Sim Cheng Ho v Fum Boo Ju (J-02(NCVC)(W)-450-03/2017)

FUM BOO JU (P)

SIM LING THOW (P) (NO. K/P: 861013-23-5920) … RESPONDEN-RESPONDEN Dalam Mahkamah Tinggi Malaya di Muar Dalam Negeri Johor, Malaysia Guaman Sivil No.: 22 NCVC 22-05/2014 Antara Sim Cheng Ho (No. K/P: 610414-01-5287 … Plaintif Dan

Fum Boo Ju (P) (No. K/P: 621220-01-5346)

Sim Ling Thow (P) (No. K/P: 861013-23-5920) … Defendan-Defendan CORUM: TENGKU MAIMUN TUAN MAT, JCA NALLINI PATHMANATHAN, JCA ZABARIAH MOHD. YUSOF, JCA 2 GROUNDS OF JUDGMENT Introduction [1] This is an appeal by Sim Cheng Ho (‘the plaintiff’) against the decision of the High Court in dismissing his suit against his wife and eldest daughter (‘the defendants’) seeking an order that they transfer back to him the properties which he had earlier transferred to them pursuant to an agreement that his marriage to his wife, the 1st defendant, be dissolved vide a joint petition for divorce. He contended that since the joint petition for divorce did not proceed, the properties should not have been transferred to them. The High Court held that the plaintiff failed to adduce any evidence which could vitiate the transfers of the properties and render the same null and void. [2] We allowed the plaintiff’s appeal and consequently the defendants sought leave to appeal to the Federal Court. By way of note, after we heard and decided this appeal on 25 October 2017, the defendants filed a motion to stay the execution of our order until the Divorce Petition No. 33-119-06/2014 dated 13 June 2014 has been heard and disposed of, or until the disposal of the defendants’ appeal to the Federal Court against our decision. The Court of Appeal granted the defendants’ application. Therefore there is a stay in operation. 3 The salient facts The parties and the properties [3] Sim Cheng Ho is the plaintiff. The 1st defendant, Fum Bum Ju, is his wife. The 2nd defendant, Sim Ling Thow is the eldest daughter of the marriage between the plaintiff and the 1st defendant. [4] The dispute between the parties here pertains to three properties. The details of the properties are as follows:

(a) The plaintiff’s ½ share in a property held under GM 2741, Lot 4846, Mukim Tangkak, Daerah Ledang, Negeri Johor which is 0.8524 hectares large and planted with oil palm trees (‘Lot 4846’);

(b) The 1st defendant’s ½ share in a property held under GRN 46994, Lot 10263, Mukim Simpang Kanan, Daerah Batu Pahat, Negeri Johor where a freehold shoplot is erected (‘Lot 10263’). The shoplot is about 150 square metres large and is charged to OCBC Bank (Malaysia) Bhd;

