Toh Hong Hooi v Goh Tat Chuan (JA-22NCC-37-07/2020)

This is a claim by the Plaintiff that 304,990 shares of Otofin Power (Johor) Sdn. Bhd. (“OPJ”) (Second Defendant) that is currently held in the name of the First Defendant (“1st Defendant”) rightfully belong to the Plaintiff. The Plaintiff claimed that the 1st Defendant is holding the said shares on trust for him. [2] After going through the evidence presented during the full trial, having read the parties’ written submissions, and after having heard the oral submissions of the parties, I allowed the Plaintiff’s claim with costs of RM10,000.00 to be paid by the 1st Defendant to the Plaintiff.

Below are the grounds of my decision.

The background facts in this suit are gathered from the cause papers and submissions filed by the parties and stated in chronological order.

The Plaintiff and 1st Defendant are the shareholders and directors of the OPJ.

The OPJ is a private limited company incorporated in Malaysia on 14.3.2000 and his principal business in the trading and rental of heavy machinery, spare parts and other related products. OPJ is only a nominal defendant in the present action.

The subject matter of the Plaintiff’s claim involves 304,990 shares of OPJ that is currently held in the name of the 1st Defendant. In this regard, the Plaintiff’s claim is predicated on the law of trust wherein the Plaintiff is claiming that out of the 479,990 shares that are in the name of the 1st Defendant, 304,990 shares belong to the Plaintiff.

In this action, the Plaintiff sought inter alia, the following reliefs:

a declaration that the Plaintiff is the legal and/or beneficial owner of 304,990 shares of OPJ that is being held on trust by the 1st Defendant; (aa) alternatively, a declaration that the Plaintiff is the legal and/or beneficial owner of 65% of the total shareholding of OPJ;

a declaration that the 1st Defendant had acted in breach of trust and/or duty owed to the Plaintiff;

an order that the 1st Defendant immediately sign and/or execute all necessary documents or do anything necessary to transfer and/or effect the transfer of the OPJ shares to the Plaintiff; and

in the alternative, an order that the Deputy Registrar/Senior Assistant Registrar of the High Court of Malaya be given power and authority to sign and execute all and any documents and/or to act in any way necessary to effect the transfer of the OPJ shares from the 1st Defendant to the Plaintiff. [9] In March 2000, the Plaintiff and one Tan Soo Im (hereinafter referred to as “Tan”) acquired OPJ (it was known as Smilling Empire Sdn. Bhd. at that time). At that material time, OPJ had a total paid up capital of 2 ordinary shares in the following proportion:

Plaintiff : 1 share

(ii) Tan : 1 share Total : 2 shares [10] In October 2002, the paid-up capital of OPJ was increased from 2 shares to 100,000 shares with the allotment of 99,998 shares. The shareholding proportion of OPJ became as follows:

Plaintiff : 60,000 shares

(ii) 1st Defendant : 30,000 shares

(iii) Tan : 10,000 shares Total : 100,000 shares [11] In March 2007, the Plaintiff transferred all of his shares to Tan and the 1st Defendant which resulted in the change in the shareholding proportion as follows:

Plaintiff : -nil-

(ii) 1st Defendant : 80,000 shares

(iii) Tan : 20,000 shares Total : 100,000 shares [12] In November 2009, the 1st Defendant transferred 1 OPJ share to the Plaintiff. [13] In 2011, pursuant to a rights issue exercises, 200,000 new shares were issued and offered to the existing shareholders on the basis of 2 new shares for every existing share held (the “Rights Issues 2011”). However, Tan did not take up any of the rights issues offered to him and his entitlement were taken up by the other shareholders. This has resulted in the change in the shareholding proportion as follows:

Plaintiff : 10 shares

(ii) 1st Defendant : 279,990 shares

(iii) Tan : 20,000 shares Total : 100,000 shares [14] In June 2011, Tan has brought an action against the Plaintiff and OPJ vide High Court Petition No: 26NCC-103-12-2011 (“Petition No.103”). [15] In March 2012, whilst the dispute in Petition No. 103 was ongoing, OPJ had undertaken another rights issue exercise wherein 200,000 new shares were issued and offered to the existing shareholders on a basis of 1 new share for every 1.5 existing share (the “Right Issues 2012”). Tan did not take up his entitlement and the excess new shares were offered and taken up by the other shareholders. Pursuant to the Rights Issues 2012, the shareholding proportion of OPJ became as follows:

Plaintiff : 10 shares

(ii) 1st Defendant : 479,990 shares

(iv) Tan : 20,000 shares Total : 500,000 shares [16] The dispute in the Petition 103 was settled between Tan, the Plaintiff and OPJ by way of consent order dated 7.5.2012 and the parties agreed, inter alia, that—

Tan resign as a director of OPJ;

Tan to transfer his entire 20,000 shares of OPJ to the

the Plaintiff shall pay Tan the sum of RM50,000.00 as a consideration to purchase the said shares from Tan. [17] In June 2013, Tan exited OPJ and transferred all 20,000 OPJ shares to the Plaintiff which resulted in the change in the shareholding proportion as follows:

