[2020] 1 LNS 726 Legal Network Series

IN THE FEDERAL TERRITORY, MALAYSIA

CIVIL DIVISION
[CIVIL SUIT NO. WA-22NCVC-561-09/2016]

BETWEEN

RATNAVEL A/L PACKIRISAMY & 31 LAGI … PLAINTIFFS

AND

KOPERASI NLFCS BERHAD

(No. Daftar: 3405) ... DEFENDANT

JUDGMENT

[1] The Plaintiff’s suit against the Defendant before me is premised

on a cause of action for breach of trust under several categories
namely:

(i) breach of a resulting trust;

(ii) breach of constructive trust

(iii) breach of an express trust; and

(iv) equitable fraud.

[2] The trial in relation to this suit commenced on 6.3.2018. After

16 days of hearing (albeit on a sporadic basis), the Defendant
closed their case on 22.6.2019. Directions were then given for
parties to file in their respective submissions.

[3] Having reviewed the submissions of both parties and upon

hearing the oral submissions by counsels, this Court on
20.1.2020 found for the Plaintiffs. In consequence thereof, the
following orders were pronounced against the Defendant:

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(i) the Plaintiffs are entitled by way of restitution, all profits

that has been made by the defendant in the Temiang Land
Scheme/Development (that is the development on the lad
which was formerly held under Grant No. 17937 Lot No.
3032 Mukim Seremban, Negeri Sembilan, which is also
now known as Taman Bukit Zamrud);

(ii) In the event that there is no profit by way of all monies

received by the Defendant pursuant to the Temiang Land
Scheme/Development, the Defendant is to render a true
account of all the monies received by Defendant;

(iii) registrar’s caveats are to be entered against the unsold lots

in the said Temiang Land DevelopmenUScheme;

(iv) the amount of compensation to be awarded to the plaintiffs

is to be assessed by the court;

(v) the Defendant is to pay the Plaintiffs, the sum of RM 81,

311.50 as costs of this action subject to allocator fees.

[4] Dissatisfied with the above decision, the Defendant appealed

against the whole of my above decision by way of their Notice
of Appeal dated 17.2.2020. The Plaintiff then cross appealed by
way of a Notice of Appeal dated 18.2.2020 against part of my
decision in ordering for damages to be assess. The following are
my grounds of judgment for purposes of the respective appeals.

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The Plaintiff’s pleaded case

[5] The Plaintiff’s case can be summarised as follows:

(i) The Plaintiffs are some of approximately 160 persons who

has contributed either directly or indirectly through their
predecessors in title, to the purchase of a land measuring
approximately 17.59 hectares and which was, before sub
division, held under Grant No. 17937, Lot No. 3032,
Mukim Seremban, Negeri Sembilan (“the said Land”);

(ii) The scheme to purchase the land was mooted in 1972 and
was known as the Temiang Land Scheme and the
Defendant agreed to act as the nominee or agent of the
purchasers (who shall be referred to as “the participants of
the Temiang Land Scheme) for the purchase of the said
Land in the Defendant’s name;

(iii) Each of the participants of the Temiang Land Scheme(‘the

Land Scheme”) including the Plaintiffs and/or their
predecessors in title paid a sum of RM 550 to the
Defendant, for an entitlement to and right and interest in
approximately one quarter (1/4) of an acre each in the said
Land;

(iv) The entire purchase price of the said Land was paid for by
the participants of the Temiang Land Scheme;

(v) It is the Plaintiffs’ case that the purchase agreement

(between the Defendant and the vendor who sold it) is in
truth and substance a trust under terms of which the
Defendant held the Plaintiffs’ entitlement to one quarter
(1/4) of an acre each (except for Plaintiffs No.1, 9 and 23
who had purchased two (2) lots each or one half (1/2) acre

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each either directly or through their predecessors in title or

through transfers from original purchasers to themselves or
to their predecessors in title with the knowledge of the
Defendant) in the said land on trust for them;

(vi) Further or in the alternative, as the purchase price for the

said Land was wholly contributed by the participants of
the Temiang Land Scheme (which would include the
Plaintiffs and/ or their predecessors in title), a resulting
trust therefore arises in favour of the participants of the
Land Scheme, inclusive of the Plaintiffs;

(vii) Pursuant to a resolution taken in a meeting held on 30

August 1980, the Defendant was to arrange for the land to
be developed and sub-divided and then to be transferred to
the participants of the Temiang Land Scheme respectively,
without any financial responsibility on the part of the
Defendant;

