PA-22NCvC-136-08/2018
High Court of Malaysia18 Nov 2024
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“tted by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract. [35] Section 14 of the Contract Act 1950 had explained that consent is said to free when its is not cause by among others are undue influence.”
“f a crime need only be on a balance of probabilities". (See Boonsom Boonyanit v. Adorna Properties Sdn Bhd [1997] 3 CLJ 17, at p. 32; [1997] 2 MLJ 62, at p. 74). [34] Fraud is defined in s 17 of the Contracts Act as follows: 'Fraud' includes any of the following acts committed by a party to a contract, or with his conn”
“eceased’s residence but Ah Kim did. Ah Kim was the one who had personal knowledge but the plaintiff did not call her to testify for him. Therefore, adverse inference pursuant to Section 114(g) of the Evidence Act 1950 must be invoked against the Plaintiff that if Ah Kim is called to testify, her evidence will not be in”
“the accused did not call another expert to challenge the evidence of the government chemist. As to the duty of an expert witness, I need only to refer to the case of Davie v. Magistrate of Edinburgh [1953] SC 34 at p 40. There the court had this say: Their duty to furnish the judge or jury with the necessary scientific”
“held that: "The opinion of expert witness was admissible in evidence and there was no requirement in law that such evidence be corroborated.". [27] The Court of Appeal in Ong Hooi Beng & Ors v. PP [2015] CLJU 63; [2015] LNS 63; [2015] MLJU 22 held that: "In any event expert opinion must be challenged by another expert.”
“e opinion of expert witness was admissible in evidence and there was no requirement in law that such evidence be corroborated.". [27] The Court of Appeal in Ong Hooi Beng & Ors v. PP [2015] CLJU 63; [2015] LNS 63; [2015] MLJU 22 held that: "In any event expert opinion must be challenged by another expert. The challenge”
“pert witness was admissible in evidence and there was no requirement in law that such evidence be corroborated.". [27] The Court of Appeal in Ong Hooi Beng & Ors v. PP [2015] CLJU 63; [2015] LNS 63; [2015] MLJU 22 held that: "In any event expert opinion must be challenged by another expert. The challenge in cross exami”
“independent judgment by the application of these criteria to the facts proved in evidence. [29] In Leisure Farm Corporation Sdn Bhd v Kabushiki Kaisha Ngu (Previously known as DAI-ICHI SHOKAI & Ors [2019] MLU 589 where this case refers to expert testimony in an evaluation report that was unchallenged in terms of facts”
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1 DALAM MAHKAMAH TINGGI MALAYA DI PULAU PINANG DALAM NEGERI PULAU PINANG, MALAYSIA GUAMAN SIVIL NO: PA-22NCVC-136-08/2018 ANTARA TAN LENG KEAT (NO. KAD IDENTITI SINGAPURA: S2559559i) [MEMBAWA GUAMAN SEBAGAI WASI DAN PENAKAT TUNGGAL KEPADA HARTA PUSAKA WONG KUAN HOH @ WONG KUAN LAN (NO. K/P: 371127-07-5118) (“SI MATI”) … PLAINTIF
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TAN YUNG QUAN
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SEE HONG NGO
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TAN JOO LENG
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OOI YOONG YONG (NO. K/P 701012-08-6238) … DEFENDAN-DEFENDAN DIGABUNG DAN DIDENGAR BERSAMA DALAM MAHKAMAH TINGGI MALAYA DI PULAU PINANG DALAM NEGERI PULAU PINANG, MALAYSIA GUAMAN SIVIL NO: PA-22NCVC-122-04/2019 25/02/2025 12:52:42 PA-22NCvC-136-08/2018 Kand. 216 ANTARA TAN LENG KEAT (NO. KAD IDENTITI SINGAPURA S2559559i) [MEMBAWA GUAMAN SEBAGAI WASI DAN PENAKAT TUNGGAL KEPADA HARTA PUSAKA WONG KUAN HOH @ WONG KUAN LAN (NO. K/P: 371127-07-5118) (“SI MATI”) … PLAINTIF
1
TAN JOO LENG
2