Plaintiff : 20,010 shares

(ii) 1st Defendant : 479,990 shares Total : 500,000 shares [18] The Plaintiff has paid Tan the sum of RM50,000.00 by way of his personal cheque dated 7.6.2012 (exhibit P3, page 6 of Bundlle B2). [19] In March 2013, pending the completion and performance of the consent order between the Plaintiff and Tan, there was a trust arrangement between the Plaintiff and the 1st Defendant wherein the Plaintiff shall be the legal and beneficial owner of 65% of the total paid-up capital of OPJ and the 1st Defendant holds the remaining 35% (“Trust Arrangement”). [20] In order to achieve the shareholding proportion as envisaged under the Trust Arrangement, 2 undated shares transfer forms in Form 32A of the Companies Act 1965 [Act 125] (“Shares Transfer Form”) and 2 Directors’ Circular Resolutions were executed by the parties as follows:

Form 32A for the transfer of 324,990 OPJ shares from the 1st Defendant to the Plaintiff;

OPJ’s Directors’ Circular Resolution to give effect to the transfer of 324,990 OPJ shares to the Plaintiff;

Form 32A for the transfer of 20,000 OPJ shares from the Plainitff to the 1st Defendant; and

OPJ’s Directors’ Circular Resolution to give effect to the transfer of 20,000 OPJ shares to the 1st Defendant [21] The net effect of the 2 Shares Transfer Forms reflecting the Trust Arrangement is illustrated in the following diagram form: Before Tan’s exit Upon Tan’s exit Net effect of Share Transfer Forms Tan’s shareholding 20,000 - - Plaintiff’s shareholding 10 20,010 325,000 (65%) 1st Defendant’s shareholding 479,990 479,990 175,000 (35%) [22] The dispute arose after the coming into force of the new Companies Act 2016 [Act 777]. After the Act 777 came into force, the prescribed instrument of transfer under section 105 Act 777 replaces the instrument of transfer in Form 32A under Act 125 where there is a requirement for the resolution in writing by directors for the transmission of the company shares. [23] Consequently, the company secretary of OPJ prepared a new set of transfer forms and Directors’ Circular Resolution as envisaged under the Trust Arrangement to be executed by the Plaintiff and the 1st Defendant. However, the 1st Defendant refused to return the signed transfer forms. [24] Then in or around April 2019, the 1st Defendant exercised its voting powers to dispose off 2 semi-detached factories of OPJ which housed the business operation of the company at GRN 459095, Lot 26414 and GRN 459096 Lot 26415 both at Mukim Tebrau, District of Johor Bharu, State of Johor Darul Takzim (the “assets of OPJ”) and such action has transgred the Plaintiff’s rights over the trust shares. [25] Thereafter, the 1st Defendant sought to use the voting powers of the trust shares to appoint himself as the corporate representative of OPJ and also to appoint his brother, one Goh Kim Hock as an additional member of the Board of Directors of OPJ. [26] In July 2019, the Plaintiff has via a letter dated 25.7.2019 to the 1st Defendant objecting the disposal of the assets of OPJ on the reason, among others, that the 1st Defendant is only a trustee for the 304,990 OPJ shares and thus, he has no voting powers over the same. The 1st Defendant did not respond to the Plaintiff’s letter. [27] Due to the conduct of the 1st Defendant, the Plaintiff has instituted the action to enforce his position that he is the beneficial owner of 65% of the total shareholding of OPJ. ISSUES TO BE DETERMINED [28] The issues for the determination of this Court are as follows:

whether the 1st Defendant holds 304,990 OPJ shares on trust for the Plaintiff; and

whether the 1st Defendant had acted in breach of trust. COURT ANALYSIS AND FINDINGS Whether the 1st Defendant holds 304,990 OPJ shares on trust for the Plaintiff [29] In order to determine the issues raised by both parties, I will examine the evidence presented during the trial before me. Evidence of the Plaintiff and the 1st Defendant [30] The Plantiff has, inter alia, informed that he is the chairman of the Board of Directors of OPJ and corporate representative of OPJ in its subsidiary Otofin Power (KL) Sdn. Bhd.(“OPKL”). His role within OPJ to include overseeing the management of OPJ whereas the 1st Defendant was in-charge of its operation. In this regard, the 1st Defendant would seek the business advice of the Plaintiff (PWS-1, Q&A 4). [31] The Plaintiff has given evidence that he has made those payments for the shares in OPJ. He further informed that even though shares of OPJ were registered in the name of Tan and the 1st Defendant, those OPJ shares were meant to be held on trust by them in his favour (PWS-1, Q &A9). [32] According to the Plaintiff, it is not uncommon that he has transferred his OPJ shares to Tan and 1st Defendant. He has quoted the incident happened in March 2007 that he has transferred his entire shareholding in OPJ which is 60,000 shares to Tan and the 1st Defendant respectively. The Plaintiff would ensure that a trust is created over the said shares by requiring the 1st Defendant to pre-sign a share transfer form of 60,000 OPJ shares back to the Plaintiff. The pre-signed shares transfer form for 60,000 OPJ shares would then be kept and held in escrow with the company secretary at that time one Peter Tang Swee Guan of PTP Corporate Services Sdn. Bhd. (PWS-1 Q &A 12). Peter Tang is also Tan’s brother. [33] Despite he has transferred his entire OPJ to Tan and 1st Defendant, he is still remain the shareholders of OPJ. This is admitted by the 1st Defendant during cross-examination [see page 332 of the Notes of Proceedings (“NOP”)]. [34] The Plaintiff further informed that because of the dispute with Tan, he had approached the 1st Defendant and came to an agreement where the Plaintiff shall have ownership and control over 65% of the shares of OPJ and the 1st Defendant shall hold such number of shares on trust for the Plaintiff. Whereas, the 1st Defendant shall hold 35% shareholding in OPJ. The 1st Defendant agreed to the Trust Arrangement because he did not pay any money for the shares of OPJ (PWS1, Q & A 29). [35] The Plaintiff also informed that that on one of the discussions which he had with the 1st Defendant in a meeting at his office on