(viii) In or about 1981, the Defendant obtained consent of each

of the participants of the Land Scheme, inclusive of the
Plaintiffs and/or their predecessors in title to enter into an
agreement with the Defendant (“the 1981 Agreement”),
where under the Defendant undertook to act as an
intermediary for the participants of the Temiang Land
Scheme, inclusive of the Plaintiffs and/or their
predecessors in title and help them to implement the
housing project gratuitously;

(ix) The 1981 Agreement stipulates that:

(a) The Defendant bought and is the beneficial owner of

the said Land, utilizing money paid by the purchasers
(which would mean the participants);

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(b) That each of the participants of the Temiang Land

Scheme have paid a sum of RM 550 to participate in
the housing scheme;

(c) That the Defendant shall transfer one lot of land

measuring approximately 4500 sf feet with a building
measuring 1500 sq ft to each purchaser of the land
scheme in consideration of the sum of RM 20,550;

(d) Between 1984 and 1985, the Defendant caused all the
participants of the Land Scheme, inclusive of the
Plaintiffs and/or their predecessors in title to enter
into another agreement (hereinafter referred to as
“the 1984 Agreement”) for the delivery of a terrace
house and one lot in the land measuring 1540 sq ft
only for the sum of RM 15,250. The 1984 Agreement
was also prepared by the Defendant’s solicitors; and

(e) About a decade later, the Defendant informed the

Plaintiffs vide letter dated 10.07.1995 that the price
of the terrace houses to be built on each of the lots
has been increased to RM 24,000;

(x) Between the years 2000 and 2002, the Defendant prepared
yet another agreement for the execution by each of the
participants of the Land Scheme, that is an agreement
known as the “Sales and Purchase Agreement Participants’
Units (hereinafter referred to as “the Final Agreement”)
where under that the Defendant again undertook to deliver
to the participants of the Land Scheme (inclusive of the
Plaintiffs and/or their predecessors in title), their
respective terrace house for the consideration of RM
24,000;

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(xi) The housing units of the Plaintiffs and/or their

predecessors in title were finally completed sometime in
2004. Aside from such units of the Plaintiffs and the other
purchasers of the Land Scheme, the Defendant also caused
to be built on the said land very many units of houses,
some of similar size and others much larger;

(xii) The Plaintiffs alleges that the land area of each of the units
of houses that was delivered to the Plaintiffs and/or their
predecessors in title were only in the region of 1,540 sq ft,
as opposed to the their right and entitlement and interest,
that is approximately one quarter (1/4) of an acre each for
every lot purchased;

(xiii) The Plaintiffs have also discovered an express trust which

was executed in favour of the participants of the Land
Scheme, inclusive of the Plaintiffs and/or their
predecessors in title, dated 29 November 1995;

(xiv) The Plaintiff alleges that the Defendant thereby acted in

breach of the fiduciary duty it owed the Plaintiffs under
the aforesaid trusts, be it implied or express. In this
regard, the Defendant has failed to account to each of the
Plaintiffs for the remaining land size of approximately
9350 sq ft that each of the Plaintiffs are entitled to for
each lot purchased;

(xv) In breach of trust, the Defendant has sold and/or

transferred many of the units built thereon or parts of the
said Land to other parties thereby unjustly enriching itself
and causing wrongful loss to the Plaintiffs;

(xvi) The Plaintiffs, as beneficiaries, have been wrongfully

deprived of their right, title and interest in the said land

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and/or their respective lots which each of them are entitled

to. The Defendant, having converted or abrogated the
Plaintiff’s right, title and interest in the said land for its
own use and benefit is liable in equity to compensate the
Plaintiffs for the loss of their right, title and interest
thereto; and

(xvii) Based on the above facts, the Plaintiffs commenced the

present seeking reliefs as prayed for at paragraph 28 of the
Statement of Claim.