OOI YOONG YOONG (NO. K/P 701012-08-6238) … DEFENDAN-DEFENDAN JUDGEMENT [1] These two suits; PA-22NCVC-136-08/2018 and PA-22NCVC-122- 04/2019 were consolidated and heard together. For ease of convenient, the Defendants in both suits will be referred to their names; Tan Yung Quan as D1, See Hong Ngo @ Chee Kwan Fong as D2 in suit PA- 22NCVC-136-08/2018 and Tan Joo Leng as D3 and Ooi Yoong Yoong as D4 in suit PA-22NCVC-122-04/2019. [2] The Plaintiff, is suing the Defendants in his capacity as the executor of his deceased mother Wong Kuan Hoh @ Wong Kuan Lan, (deceased) seeking for a declaratory relief with regard to the validity of the transfer and/or sale of the deceased’s shares in Kayangan Mutiara Sdn Bhd (KMSB) to D1. The Plaintiff claims that the transfer and/or sale of the shares of 335,000 are null and void on the grounds that the deceased had no or insufficient mental capacity at the time of the deceased signing the transfer of the shares in question. Further the Plaintiff claimed that the transfer and/or sale of the shares was procured by means of fraud and/or undue influence. [3] The Plaintiff's prayed inter alia, the return of 335,000 shares which is equivalent to 33.5% owned by the deceased to be transferred back by D1 to the Plaintiff within 14 days from the date of Judgement or alternatively the Defendants to the value of 33.5% shares inclusive of the assets. The Plaintiff has abandoned his claims in para 25 (b) and (c) of his Amended Statement of Claim. B. BACKGROUND OF THE CASE [4] Around early June 2014, Wong Kuan Hoh @ Wong Kuan Lan (the deceased) informed the Plaintiff of his intention and desire to transfer 335,000 shares owned by him (equivalent to 33.5% of the shares of Kayangan Mutiara Sdn Bhd) to the Plaintiff, who is the only biological child of the deceased. On 30th June 2014, the deceased was diagnosed by a medical specialist from KPJ Selangor Specialist Hospital with Dementia Secondary to Alzheimer's Disease. [5] On the morning of 12th September 2014, the Plaintiff instructed his friend, Gan Kheng Chuah, to deliver a letter ("the Letter") signed by the Deceased, which was addressed to the Secretary of the Company. The letter stated the Deceased's intention to transfer all of his shares and directorship to the Plaintiff. [6] On the late morning of 12.09.2024, an Extraordinary General Meeting ('EGM') was held by the board members. At that time, the deceased was still a director and shareholder of the company, but the deceased was not informed about the Extraordinary General Meeting. In this EGM, the deceased was removed as an authorized signatory for all the company's bank accounts and also for the change of the company’s bank account details, without the knowledge or approval of the deceased. After the Extraordinary General Meeting, at around 12:00 pm, after the D4, as the secretary of the company received the letter, D1, D2 and D3, jointly and/or separately, hurried to the deceased's house and, through fraudulent means/undue influence, deceived the deceased into selling all 335,000 of his shares in the company to D1 for the price of RM670,000.00. [7] D1, D2 and D3 then contacted D4 and instructed him to bring all the relevant documents for the purpose of transferring ownership of all the deceased's shares in the company to the first defendant. On the same day, D4 also prepared the documents related to the transfer of shares and rushed to the deceased's house and got the deceased to unlawfully sign several documents for transferring shares ownership. [8] After learning about what happened to the deceased, the Plaintiff, through a letter dated 17.09.2014, informed D4, the secretary of the company, that the deceased was unwell and was still undergoing treatment when signing the documents on 12.09.2014. The Plaintiff requested that D4 not to give effect to the documents that were allegedly signed by the deceased on 12.09.2014. However, D4 ignored the Plaintiff's request and proceeded to register the transfer of the deceased's shares in the company to D1. [9] On or around 17.09.2014, the Plaintiff took action to return a sum of RM200,000.00 to D4. A total amount of RM470,000.00 was also returned by the Plaintiff and the deceased around the end of September. In October and November 2014, the Defendants' lawyers attempted to send a cheque for RM470,000.00 to the deceased, but it was rejected by the deceased. However, around March 2015, under unknown circumstances, RM470,000.00 was suddenly deposited into a different account of the deceased. [10] The Plaintiff alleged that the Defendants, acting together through fraudulent means/undue influence and deception, encouraged and deceived the deceased, who had no mental capacity to enter into any agreement due to his condition of Dementia Secondary