19.6.2012 (the “said discussion’’) (PWS1, Q &A 30). The said discussion was also attended by Miss Saraswathy (PW2) and another former staff Sylvia Chong Mong Yen (with the nickname of “Natalie”). [36] Subsequent thereto, the Plaintiff gave instructions to OPJ’s company secretary to implement the Trust Agreement and have made reference to a phone conversation between the Plaintiff and Mr. Loh Tin Chee. The Plaintiff’s handwritten note is reproduced as follows: “Dear Mr Loh, Re our Telecom yesterday I am sending Tan Soo Im’s share certificates to you for the necessary actions.

Tan’s shares to be transferred to Goh and me.

After the transfer Goh will hold 35% of the shares while the remaining 65% will be in my name.

Do take note that my 65% shares will be held in trust for me.

Kindly effect the transfer forms for Goh to sign.

Also prepare the necessary undated resolutions pertaining to the sign bac shares.

Any other formalities as may be required. Thank You.’’. [37] The Plaintiff then placed a stamp in red ink with the word “Toh” and the date “04.3.2013”. [38] Following from that, OPJ’s company secretary has prepared the the 2 Shares Transfer Forms and 2 Directors’ Circular Resolutions to give effect to the share transfer. OPJ’s company secretary has on 15.3.2013 forwarded the 2 Shares Transfer Forms and 2 Directors’ Circular Resolutions via email. The 2 Directors’ Circular Resolution was also signed by a former director of OPJ, Chan Chee Khong. Chan Chee Khong was a director of OPJ from August 2009 to 2018. [39] The executed documents were returned to the OPJ’s company secretary to be held in escrow. [40] The 1st Defendant did not deny the Plaintiff has made payment of 30,000 shares that has allotted to him in 2002. However, the 1st Defendant contended that the payment was made to set off the debt of RM45,000.00 owed by the Plaintiff to him (paragraph 8 at page 37 of the Bundle of Pleadings). [41] However, during the trial, the 1st Defendant informed that the payment of RM45,000.00 was a bonus wherein RM15,000.00 was paid to him in cash by the Plaintiff and RM30,000.00 was paid via the allotment of the 30,000 OPJ shares. The 1st Defendant explained that the Plaintiff owed him the sum RM45,000.00 being the profit made by OPJ and bonus was given to encourage him to work harder for OPJ [pages 293-294 and 301-302 of the NOP]. [42] The 1st Defendant claimed the payment of the subscription of Rights Issues 2011 and Rights Issues 2012 of RM200,000.00 respectively were made via bonus entitlement. Court analysis and findings [43] From the evidence presented, it can be summarized that that it is the Plaintiff’s case that the 1st Defendant holds 304,990 OPJ shares on trust for the Plaintiff. However, the 1st Defendant argued that the Plaintiff was not entitled to his claim as there was not a shred of documentary evidence with the word “trust”or “trustee” written on it to support his claim and that the Plaintiff was simply making a bare claim whose oral evidence in Court was inherently unbelievable. [44] The 1st Defendant contended that there was no trust in existence or any agreement for the creation of any trust by the 1st Defendant in favour of the Plaintiff and the 1st Defendant is the beneficial owner of nearly 96% shareholding of the OPJ. [45] The 1st Defendant argued that it was quite impossible for the Plaintiff, who was a very meticulous man, not to have prepared a deed of trust or at least a confirmation letter for the 1st Defendant to confirm the alleged Trust Arrangement if it was true. [46] The 1st Defendant further argued that there was no reason for the Plaintiff to have to ask the 1st Defendant and Tan to hold some shares in the OPJ on trust for him as it was not a case where the Plaintiff was a resident overseas or that the Plaintiff was a foreigner prohibited from being a shareholder in Malaysia. Therefore, there was never any impediment to the Plaintiff being registered as a shareholder in the OPJ and thus gives the logical conclusion that the Plaintiff owns the shares registered in his name only. [47] Further, the 1st Defendant contended that the Plaintiff was appointed as the corporate representative of the OPJ in its subsidiary company, namely Otofin Power (KL) Sdn. Bhd. (“OPKL”) has acted in breach of his fiduciary duties to protect its investment in OPKL because he had, instead of performing his fiduciary duties, wrongfully commited acts which are in conflict of interest and detrimental to OPKL and the OPJ, for example, arranging for his own company to enter default judgment against OPKL. [48] The 1st Defendant submits that the Plaintiff bears the burden of proof under subsection 101(1) of the Evidence Act 1950 [Act 56] to prove his claim against the Defendants but had failed to prove that there indeed, had been shares held on trust by the 1st Defendant on behalf of the Plaintiff. [49] The 1st Defendant submits that the Plaintiff had failed to discharge that burden on a balance of probabilities. [50] However, I find from the evidence presented, it is clear as day that the Plaintiff has been the person who made payment for the purchase of the shares of OPJ since the incorporation of the OPJ. The Plaintiff has been the sole provider who paid for the shares of OPJ as evidenced through the various documents produced before the Court as below:

in relation to the allotment of new OPJ shares in 2002, a cheque deposit slip for Citibank cheque no. 899124 in the amount of RM99,998.00 (page 8 of Bundle A2);

in relation to the Rights Issues 2011, 2 Public Bank Berhad banker’s cheque for RM159,998.00 and RM40,000.00 together with 2 Remittance Application Forms dated 11.4.2011 for the same amounts. The Plaintiff is the applicant who had signed the said 2 Remittance Application Forms (pages 19, 21 of Bundle A2 and pages 6-9 of Bundle A3);

a deposit slip for the sum of RM2.00 dated 13.4.2011 to make up the balance for the Rights Issues 2011 (page 23 of Bundle A2);

in relation to the Rights Issues 2012, a Citibank Berhad banker’s cheque for RM150,000.00 together with a form for the Application for Funds Transfer dated 20.3.2012 of the same amount. The Plaintiff is the applicant who had signed the Citibank form for the Application for Funds Transfer (page 34 of Bundle A2); and

in relation to the Rights Issues 2012, a Malayan Banking Berhad Banker’s cheque for RM50,000.00 together with a form for Application for Remittance dated 20.3.2012 of the same amount. The Plaintiff is the applicant who had signed the Maybank form for the Application for Remittance (pages 35-36 of Bundle A2 and pages10-11 of Bundle A3). [51] I further find that the evidence of the Plaintiff that in relation to the said discussion are supported by the following contemporaneous documents:

prior to the meeting, a note was prepared by PW2 outlining the historical movements of OPJ shares, cancellation and replacement of share certificates and rights issues from the first share certificate until mid- 2012 (Exhibit P6 in pages 6-8 of Bundle B2 and PWS1, Q&A 31);

the Plaintiff wrote on the note, a message to PW2 asking PW2 to discuss the matter with her and Miss Sylvia. The Plaintiff placed a stamp in red ink with the date “18.6.2012”;

the Plaintiff wrote in blue, the outcome of the discussion with reference to the Plaintiff having 65% and the 1st Defendant having 35% (Exhibit P6 in page 6 of Bundle B2) as follows: “10 to be in MT’s name. The rest to be held in trust Form 32A to be signed. Missing cert for 50k to be replaced signed by Goh on 19/6”. [52] The evidence of the Plaintiff on the said discussion on 19.6.2012 was corroborated by PW2 who is the an employee of the Plaintiff and had known the Plaintiff and the 1st Defendant. PW2 informed that—

she has prepared and printed the document at Exhibit P6, (pages 6-8 pages 6-8 of Bundle B2) on the instructions of the Plaintiff;

Exhibit P6 was prepared for the Plaintiff, who at that material time, wanted to have a discussion with the 1st Defendant to achieve an understanding that the shares of OPJ will be held by the 1st Defendant on his behalf (PWS2, Q&A15); and

in the said discussion on 19.6.2012,it was agreed that the Plaintiff shall own 65% OPJ shares and the 1st Defendant shall own the remaining 35% OPJ shares (PWS2, Q &A15);

upon received the 2 Shares Transfer Forms and 2 Directors’ Circular on 15.3.2013, she has handed to the 1st Defendant for his execution; and

the 2 pre-signed Shares Transfer Forms were prepared to achieve the net effect envisaged under the Trust Arrangement of 65%: 35% shareholding proportion between the Plaintiff and the 1st Defendant (PWS2, Q&A 16). [53] Futher, the evidence of the PW3 also corroborated the evidence of the Plaintiff on the instruction given by the Plaintiff on 4.3.2013 and has taken the following action upon received the Plaintiff’s instruction:

she has prepared the necessary forms and documents to reflect the Trust Arrangement between the Plaintiff and the 1st Defendant and also in anticipation of the transfer of Tan’s 20,000 OPJ shares. She had made a handwritten note dated 4.3.2013 to memorialise what has to be done;

she has produced the original handwritten note (Exhibit P15, page 14 of Bundle A5) during trial, where it was stated the following on the top half:

Tan Soo Im (initialised as TSI) to transfer 20,000 to the 1st Defendant (initialised as GTC);

(ii) to prepare directors’ circular resolution and Form 32A to transfer 324,990 OPJ shares to the Plaintiff;