Summary of The Defendants’ Case

[7] In opposing the Plaintiffs’ claim, the Defendant’s pleaded as

follows:

(i) Circa 1972, seven (7) individuals namely Albert Mathews,

R. Muthusamy, F. Robert, S. Kamalanathan, P.
Rengasamy, P. Thandav and M. Krishnan (hereinafter
referred to as “the Initiators”) formed a committee known
as Temiang Land Committee (hereinafter referred to as
“the Committee”) and initiated the purchase of a piece of
land measuring approximately 17.59 hectares previously
held under Grant No. 17937 Lot No. 3032 (and previous to
that Grant No.4010 Lot No. 715) Mukim Seremban, Negeri
Sembilan {hereinafter referred to as “the said Land”);

(ii) The Defendant acted only as an intermediary in the

transaction related to the Land Scheme in order to assist
the participants thereof. The Committee and the
participants/purchasers of the Land Scheme had agreed
that the Defendant would not have any liability relating to
the Land Scheme;

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(iii) There were 3 agreements involved in the Temiang Land

Scheme, ie,

(a) 1981/1982 Agreement(“the 1981 Agreement”);

(b) 1984/1985 Agreement(“the 1984 Agreement”); and

(c) 2000/2002 Agreement(the Final Agreement”);

(iv) The 1981 Agreement was executed by the

participants/purchasers of Temiang Land Scheme and the
Defendant around year 1981 and the house specification
was a single-storey bungalow house measuring 60’ x 75’
with 4,500 square feet. However, not all the plaintiffs in
this suit executed the 1981 Agreement. Under this
Agreement the participants had authorize the Defendant to
engage Revathy Development (M) Sdn Bhd (“Revathy
Development”) to develop the said Land. It was also
agreed in the meeting that 160 lots will be allocated as
Participants’ Units and 173 lots will be allocated as
Developer’s Units. Thereafter an Agreement dated 28.08.
1981 was entered between Revathy Development for
purposes of the development. This Agreement was
however terminated due to Revathy Development being
wound up;

(v) The 1984 Agreement was executed by the

participants/purchasers of Temiang Land Scheme and the
Defendant around year 1984 and the house specification
was a single-storey terrace house measuring 22’ x 70’ with
1,540 square feet. Similar to the 1981 Agreement, not all
the Plaintiffs in this suit executed 1984 Agreement.
Pursuant to a meeting held on 17.01.1984, it was
unanimously agreed by the participants/purchasers to

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authorize the Defendant to appoint Pembinaan Kaya Raya

Sdn Bhd (“Pembinaan Kaya Raya”) as Developer. It was
also agreed in the meeting that 160 lots will be allocated
as Participant’s Units and 340 lots will be allocated as
Developer’s Units. However, Pembinaan Kaya Raya went
into liquidation vide a Court Order dated 29.04.1998,
resulting in no development taking place;

(vi) The Final Agreement also referred to as”the Sale and

Purchase Agreement Participants’ Units” and was executed
by the participants/purchasers of the Land Scheme and the
Defendant around year 2000. The house specification was
a single-storey terrace house measuring 22’ x 70’ with
1,540 square feet. The Defendant takes the position that
not all the Plaintiffs in this suit executed the Final
Agreement;

(vii) The Final Agreement supersedes the previous agreements

including the 1981Agreement and the 1984 Agreement. By
signing the Final Agreement, the Plaintiffs have agreed to
all the terms and contents contained in the Final
Agreement. For purposes of the Final Agreement, the
Defendant entered into a Project Management Agreement
dated 25.02.2000 with Astral Panorama (M) Sdn Bhd
(“AP”), whereby the Agreement provides that 165 lots will
be allocated as the lots for the participant/purchaser of the
Temiang Land Scheme. The balance lot will be allocated to
AP as the Project Manager’s lots. The Defendant alleges
that transaction with AP, caused them to incur cost in the
sum of RM 3,347,999.65;

(viii) Due to AP’s inability to complete the development, a

Supplementary Project Management Agreement dated

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23.04.2003 was entered between the Defendant and Dhaya

Maju Infrastructure Asia Sdn Bhd (“Dhaya Maju”) as the
new Project Management whereby it provides that 165 lots
will be allocated as the lots for the participant/purchaser of
the Temiang Land Scheme. Under this Agreement, 260 lots
will be allocated as the Developer’s lot;

(ix) The development of the said Land thereafter materialized

into a housing project known as Taman Bukit Zamrud,
whereby the vacant possession has been delivered in 2004.
All the remaining titles of 260 units were surrended to
Dhaya Maju and the Defendant did not own any titles;

(x) Vide a letter dated 18.06.2008, Dhaya Maju has stated that
Dhaya Maju was facing financial problems and difficulties
in selling the houses. Therefore, Dhaya Maju has given a
proposal that the Defendant buy back all the unsold units.
Pursuant to a Deed of Settlement dated 24.10.2008 entered
between the Defendant with Dhaya Maju, it was agreed as
follows:

(a) Dhaya Maju agreed to sell and the Defendant agreed

to purchase 98 titles of the said Land with the price
of RM 4,602,000.00;

(b) The Defendant has agreed to pay RM 1,054,000.35 to

Dhaya Maju upon taking into account the following
deduction:

i. RM 3,347,999.65 (which is the advance

payment paid by the Defendant to Astral
Panorama); and

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ii. RM 200,000.00 (which is the advance payment

paid by the Defendant on 08.10.2008 to Dhaya
Maju).