to Alzheimer's Disease, into selling his 335,000 shares to D1 at an extremely low price, resulting in severe losses for the deceased. D4 still retains RM200,000.00 out of the RM670,000.00 that is supposedly said to be the sale price of the deceased's shares. [11] The Plaintiff's case is that the Defendants failed to pay the deceased the price of his shares based on the value (conservative value/net tangible assets). The conservative valuation is around RM4.64 per ordinary share for the years 2013 and 2014, which means the conservative value for 335,000 ordinary shares is approximately RM1,554,400. C. PLAINTIFF’S SUBMISSION [12] The deceased did not have any mental capacity on 12.9.2014 to sell and transfer her shares in Kayangan Mutiara Sdn Bhd to D1. In May 2014, the deceased was diagnosed by a medical specialist, PW3, with Dementia Secondary to Alzheimer's Disease. PW3 was subpoenaed to testify as an expert witness. During cross-examination, PW3 firmly stood by his examination and stated that the deceased was suffering from Dementia Secondary to Alzheimer's Disease. The Defendants did not call any expert witnesses to challenge the evidence and testimony provided by PW3. Therefore, the evidence and testimony provided by PW3 are valid and undisputed that the deceased was suffering from Dementia Secondary to Alzheimer's Disease and lacked the mental capacity to make any decisions and/or think rationally. [13] The Plaintiff submitted that when the deceased signed all the documents, the Defendants stood beside the deceased and exert pressure on her. No one who was on the deceased's side was present with her when she signed all the documents brought by D4. After all the documents were signed by the deceased, all the Defendants hurriedly left the deceased's house and never met her again. The deceased also did not have any copies of the documents she had signed on 12.9.2014. The sequence of events clearly proves that the Defendants attempted to unduly influence the deceased through an unexpected visit to her home, which was a further action by the Defendants to deceive the deceased regarding her shareholding, directorship rights, and others. [14] As the deceased did not have any mental capacity on 12.9.2014 to sell and transfer her shares in Kayangan Mutiara Sdn Bhd to D1 and as the deceased was also undue influenced by the Defendants, the transfer of 335,000 shares owned by the deceased to D1 on 12.9.2014 is null and void. D. DEFENDANT’S SUBMISSION [15] In January 2015, the Plaintiff brought a suit in his purported capacity as the deceased’s litigation representative (“the 2015 suit”) against D1, alleging that D1 exercised undue influence over the deceased who was allegedly mentally unsound to sell her shares to him. The plaintiff’s basis in filing the 2015 suit and the present suits are the same except that the allegation of fraud was not raised in the 2015 suit. The 2015 suit was struck out. The plaintiff’s appeal against that decision was also struck out. [16] In December 2018, the Plaintiff filed a suit against KMSB (“the KMSB suit”) in his capacity as the deceased’s executor, for recovery of a sum of RM1,276,714.00 allegedly owed by KMSB to the deceased. The KMSB suit was struck out. The Plaintiff’s appeal against the decision was dismissed. The Plaintiff is now bringing a similar claim as the 2015 suit which has been struck out and therefore is estopped by the principle of res judicata to relitigate his claim herein. [17] The Plaintiff and PW3 (medical expert) are obviously not credible witnesses. The evidence given by them is full of inconsistencies. PW3 is also an unreliable witness and has openly denied the whole of her witness statement and initially declared that she wanted it withdrawn instead later adopted the whole of her witness statement and affixed her signature on it. [18] The Plaintiff’s allegations of undue influence and/or fraud are based on hearsay. The Plaintiff failed to call the most material witness, Ah Kim who also present during the signing to support his case. As admitted by the Plaintiff in his witness statement, he did not witness what happened at the deceased’s residence but Ah Kim did. Ah Kim was the one who had personal knowledge but the plaintiff