(c) The plaintiff’s 1/1 share in a property held under H.S.(D) 3526, PT 2569, Mukim Simpang Kanan, Daerah Batu Pahat, Negeri Johor where a freehold residential property is erected (‘Lot 2569’). The premises are 163.5093 square metres large and charged to OCBC Bank (Malaysia) Bhd. 4 The background [5] The plaintiff and the 1st defendant were married on 15 September 1984. Their marriage lasted for nearly 30 years and resulted in three children, but broke down irretrievably. [6] The 1st defendant pleaded that the reason for the break-up of their marriage was due to the plaintiff’s affair with another woman, his mistress. The plaintiff’s reply to that was that in the year 2011, the 1st defendant accepted the plaintiff’s relationship with his mistress where the arrangement between them was that the 1st defendant would be the “big wife” and the mistress would be the “small wife”. In recognition of this arrangement, the plaintiff and the mistress had carried out a traditional marriage ceremony in the presence of the 1st defendant. [7] The 1st defendant disputed this version and stated that she only discovered the plaintiff’s adultery later, months after the plaintiff and the 1st defendant had signed a joint petition for divorce on the basis that a fortune teller had advised the plaintiff that if they did not divorce, the 1st defendant would suffer an accident. It was after that, that the 1st defendant discovered that the plaintiff and his mistress had carried out a traditional marriage ceremony on 17 June 2013. The plaintiff is said to have discovered sometime in March 2013 that his mistress was pregnant and therefore decided to divorce the 1st defendant. [8] The 1st defendant alleged that when their discussion towards an amicable divorce on 13 March 2013 at the legal offices of Messrs Fadzilah Ong Chee Seong & Associates failed, the plaintiff physically abused her on 9 May 2013 and threatened her into signing a joint 5 petition for divorce dated 28 May 2013. The 1st defendant lodged police report No. BT PAHAT/009333/13 in relation to the alleged brutality. [9] Be it as it may, the plaintiff and 1st defendant finally worked out an agreement between them and their solicitors drew up the terms. The plaintiff and the 1st defendant went to the law offices of Messrs Fadzilah Ong Chee Seong & Associates on or around 29 May 2013 and executed a joint petition for divorce. [10] The plaintiff is not Malay literate. As the joint petition for divorce was in Malay, it should have been translated and explained to him. The plaintiff claimed that this was not done and that he signed the joint petition for divorce because he trusted the solicitors to have included the terms which he had agreed to. The lawyer and the clerk in attendance to the execution contended that the clerk had explained everything to him. [11] The plaintiff claimed that the solicitors drew up a joint petition for divorce which did not embody the terms upon which he and the 1st defendant had agreed upon. He only discovered that the petition which he signed contained different terms, after it had been filed and withdrawn. [12] He contended that the first term agreed upon was that his ½ share in Lot 4846 was to be exchanged for the 1st defendant’s ½ share in Lot 10263 and this exchange was supposed to take place after the grant of a decree nisi (‘Term 1’). 6 [13] Secondly, the plaintiff contended that the entire Lot 2569 was to be transferred to the 2nd defendant only on the condition that she would take out a new loan, settle the current loan outstanding and continue to service the loan. The plaintiff contended that this transfer too was supposed to take place after the grant of a decree nisi (‘Term 2’). [14] The plaintiff acknowledged that he and the 1st defendant had agreed on another term to be included in the joint petition for divorce, i.e. that he would pay her RM1,000-00 per month as maintenance for a period of 1 year from June 2013, and thereafter RM500-00 per month for the following year, and thereafter he would stop paying maintenance (‘Term 3’). [15] The plaintiff further submitted that the transfers of property in Term 1 and Term 2 were only supposed to be effected after the divorce went through. [16] On subsequent dates, the plaintiff went to the law firm to execute transfer documents. The solicitor in charge of conveyancing matters was one Mulia Idayu binti Ahmad. Since no translation of the transfer document was prepared by the solicitors, it is the defendants’ case that when Mulia Idayu attended to the plaintiff, she was assisted by an employee who acted as a translator, known as Ms Tian. The plaintiff’s attestation of the transfer document was witnessed by one Zaitun binti Mohd Diah, the chief clerk for conveyancing. These three persons were not called as witnesses at the trial. Therefore we only have the testimony of Lee Yen Pin (DW1) that the transfer documents were translated and explained to the plaintiff. 7 [17] The transfer document, Form 14A stated that the plaintiff transferred his ½ share in Lot 4846 to the 1st defendant for the consideration of “love and affection”. From the testimony of the clerk in attendance, the 1st defendant executed it on 27 May 2013 while the plaintiff executed it the following day. [18] The plaintiff pointed to a discrepancy and queried why the 1st defendant’s signature was attested by Mulia Idayu while the plaintiff’s signature was attested by Zaitun. DW1’s explanation was that in the conveyancing field, a legal firm cannot act for both parties but in this case the same legal firm had acted for both the plaintiff and the 1st defendant. Therefore it was common practice for a clerk to witness the vendor’s signature while a lawyer would witness the purchaser’s signature. [19] On 30 May 2013, the plaintiff and the 2nd defendant executed a sale and purchase agreement in respect of Lot 2569 for a consideration of RM130,000-00. This transfer was registered on 20 August 2013. It is in evidence that the purchase price of Lot 2569 was determined not on market value, but was set higher than the redemption sum in order for the 2nd defendant to obtain a higher bank loan. [20] The solicitors filed the joint petition for divorce on 30 May 2013 in the Muar High Court No. 33NCVC-196-05/2013. However, on 15 August 2013, the petition was withdrawn with liberty to file afresh. [21] From the evidence of Aily Aainaa Aisha binti Mohd Ali (DW2), the lawyer in charge of the divorce matter, the court fixed the first date 8 on 1 July 2013 but a day prior to that, the 1st defendant met her and refused to consent to the divorce. This was apparently because the 1st defendant discovered the “wedding” photos of the plaintiff and his mistress. [22] DW2 sought an adjournment of the court date to 15 August 2013 and on that date withdrew the petition since the 1st defendant no longer wished to proceed with the divorce. That being the case, the plaintiff and 1st defendant are still legally husband and wife. [23] The plaintiff alleged that he was not given a copy of the joint petition for divorce which he signed. On a subsequent date sometime in August 2013 he went back to the law firm to ask for a copy of the same, but he was only given a draft copy of the joint petition for divorce. DW1 assured him that this was only a draft, but actually the joint petition for divorce had already been filed in court. On the other hand, when this issue was put to DW1 in cross-examination, she stated that she had no recollection of giving the plaintiff a draft of the joint petition for divorce. When shown the “draft” joint divorce petition with the stamp “draft” on it, she stated that she did not know how the plaintiff obtained it. [24] The plaintiff then discovered that the “draft” joint petition for divorce contained different terms and conditions from what the parties had agreed to. Term 3 (above) was included but Term 1 and Term 2 were not included or included with different conditions. The terms in the joint petition for divorce which the plaintiff objected to are as follows: 9

