Sathasivam a/l Vitiveloo v Ratha a/p Vitiveloo (BF-A52-1-11/2023)

This matter involves a dispute between siblings stemming from the redemption of jewellery originally pledged by the Plaintiff. The conflict centers on the Defendant's subsequent possession of the items and the respective rights and obligations of both parties following the redemption.

Having considered the pleadings, the oral and documentary evidence, and the submissions of learned counsel, this Court dismissed the Plaintiff's claim with costs of RM15,000.00 and dismissed the Defendant's counterclaim with no order as to costs.

The Plaintiff on 10 July 2026 filed a Notice of Appeal against the Court's decision. The reasons for the Court's decision are set out below.

Prior to the events giving rise to the present action, several items of jewellery belonging to the Plaintiff had been pledged at Kedai Pajak Gadai Mun Fong Sdn Bhd, Pajak Gadai Van Hin Sdn Bhd and Bank Rakyat, Rawang. Sometime between March and April 2014, arrangements were made for the redemption of the pledged jewellery.

It is common ground that the Defendant provided the funds for the redemption. The Plaintiff's case is that approximately RM45,000.00 was advanced for that purpose. The Defendant, however, maintains that she obtained financing of approximately RM70,000.00 in her own name through Agro Bank to facilitate the redemption at the Plaintiff's request. Following the redemption, the jewellery and the documents relating to the redemption remained in the Defendant's possession. The Plaintiff maintains that the Defendant held them only as a temporary custodian pending repayment of the redemption monies. The Defendant disputes this and contends that her possession formed part of a broader financial arrangement between the parties.

The dispute arose when the Defendant subsequently dealt with the jewellery. The Plaintiff contends that the jewellery was sold without his knowledge or authority, whereas the Defendant maintains that her actions were consistent with the parties' arrangement.

The Plaintiff further claims that the jewellery comprised approximately 720 grams of gold jewellery. The Defendant disputes both the quantity and extent of the jewellery claimed.

Against that background, the Plaintiff seeks:

a declaration that the Defendant held the jewellery on his behalf and/or was under an obligation to return it;

an order for the return of the jewellery;

alternatively, payment of the current market value of the jewellery; and

delivery up of all documents relating to the pledging and redemption of the jewellery. [10] The Defendant denies liability and counterclaims for RM15,000.00. BURDEN AND STANDARD OF PROOF [11] In establishing the present claim, the legal burden rested throughout upon the Plaintiff as the party asserting the existence of the facts relied upon, pursuant to sections 101 and 102 of the Evidence Act 1950. In CB Media Sdn Bhd & Anor v Kesas Sdn Bhd [2019] 4 CLJ 609, the Court of Appeal held: [19] It is settled law that the burden of proof rests throughout the trial on the party who asserts that the facts exist (s.101 of the Evidence Act 1950). Where a party on whom the burden of proof lay had discharged that burden, then the evidential burden shifted to the other party. But if the party on whom the burden of proof lay failed to discharge it, the other party need not call any evidence: Hong Yik Trading v. Liziz Plantation Sdn Bhd [2017] 8 CLJ 491 ; [2017] 5 MLJ 398." [12] The standard of proof in civil proceedings is on a balance of probabilities. As reaffirmed by the Federal Court in Inas Faiqah bt Mohd Helmi (an infant suing through her father and next friend, Mohd Helmi bin Abdul Aziz) v Kerajaan Malaysia & Ors [2016] 2 MLJ 1, adopting the principle in Miller v Minister of Pensions [1947] 2 All ER 372, the burden is discharged only where the Court is satisfied that the fact asserted is more probable than not. Where the probabilities are evenly balanced, the burden remains undischarged. ] Accordingly, although the evidential burden may shift in the course of the trial depending on the evidence adduced, the legal burden remained throughout upon the Plaintiff to prove, on a balance of probabilities, the facts necessary to establish the causes of action and to justify the reliefs sought. ISSUES FOR DETERMINATION [14] The parties have agreed on the Issues to be Tried as set out in Enclosure 53. Having considered those agreed issues together with the pleadings, the evidence adduced at trial and the submissions of learned counsel, the Court is satisfied that several of those issues substantially overlap, whilst others are evidential matters which arise in the course of determining the principal questions in dispute. The Court therefore considers it appropriate to address the dispute under the following principal issues:

the nature of the parties' arrangement following the redemption of the jewellery;

whether the Defendant acted beyond the scope of that arrangement in retaining possession of, or subsequently dealing with, the jewellery;

whether the Plaintiff is entitled to the reliefs claimed; and

whether the Defendant has established her counterclaim. ANALYSIS AND FINDINGS The Parties' Arrangement Following the Redemption of the Jewellery [15] The first issue concerns the nature of the parties' arrangement following the redemption of the jewellery. There is no dispute that the Defendant redeemed the jewellery and that it thereafter remained in her possession. According to Plaintiff, the Defendant merely kept the jewellery on his behalf until the redemption monies were repaid, giving rise to an express trust under which the Defendant assumed fiduciary obligations. The Defendant, in contrast, maintains that her continued possession formed part of the financial arrangement between the parties after she had advanced the monies required for the redemption. [6] The Plaintiff's evidence is that the Defendant agreed to provide the funds required to redeem the jewellery from the respective pawnshops. Once the jewellery had been redeemed, both the jewellery and the redemption documents were handed to the Defendant for safekeeping until the redemption monies, said to be approximately RM45,000.00, had been repaid. Ownership of the jewellery, it is said, remained with the Plaintiff throughout. SP1 added that the arrangement was reached orally in the presence of their mother. [17] The Defendant's explanation is different. She says the redemption was financed through a loan of approximately RM70,000.00 obtained from Agro Bank in her own name at the Plaintiff's request. She remained personally responsible for servicing the facility and maintained that the Plaintiff had agreed to repay both the redemption monies and the monthly instalments. According to the Defendant, it was further agreed that the jewellery would remain in her possession and would only be returned after the redemption monies and the loan repayments had been fully settled. On that account, the jewellery continued to remain in her possession after the redemption. [18] The Plaintiff further says that, after securing sufficient funds, he requested the return of the jewellery. Instead, the Defendant lodged the police report marked as Exhibit P4 on 17.10.2019, approximately five years after the jewellery had been redeemed. In that report, the Defendant stated that the jewellery would be returned upon repayment of the redemption monies. The Plaintiff relies heavily on those statements. It is argued that they amount to an acknowledgment by the Defendant that ownership of the jewellery remained with the Plaintiff and that she was merely retaining possession pending repayment. [19] Against that background, the Plaintiff contends that the arrangement between the parties satisfied the requirements for the creation of an express trust. He argued that Defendant's continued possession gave rise to the fiduciary obligations of a trustee. [20] The applicable principles are well settled. An express trust need not be constituted by formal words or reduced into writing. Whether such a trust arises depends on the substance of the parties' arrangement as disclosed by the evidence. As explained in Knight v Knight (1840) 3 Beav 148, the creation of an express trust requires certainty of intention, certainty of subject matter and certainty of objects. Those principles were reaffirmed by the Federal Court in David Wee Eng Siew (administrator to the estate of Lim Eang Tee, deceased) v Lim Lean Seng & Anor [2018] Supp MLJ 50. [21] This case does not turn on the fact that the parties' arrangement was oral. An express trust may arise without any formal declaration or written agreement. The issue is whether the evidence establishes the terms upon which the Defendant continued to retain possession of the jewellery after its redemption and, if so, whether those terms permit the Court to infer that the parties intended to create the legal relationship of trustee and beneficiary. That question falls to be answered by reference to the evidence as a whole. [22] Exhibit P4 occupies a central place in the Plaintiff's case. The Plaintiff relies on the Defendant's own statement in the police report that the jewellery would be returned upon repayment of the redemption monies as an acknowledgment that ownership of the jewellery remained with him. That proposition was put to SD1 during cross-examination, and SD1 accepted that Exhibit P4 recorded that the jewellery would be returned upon repayment of the redemption monies. The Plaintiff submits that the Defendant's version of the arrangement is consistent only with the existence of an express trust under which the Defendant held the jewellery as trustee pending repayment. [23] The document undoubtedly lends