did not call her to testify for him. Therefore, adverse inference pursuant to Section 114(g) of the Evidence Act 1950 must be invoked against the Plaintiff that if Ah Kim is called to testify, her evidence will not be in the plaintiff’s favour. In any event, the Plaintiff’s failure to call the only alleged eyewitness of the alleged fraud and/or undue influence (all other persons who were present said that there was no fraud or undue influence) is fatal to his case. [19] Based on the above, the Defendant submitted that the Plaintiff has failed to prove his case on a balance of probabilities and the Plaintiff’s claim shall be dismissed with costs. E. ANALYSIS AND DECISION [20] The issues submitted by the parties are as follows: [a] Whether these suits are barred by Res Judicata and/or an abuse of process of the Court? [b] Whether the transfer of 335,000 shares belonging to the deceased in KMSB to the D1 in the on 12.09.2014 was valid or void in fact and/or in law. [c] Whether the transfer of the said 335,000 shares to D1 was conducted in any of the following manner: [i] Made by the deceased without any or any sufficient mental capacity; and/or [ii] Procured by the Defendants by means of fraud and/or undue influence. [21] Firstly, I will deal with the issue of Res Judicata where the Defendants submitted that the Plaintiff is estopped by the principle of res judicata to relitigate his claim on the basis that the Plaintiff has filed a similar claim in 2015 suit. From the Court’s record, it shows that on 21.11.2018, D1 and D2 have filed an application (Enclosure 6) under Order 18 Rule 19 to struck out the Plaintiff’s claims on the reasons, inter alia, that the claim is barred by the doctrine of Res Judicata. On the 22.03.2019, the High Court dismissed the Application. An appeal then was brought before the Court of Appeal No P-02(IM)(NCvC)-670-04/2019 which was also dismissed on the 28.02.2020. Following this position, I find that the issue on res judicata has already been decided and disposed of. [22] Now, the case before me, is essentially revolved around the mental capacity of the deceased. Thus, I am of the view that the main issue to be determined is whether at the material time the deceased has sufficient mental capacity to transfer the 335,000 shares to D1 in consenting to the transfer. [23] It is essential that the deceased understood the nature of her act and its effects of the shares of which she disposing. Here, the deceased must be able to comprehend and appreciate her action of doing so. There must be no disorder of the mind shall poison her affections, pervert her sense of right, or prevent the exercise of her natural faculties - that no insane delusion shall influence her in disposing of the shares of which, if the mind had been sound, she would not have been made. [24] The burden of proof that the deceased had no mental capacity is upon the Plaintiff. This is clear from the reading of Section 103 of the Evidence Act 1950 that the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person. There is a plethora of cases which I do not wish to elaborate upon and it is a settled law that the standard of proof in a civil case is on balance of probabilities. [25] On 30.6.2014 the deceased was diagnosed by an expert Dr Shuguna a/p Mariappan (PW 3), a Consultant Physician and Neurologist, with Dementia Secondary to Alzheimer’s Disease. According to PW3, the deceased had Dementia of moderate severity and needs constant supervision and was unfit to make any major decisions on her own as reflected in PW3’s medical report. I took note of the Defendants submission to challenge the findings of PW3 but the Defendants offer no evidence or provide any expert witness to rebut PW3. With the absence of another expert witness to rebut PW3, I regarded PW3's assessment of the mental capacity as not only confined or limited to understanding of her disabilities but an overall assessment of the deceased mental capacity. PW3's as an independent and expert witness gives clear insight as to the mental capacity of the deceased in her medical report and this was also supported by the testimony of PW1 and PW2 as to the changes in behaviour of the deceased. [26] In Dr Shanmuganathan Periasamy