 2017. It is also not disputed that he was a director of the Plaintiff at the material time. The principal defence is that the money was not a loan or advance but formed part of monies allegedly due to him pursuant to an arrangement involving Tan Sri Kam Woon Wah.

The Plaintiff’s affidavit evidence similarly states that the pleaded claim is for repayment of loans and/or advances in the sum of RM1.5 million given by the Plaintiff to the Defendant when he was a director of the Plaintiff between January 2017 and July 2017, without prior approval of the Plaintiff by way of shareholders’ resolution. The Plaintiff also exhibited the SSM search showing that the Defendant was a Director, the remittance application forms showing the total remittance of RM1.5 million, and the payment vouchers in respect of those remittances.

The Defendant’s answer is not that he did not receive the money. Nor is his answer that the money did not emanate from the Plaintiff. His answer is that the RM1.5 million formed part of sums allegedly due to him by Tan Sri Kam pursuant to an alleged entitlement arising from the alleged underlying arrangement and the agreement dated 16 January 2017. That is precisely the defence which the Plaintiff seeks to test under Order 14A.

In my judgment, that defence is unsustainable in law. The monies belonged to the Plaintiff. The Plaintiff is a separate legal entity. Even assuming, for present purposes, that the Defendant had some personal claim against Tan Sri Kam, that could not in law entitle him to retain monies belonging to the Plaintiff, unless there was a legally recognised basis upon which the Plaintiff authorised, adopted or ratified the payment as satisfaction of Tan Sri Kam’s alleged personal obligation. No such legal basis is shown.

The Plaintiff is not Tan Sri Kam. RMDC is not Tan Sri Kam. The Plaintiff’s assets are not Tan Sri Kam’s assets. This elementary principle of separate legal personality is fatal to the Defendant’s pleaded attempt to treat monies of the Plaintiff as if they were available to satisfy a personal or familial arrangement said to exist between the Defendant and Tan Sri Kam.

The Defendant’s difficulty is compounded by the earlier decisions relied upon by the Plaintiff. The Plaintiff’s application was expressly framed by reference to the Court of Appeal decisions in Appeals 2007 and 2009, the Court of Appeal decision in Appeal 952, and the High Court’s decision after trial in Suit 352. The Notice of Application records that the Court of Appeal decisions struck out the Defendant’s claims against the Plaintiff, RMDC and the corporate shareholders on the basis that their respective shareholdings in RMDC belonged to them and not to Tan Sri Kam, and that Tan Sri Kam had no rights to deal with their shareholdings in RMDC.

The Plaintiff’s affidavit further states that the High Court in Suit 352 found, after a full trial, that the alleged underlying agreement did not exist and that, under the agreement dated 16 January 2017, the Defendant was only entitled to 3½ shares in RMDC held personally or directly by Tan Sri Kam, and not Tan Sri Kam’s alleged indirect interests.

That finding is directly material. If the Defendant’s entitlement under the agreement dated 16 January 2017 was limited to shares held personally or directly by Tan Sri Kam, and did not extend to the assets, monies or indirect corporate interests of the Plaintiff or RMDC, the RM1.5 million transferred from the Plaintiff’s bank account could not legally be justified as part of the Defendant’s entitlement under that agreement. The defence therefore fails at the level of legal characterisation.

I have considered the Defendant’s argument that the High Court decision in Suit 352 is presently under appeal. The Defendant says that because the decision is under appeal, the relevant facts have not crystallised and this Court should not proceed under Order 14A. The central theme of the Defendant’s objection is that the Court of Appeal might reverse the findings in Suit 352, and that it would be wasteful for this Court to determine Questions (i) and (ii) now.

I am unable to accept that submission. A pending appeal does not, without more, deprive a subsisting High Court judgment of legal effect. Unless and until it is set aside, it remains operative. See, Profound Reliance Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [2023] MLJU 1269 and Tai Choi Yu v The Government of Malaysia & Ors [1993] 2 MLJ 311.

An appeal, therefore, does not prevent the judgment below from being final and conclusive for present purposes. I accept that proposition in the context of the present application. The Defendant’s approach would mean that a party could defer or neutralise the legal consequences of an adverse judgment merely by filing an appeal. That cannot be correct. The existence of an appeal may, in an appropriate case, be relevant to discretion. It does not, however, render the judgment legally non-existent.

The Defendant also submits that the Court of Appeal decisions in Appeals 2007, 2009 and 952 did not decide whether Tan Sri Kam used the Plaintiff as a vehicle to channel profits due to the Defendant. In one sense, that is true. But it misses the point. The question is not whether the Court of Appeal used that precise formulation. The question is whether the Defendant can in law justify retention of the Plaintiff’s monies by reference to an alleged entitlement against Tan Sri Kam. Once it is recognised that the Plaintiff’s assets and shareholdings belong to the Plaintiff or the relevant corporate entities, and not to Tan Sri Kam personally, the Defendant’s pleaded justification loses its legal foundation.