support to part of the Plaintiff's case. It is consistent with the Plaintiff's assertion that ownership of the jewellery remained with him and that the Defendant continued to retain possession pending repayment. However, the report says nothing about why the Defendant was to hold the jewellery in that capacity or whether the parties intended that arrangement to carry the obligations of a trustee. Nor does it explain what was to happen if repayment was never made. Those omissions are material to the question whether the parties intended to create an express trust. [24] That uncertainty is not resolved by the oral evidence. Neither SP1 nor SD1 was able to identify any agreed timeframe for repayment or explain what the parties had agreed would happen if the redemption monies remained unpaid. Neither witness identify the terms upon which the Defendant was to continue holding the jewellery beyond the expectation that the redemption monies would eventually be repaid. While they do not negate the existence of an arrangement between the parties, they leave the Court without a proper evidential basis to conclude that the arrangement was intended to create the legal relationship of trustee and beneficiary. [25] The Defendant's explanation must also be considered. Her evidence was that she obtained financing of approximately RM70,000.00 from Agro Bank in her own name to redeem the jewellery at the Plaintiff's request. She remained personally liable for the monthly instalments and retained possession of the jewellery because the redemption monies had not been repaid. Although the Plaintiff testified that he later went to the Defendant's house with his former wife intending to repay the redemption monies and recover the jewellery, there is no evidence that any payment was in fact made. Indeed, up to the filing of this action, the evidence does not establish that the redemption monies of approximately RM45,000.00, as alleged by the Plaintiff, had been paid to the Defendant. That evidence is consistent with the Defendant's explanation for retaining possession of the jewellery. It does not, however, answer the separate question whether the parties intended her possession to assume the legal incidents of a trust. [26] The surrounding evidence establishes that the Defendant retained possession of the jewellery pending repayment of the redemption monies. While the requisite intention to create an express trust may be inferred from the words and conduct of the parties [refer Paul v Constance [1977] 1 All ER 195], the conduct relied upon in the present case does not demonstrate a clear intention that the Defendant was to hold the jewellery as trustee for the Plaintiff. On the contrary, the evidence also shows that the Defendant had personally financed the redemption of the jewellery and remained liable for the loan repayments. In those circumstances, her continued possession of the jewellery is readily explained by the fact that the redemption monies had yet to be repaid. The Court is therefore unable to infer from her continued possession alone that the parties intended to create an express trust. [27] In the circumstances, the Court is not satisfied that the Plaintiff has established the requisite certainty of intention for the creation of an express trust. While the evidence establishes that the parties had reached an arrangement concerning the Defendant's possession of the jewellery, it falls short of demonstrating that they intended to create the legal relationship of trustee and beneficiary. The Plaintiff has therefore failed to prove the first of the three certainties identified in Knight v Knight. [28] For the foregoing reasons, the Court finds that the Plaintiff has failed to establish the express trust pleaded. The first issue is accordingly answered in the negative. Whether the Defendant Acted Beyond the Scope of the Parties' Arrangement [29] The absence of an express trust does not, by itself, determine whether the Defendant was entitled to sell or disposed of the jewellery. A separate question remains, namely whether the Plaintiff has established that the Defendant acted beyond the scope of the parties' arrangement when she subsequently disposed of the jewellery. In Exhibit P2, The Plaintiff relies on the Defendant's reference in wording "our client's record" as being consistent with his evidence that the redemption documents had remained in the Defendant's possession following the redemption. Similar reliance is placed on Exhibit P4, in which the Defendant stated that the jewellery would be returned upon repayment of the redemption monies. The Plaintiff contends that neither document contains any assertion by the Defendant that the Plaintiff had authorised her to sell the jewellery. [31] The Defendant disputes the significance attached to both matters. Her evidence is that neither Exhibit P2 nor Exhibit P4 was intended to set out everything that had transpired