s/o Sithambaram Pillai [1997] 2 CLJ 153; [1997] 3 MLJ 61, the Federal Court held that: "The opinion of expert witness was admissible in evidence and there was no requirement in law that such evidence be corroborated.". [27] The Court of Appeal in Ong Hooi Beng & Ors v. PP [2015] CLJU 63; [2015] LNS 63; [2015] MLJU 22 held that: "In any event expert opinion must be challenged by another expert. The challenge in cross examination if at all of an expert witness is merely to lay the groundwork for the evidence of another expert if called. [28] In Samundee Devan a/l Kerishnan Muthu v. PP [2009] 1 CLJ 498; [2009] 1 MLJ 697 di 709, the Court of Appeal held that: "[19] The value of expert opinions can never be doubted. Expert opinions have a high probative value. Two reasons any be advanced for this. Firstly, an expert witness has the necessary experience in arriving at and justifying his opinion in his specialist field. Secondly, expert opinions can readily be tested against the known facts and the opinion of another expert called by the opposing party in the case. Here, the accused did not call another expert to challenge the evidence of the government chemist. As to the duty of an expert witness, I need only to refer to the case of Davie v. Magistrate of Edinburgh [1953] SC 34 at p 40. There the court had this say: Their duty to furnish the judge or jury with the necessary scientific criteria for testing the accuracy of their conclusions, so as to enable the judge or jury to form their own independent judgment by the application of these criteria to the facts proved in evidence. [29] In Leisure Farm Corporation Sdn Bhd v Kabushiki Kaisha Ngu (Previously known as DAI-ICHI SHOKAI & Ors [2019] MLU 589 where this case refers to expert testimony in an evaluation report that was unchallenged in terms of facts and evidence, as well as the failure to cross-examine the expert witness. “[70] The expert report is not rebutted both on evidence of facts and opinion. There is no conflicting evidence before this Court. There is no indication to cross examine the expert. The ROC provides for avenue for the 1st Defendant to put questions to the expert on the content of the report to which the 1st Defendant has not avail itself to such provision… [71] This Court accepts that there is no challenge to the Plaintiffs affidavit and expert report demonstrating the 1st Defendant's acceptance of the expert's evidence. And as stated in the case of Sakthivel Punithavathi v. PP [2007] 2 SLR 983: [79] The statement in the above is a fact which is unrebutted. The expert was Informed by the Plaintiff of that fact and has given the information on oath. The 1st Defendant has elected not to challenge or dispute that statement of fact by way of an affidavit and as such there is no room to depart from what the expert has acted on or based upon in giving the opinion as to the valuation. [83] This Court is not in the position to substitute its own. views for the uncontested expert's opinion. Even if this Court would want to question the evidence, the content, the credibility, partiality, coherence and to analyze the evidence (Kamdar Sdn Bhd v Bipinchandra a/l Balvatrai & 2 Ors (supra)), based on the established facts, there must be before this Court cross examination or rebuttal to challenge the expert evidence. The Plaintiff's expert affidavit complied with the requirements laid down in O. 40A r. ROC. Accordingly, this Court is satisfied that the Plaintiff's expert has discharged the duty to the Court and it must be taken into account. The expert evidence is uncontroverted and as such it is evidence in support of the assessment herein. [30] The Defendants were aware that in April 2014, KMSB has stopped paying the deceased’s salary due to the fact that the deceased was mentally unstable (blurred). The deceased intended to appoint an alternate director but was declined by the Board of Directors KMSB. On 12.9.2014 during the Board of Director Meeting (BOD), it was decided to terminate the authority given to the deceased as one of the authorised signatories for all the banks account belongs to KMSB due to the mental state of the deceased. [31] It was thus clear to me that the deceased's mental condition was within the