Trutz Bernhard Winter v Ong Kim Beng (WA-12BNCvC-133-11/2024)

This is an appeal by the Appellant, Trutz Bernhard Winter, against the decision of the learned Sessions Court Judge, delivered on 22 October 2024 in Civil Suit No. WA-B52NCC- 461-07/2021. 30/12/2025 16:47:50

The Sessions Court had allowed the Respondent, Ong Kim Beng’s alternative claim founded on unjust enrichment, dismissed the Appellant’s counterclaim, and made the following orders:

A declaration that the Appellant had been unjustly enriched in the sum of RM401,270.73;

An order directing the Appellant to refund the said sum to the Respondent;

Interest at 5% per annum on the said sum from the date of filing until full and final settlement; and

Costs of RM10,000 to the Respondent;

The Appellant’s counterclaim was dismissed with costs of RM10,000 to the Respondent. Dissatisfied with that decision, the Appellant filed a Notice of Appeal dated 4 November 2024, followed by a Memorandum of Appeal dated 4 December 2024, raising twelve (12) principal grounds.

In essence, the Appellant contends that the learned Sessions Court Judge erred in law and in fact by:

Misapplying the doctrine of unjust enrichment where the parties’ relationship was governed by a structured commercial arrangement;

Erroneously invoking subsection 44(2) of the Contracts Act 1950 (“CA 1950”) to impose equal liability; and

Failing to give proper weight to the parties’ longstanding course of dealings and shareholding arrangement reflecting a 71:29 liability structure through the companies known as Triton Equity Sdn Bhd (“TESB”) and the Four Hotel Room Floors Companies (“4HRF”). B. BRIEF BACKGROUND FACTS

The Appellant, a Swiss national, and the Respondent, a Malaysian businessman, were joint venture partners in a hospitality investment scheme centred on Empire Damansara, Petaling Jaya. They jointly incorporated TESB to manage operations of the hotel, and they were also shareholders and directors in several related companies collectively referred to as the 4HRF Companies, which owned six (6) floors of hotel units in the said building.

To finance the acquisition and operation of those hotel floors, the parties jointly obtained several loan facilities from financial institutions, securing them by personal guarantees and charges over the property units.

Between 2018 and 2021, the Respondent alleged that he made repayments towards those loan facilities amounting to RM802,541.45, which included the Appellant’s supposed share of the liability. On that basis, the Respondent sought reimbursement of half that sum, RM401,270.73, arguing that the Appellant had been unjustly enriched by the Respondent’s payments.

The Appellant’s position, on the other hand, is that all payments and obligations under the loan facilities were made and apportioned according to a pre-existing commercial structure, under which the Respondent held 71% of the shares and the Appellant 29%. The financial arrangements, including repayment of loans and distribution of Guaranteed Rental Returns (GRR), were at all times implemented strictly in accordance with that ratio. Hence, there was no gratuitous payment or unjust benefit as alleged; any payment made by the Respondent was part of the ongoing contractual and business framework.

The Appellant further submits that the learned Sessions Court Judge erred in invoking subsection 44(2) of the CA 1950, which merely creates a rebuttable presumption of equal liability in the absence of an express or implied agreement to the contrary. The evidence, it is said, clearly established an agreed 71:29 apportionment between the parties, supported by years of conduct and documentary correspondence.

The Respondent, moreover, failed to particularise the alleged unjust enrichment, providing no detailed breakdown of the sums said to have been paid, nor any causal connection between those payments and the benefit supposedly received by the Appellant.

Against this factual and procedural backdrop, the central task of this Court is to determine whether the learned Sessions Court

Misapprehended or misapplied the law relating to unjust enrichment;

Erred in imposing joint and equal liability under section 44 of the CA 1950;

Failed to appreciate the legal effect of the parties’ long-standing commercial arrangement and conduct; and

Erred in rejecting the Appellant’s counterclaim notwithstanding evidence of personal injections of funds into the venture companies.