(iii) to issue new share certificates to reflect the 35%:65% shareholding arrangement between the 1st Defendant and the Plaintiff;

in the second half of her handwritten note (Exhibit P15, page 14 of Bundle A5), she has stated an alternative scenario that is with Tan transferring his 20,000 OPJ shares to the Plaintiff and the Plaintiff to then transfer 20,000 OPJ shares to the 1st Defendant by way of a cross-transfer of shares;

both scenarios would achieve the same outcome as anticipated in the Trust Arrangement of 65%:35% shareholding between the Plaintiff and the 1st Defendant;

she has kept the handwritten note (Exhibit P15, page14 of Bundle A5) in the company’s secretarial file since then (PWS3, Q&A19);

she kept the 2 Shares Transfer Forms and 2 Directors’ Circular Resolutions in the secretarial file (PWS2, Q&A26) after receiving them;

she has explained the processes to effect the transfer and registration of the transfer of shares in the private limited company, inter alia, that where the transfer form will be pre-signed with the director’s circular to authorize the registrasion of shares and once there is an instruction to proceed with the transfer, the transfer form will then submitted for adjudication of stamp duty in the stamp office and thereafter the company secretary will register the transfer in the Register of Member of the company; and

it is common for the parties to formalize Trust Arrangement over shares by pre-signing share transfer form and without deed of trust. [54] Subsequent thereto, 2 Shares Transfer Forms and 2 Directors’ Circular Resolutions are prepared as follows: i. Tan to transfer 20,000 OPJ shares to the Plaintiff; ii. 324,990 OPJ shares to be transferred by the 1st Defendant to the Plaintiff (page 45 of Bundle A2); and ii. thereafter 20,000 OPJ shares to be transferred by the Plaintiff to the 1st Defendant (page 47 of Bundle A2). [55] I find the fact on the execution of 2 Shares Transfer Forms and 2 Directors’ Circular was not disputed by the 1st Defendant. However, the 1st Defendant argued that the purpose of the pre-signed transfer form was to sell 70% of his shares in OPJ to Sime Darby Bhd. Later on, during the trial, the 1st Defendant changed it to a subsidiary of the Sime Darby. The evidence of the 1st Defendant was not supported by any documentary evidence. I further find the total shares of 324,990 OPJ shares as stated in the 2 Shares Transfer did not amount to 70% of the total shareholding of OPJ. This has been admitted by the 1st Defendant during the cross-examination (page 341 of the NOP). [56] Further, I find that the Plaintiff has proved the Trust Arrangement by the producing the handwritten note dated 4.3.2013 (Exhibit P7, page 9 of Bundle B2, PWS1 QA32). The Plaintiff’s handwritten note was prepared after the Plaintiff had received the share transfer forms for Tan’s 20,000 shares pursuant to the consent order from his then solicitors Messrs Thomas Philip in late February 2013. The handwritten note was address to Mr. Loh Tin Chee who is the director of Beaucorp Management Sdn. Bhd. [57] In contrast, the evidence of the 1st Defendant is a bare assertion without any documentary prove. The 1st Defendant failed to produce any documentary evidence to prove that he has paid for the Rights Issues 2011 and Rights Issues 2012 except bare denial. The 1st Defendant has admitted during cross-examination that he did make any payment of the subscription of of the Rights Issues 2011 and Rights Issues 2012 (pages 291-292 of NOP), but contended RM200,000.00 for the respective Rights Issues 2011 and Rights Issues 2012 were paid through bonus entitilement. [58] The 1st Defendant has failed to provide the particulars as to events that lead to the payment of RM45,000.00 by the Plaintiff to the 1st Defendant and also the payment of RM200,000.00 for the Rights Issues 2011 and the Rights Issues 2012 respectively via bonus entitlement. If the allegation is true, the 1st Defendant would have able to produce those particulars or produce an documentary evidence in Court to prove the same. [59] I further find the 1st Defendant’s arguments on the payment of the shares were refuted by the voluminous payment slips produced by the Plaintiff during trial in Bundle A2, pages 8, 19, 21, 23-36 and Bundle A3, pages 6-11. [60] The 1st Defendant has kept changing his line of defence from the bare denial to the defence, in particular as to the entitilement of bonus paid through the allotment of the shares by the Plaintiff. It has cleary departed from the pleadings and it was an afterthought. [61] Upon examining the financial statement of OPJ for the year ending 31.3.2003, I noted the profit made by OPJ was only RM2,972.00 (page 158 of Bundle A2). Apart from that, it is observed that none of the directors had acquired benefits by means of acquisition of shares of the company (page 159 of Bundle A2). Hence, it is impossible that OPJ would pay him the bonus of RM45,000.00. If the allegation is true, the payment should be from OPJ and not from the Plaintiff [62] I further find the evidence of the 1st Defendant that the Plaintiff had been acting against the interst of OPJ where the Plaintiff via his company, Gift of the Sun Sdn. Bhd. has entered the jugement in default entered against the OPKL and garnished the bank account of OPKL has no bearing and not relevant in the case against the 1st Defendant. [63] Upon perusing the documentary and financial evidence, it clearly depicts that at all material times, it had been the Plaintiff making the necessary payments to purchase the OPJ shares and, in connection to those payments, the oral testimony of the Plaintiff shows that even though shares of OPJ were registered in the name of Tan and the 1st Defendant, those OPJ shares were at all times, meant to be held on trust by them in his favour. [64] Further, the Plaintiff informed that every single time the Plaintiff transferred his OPJ’s shares to Tan or the 1st Defendant, Tan or the 1st Defendant would pre-sign a share transfer form for the shares to be transferred back to the Plaintiff and the pre-signed share transfer form would then be kept and held in escrow with the Company Secretary. [65] Therefore, based on the evidence produced in Court, I rule that the Plaintiff is the person funding OPJ. The 1st Defendant is merely a salaried director of OPJ holding OPJ shares on behalf of the Plaintiff as per the terms as directed by the Plaintiff. The 1st Defendant was in charge of the day-to day operation of OPJ and the final decision making power resides with the Plaintiff and all statutory forms and documents of OPJ would still be signed by the Plaintiff on behalf of the Board. [66] At every step of the way, the 1st Defendant had pre-signed shares transfer forms for the shares held under his name on trust to be transferred back to the Plaintiff. The pre-signed shares transfer forms were kept and held in escrow by the then company secretary. [67] Based on the above, the Plaintiff is entitled to his claim for 65% of the total shareholding of OPJ. [68] In this regard, I am guided by the Federal Court’s decision in the case of Takako Sakao (f) v Ng Pek Yuen (f) & Anor [2009] 6 MLJ 751 where the concept of resulting trust and constructive trust was explained as follows: “…The device of a resulting trust was invented by the Court of Chancery to give effect to the implied intention of parties in relation to the acquisition and disposal of moveable or immovable property. SeeWestdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, where Lord Browne-Wilkinson said: Under existing law a resulting trust arises in two sets of circumstances:

(A) where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, there is a presumption that A did not intend to make a gift to B: the money or property is held on trust for A (if he is the sole provider of the money) or in the case of a joint purchase by A and B in shares proportionate to their contributions. It is important to stress that this is only a presumption, which presumption is easily rebutted either by the counter-presumption of advancement or by direct evidence of A’s intention to make an outright transfer: see Underhill and Hayton, Law of Trusts and Trustees at pp 317 et seq; Vandervell v Inland Revenue Commissioners [1967] 2 AC 291 at pp 312 et seq; In re Vandervell’s Trusts (No 2) [1974] Ch 269 at pp 288 et seq. (B) Where A transfers property to B on express trusts, but the trusts declared do not exhaust the whole beneficial interest: ibid and Quistclose Investments Ltd v Rolls Razor Ltd (In Liquidation) [1970] AC 567. Both types of resulting trust are traditionally regarded as examples of trusts giving effect to the common intention of the parties. A resulting trust is not imposed by law against the intentions of the trustee (as is a constructive trust) but gives effect to his presumed intention. [Emphasis added] [69] I further refer to the Court of Appeal case of Wong Kim Cheng v Aidil Fahmy bin Zainal Abedin & Ors [2014] 2 MLJ 63 bear striking similarities to the case at hand and it was held as such in that case— “…[15] We have examined the evidence and we are satisfied that, from the evidence adduced, the plaintiff (PW1) (Mdm Wong Kim Cheng) has succeeded in establishing on a balance of probabilities that the 390,000 shares in question are hers and that the first defendant held the shares on trust for her benefit; and that the first defendant, in breach of that trust, had fraudulently or dishonestly transferred the shares to the second, third and fourth defendants; the transfer facilitated by the professional negligence of the fifth defendant, the company secretary. [16] We hold that there is a resulting trust relationship between the plaintiff and the first defendant in relation to the 390,000; the first defendant being the trustee, and the plaintiff, the beneficiary. … [30] According to the evidence of PW2, the first defendant had pre-signed blank transfer forms, namely, Forms 32A, in relation to the 390,000 shares; and the forms were kept in escrow with the company secretary, Norvic..”. [Emphasis added] [70] I also refer to the recent Court of Appeal case of Chong Chee Piao & Ors v Koh Wah Leong (as Chairman of Pertubuhan Penganut-Penganut Ting Leong Keng Lee Hu Tong Chu, Pantai Remis, Manjong, Perak) [2023] 2 MLJ 229 where it was held as such in that case— “…[32] We find merit in the submission of counsel for the respondent that in the case of implied and constructive trust as opposed to an express trust, the element of intention to create a trust on the part of the testator is not essential. It is a trust that is imposed by the law to prevent unfairness or injustice. In the recent case of Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67; [2020] 10 CLJ 1, Zabariah Mohd Yusof FCJ at the Federal Court said as follows about the irrelevance of intention in a finding of constructive trust: [111] It is trite law that the intention to create a trust is applicable in situation of express trusts and not in constructive trusts. Constructive trust are trusts that may be implied in the absence of any declaration/intention of a trust, where the trustee has induced another to act to their detriment they would acquire a beneficial interest in the land/property. A characteristic feature of this trust does not owe its existence to the parties’ intention, but by operation of law. In Takako Sakao v Ng Pek Yuen [2009] 6 MLJ 751; [2010] 1 CLJ 381, it was held that: A constructive trust is imposed by law irrespective of the intention of the parties. And it is imposed only in certain circumstances, eg where there is dishonest, unconscionable or fraudulent conduct in the acquisition of property. What equity does in those circumstances is to fasten upon the conscience of the holder of the property a trust in favour of another in respect of the whole or part thereof. [112] Constructive trust is viewed as a device under which equity will intervene so as to create a trust relationship between the parties in order to make a person accountable for the trust to prevent any unfairness or injustice. Equity will impose obligation on the defendant to hold the property for the benefit of another. (Emphasis added.) [33] In the earlier case of Perbadanan Kemajuan Pertanian Selangor v JW Properties Sdn Bhd [2017] MLJU 1107; [2017] 8 CLJ 392, the Federal Court also emphasised the principle that constructive trust is a trust imposed by equity in order to satisfy the demands of justice and good conscience without reference to intention of the parties. Zulkefli Ahmad Makinudin PCA who delivered the decision of the court said as follows: [59] It has also been held that a constructive trust is a trust which is imposed by equity in order to satisfy the demands of justice and good conscience without reference to any express or presumed intention of the parties (see the case of Hassan Kadir & Ors v Mohamed Moidu Mohamed & Anor [2011] MLJU 1556; [2011] 5 CLJ 136 (FC)). A constructive trust is a remedial device that is employed to prevent unjust enrichment. It has the effect of taking the title to the property from one person whose title unjustly enriches him, and transferring it to another who has been unjustly deprived of it (see the case of Tay Choo Foo v Tengku Mohd Saad Tengku Mansur & Ors. And Another Appeal [2009] 1 MLJ 289; [2009] 2 CLJ 363 CA). [34] Thus, a written document evidencing the existence of a trust is also unnecessary..” [Emphasis added] [71] Based the the abovementioned authorities and upon perusing the documentary and financial evidence, I find that although there is no trust deed or any document to prove the existence of trust, the 2 pre-signed Shares Transfer Forms and 2 Directors’ Circular Resolutions evidenced the intention of the Plaintiff and the 1st Defendant to have Trust Arrangement wherein it was agreed that the Plaintiff shall be the legal and beneficial owner of 65% of the total paid up capital of OPJ and the 1st Defendant holds the remaining 35%. [72] Therefore, I am of the considered view that the 2 Shares Transfer Forms and 2 Directors’ Circular Resolutions issued are valid and binding on the 1st Defendant. [73] I am further guided by the case of Datuk M Kayveas v See Hong Chen & Sons Sdn. Bhd. & Ors [2014] 4 MLJ 64 where the Federal Court decided that— “From the various opinions above it may be construed that a constructive trust arises by operation of law irrespective of the intention of the parties, in circumstances where the trustee acquires property for the benefit of the beneficiary, and making it unconscionable for him to assert his own beneficial interest in the property and deny the beneficial interest of another. Being bereft of any beneficial interest, and with equity fastened upon his conscience, he cannot transfer any interest to himself let alone a third party. If he does, then a constructive trust comes into existence. An aggrieved party, by equitable remedy, may demand restitution of the property if he has been deprived of his beneficial interest. On the issue of restitution, Lord Denning MR in Hussey v Palmer [1972] 3 All ER 744 had occasion to say at p 747: Although the plaintiff alleged that there was a resulting trust, I should have thought that the trust in this case, if there was one, was more in the nature of a constructive trust … By whatever name it is described, it is a trust imposed by law whenever justice and good conscience require it. It is a liberal process, founded on large principles of equity, to be applied in cases where the defendant cannot conscientiously keep the property for himself alone, but ought to allow another to have the property or a share in it. The trust may arise at the outset when the property is acquired, or later on, as the circumstances may require. It is an equitable remedy by which the court can enable an aggrieved party to obtain restitution..”. [Emphasis added] [74] In the present case, there is no consideration paid by the 1st Defendant for the 304,990 shares in OPJ. He is not a bona fide purchaser for value of the OPJ shares as there has been no documentary evidence produced before this Court to show that the 1st Defendant had made any payment whatsoever to purchase the OPJ shares. The inadequacy of consideration made it abundantly clear there is a presumption of a Trust Arrangement, a presumption which is not rebutted on the evidence before this Court. [75] Therefore, based on the foregoing authorities, it would be unfair and unjust for the 1st Defendant to enrich himself by keeping the 304,990 shares. It would be unconscionable to allow the 1st Defendant to keep the 304,990 shares in OPJ since the facts and evidence show that the 304,990 OPJ shares are meant to be held on behalf of the Plaintiff. [76] The ingredients of a Trust Arrangement are found on the facts since the 304,990 OPJ shares are being held in circumstances where it would be inequitable to allow the 1st Defendant to defeat the Plaintiff’s claim. The circumstances are the fact that the Plaintiff used his own money to purchase the shares but transferred the shares to the 1st Defendant and Tan on the Plaintiff’s own instruction and terms. There is an understanding that the 304,990 OPJ shares belong to the Plaintiff and this is fortified by the various documents produced during trial. Whether the 1st Defendant had acted in breach of trust [77] I find that it has been established, on a balance of probabilities that the 1st Defendant held 304,990 OPJ shares on trust for the Plaintiff and thus, it is unconscionable for the 1st Defendant to retain and to exercise rights over the trust shares when the 1st Defendant was tried to dispose off the assests of OPJ and to appoint himself as the corporate representative of OPJ and also to appoint his brother, one Goh Kim Hock as an additional member of the Board of Directors of OPJ. [78] Therefore, I rule that the 1st Defendant had acted in breach of trust when he refused to transfer back the 304,990 OPJ shares to the Plaintiff. Other Issues Whether the Parties are allowed to raise issues not pleaded in their pleadings [79] The Defendant argued that the shares were paid by him through his bonus entitlement and that fact was not pleaded in the Defendant’s Statement of Defence (“SOD”). [80] Upon perusing the Defence of the 1st Defendant, I found that it had not been raised by the Defendant at any point until cross-examination during trial. [81] I am guided by principles enunciated in the case of Cheong Heng Loong Goldsmiths (Kl) Sdn Bhd & Anor v Capital Insurance Bhd And Another Appeal [2004] 1 MLJ 353 where the Court of Appeal stated the followings: “..19. Now, it is a cardinal rule of pleading that a defendant to an action for breach of duty — whether in contract or tort — may properly deny liability and require the plaintiff to prove his or her claim. But once a defendant takes that course, he must stand or fall on his pleaded case. He cannot simultaneously put forward an unpleaded case of justification for his conduct…