(c) Parties agreed that the Agreement dated 23.04.2003

shall no longer be binding and treated as null/void.

(xi) In complying with the terms of the Development Order

approved by the authorities, the Defendant had to prepare
and develop the infrastructure for the project which
includes conditions for residential building, commercial
building, future development, for open space area, for
kindergarten (public all), for water reservoir site, for
oxidation pond, for temple site, for electrical substation
site, and for mosque site that had to be complied by the
Defendant. There were also areas that had to be
surrendered back to the government for free after the titles
are registered/issued.

[8] The Defendant’s stand are as follows:

(i) there is no express trust as alleged by the Plaintiffs;

(ii) there is also no constructive/equitable fraud as based on

the Final Agreement, the Defendant was only obliged to
deliver a single storey house measuring 22’ x 70’ square
feet land size for every lot pursuant to the Final
Agreement, the Defendant has no obligation to deliver any
remaining land area allegedly in the approximate of 8750
square feet to the Plaintiffs;

(iii) there is no obligation to account to the Plaintiffs for the

alleged profits made/received from the sale of the units
built on the Land and/or the alleged transfer of parts of the

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said Land to other parties and/or for the alleged returns of

the development; and

(iv) the appointment of all the developers and/or project

managers are within the full knowledge of the
participants/purchasers of Temiang Land Scheme.

Issues To be tried

[9] For purposes of the trial, both parties had formulated the
following issues to be tried:

(i) Whether the Plaintiffs have the locus standi to institute the
action?

(ii) Whether the entire purchase price for the said Land was
paid by the participants?

(iii) Whether each of the participants were entitled to

approximately one quarter (1/4) of an acre for every lot
purchased?

(iv) Whether the Defendant is a trustee?

(v) Whether there was a breach of trust on the part of the

Defendant?

(vi) Whether the delivery of the houses under the Final

Agreement absolves and releases the Defendant of its
duties as a trustee?

(vii) Whether there was constructive and/or equitable fraud?

(viii) Whether the action of the Plaintiffs is barred by

limitation?

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Court’s analysis & findings

[10] Having stated the pleaded case of both parties and the
submissions in support thereof, I proceeded to analyse the same
by dealing with the issues to be tried formulated by parties.

[10.1] Whether the Plaintiffs have the locus standi to

institute the action?

The Defendant herein contends that the Plaintiffs do not have

any locus to bring this action. In saying so, the Defendant
divided the Plaintiffs into 3 categories listed as follows:

(a) That most of the Plaintiffs in this action were too young or
not even born yet when the Temiang Land scheme was
conceived. This include Plaintiffs number 3, 6, 7, 9, 12,
13, 15, 20, 21, 25, 26, 27, 28, 29 and 30. Therefore much
of their evidence on the said Land cannot be trusted;

(b) Not all the Plaintiffs had paid and/or contributed to the
payment of RM550/= towards the said Land. This
contention applies to Plaintiffs number 3, 6, 7, 9, 12, 13,
15, 20, 21, 25, 26, 27, 28, 29 and 30 as they were too
young or not even born yet too have paid the RM550/= or
to enter into the 1981 Agreement; and

(c) Plaintiffs number 3, 6, 7, 9, 12, 13, 15, 20, 21, 25, 26, 27,
28, 29 and 30 are not the original participants of the Land
Scheme. Neither are Plaintiffs number 17, 19 and 32. As
such, they are not privy to any Agreement with the
Defendant. The entire scheme is devoid of any rights to
any successors in title.