(a) Lot 10263 (½ share owned by 1st defendant and ½ share owned by plaintiff) was to be put up for sale, with 20% of the sale proceeds to be given to the 1st defendant;

(b) Another property held under HS(D) 33341, PTD 18652 Mukim Simpang Kanan, Daerah Batu Pahat, Negeri Johor upon which is erected a residential home bearing the address No. 21, Jalan Maju 19, Taman Maju, 83000 Batu Pahat, Johor, was to be sold, with 20% of the sale proceeds to be given to the 1st defendant. [25] In November 2013, the plaintiff conducted land searches and discovered that on 11 June 2013, his ½ share in Lot 4846 had been transferred to the 1st defendant while on 20 August 2013, the entire share in Lot 2569 had been transferred to the 2nd defendant. There was no change in the ownership of Lot 10263. These transfers had been effected notwithstanding that the joint petition for divorce had not gone through. In fact, one of the transfers was effected well after the joint petition for divorce had been withdrawn. [26] The plaintiff then engaged solicitors and through them, wrote to the defendants to reinstate his share in the properties back to status quo. They ignored his request, hence he filed this action against them. He alleged that he had been deceived into transferring the said properties to the defendants. [27] Before the High Court heard and disposed of the plaintiff’s action, the 1st defendant applied to the marriage tribunal for 10 reconciliation and then filed a unilateral Divorce Petition No. 33-119- 06/2014. That petition is still pending in the Muar High Court. The Decision of the High Court [28] The High Court dismissed the plaintiff’s claim. Further, the learned High Court judge did not make any order as to costs on the basis that the plaintiff and the 1st defendant were still legally husband and wife. [29] The reasons for the decision may be briefly summarised as follows:

(a) Even though the joint petition for divorce was withdrawn, the property transfers which were agreed to be carried out in furtherance of the divorce proceedings remain valid transfers;

(b) The plaintiff cannot at this stage raise the issue that the performance of the terms (namely Term 1 and Term 2) was subject to the divorce being finalised. This contention was an afterthought as initially, the plaintiff did have the intention to transfer Lot 4846 and Lot 2569 to the defendants who were his wife and eldest daughter;