The issues arising in this appeal are therefore primarily legal in nature, though grounded in a complex matrix of commercial facts. In determining this appeal, the Court must consider whether there has been a misdirection in law, a misapprehension of material facts, or findings that are plainly against the weight of the evidence, thereby warranting appellate intervention in accordance with the principles laid down in Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1 and China Airlines Ltd v Maltran Air Corp Sdn Bhd [1996] 3 CLJ 163. C. ISSUES FOR DETERMINATION AND APPLICABLE LEGAL

Having reviewed the Record of Appeal, the parties’ written submissions, and the authorities cited therein, this Court considers that the following issues arise for determination in this appeal:

Whether the learned Sessions Court Judge erred in law and in fact in finding that the Respondent had successfully established a claim of unjust enrichment against the Appellant for the sum of RM401,270.73.

Whether the learned Judge erred in applying subsection 44(2) of the CA 1950 to impose equal liability between the parties in respect of the loan repayments, notwithstanding the existence of a structured commercial arrangement premised on a 71:29 shareholding ratio.

Whether the Respondent’s pleadings were deficient for failure to particularise the material facts underpinning his alternative claim in unjust enrichment, and whether such deficiency rendered the Sessions Court’s finding legally unsustainable.

Whether the learned Judge erred in dismissing the Appellant’s counterclaim for reimbursement of personal advances and capital injections made to TESB and the 4HRF Companies.

These issues may conveniently be analysed within the framework of the legal principles governing –

unjust enrichment;

joint liability under the CA 1950;

the requirement for proper pleadings, and

the appellate standard of review.

Unjust Enrichment: The Governing Principles

The doctrine of unjust enrichment is well-established in Malaysian jurisprudence. The elements to be satisfied are:

The defendant has been enriched;

The enrichment is at the expense of the plaintiff;

The enrichment is unjust; and

There is no applicable legal justification for the retention of the benefit.

These elements were restated by the Federal Court in Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441.

However, as consistently emphasised in subsequent decisions, the doctrine operates only in the absence of a subsisting contractual or equitable framework governing the subject matter of the alleged enrichment. Where the benefit arises within the context of a structured commercial or fiduciary relationship, such as a partnership, joint venture, or shareholding agreement, the appropriate recourse lies within that framework rather than under restitutionary principles. This can be seen in the case of Simcity-ETE Venture Sdn Bhd v Koperasi Pembangunan Kampung Tradisional Tasek Pulau Pinang Bhd [2022] 2 MLJ 195 where the Court of Appeal cautioned that unjust enrichment cannot be invoked to rewrite or circumvent contractual obligations.

The threshold for a successful claim is therefore high. The plaintiff must demonstrate that the defendant’s enrichment was independent of any contractual allocation of risk or benefit, and that it would be unconscionable to allow the defendant to retain that enrichment. In the absence of such proof, courts have been reluctant to intervene, lest the doctrine of unjust enrichment intrude upon freely negotiated commercial arrangements.

Section 44 of the CA 1950: Joint and Several Liability

Subsection 44(1) of the CA 1950 provides that when two or more persons make a joint promise, they are bound jointly by that promise, and the promisee may compel any one or more of them to perform it. Subsection 44(2), which was relied upon by the learned Sessions Court Judge, further provides that in the absence of an express agreement to the contrary, the joint promisors shall share the burden of performance equally.

It is, however, settled law that this presumption of equality is rebuttable. The Federal Court in Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian a/l Nagappan Marie [2021] MLJU 1207 held that the actual apportionment of liability depends on the parties’ true intention, as evidenced by their conduct, communications, and the overall business structure.

Accordingly, even where parties are joint borrowers or guarantors under a financing facility, the Court must look beyond the form of the loan documents to ascertain the substance of their commercial arrangement. If the evidence demonstrates that their respective liabilities were governed by a predetermined allocation ratio, that understanding must prevail over the statutory presumption of equal contribution.

Requirement for Proper Pleadings

The requirement of proper and sufficient pleadings is a cornerstone of civil procedure. A party must state with precision the material facts upon which the claim is based so that the opposing party is not taken by surprise and can properly prepare its defence.

The principle was reaffirmed in Simcity-ETE Venture Sdn Bhd, where the Court of Appeal set aside a trial judgment that had allowed a claim for unjust enrichment in the absence of explicit pleadings. The Court held that “a claim cannot be advanced or sustained on a cause of action not pleaded, nor may a judgment be founded upon issues not joined between the parties.”