between the parties. She therefore contends that the absence of any reference to the Plaintiff's alleged consent in either document does not necessarily mean that no such consent had been given [32] Apart from Exhibits P2 and P4, the Plaintiff also relies on the inconsistencies between the evidence of SD1 and SD2 concerning the alleged authority to sell the jewellery. SD1 testified that the Plaintiff's consent was given at her house, whereas SD2 maintained that the discussion took place at the jewellery shop. The Plaintiff submits that those inconsistencies undermine the Defendant's assertion that the sale was carried out with his agreement. [33] However, according to SD1, the jewellery was sold only after the Plaintiff repeatedly failed to repay the redemption monies and after he agreed that the proceeds could be used to finance her wedding expenses. SD1 further testified that the Plaintiff attended the wedding, appeared happy throughout the ceremony and even acted as her driver. The Plaintiff denied having given such consent or knowing that the wedding expenses were funded from the sale of the jewellery. [34] The omission in Exhibits P2 and P4 is a relevant consideration. Both documents consistently reflect the Defendant's position that the jewellery would be returned upon repayment of the redemption monies. They do not, however, contain any assertion that the Plaintiff had authorised the Defendant to sell the jewellery in the event of non-payment. That omission lends some support to the Plaintiff's contention that the Defendant's authority was confined to retaining possession of the jewellery pending repayment. [35] Likewise, the inconsistency between the evidence of SD1 and SD2 is not insignificant, as it relates to the very occasion on which the Defendant alleges that the Plaintiff authorised the sale of the jewellery. Whether the discussion took place at the Plaintiff's house or at the jewellery shop is not a trivial discrepancy. The Court in Public Prosecutor v Datuk Haji Harun bin Haji Idris (No 2) [1977] 1 MLJ 15 explained that not every inconsistency is sufficient to undermine a witness's credibility. It remains the duty of the Court to scrutinise the evidence carefully and determine the weight to be attached to it in the particular circumstances of the case. Having done so, this Court finds that the inconsistency affects the weight to be attached to that aspect of the Defendant's evidence. However, standing alone, it is insufficient to establish that the Plaintiff did not authorise the sale of the jewellery. The Court has taken both matters into account. The omission in Exhibits P2 and P4, viewed together with the inconsistency between the evidence of SD1 and SD2, undoubtedly weakens the Defendant's assertion that the Plaintiff had expressly authorised the sale of the jewellery. However, where the existence of an oral agreement is in issue, the Court cannot determine the matter merely by weighing competing assertions. As reaffirmed in Yoon Goon How v Aston Villa Sdn Bhd [2024] 7 MLJ 139, the Court must examine the surrounding conduct of the parties, the contemporaneous documents and the inherent probabilities in deciding whether the alleged oral agreement has been established. It is therefore necessary to consider the evidence as a whole before determining whether the Plaintiff has proved, on a balance of probabilities, that the Defendant acted beyond the scope of the authority conferred upon her. [37] Those surrounding circumstances do not, by themselves, establish that the Plaintiff agreed to the sale of the jewellery. Equally, they do not establish that he did not. More fundamentally, the evidence does not disclose what the parties had intended should happen if the redemption monies were not repaid. There was no agreed timeframe for repayment. Neither was there evidence as to whether the Defendant was expected to continue retaining the jewellery indefinitely despite remaining personally liable for the Agro Bank financing, or whether any limitation had been placed on her ability to deal with the jewellery in those circumstances. Without evidence addressing that aspect of the parties' arrangement, the Court is unable to conclude that the Defendant acted outside the authority, if any, that had been conferred upon her. [38] Taking the evidence as a whole, the Court is not satisfied that the Plaintiff has established, on a balance of probabilities, that the Defendant acted outside the scope of the parties' arrangement when she sold the jewellery. The omission in Exhibits P2 and P4 to refer to the Plaintiff's alleged consent, together with the inconsistencies in the evidence of SD1 and SD2, are matters which weigh in the Plaintiff's favour. They are, however, insufficient to overcome the uncertainty surrounding what the parties had agreed would happen if the redemption monies remained unpaid. The second issue is answered in the negative. Whether