knowledge of the Defendants in that the deceased was incapable of making decision and acting on her own in the execution of the transfer of shares. Premised on the testimony of PW3 and her medical reports, I am satisfied that the deceased was unfit to make any major decisions on her own such as the transfer of shares which involved large amount and selling it below market value. With this sufficient proof, I, on the balance of probabilities finds that the Plaintiff has proven that the deceased has no mental capacity as required by the law to consent and let alone to transfer the shares to the D1. [32] Having decided the above, the next issue is whether the shares procured by the Defendants was by means of fraud and/or undue influence. [33] In a civil claim the position is now settled where our apex court had in the case of Sinnaiyah & Sons Sdn Bhd v. Damai Setia Sdn Bhd [2015] 7 CLJ 584 ruled that in civil cases involving proof of fraud or fraudulent conduct, the Plaintiff would need only to prove his case on the balance of probabilities where the Court said at para. 52 as follows: where it was stipulated that at law, there are only two standard of proof, namely beyond reasonable doubt for criminal cases and on the balance of probabilities for civil cases. As such, even if fraud is the subject in a civil claim, the standard of proof is on the balance of probabilities. There is no third standard. Therefore, it is up to the presiding judge, after hearing and considering the evidence adduced as being done in any other civil claim, to find whether the standard of proof has been attained. The criminal aspect of the allegation of fraud and the standard of proof required is irrelevant in the deliberation [52] We therefore reiterate that we agree and accept the rationale in In re B (Children) (supra) that in a civil claim even when fraud is alleged the civil standard of proof, that is, on the balance of probabilities, should apply. And perhaps it is not out of place here to restate the general rule at common law that, "in the absence of a statutory provision to the contrary, proof in civil proceedings of facts amounting to the commission of a crime need only be on a balance of probabilities". (See Boonsom Boonyanit v. Adorna Properties Sdn Bhd [1997] 3 CLJ 17, at p. 32; [1997] 2 MLJ 62, at p. 74). [34] Fraud is defined in s 17 of the Contracts Act as follows: 'Fraud' includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract. [35] Section 14 of the Contract Act 1950 had explained that consent is said to free when its is not cause by among others are undue influence.
Preamble
Whereas "Undue influence" is where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. A person is deemed to be in a position to dominate the will of another when (i) where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or (ii) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress. (see s. 16 of the Contracts Act 1950). [36] The Defendants contended that fraud and/or undue influence are based on hearsay since the Plaintiff was not present on the 12.09.2024 incident and was only informed by his wife who had the information from a third party. In fact, the Plaintiff himself did not witness what happened at the deceased’s residence but only procured a statutory declaration affirmed by one Cheah Ah Kim, a friend of the deceased who lived together and was present on that day. [37] The Plaintiff claimed that there was fraud and/or undue influence during the transfer of share on 12.09.2014 whereby the Plaintiff alleged that D1 and D2 have a dominant position in influencing the deceased because they have a majority control over KMSB. The Defendants’ actions/omission on the 12.09.2012 episode and their actions to exclude the deceased directorship from KMSB has manifested their intention to transfer the shares owned the deceased. Collectively, all the actions were done for personal benefit of D1 and D2 who were the directors and chairman of KMSB respectively and has revealed the abuse of power and their bad intentions to absorb the deceased's rights. [38] In summary the incident on 12.09.2014, begins when the Plaintiff instructed his friend one Gan Kheng Chuah to deliver a letter signed by the deceased to