(c) The plaintiff cannot claim that the 1st defendant, as the one who wanted the joint petition for divorce to be withdrawn, is estopped from saying that the transfers of the properties 11 should still go through, as the issue of estoppel does not apply here;

(d) The terms of the joint petition for divorce were put forward by the 1st defendant who was physically, mentally and emotionally abused and pressured into agreeing to the divorce. The plaintiff who wanted the divorce agreed to those terms in order to get his way;

(e) The plaintiff cannot plead with the court on an equitable basis because he had concealed the true reason why he wanted a divorce. He claimed to have wanted to divorce the 1st defendant based on the advice of a fortune teller that if he did not do so, the 1st defendant would suffer an accident. However, in reality the reason was because his mistress was pregnant;

(f) The plaintiff is a smart and meticulous person, therefore it is not plausible that he did not understand the terms of the joint petition for divorce before signing it. Further, he had previous dealings with the law firm in question and DW1 was his relative;

(g) The plaintiff has failed to prove any of the grounds on which the transfers of the properties may be set aside, e.g. fraud, misrepresentation, coercion, undue influence, etc;

(h) The plaintiff contended that he did not receive any purchase sum in relation to Lot 2569 and alleged that there was no 12 sale and purchase transaction between him and his daughter. It is inconceivable that the plaintiff did not know what he executed. In any case, the plaintiff himself claimed that it was agreed in Term 1 of the joint petition for divorce that he would transfer Lot 2569 to the 2nd defendant if she redeemed the property and took on the charge. The 2nd defendant has fulfilled her part of the agreement. Function of the Appellate Court [31] In an earlier decision of the Court of Appeal, Kamdar Sdn Bhd v. Bipinchandra Balvantrai & Ors [2017] 1 CLJ 369, [2016] 1 LNS 743, we had considered and summarised the function of the appellate court. We adopt the well-accepted principles of law applicable in relation to the function of an appellate court when dealing with the judgment of a trial court as stated there. [32] The primary function of the appellate courts is to review the decision of the trial court. Three categories of errors may arise, namely errors on findings of fact, errors of law or errors of mixed law and fact. It is trite that an appellate court will only very rarely reverse a trial judge’s findings of primary fact and then only if it is satisfied that the trial judge was plainly wrong. (See for example Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229, Gan Yook Chin v Lee Ing Chin [2004] 4 CLJ 309, UEM Group Bhd v. Genisys Integrated Engineers Pte Ltd & Anor [2010] 2 MLRA 668, Thomas v Thomas [1947] AC 484 per Lord Thankerton, Yuill v Yuill [1945] P 15, 19 per Lord Greene MR, and more recently in the United Kingdom, Watson Farley and Wiliams v Ostrovizky [2015] EWCA Civ 457; Fage UK 13 Ltd v Chobani UK Ltd [2014] EWCA Civ 5 [2014] ETMR 26 (English Court of Appeal)). [33] The position that a court of appeal will only rarely contemplate reversing a trial judge’s primary findings of fact, has been summarized aptly in the case of In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] 1 WLR 1911 by Lord Neuberger (at paragraph 53) thus: “This is traditionally and rightly explained by reference to good sense, namely that the trial judge has the benefit of assessing the witnesses and actually hearing and considering their evidence as it emerges. Consequently, where a trial judge has reached a conclusion on the primary facts, it is only in a rare case, such as where the conclusion was one (i) which there was no evidence to support, (ii) which was based on a misunderstanding of the evidence, or (iii) which no reasonable judge could have reached, that an appellate tribunal will interfere with it. This can also be justified on grounds of policy (parties should put forward their best case on the facts at trial and not regard the potential to appeal as a second chance), cost (appeals can be expensive), delay (appeals on fact often take a long time to get on), and practicality (in many cases, it is very hard to ascertain the facts with confidence, so a second, different opinion is no more likely to be right than the first).” 