The Plaintiff’s submission in reply captures the point. The Plaintiff submits that Tan Sri Kam was not entitled to use or channel the profits or assets of the Plaintiff, which is a separate legal entity, and that the Defendant had no right or entitlement to receive the said sum from the Plaintiff. It further emphasises that the fact remains undisputed that the Defendant received RM1.5 million from the Plaintiff when he was a Director, without any resolution of the Plaintiff’s shareholders or directors.

In my judgment, the first two questions posed by the Plaintiff are therefore properly answered in the negative. The Defendant’s defence that the RM1.5 million formed part of sums allegedly due and payable by Tan Sri Kam to him, in relation to his alleged entitlement as the true majority shareholder of RMDC, including the profits of the Plaintiff and/or RMDC, is not sustainable in law. Likewise, the defence that the RM1.5 million was channelled by Tan Sri Kam to the Defendant in affirmation of the agreement is not sustainable in law.

I then turn to the issue of constructive trust. The Defendant says that Questions (iii) and (iv) are fact-sensitive and unsuitable for determination under Order 14A. He submits that neither the High Court decision in Suit 352 nor the Court of Appeal decisions bear on constructive trust or limitation, and that these issues ought to be ventilated at trial.

I do not accept that submission on the facts of this case. The constructive trust analysis proceeds from undisputed facts. The money came from the Plaintiff. The Defendant received it. He was a director of the Plaintiff at the time. There is no evidence of authorisation by the Plaintiff’s shareholders or directors. Once the Defendant’s pleaded entitlement is rejected as legally unsustainable, there remains no juridical basis upon which he may retain the Plaintiff’s money.

The Plaintiff relied on CIMB Bank Bhd v Jaring Communications Sdn Bhd [2017] 4 CLJ 465, where Mohd Nazlan Ghazali JC, as His Lordship then was, considered advances made to company directors and persons connected to directors. The passage relied upon by the Plaintiff is apposite: “Advances made to company directors relevant to their role as directors, could in appropriate circumstances be legally valid if they could come within the scope of s. 133 [now section 224 of the Companies Act 2016] or otherwise approved by the board or the general meeting of the shareholders of the company depending on the governing articles of association of the company… But payments made to family members of or persons connected with the directors are inherently more difficult to justify. They fly in the face of an honest discharge of a director’s duties and prima facie unlawful especially in the absence of any rational explanation, like in the instant case. Such payments cannot conceivably on the face of it be construed as being for the benefit of the company. They are on the contrary indicative of a flagrant breach of director’s fiduciary duty…”

The ratio is that payments or advances by a company to directors, absent proper authorisation or a rational corporate purpose, are prima facie inconsistent with directors’ fiduciary obligations and may be recovered by the company.

The same principle is consistent with General Container Sdn Bhd v Tan Chin Wah @ Sin Ying San and Ors [2010] MLJU 1540, where the Plaintiff submits that a director is regarded as a trustee for the company in respect of the assets and monies of the company which come into his hands. The principle is not that every debt owed by a director is automatically a trust. The principle is that where a director receives or retains company monies in circumstances inconsistent with his fiduciary duty and without proper corporate authority, equity may fasten upon his conscience and require him to restore the money to the company.

In the present case, the Defendant received RM1.5 million of the Plaintiff’s money when he was a Director. The asserted basis for retaining the money is not a corporate purpose of the Plaintiff. It is not a shareholders’ resolution. It is not a board approval. It is not an agreement between the Plaintiff and the Defendant. It is an alleged personal entitlement against Tan Sri Kam. Once that justification is rejected, the Defendant’s retention of the Plaintiff’s money is unconscionable.

The equitable characterisation is reinforced by the classic restitutionary rationale for constructive trusts. In Target Holdings Ltd v Redferns [1996] AC 421, Lord Browne-Wilkinson explained the equitable obligation of restoration in the following terms: “The equitable rules of compensation for breach of trust have been largely developed in relation to such traditional trusts, where the only way in which all the beneficiaries’ rights can be protected is to restore to the trust fund what ought to be there. In such a case the basic rule is that a trustee in breach of trust must restore or pay to the trust estate either the assets which have been lost to the estate by reason of the breach or compensation for such loss.”

Although Target Holdings concerned traditional trust principles, the underlying remedial point applies here by analogy: where equity treats the Defendant as holding the Plaintiff’s money in a fiduciary capacity, the appropriate consequence is restoration of that money to the Plaintiff.

I therefore answer Question (iii) in the affirmative. The Defendant holds the RM1.5 million remitted from the Plaintiff’s bank account to him on trust and/or as a constructive trustee for the Plaintiff.

It follows that the defences of limitation and laches cannot avail the Defendant. Section 22(1)(b) of the Limitation Act 1953 provides that no period of limitation prescribed by the Act shall apply to an action by a beneficiary under a trust 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. The Plaintiff relies on this provision as a complete answer to the limitation defence once the Defendant is characterised as a constructive trustee.

The Plaintiff also relied on Bartlett v Barclays Bank Trust Co Ltd [1980] 2 All ER 92, where Brightman J stated that, until restitution has been made, the default continues because it has not been made good. The point is consistent with the equitable nature of the claim. Where the Plaintiff seeks restoration of its own money from a fiduciary or constructive trustee, the Defendant cannot defeat the claim by treating the case as an ordinary time-barred debt.