D4. The letter states the deceased’s intention was to transfer all the shares that the deceased owned and directs it to the Plaintiff. On the same day, the BOD of KMSB was held where D1 and D2 were present in the attendance of D4. The deceased was not present since she has stopped working with KMSB since March or April 2014. According to D2, during the BOD, she received a call from the deceased and was told that the Plaintiff had instructed Gan Kheng Chuah to bring the letter to D4. According to D2, the deceased told her not to give effect to the said letter and that the deceased wanted to sell her shares to D2 and eventually to quit KMSB. [39] Immediately after the BOD, D2 went to the deceased’s house to negotiate for the price of the shares. D2 nominated D1 as the purchaser/transferee. On D2’s request, D3 who is an employee and old friend of the deceased, also went to the deceased’s house to witness the signing of documents. Upon negotiation, D2 agreed to purchase the shares at RM670,000.00. [40] D4 prepared and brought the relevant documents to the deceased’s house where the deceased had signed the shares transfer form in favour of D1 and also revoked the deceased’s earlier letter brought by Gan Kheng Chuah. A cheque of RM200,000.00 was given to the deceased on the same day and the balance of the purchase price was to be paid at a later date. However, the cheque of RM200,000.00 was not deposited into the deceased’s account as the Plaintiff refused to accept the payment after having discovered the transfer of shares to D1. The cheque then lapsed, but D1 and/or D2 subsequently deposited the sum of RM200,000.00 with their solicitors who have since held the same as stakeholders pending disposal of these actions. The balance sum of RM470,000.00 was also not accepted by the Plaintiff but later was subsequently bank in to the deceased’s bank account on or around 25 March 2015. [41] Taken in totality the chronology of events and the evidence before me, it is my considered view that an element of undue influence does exists. This is more so after taking into account of the deceased mental state and the conduct of D1 and D2 when they hastily after the BOD went to the deceased house to purchase the shares despite D2 had initial knowledge about the intention of the deceased to transfer the shares to the Plaintiff. D1 and/or D2 at no material time informed the Plaintiff being the deceased son of the new changes of the deceased’s intention since the value of the shares involved a substantial amount. To make matter worst, the transfer was executed in the absence of Plaintiff despite the Defendants knew the initial intention of the deceased. In my view, if D1 and D2 have an honest intention to purchase the shares, they would have informed the Plaintiff and due diligently check the market value of the share’s prior negotiate the purchase for the transfer. On the contrary, D1 and/or D2 did not informed the deceased nor the Plaintiff of the current market value instead continue with the transfer which was said to be under market value. [42] In the light of the suspicious circumstances surrounding the transfer, the D1 and D2 motive is questionable in executing the transfer whom D1 and D2 knew that the deceased was mentally incapable. I further found the circumstances subsequent to the deceased’s transfer equally suspicious as the transfer was only later discovered by the Plaintiff. In this regard, there was no justifiable explanation for the D1 and D2 not to inform the Plaintiff of the transfer of shares. It was thus clear to me that the Defendants had deliberately and wilfully excluded the Plaintiff from any knowledge of the transfer with the sole and clear intent to undue influence the deceased into executing the transfer of shares to the Defendants' exclusive benefit or at the very least to D1. It is my view that D2 and D1 was undoubtedly in a position to dominate authority and possibly assert undue influence over an older woman, the deceased, who had been suffering from mental condition had been surreptitiously led into to execute elaborate documentation. [43] I thus concluded that the Defendant's wilful non-disclosure to the Plaintiff was in bad faith and tampered with undue influence. With