Unfortunately, this is precisely the rule that the respondent breached in this case. The respondent before us, in its statement of defence, denied liability and put the appellant to strict proof of its claim that there had been a robbery. There was no plea of an affirmative case, namely, the breach of policy condition 6. It was therefore manifestly not open at trial for the respondent to pursue an unpleaded affirmative case alleging a breach of condition 6 and to succeed on that unpleaded case. Our courts have made this point clear in many decisions…”. [Emphasis added] [82] In this regard, I rule that the Defendant is not allowed to raise the arguments that he paid for the shares through his bonus entitlement as it was not pleaded in the Defendant’s SOD. [83] I further rule although the issue of resulting trust or constructive trust was not raised in the Plaintiff’s Statement of Claim and was only raised in the Plaintiff’s submission, is accepted by this Court as it was ruled in the case of Wong Kim Cheng v Aidil Fahmy bin Zainal Abedin & Ors (supra) and Chong Chee Piao & Ors v Koh Wah Leong (as Chairman of Pertubuhan Penganut-Penganut Ting Leong Keng Lee Hu Tong Chu, Pantai Remis, Manjong, Perak)(supra) that the constructive trust or resulting trust can be implied from the evidence presented even lack of intention or any trust deed, to prevent injustice or unfairness. Conclusion [84] In the present case, I find the 1st Defendant lacked good faith and his argument that the shares were not held on trust for the Plaintiff was not supported by any contemporeneous documents and hence I stand guided by the Court of Appeal case of Wong Kim Cheng v Aidil Fahmy bin Zainal Abedin & Ors (supra). [85] Based on the abovementioned, I allowed the Plaintiff’s claim against the 1st Defendant and gave the following orders:

a declaration that the Plaintiff is the legal and/or beneficial owner of 65% of the total shareholding of the OPJ;

a declaration that the 1st Defendant had acted in breach of trust and/or duty owed to the Plaintiff;

an order that the 1st Defendant immediately sign and/or execute all necessary documents and/or do anything necessary to transfer and/or effect the transfer of 304,990 shares of the OPJ from the 1st

an order that the Deputy Registrar/Senior Assistant Registrar of the High Court of Malaya be given power and authority to sign and execute all and any documents and/or to act in any way necessary to effect the transfer of 304,990 shares of the OPJ from the 1st Defendant to the Plaintiff; and

a permanent injunction to prevent and/or restrain the 1st Defendant, whether by himself and/or through his agents and/or employees and/or nominees, and/or any other individuals or persons from exercising any power and/or rights including voting rights and rights of disposal over the 304,990 shares of the OPJ held on trust by the 1st Defendant on behalf of the Plaintiff. [86] I further allowed the Plaintiff’s claim against the 2nd Defendant, OPJ and gave the following orders:

an order that the OPJ do all things necessary to transfer and/or effect the transfer of the 304,990 shares of the OPJ from the 1st Defendant to the Plaintiff, including to sign and execute all and any documents and/or to act in any way necessary to effect the transfer of the OPJ shares to the Plaintiff; and

a permanent injunction to prevent and/or restrain the OPJ, whether by itself and/or through its agents and/or employees and/or nominees, and/or any other individuals from acting upon any resolution or proposed resolution made in connection with 304,990 shares of the OPJ held by the 1st Defendant until the transfer of the 304,990 shares from the 1st Defendant to the Plaintiff. [87] I also held that the injuction is to be in force from the date of the judgment until the shares were transferred by the Defendants to the Plaintiff. I further awarded costs of RM 10,000.00 to be paid by the Defendants to the Plaintiff. Dated 12 December 2024 Signed by: ………………….. Wong Mee Ling Judge High Court of Malaya Johor Bahru Johor Darul Ta’zim. Counsel/Solicitor: For the Plaintiff Mr. Leong Sher How Messrs Leong & Partners C4-3A-3A, Solaris Dutamas No. 1, Jalan Dutamas 1 50480 Kuala Lumpur. For the Defendants Mr. T Gan Messrs Gan & Lim No. 39, Jalan Tan Hiok Nee 80000 Johor Bahru, Johor. Cases referred to:

Takako Sakao (f) v Ng Pek Yuen (f) & Anor [2009] 6 MLJ 751

Wong Kim Cheng v Aidil Fahmy bin Zainal Abedin & Ors [2014] 2

Chong Chee Piao & Ors v Koh Wah Leong (as Chairman of Pertubuhan Penganut-Penganut Ting Leong Keng Lee Hu Tong Chu, Pantai Remis, Manjong, Perak) [2023] 2 MLJ 229

Datuk M Kayveas v See Hong Chen & Sons Sdn Bhd & Ors [2014]

Cheong Heng Loong Goldsmiths (Kl) Sdn Bhd & Anor v Capital Insurance Bhd And Another Appeal [2004] 1 MLJ 353 Legislation referred to:

Evidence Act 1950 [Act 56]

Companies Act 1965 [Act 125]