the Plaintiff is Entitled to the Reliefs Claimed [39] The remaining issue concerns the reliefs sought by the Plaintiff. To determine whether those reliefs may be granted, the Court must first be satisfied that the Plaintiff has established the identity and extent of the jewellery said to be the subject matter of this action. [40] The Plaintiff seeks, amongst others, a declaration that the jewellery belongs to him, an order for its return together with the redemption documents, and, in the alternative, payment of RM463,917.60 said to represent the present market value of approximately 720 grams of gold jewellery. The Defendant disputes both the alleged weight of the jewellery and the basis upon which the alternative monetary claim has been assessed. [41] The Plaintiff's evidence is that the jewellery redeemed by the Defendant weighed approximately 720 grams. That figure is derived principally from SP1's own evidence. No inventory of the jewellery, redemption receipts identifying the individual items or their respective weights, valuation reports or other contemporaneous records were produced in support of that assertion. [42] The Plaintiff argues that documentary evidence is not the only means by which ownership of movable property may be established. Reliance is also placed on SP2's evidence regarding the ordinary practice followed upon the redemption of pledged jewellery. The Plaintiff further relies on the wording of Exhibit P2, being the Defendant's solicitors' reply dated 6.1.2023. Particular emphasis is placed on the statement, "According to our client's record", which the Plaintiff submits amounts to an acknowledgment that the Defendant was in possession of the records relating to the redemption of the jewellery, including the pawn shop receipts. On that footing, it is argued that the Defendant ought to have produced those records at trial. Her failure to do so, according to the Plaintiff, warrants the drawing of an adverse inference pursuant to section 114(g) of the Evidence Act 1950. [43] The Defendant disputes that interpretation. During crossexamination, SD1 explained that the reference to "our client's record" was intended to refer to her Agro Bank loan records and not to the pawn shop receipts. She denied that the pawn shop receipts remained in her possession and maintained that upon redemption, the original pawn receipts would have been retained by the respective pawnshops. [44] The Court is unable to accept the Plaintiff's interpretation of Exhibit P2 without qualification. The phrase "our client's record" does not, on its face, identify the particular records being referred to. Read in context, the letter is principally concerned with the Agro Bank financing obtained by the Defendant and the amount said to have been advanced for the redemption of the jewellery. It does not expressly state that the Defendant retained the pawn shop receipts. [45] That explanation of SD1 is reinforced by the evidence of SP2, an employee of Wan Hin Pawnshop with approximately 13 years' experience. SP2 explained that, upon redemption of the pledged jewellery, the original pawn receipt would ordinarily be retained by the pawnshop as part of the redemption process, while the customer would only be issued with a payment receipt. That evidence makes it difficult to accept the Plaintiff's submission that the Defendant necessarily remained in possession of the original pawn receipts after the redemption. At the very least, it demonstrates that the Plaintiff's interpretation of Exhibit P2 is not the only reasonable inference on the evidence. The Court is therefore unable to proceed on the premise that the pawn shop receipts remained in the Defendant's possession merely from the use of the words "our client's record" in Exhibit P2. [46] In those circumstances, the Court is not persuaded that the Defendant's failure to produce the pawn shop receipts justifies the drawing of an adverse inference under section 114(g) of the Evidence Act 1950. The Supreme Court in Aik Ming (M) Sdn Bhd & Ors v Chang Ching Chuen & Ors [1995] 2 MLJ 770 held that the presumption under section 114(g) is discretionary rather than mandatory. In the present case, the Court is not satisfied that the evidence justifies the exercise of that discretion, particularly when it has not first been established that the pawn shop receipts remained in the Defendant's possession or power. [47] Even leaving aside the question of the redemption documents, the Plaintiff must still establish the identity of the jewellery forming the subject matter of this action. In particular, the Plaintiff bears the burden of proving that the jewellery allegedly sold by the Defendant was the same jewellery redeemed from the pawnshops and that it weighed approximately 720 grams as pleaded. Section 103 of the Evidence Act 1950 places the burden of proving those particular facts upon the party who asserts them. [48] In that