14 [34] And as stated in Elliston v Glencore Services (UK) Ltd [2016] EWC CIV 407 (a decision of the Court of Appeal of UK): “….It is all too easy for an appellate court to criticize individual sentences or infelicities of language or reasoning of a trial judge, notwithstanding that at the end of the day his judgment on the entirety of the evidence may well have been correct. A judgment should be looked at in the round, particularly where the outcome depends on the judge’s assessment of the credibility of the respective witnesses. It should not be picked over or construed as though it were a piece of legislation or a complex commercial contract. Nor should a judge be criticized for not mentioning every item of evidence.” This case clearly discourages a piecemeal criticism of a trial court’s judgment. [35] As we stated in the case of Kamdar (above), there are numerous other erudite expositions setting out why an appellate court in the exercise of its review function is loath to intervene in and reverse findings of primary fact made by a trial judge. In this context, we are well aware that a trial judge has the indubitable advantage of seeing the witnesses in real-time and judging their demeanour. However, where a trial judge has clearly gone wrong in his approach to, and evaluation of, the evidence and an appellate court has the benefit of a full transcript, this advantage can be overstated. 15 [36] Therefore an appellate court, in exercising its review function, will rarely intervene where an appeal is premised on erroneous findings of fact, unless it can be shown that those findings are plainly wrong, given the evidentiary record. In a case from the Supreme Court of Canada, Housen v Nikolaisen [2002] SCC 33, the court held that an appellate court will not generally reverse findings of fact unless the trial judge made palpable and overriding errors of fact. [37] In Kamdar (above), we summarised the critical question to be answered by this court in the exercise of its review function thus: On an objective assessment, are the trial judge’s reasons in his judgment, considered in the context of the evidentiary record, the issues as they emerged at trial and the submissions of counsel, such as to warrant a conclusion that no reasonable judge could have come to the conclusion that the trial judge reached? [38] We found that the learned High Court judge had not sufficiently appreciated the evidence and that her decision was plainly wrong, leading to a miscarriage of justice. Our reasons for so concluding are set out below. Our Analysis and Decision [39] We are of the view that the learned judge gave undue weight to the matrimonial issues surrounding the breakdown of the marriage. Her Ladyship appears to have focused on the various unproven 16 allegations by the 1st defendant, namely that the plaintiff had physically, mentally and emotionally abused her and forced her into signing the joint petition for divorce and that the plaintiff had concealed from the 1st defendant the true reason for wanting a divorce. [40] These allegations are unproven and are beside the point. Whatever the reason, it is clear that the relationship between the plaintiff and the 1st defendant had irretrievably broken down. In such situations, parties sought a divorce and the grant of the decree nisi does not depend on the true motives of the parties seeking the divorce. Initially it was only the plaintiff who wanted the divorce but as mentioned above in paragraph 27, the 1st defendant has filed her own divorce petition as she could not tolerate the fact that the plaintiff had a mistress. [41] It must be kept in mind that neither the divorce proceedings (i.e. the joint petition for divorce which was withdrawn and the 1st defendant’s unilateral divorce petition) nor any criminal proceeding against the plaintiff for domestic abuse are before us. At present there are in fact no proceedings whatsoever either civil or criminal against the plaintiff on record, save for the divorce petition filed by the 1st defendant. Therefore issues raised in relation to such matters are irrelevant and should not have been considered by the learned High Court Judge. This court has to decide on matters confined to the scope of the appeal record before us. The plaintiff appealed because he was dissatisfied with the High Court’s dismissal of his suit to recover the properties which he claimed had been transferred to the 17 defendants without authorisation, consent of the parties or a court order. [42] To our minds, the questions that should have been addressed by the High Court judge are as follows:

(a) On what basis was the transfer of the properties effected by the solicitors? It cannot be on the basis of the terms of the joint petition for divorce because firstly, the transfer of the ½ share in Lot 4846 was effected even before the first date fixed for the joint petition for divorce. Secondly, this petition was withdrawn, meaning that the terms to which the plaintiff purportedly agreed, were not recorded before the court. Most importantly, the terms of the joint petition for divorce did not contain the ½ share in Lot 4846 which the plaintiff admitted was in his contemplation to be transferred to the 1st defendant in furtherance of the divorce proceedings;