the above finding, the burden of proof that there was no undue influence has shifted on the D2 and D1 of which I find that they have failed to discharge the burden. [44] As to fraud, relating to event unfolded, it is my considered view that it may be said to give rise to suspicion, at best. The only witness present during the 12.09.2014 incident, was Cheah Ah Kim but she was not called as witness. The Plaintiff only produced Cheah Ah Kim Statutory Declaration (marked as IDP 10) which was not admitted as evidence since the maker was not called. Although the Plaintiff testified that he was calling Cheah Ah Kim as witness but later he failed to do so. At this juncture, I am of the view that Cheah Ah Kim is a material witness to prove the Plaintiff’s allegation of fraud. Since the Plaintiff has failed to do so, I find that an adverse inference ought to be drawn for the failure to call this material witness as stipulated in Section 114(g) of the Evidence Act 1950. Therefore, I find that fraud is not established, nor may be inferred by reason of the inconclusiveness of the allegations or bare averments made by the Plaintiff. In such circumstances, it is untenable for me now to conclude that fraud has been proven. [45] As to D3 and D4, I am of the view that both of them are not part of playing any substantial or active role or conduct to fraudulently or undue influence the deceased in signing the transfer of shares. From the evidence, it only reveals that D3 was only presence as a witness during the transfer of shares by the deceased to D2 and D1. D4 on the other hand, as a company secretary, was only doing her responsibility to prepare any requirement required by KMSB or its directors. Therefore, I dismiss the Plaintiff claims against D3 and D4 with costs. [46] In the light of the evidence adduced before me and on a balance of probabilities, I thus held at the time of the transfer the deceased was mentally incompetent and lacked of mental capacity to understand the nature of the transfer transaction and its consequences on her interest. D1 and/or D2 have undue influence the deceased in the execution of the transfer which accordingly rendered the deceased's transfer to D1 is ineffective in law, null and void. Accordingly, the Plaintiff's claim for the reliefs prayed in paragraph 25 with amendment by the Court is allowed as follows: [a] Satu Deklarasi bahawa pindahmilik/penjualan saham diantara Simati dan Defendan Pertama, peletakan jawatan Simati, dan penyerahan hak Simati untuk menuntut terhadap Syarikat Kayangan Mutiara Sdn Bhd [285606-M] yang ditandatangani pada 12.9.2014 adalah terbatal dan tidak sah; [b] Satu deklarasi bahawa kedudukan Simati sebagai pengarah Syarikat Kayangan Mutiara Sdn Bhd [285606-M] adalah dikekalkan dan oleh itu, D1 and D2 secara bersesama dan berasingan ("jointly & severally") hendaklah menyebabkan Syarikat Kayangan Mutiara Sdn Bhd [285606-M] membayar semua manfaat-manfaat pengarah yang terhutang dan seharusnya diberikan kepada Simati yang tidak terhad kepada gaji, fi dan elaun pengarah kepada Plaintif dari tahun 2014 sehingga tarikh kematian Si Mati. [c] Satu perintah bahawa D1 dan D2 secara bersesama dan berasingan ("jointly & severally") hendaklah membayar nilai 33.5% saham milik Simati tersebut yang termasuk penilaian aset-aset Syarikat tersebut dalam masa 14 hari kepada Plaintif selepas taksiran disiapkan oleh Juruaudit dan/atau penilai hartanah bebas yang dipersetujui lantikannya oleh kedua-dua pihak di mana fi/bayaran juruaudit dan/atau penilai hartanah bebas yang dilantik atas persetujuan dua-dua pihak adalah ditanggung oleh Defendan Pertama dan Defendan Kedua. [d] Faedah pada kadar 5% dikira daripada tarikh Penghakiman sehingga penyelesaian penuh jumlah penghakiman. [e] Kos RM80,000.00 di bayar oleh D1 dan D2 kepada Plaintiff. [f] Tuntutan keatas D3 dan D4 ditolak. [g] Kos RM20,000.00 dibayar oleh Plaintiff kepada D3 dan D4 setiap seorang. SGD (ROZANA BINTI ALI YUSOFF) Judge High Court Penang Dated on 24th February 2025. Counsel Darren Lai, Wong Zi Ying and Ding Huoy Huoy (Messrs Richard Wee Chambers) for the Plaintiff. YC Wong and Wan Hsiek Eam (Messrs Y.C. Wong) for the Defendants.
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