Thus, where a plaintiff merely asserts “unjust enrichment” without identifying the factual matrix, the quantum attributable to each transaction, or the specific causal link between the payment and the alleged enrichment, such a pleading is defective and cannot sustain a judgment.

Standard of Appellate Intervention

The principles governing appellate intervention are equally well-settled. An appellate court will not ordinarily interfere with findings of fact made by the trial court, particularly where those findings are based on the trial judge’s assessment of oral testimony. However, intervention is warranted where the appellate court is satisfied that:

The trial court misdirected itself on the law;

The trial court misapprehended the evidence or failed to give proper judicial appreciation to it; or

The findings are plainly wrong or against the weight of the evidence.

This approach is articulated in Gan Yook Chin (P) & Anor, where the Federal Court affirmed that appellate courts are entitled to examine the “process of evaluation” adopted by the trial court to determine whether the conclusion reached was legally and factually sustainable. Similar principles were reaffirmed in Sivalingam a/l Periasamy v Periasamy & Anor [1995] 3 MLJ 395 and China Airlines Ltd v Maltran Air Corp Sdn Bhd [1996] 3 CLJ 163.

It follows that if the learned Sessions Court Judge failed to apply the correct legal tests to the facts, or reached findings inconsistent with the weight of the evidence, this Court must intervene to prevent a miscarriage of justice. D. ANALYSIS AND FINDINGS Issue (a): Whether the Respondent successfully proved unjust enrichment

Having carefully examined the Record of Appeal and the Sessions Court’s Grounds of Judgment, it appears that the learned Sessions Judge treated the Respondent’s payments of the joint loans as automatically conferring an unjust benefit on the Appellant, without first determining whether those payments were made outside the scope of the parties’ commercial framework.

The difficulty with this finding is that the element of “unjustness” cannot be presumed merely because one party paid more than the other. The doctrine of unjust enrichment only arises in the absence of a subsisting legal or contractual arrangement governing the allocation of risk and benefit between the parties (See Dream Property Sdn Bhd).

The evidence before the trial court, and extensively referenced in the Appellant’s submissions, shows that the parties had long been bound by an arrangement where the Respondent held a 71% share and the Appellant a 29% share in the 4HRF and TESB structure. The distribution of the Guaranteed Rental Return (GRR) and loan repayments was consistently made based on that ratio. This course of dealing was not denied by the Respondent; rather, it was his explanation for several years of operations before the relationship broke down.

In my view, once it is accepted that such a structured and mutually understood arrangement existed, any payment made by the Respondent in discharge of the loans forms part of that ongoing business framework, not a gratuitous payment entitling restitution. The Sessions Court’s finding of unjust enrichment, therefore, rests on a misapplication of principle. It conflated commercial imbalance with legal “unjustness”. The proper remedy, if at all, would have been in contract, partnership accounting, or contribution under an express term, not restitution in unjust enrichment. Hence, the Court finds that the element of unjustness was not established; the claim was not maintainable in restitution. Issue (b): Whether subsection 44(2) of the CA 1950 was correctly applied

The Sessions Court appears to have relied on subsection 44(2) to hold that the Appellant was equally liable for half the loan repayments. This provision creates only a rebuttable presumption of equal contribution, applicable only in the absence of evidence to the contrary.

On the facts, the presumption was clearly displaced. The documentary and oral evidence demonstrated that the parties’ respective liabilities corresponded with their 71:29 ownership structure. Both parties acknowledged that this ratio governed GRR payments and loan servicing over several years. It was only after the breakdown of their relationship that the Respondent asserted a 50:50 obligation.

As the Federal Court held in Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian a/l Nagappan Marie, the true allocation of liability depends on the parties’ intention as evidenced by their conduct. The Respondent’s own conduct, including his acceptance of the 71:29 arrangement and his silence over several years, rebuts any inference of equal contribution. This prior conduct estops him from resiling from that position (See Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331). The learned Sessions Court Judge therefore erred in applying subsection 44(2) to impose an equality of liability when the evidence clearly established a contrary arrangement.