(b) The issue of the terms agreed upon between the parties is in dispute because DW1 acted as a translator between the plaintiff vis a vis the solicitor, DW2, who could not understand Mandarin. The court should have scrutinised the role played by DW1 as the translation of the contents of the agreed terms is in issue;

(c) Did the solicitors explain and translate the documents executed by the plaintiff, who was not Malay literate? Did the plaintiff know and understand the effect of the various transfer forms and the sale and purchase agreement? 18 [43] The first witness for the defendants is one Lee Yen Pin (DW1). The defendants’ submissions refer to her as the plaintiff’s relative. The plaintiff stated in his reply to the defendants’ defence that the 1st defendant had claimed that her friend, DW1, is a lawyer. The plaintiff claimed that he subsequently discovered that DW1 was merely a clerk at Messrs Fadzilah Ong Chee Seong & Associates and that he was mulling legal action against DW1. [44] The plaintiff tried to establish that DW1 held herself out to be a lawyer and had a franchise agreement with the law firm where DW1 would split fees with the law firm. [45] In DW1’s police report dated 10 October 2013, she described herself as the manager of Messrs Fadzilah Ong Chee Seong & Associates. When she was cross-examined by the plaintiff, she admitted that she did not have a law degree. She stated that she was the chief clerk of the law firm and would assist in interpreting for Chinese clients because the lawyers at the firm were Malay. [46] Strangely, when the defendants’ second witness DW2 gave evidence, she claimed that DW1 had a law degree and had practised law in Vietnam, but did not have a Certificate of Legal Practice. This testimony directly contradicts the defendants’ own lawyer who, during the trial, objected to the line of questioning of DW1, by saying that since she had no degree in law, she could not answer questions pertaining to the withdrawal of the joint petition for divorce. [47] At the trial, the plaintiff adduced evidence of other documents where DW1 had described herself as a legal advisor to associations 19 and temples. The defendants objected to these documents because DW1 was only in court to give evidence and she was not on trial. [48] The plaintiff also adduced a receipt issued by DW1’s company, Prime Management and Advisory (‘PMA’), to the plaintiff for the sum of RM1,300-00. When queried as to why the bill was issued by Prime Management and Advisory and not Messrs Fadzillah Ong Chee Seong & Associates, DW1’s excuse was that this sum was owed to her by the plaintiff, as DW1 had advanced this sum to him to pay for the filing of the joint petition for divorce. She also said that at the time she issued the receipt to the plaintiff, she did not have the law firm’s receipt book and was therefore in a hurry so she issued the plaintiff a receipt from PMA. [49] The plaintiff challenged this excuse as, according to him, he gave DW1 a blank signed cheque for her to fill in the amount of payment for the filing of the joint petition for divorce. In cross-examination, DW1 admitted that there was no agreement between PMA and the law firm for her to collect fees on behalf of the law firm. Neither was she authorised by the Bar Council to do so. [50] What is clear from the testimony of the witnesses is that DW1 was certainly not qualified to practise law in Malaysia and was not entitled to hold herself out as a lawyer. However, this is only relevant in terms of her credibility. Whatever grievance the plaintiff has against DW1 in relation to her alleged misrepresentation, may be dealt with by way of proceedings against DW1. As correctly submitted by the defendants’ counsel during the trial, DW1 is not a defendant in these proceedings. 20 [51] However, it appeared to us that the learned Judge failed to appreciate that DW1’s credibility remained in issue, particularly since she was the translator between the plaintiff and DW2. The plaintiff claimed that DW1 misled him. In this regard, the evidence given by DW2 that the plaintiff consented to the terms in the finalised joint petition for divorce is in doubt, as it was DW1 who interpreted and conveyed the intentions of the plaintiff to DW2. [52] It is the defendants’ case that there was a change in the terms and conditions, to which the parties had originally agreed. This was reflected in two letters from the solicitors to the plaintiff, dated 6 May 2013 and 5 July 2013 respectively. DW1 claimed that it was the 1st defendant who instructed the law firm to prepare the new terms and send the letters to the plaintiff. This resulted in the new terms being embodied in the final version of the joint petition for divorce which