regard, SP2's evidence is of limited assistance. While SP2 explained the ordinary procedures followed upon the redemption of pledged jewellery, he was neither involved in the redemption of the jewellery forming the subject matter of this action nor able from his own knowledge, to identify the jewellery allegedly redeemed by the Defendant or verify its total weight. [49] Likewise, the absence of the redemption documents does not relieve the Plaintiff of the burden of proving those essential facts. Even if the Court were to assume that the redemption documents would have provided some assistance, they could not establish that the jewellery now claimed was the same jewellery redeemed by the Defendant or that it weighed approximately 720 grams. [50] The burden of proving that the jewellery forming the subject matter of this action weighed approximately 720 grams rested throughout upon the Plaintiff pursuant to sections 101 and 102 of the Evidence Act 1950. In the absence of contemporaneous records, redemption receipts, inventory, valuation reports or other cogent evidence capable of verifying the alleged weight, the Court is not satisfied that the Plaintiff has discharged that burden. [51] The Plaintiff's alternative claim for RM463,917.60 stands on no different footing. That claim is premised on the assertion that the Defendant had disposed of jewellery weighing approximately 720 grams. However, having found that the Plaintiff has failed to establish the identity and extent of the jewellery said to be the subject matter of this action, there is no evidential basis upon which the Court can determine its present market value. Any assessment of damages in the circumstances would necessarily be speculative. [52] Taking the evidence as a whole, the Court finds that the Plaintiff has failed to establish, on a balance of probabilities, that the jewellery forming the subject matter of this action has been sufficiently identified or that it weighed approximately 720 grams as alleged. It follows that the Plaintiff has failed to establish any entitlement to the declaratory relief sought, the order for the return of the jewellery and redemption documents, or, in the alternative, damages in the sum of RM463,917.60. Counterclaim [53] A counterclaim is in substance a cross-action and must be proved as an independent claim. As recognised by the Federal Court in Permodalan Plantation Sdn Bhd v Rachuta Sdn Bhd [1985] 1 MLJ 157, the Defendant bore the burden of establishing, pursuant to sections 101 and 103 of the Evidence Act 1950, the facts necessary to support the relief sought in the counterclaim. [54] By her counterclaim, the Defendant seeks the sum of RM15,000.00, said to represent legal expenses incurred in connection with the present proceedings. The Defendant contends that those expenses were incurred as a consequence of having to defend the Plaintiff's claim and ought therefore to be borne by the Plaintiff. [55] The counterclaim cannot be sustained. As a matter of evidence, SD1 acknowledged during cross-examination that no receipts, invoices, solicitor's bills or other documentary evidence were produced to substantiate the amount claimed. More fundamentally, the Defendant has not identified any contractual obligation, statutory provision or recognised legal principle which entitles her to recover legal expenses incurred in defending this action as a separate substantive claim. [56] In any event, the counterclaim is misconceived in law. In Golden Star & Ors v Ling Peek Hoe & Anor & Another Appeal [2024] MLJU 909, the Federal Court reaffirmed that costs are distinct from damages and that legal costs incurred in the same proceedings between the same parties are not recoverable as special damages. Such costs fall within the Court's discretion in the exercise of its costs jurisdiction and do not constitute an independent cause of action. [57] In the premises, the Defendant has failed to establish, on a balance of probabilities, any legal entitlement to recover the sum of RM15,000.00 claimed under the counterclaim. The counterclaim is accordingly dismissed. Conclusion [58] For the reasons set out above, the Plaintiff has failed to establish his claim on a balance of probabilities. The Plaintiff's claim is accordingly dismissed. The Defendant has likewise failed to establish her counterclaim, which is also dismissed. [59] Having regard to the nature of the dispute, the issues determined, the length of the trial and the work reasonably undertaken by counsel, the Court awards the Defendant costs of RM15,000.00 in respect of the Plaintiff's claim. As the counterclaim did not materially enlarge the scope of the proceedings and has been dismissed, the Court makes no order as to costs in respect of the counterclaim. Dated 20th of July 2026 NORHAYATI BINTI JOHAR Sessions Court Judge Sessions Court Kuala Kubu Bharu, Selangor For the Plaintiff: Nur Aqilah Izmah binti Ahmad Tarmizi