Hence, the Court finds that the learned Sessions Court Judge erred in applying subsection 44(2); the evidence rebutted the presumption of equality. Issue (c): Whether the Respondent’s pleadings were sufficient to sustain a claim in unjust enrichment

The Respondent contended in oral and written argument that the cause of action in unjust enrichment had in fact been pleaded by reference to paragraphs 72 to 77 of the Amended Statement of Claim, which state inter alia that the Defendant “had been unjustly enriched (‘diperkayakan secara tidak adil’) from the Plaintiff’s repayment of the loan facilities for the four hotel room floors”, and that the Defendant “is liable to restore such payments”.

It is therefore correct that, in form, the concept of unjust enrichment was expressly pleaded. The issue cannot be said to have been introduced only at the stage of submissions. The learned Sessions Court was entitled to recognise that the Respondent was pursuing such a claim in the alternative.

However, the existence of a pleading in form is not the same as sufficiency in substance. The Amended Statement of Claim merely asserts the conclusion that the Defendant was “unjustly enriched” without setting out the material facts required by law, namely –

identification of the specific loan facilities and the corresponding repayment amounts;

the proportion of such payments said to relate to the Defendant’s obligation;

the factual circumstances rendering the enrichment “unjust” (for example, mistake, compulsion, or absence of consideration); and

the causal link between each payment and the alleged benefit obtained by the Defendant.

These omissions are significant because a plea of unjust enrichment must be supported by clear particulars demonstrating that the enrichment arose outside any contractual or commercial allocation of risk.

As the Court of Appeal held in Simcity-ETE Venture Sdn Bhd, it is not enough for a plaintiff merely to invoke the label of “unjust enrichment”; the material facts constituting the alleged unjust factor must be pleaded with precision. Similarly, in Boustead Trading (1985) Sdn Bhd, the Federal Court emphasised that a pleading must contain facts, not conclusions of law.

The paragraphs relied upon by the Respondent contain no reference to the relevant banking facilities, repayment schedules, or documentary particulars. They do not identify which portion of the RM 802,541.45 was paid for the Defendant’s share, nor how such payment conferred an unjust benefit. In effect, the pleading leaves the Court and the Defendant to infer the factual foundation from subsequent evidence, which is impermissible.

The learned Sessions Court Judge appears to have treated these broad averments as sufficient, proceeding on the basis of equitable fairness rather than pleaded material facts. In doing so, the trial court conflated “pleading the legal label” with “pleading the constituent facts”. This amounted to a misdirection in law.

I therefore find that although the Respondent did plead the concept of unjust enrichment, the pleading was defective in material particulars and failed to disclose a legally sustainable cause of action. The learned Sessions Court Judge erred in relying on such bare assertions to found liability. The defect was not merely technical but substantive, as it went to the very basis of the Respondent’s entitlement to restitution.

The Court believes that the cause of action in unjust enrichment was pleaded in name but not properly particularised in substance. Therefore, the Court finds that the Sessions Court erred in treating it as sufficient to establish liability. Issue (d): Whether the learned Sessions Court Judge erred in dismissing the Appellant’s counterclaim

The Appellant’s counterclaim was based on his personal advances and injections of funds into TESB and the 4HRF Companies, specifically RM860,000 in 2017 and RM396,788.05 between 2012 and 2016, to maintain loan servicing and avoid default. These were substantiated by documentary evidence and were not effectively disputed by the Respondent.

The Sessions Court dismissed the counterclaim on the ground that the Appellant’s recourse lay in the liquidation of TESB. With respect, that reasoning is misconceived. The advances in question were personal contributions made outside the company’s ordinary financing, for the joint benefit of both parties, and were used to preserve assets in which the Respondent held the majority interest.

The Respondent’s argument that the Appellant’s claim should be confined to the winding-up process overlooks the equitable character of the counterclaim. The Appellant’s injections conferred a measurable benefit on the Respondent by preventing default and maintaining asset value; in such circumstances, restitution or equitable reimbursement is available.

The Respondent submitted that the Appellant failed to prove that the advances were personal or that they conferred a direct benefit on the Respondent individually, and therefore, such claims ought properly to be pursued in the liquidation of TESB.

With respect, this submission is not supported either by the evidence on record or by principle.