was filed in court. [53] In response, the plaintiff pointed out that the letter from Messrs Fadzilah Ong Chee Seong & Associates dated 6 May 2013 which was purportedly sent by AR registered post was returned to the solicitors and only eventually delivered to him on 24 June 2013, which was after the filing of the joint petition for divorce on 30 May 2013. Further, the second letter dated 5 July 2013 was issued AFTER the filing of the joint petition for divorce. [54] In addition, the second letter dated 5 July 2013 contained three additional terms, none of which pertained to the properties mentioned in the joint petition for divorce. It contained Term 3 i.e. the provision of maintenance, a shophouse with the address 142, Jalan Rotan 21 Batu, Taman Sri Jaya, 83000 to be sold to the plaintiff, and the requirement for the plaintiff to publish a letter of apology in the Sin Chew Jit Poh Newpaper. The plaintiff argued that assuming he had consented to the addition of these three terms, why did the joint petition for divorce only include one of those three terms, namely that pertaining to maintenance, and leave out the other two terms? [55] In cross-examination, DW1 admitted that no consent was obtained from the plaintiff in respect of the three additional terms contained in the second letter dated 5 July 2013. DW1 also admitted that since the letters were in Malay, the plaintiff would not have been able to read the letters anyway and would have to see translation from her personally. [56] The defendants alleged that even if the plaintiff had not received the letters purporting to change the terms which the parties had agreed to be included in the joint petition for divorce, this did not change the fact that the plaintiff’s intention was for the properties to be transferred. DW1 gave evidence that the reason why the transfer of the properties proceeded even though the divorce proceedings did not, was because the 1st defendant wanted this to be done as security before she consented to sign the joint petition for divorce. This submission of the defendants shows that they admit that the plaintiff was not aware of the change in the terms to be embodied in the joint petition for divorce. [57] We do not find that it is plausible that the joint petition for divorce contained the finalised terms agreed between the parties as there are too many discrepancies. There is no explanation to date relating to 22 why the property held under HS(D) 33341, PTD 18652 Mukim Simpang Kanan, Daerah Batu Pahat, Negeri Johor upon which is erected a residential home bearing the address No. 21, Jalan Maju 19, Taman Maju, 83000 Batu Pahat, Johor was not sold and 20% of the proceeds given to the 1st defendant as stipulated in the joint petition for divorce. Neither is there any explanation as to why the law firm proceeded to transfer the plaintiff’s ½ share in Lot 4846 which was not mentioned in the joint petition for divorce. [58] We therefore find that the learned High Court judge erred in giving undue weight to the defendants’ evidence. The conflicting versions of the evidence leading to the transfer of the properties by the defendants leads us to the conclusion that the plaintiff had intended for the transfer to operate as part of the division of the matrimonial assets in the divorce proceedings. The transfer of the properties should therefore have been effected during the course of the ancillary relief proceedings at the time of or subsequent to the grant of the decree nisi. We are of the view that the solicitors should not have proceeded to transfer the properties when the joint divorce petition fell through. In short, the transfers of the properties were procured by fraud and misrepresentation. [59] In particular, the role of DW1, who was the chief clerk of the legal firm but who seems to have played a major role in advising the parties, seems overly prominent in every aspect of the impugned transactions. It is highly suspect whether she accurately translated the advice of DW2 for the parties and conveyed the intentions of the parties to DW2. From the evidence on record, the inference to be 23 drawn is that it is highly probable that there was no real consensus as to the proposed settlement relating to the transfers of the properties. [60] Even if we are wrong in our conclusion above, we find that the transfers of the properties were erroneously effected as the divorce proceedings were withdrawn. The transfers were contingent upon the divorce going through. Thirdly, we find that the transfers of the properties are vitiated due to the fact that on a balance of probabilities, the plaintiff did not understand the legal documents he executed. With regard to the issue of the explanation and translation of