I also do not accept that laches or acquiescence assists the Defendant. Laches is an equitable defence. It depends not merely on the passage of time, but on whether it would be inequitable to grant relief having regard to delay, acquiescence, change of position and prejudice. Here, the Defendant was a director who received RM1.5 million of the Plaintiff’s money. Once his pleaded entitlement is held to be legally unsustainable, no equitable unfairness arises in requiring him to restore the money. It would be contrary to equity, not consonant with it, to allow him to retain the Plaintiff’s money merely by invoking delay in the abstract.

For completeness, I have considered the Defendant’s remaining arguments on alleged inconsistent positions, abuse of process and collateral purpose. The Defendant says that the Plaintiff has been inconsistent in describing the payments as loans, advances or misappropriation, and that the present application is an attempt to avoid trial or delay the Defendant’s discovery application.

Those contentions do not alter the legal analysis. Whether the payments are described as loans, advances, unauthorised payments, or misapplied company funds, the core facts remain the same: the Defendant received RM1.5 million from the Plaintiff while he was a director, and he has failed to show a sustainable legal basis for retaining it. The labels used by the Plaintiff do not confer upon the Defendant an entitlement to money which, in law and equity, belongs to the Plaintiff.

Nor does the allegation of collateral purpose constitute an independent defence to the Plaintiff’s claim. The Order 14A questions go to the legal sustainability of the Defendant’s pleaded defence. Once that defence is rejected, the allegation that the application was brought tactically or inconveniently does not answer the Plaintiff’s substantive entitlement. The Court is concerned with whether the questions are suitable for determination and whether their determination disposes of the material issues. In my judgment, they are and they do.

I also reject the submission that the earlier dismissal of the Plaintiff’s summary judgment application prevents the present application. The Court in Danaharta Managers Sdn Bhd (supra), makes clear that a failed Order 14 application does not bar a subsequent Order 14A application where the facts are not disputed and the determination of legal issues will dispose of the case. The earlier dismissal meant only that summary judgment was not then granted. It did not finally determine the legal questions now posed.

In the final analysis, the Defendant’s resistance depends on one central proposition: that he was entitled to retain RM1.5 million of the Plaintiff’s money because of an arrangement with Tan Sri Kam. That proposition cannot stand with the separate legal personality of the Plaintiff, the earlier findings limiting the Defendant’s entitlement, and the absence of any corporate authorisation for the transfer. The issues are therefore apt for Order 14A determination. A full trial would not change the legal answer.

Accordingly, I answer the questions in Enclosure 83 as follows: i. the Defendant’s defence that the RM1.5 million formed part of sums allegedly due and payable by Tan Sri Kam to him in relation to his alleged entitlement as the true majority shareholder of RMDC, including profits of the Plaintiff and/or RMDC, is unsustainable in law; ii. the Defendant’s defence that the RM1.5 million was channelled by Tan Sri Kam to him in affirmation of the agreement is unsustainable in law; iii. the Defendant holds the RM1.5 million on trust and/or as constructive trustee for the Plaintiff; and iv. the defences of laches and/or limitation are not available to the Defendant in law against the Plaintiff’s claim.

The Plaintiff’s application is therefore allowed. Judgment is entered for the Plaintiff in terms of prayers 7(i), 7(ii) and 7(iii) of the amended Statement of Claim. The Plaintiff shall have costs of the application. Dated the 11th day of May 2026 -sgd- ……………………………………………………………………… MUHAMMAD ADAM @ EDWARD BIN ABDULLAH Judicial Commissioner (Commercial Division NCC 4) High Court of Malaya In the Federal Territory of Kuala Lumpur, Malaysia Counsel for the Plaintiff : Wong Yee Chue Messrs. Y. C. Wong Counsel for the Defendant : Lim Wei Jiet Messrs. Lim Wei Jiet

Bartlett v Barclays Bank Trust Co Ltd [1980] 2 All ER 92 2. CIMB Bank Bhd v Jaring Communications Sdn Bhd [2017] 4 CLJ 465 3. Danaharta Managers Sdn Bhd v Melewar Leisure Sdn Bhd & Ors [2008] 4 MLJ 448 4. Dato’ Sivanathan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122 5. Director of Forests, Sarawak & Anor v Racha ak Urud @ Peter Racha Urud & Ors and other appeals [2017] 4 MLJ 42 6. General Container Sdn Bhd v Tan Chin Wah @ Sin Ying San and Ors [2010] MLJU 1540 7. Ong Siang Pheng v Millennium Mall Sdn Bhd & Ors [2021] MLJU 1019 8. Profound Reliance Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [2023] MLJU 1269 9. Rockwin Enterprises Ltd v Shui Yee Ltd & Ors [2003] 3 HKC 174 10. Tai Choi Yu v The Government of Malaysia & Ors [1993] 2 MLJ 311 11. Target Holdings Ltd v Redferns [1996] AC 421 12. Thein Hong Teck & Ors v Mohd Afrizan bin Husain and another appeal [2012] 2 MLJ 299

Section 22(1)(b) of the Limitation Act 1953 2.