First, the documentary evidence demonstrates that the advances were made by the Appellant personally from his own bank accounts, and not from TESB’s corporate funds. The transfers were made directly to meet loan-servicing obligations and to preserve the hotel assets. The source of the payment is determinative of whether the claim is personal or corporate. Where a co-venturer personally injects funds to preserve a joint investment, the right of recovery lies against the other participant and not through the corporate vehicle. (See Goh Chan Heng v MBf Finance Bhd [1996] 2 MLJ 389).

Secondly, the benefit of the Appellant’s contributions accrued immediately and directly to the Respondent. The payments prevented loan defaults and foreclosure, thereby preserving the value of the hotel floors in which the Respondent held a 71% beneficial interest. Under restitutionary principles, enrichment may arise not only through the direct receipt of money but equally where a party’s property or investment is preserved at another’s expense. (See Dream Property Sdn Bhd ).

Thirdly, the Respondent’s reliance on TESB’s liquidation is misconceived. The Appellant is not pursuing a derivative claim on behalf of TESB, nor asserting that TESB itself owes him a debt. His claim is a personal equitable contribution claim against a fellow joint participant in the venture. The fact that the corporate entity is now in liquidation does not extinguish or displace the personal rights and obligations which exist inter se between co-venturers. (See Tan Sri Khoo Teck Puat v Plenitude Holdings Sdn Bhd [1999] 3 MLJ 513).

Fourthly, equity has long recognised the right of reimbursement where one party to a joint arrangement has borne more than his fair share of a common obligation. A contribution claim arises as a matter of fairness and necessity where the expenditure was made to protect the common asset. (See Re Reid’s Will Trusts [1951] Ch 661, applied in Simcity-ETE Venture Sdn Bhd). The Appellant’s advances were not voluntary. They were compelled by the need to prevent default and maintain assets that jointly benefited both parties.

Accordingly, the Respondent’s submission that the claim should be confined to TESB’s liquidation cannot be sustained. The Appellant’s claim is personal, rests on well-established equitable principles, and is supported by the contemporaneous evidence. The Sessions Court erred in dismissing the counterclaim on this basis.

The Court finds that the dismissal of the counterclaim was not supported by the evidence. The counterclaim should be allowed in principle, subject to verification of the precise quantum.

When viewed cumulatively, the Sessions Court’s findings reflect misdirection on questions of law, specifically the misapplication of unjust enrichment and section 44, and insufficient judicial appreciation of the evidence concerning the parties’ long-standing commercial arrangement. The findings were therefore plainly wrong within the meaning of Gan Yook Chin (P) & Anor v and Sivalingam a/l Periasamy .

This is therefore a proper case for appellate intervention. The Sessions Court’s decision cannot stand in light of the factual and legal misapprehensions identified above.

For the reasons above, I am unable to agree with the learned Sessions Court Judge’s findings. The appeal is therefore allowed.

The decision of the Sessions Court dated 22 October 2024 is set aside. In its place, this Court makes the following orders:

The Respondent’s claim for unjust enrichment is dismissed.

The Appellant’s counterclaim is allowed in principle, with liberty to the Appellant to file a supporting affidavit verifying the quantum for assessment before the Sessions Court.

The Respondent shall pay to the Appellant costs of RM8,000 in this appeal, and the Sessions Court costs order is accordingly varied.

Interest at the prescribed rate shall apply from the date of this judgment until full payment.

In summarising the reasoning, this Court finds that –

The Sessions Court erred in treating the Respondent’s payments as unjust enrichment when they arose from a subsisting 71:29 commercial framework.

Subsection 44(2) was wrongly invoked; the presumption of equal liability was rebutted by conduct and prior course of dealing.

The pleadings were materially deficient to sustain a restitutionary claim.

The Appellant’s counterclaim was wrongly dismissed despite uncontroverted evidence of personal advances benefiting both parties. Dated: 30th December 2025 ……………………………………………… (YA PUAN MAHAZAN BINTI MAT TAIB) JUDGE HIGH COURT OF MALAYA KUALA LUMPUR Counsel for The Appellant : Ivanpal Singh Grewal Messrs. A. J. Ariffin, Yeo & Harpal Advocates & Solicitors Counsel for The Respondent : Poon Wei Ying, Kenneth Koh, Sandra Tan We Han