the transfer documents to the plaintiff, an adverse inference ought to have been drawn against the defendants for not calling to the witness stand any of the persons who purportedly attended to the plaintiff on the day he signed the document and translated the contents for him. [61] To our minds, the defendants’ case that the additional terms were incorporated in the joint petition for divorce by consent is not tenable given the clear testimony of the plaintiff, namely that he did not consent to an outright transfer of these properties to the defendants. As stated earlier, the transfers were contingent upon the divorce. Therefore it is even more incredible that when the joint petition for divorce fell through, the solicitors proceeded to transfer the properties, that too by partially following the additional terms in the joint petition for divorce (as amended) and partially in accordance with the original terms. Put simply, the solicitors ultimately transferred the properties that the defendants chose. [62] This is a case where the evidence of the defendants was not corroborated by the conduct of the parties or the contemporaneous 24 documents. The transfers, as stated earlier, were only to take effect as a consequence of, or resultant upon the divorce. As the divorce was never granted, there was no reason to substantiate the transfer of the properties. The plaintiff was effectively defrauded into transferring the properties by the defendants and the solicitors who were complicit with the defendants. Such conduct amounts to fraud as understood within the purview of the National Land Code (NLC), namely as actual fraud as envisaged under section 340(2)(a). (See the Privy Council cases of Assets Co Ltd v Mere Roihi [1905] AC 176 and Waimiha Sawmilling Co (in liquidation) v Waione Timber Co Ltd [1923] NZLR 1137; (1923) 25 GLR 353, both considered and applied by Edgar Joseph FCJ in the Federal Court case of Pekan Nenas Industries Sdn Bhd v Chang Ching Chuen & Ors [1998] 1 MLJ 465.) Both the defendants were privy to, or party to, the actual fraud. The transfers are to that extent defeasible and liable to be set aside under that section. [63] We therefore allowed the plaintiff’s appeal and returned the ownership of the properties to the plaintiff thereby maintaining status quo, i.e. before the discussions relating to divorce. We note that the 1st defendant has instituted divorce proceedings which are pending. The transfer of the properties ought to be undertaken in the course of the divorce proceedings as may be ordered by the Court. The fact of the current matrimonial proceedings in itself evidences the fact that the previous transfers ought never to have taken place. 25 Conclusion [64] We were therefore of the unanimous view that the transfer of the properties without an order for ancillary relief was done wrongfully and fraudulently under section 340(2)(a) of the NLC. The learned High Court judge erred in failing to have regard to, or make any reasonable findings or inferences from the evidence on record. If Her Ladyship had done so, she would not have come to the conclusion she did. (See Tindok Besar Estate Sdn Bhd v. Tinjar Co [1979] 1 LNS 119; [1979] 2 MLJ 229.) [65] On the law the learned Judge failed to appreciate that the transfer of property could not be and should not have been effected by way of ancillary relief when the divorce proceedings were in actuality withdrawn. In the absence of the divorce proceedings, there was no basis to effect such transfers. The defendants’ case that the transfers were in fact outright transfers to grant the plaintiff a divorce is not supported by the contemporaneous documents or events. The learned Judge failed to appreciate this. We are satisfied that the learned Judge was plainly wrong and that the decision resulted in a miscarriage of justice. Appellate intervention was therefore warranted. [66] As stated above, the transfer of the matrimonial properties should be dealt with in the course of the divorce proceedings pending in the Muar High Court, Divorce Petition No. 33-119-06/2014. Therefore the appeal is allowed with costs of RM10,000-00 to the appellant/plaintiff, subject to allocatur. This means in effect that the properties are to be transferred back to the plaintiff, as title to the 26 same is defeasible under section 340(2)(a) NLC. The deposit is refunded. Nallini Pathmanathan Judge Court of Appeal Malaysia Dated: 29 August 2018 For the Appellants : H.Y. Lee Tetuan Lee Han Yen & Co Peguambela & Peguamcara No. 114-A (Tingkat 1) Jalan Pengkai 83000 Batu Pahat Johor Darul Takzim For the Respondents : Julie Lim Tetuan Julie Lim, Vasanthan & Co Peguambela & Peguamcara NO. 29 Jalan Ismail 83000 Batu Pahat Johor Darul Ta’zim Signed