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Findings

In analysing whether the Plaintiffs have the locus standi to bring this
action against the Defendant, my attention is drawn to the following
evidence:

(i) Almost all of the Plaintiffs herein (with the exception of

Plaintiff nos. 11, 23, 28 and 31) have produced the Final
Agreement executed between the participants of the Land
Scheme as purchasers and the Defendant. A perusal of
Recital 3 of the Agreement clearly states that “ The
Purchaser is the beneficial owner of the said /of ’ which
the subject land purchased by the participants of the Land
scheme;

(ii) With reference to Plaintiffs nos. 11, 23 and 31, the

Defendants had during their application to strike out the
Plaintiffs’ suit, admitted that Plaintiffs nos. 11, 23 and 31
were the original of the Land Scheme. This was based on
the fact that they had executed the 1981 Agreement. In
addition, this fact was acknowledged by the Defendant’s
sole witness, DW-1 in Answer 21 of his witness statement
where he said that based on his perusal of the documents,
Plaintiffs Nos. 5, 11, 12, 14, 21 and 31 did sign the 1981
Agreement;

(iii) for Plaintiff no. 28, the Defendant had delivered vacant
possession of the house pursuant to the Final Agreement to
his father. Despite not having a copy of the Final
Agreement, copy of the 1981 Agreement executed between
his father and the Defendant was produced in evidence. If
Plaintiff no. 28 or his father (as the case may be) was not a

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participant of the Land scheme, the delivery of the house

under the Final Agreement would not have taken place;

(iv) The names of all the Plaintiffs are listed in the Schedule to
the Deed of Trust dated 29.11. 1995 executed by the
Defendants (see page 245 to 1253 of Bundle F).

Having scrutinised the above evidence, I constraint to state that

I am unable to agree with the Defendant’s submission on this
issue.

[10.2] Whether the entire purchase price for the said

Land was paid by the participants?

With reference to this issue, the Defendant contended that 10 of

the Plaintiffs in this case have not fully settled the necessary
payments under the Final Agreement. In other words, these
Plaintiffs are in breach of the Agreement. Under this
circumstance, they have not come to Court with clean hands and
therefore are not entitled to any remedy as claimed in the
Statement of Claim.

Findings

I propose to deal the above issue at paragraph 10.2 together with issue
at paragraph 10.3.

[10.3] Whether each of the participants were entitled to

approximately one quarter (1/4) of an acre for
every lot purchased?

In so far as this issue is concerned, the Defendant contends that

the Plaintiffs have failed to proof that each participant under the
Land Scheme is entitled to % of acre land. There is no document

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in support of such entitlement. Whether the participants are

entitled to exactly % acre or approximately % acre is also not
certain. In fact, Exhibit P1 (the Temiang Housing Committee
Circular dated 14.6.1979), clearly shows that the participants of
the Land Scheme had knowledge as early as 14.6.1979 that
based on the new economic policy, the government would not
permit the whole of the land to be developed into % acre
premises for each participant.

As opposed to the Plaintiffs contention that each of them are

entitled to % acre of land, the Agreements executed between the
participants of the Land Scheme and the Defendant: the 1981
Agreement, the 1984 Agreement and the Final Agreement all
shows the exact size of house and land size that the Plaintiff is
entitled to, which is nowhere close to Y-i acre. Even the
Circulars issued to by the Defendants to the Plaintiff dated
10.7.1995 and 15.1.1997 lends support to the Defendants
position.

The penultimate agreement prescribing the size of property also

stated that the participants are entitled to is the Final Agreement
wherein the size of the house is stated at 22’ x 70’ and with land
of 1540 square feet. This fact was also agreed by all the
Plaintiffs own witnesses namely: SP-4, SP-5 and SP-17.

Findings on issues at paragraphs 10.2 and 10.3

In analysing the above issues, I am incline to agree with the

Defendant’s submission that at least 10 of the Plaintiffs in this suit
has not paid for the houses pursuant to the Final Agreement. I am also
incline to agree with the Defendant’s submission that under the Final
Agreement, the participants are entitled is only a single storey house
measuring 22’ x 70’ in size with land of 1540 square feet.

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Be that as it may, the Plaintiffs claim herein is not about the

measurement of the house nor is it about the size of the land where
the house is built upon. The claim by the Plaintiffs is about the
remaining portion of the land bearing in mind that the Land scheme
was to cater for 160 participants of the Scheme. Surely, 160 houses
built on land measuring 1540 square feet will not take up the total 17
hectares of the Land which was purchased by the participants of the
Scheme, even after deducting 15% of size of the land to cater for
infrastructure.

Apart from paying for the purchase price of the Land, the participants
of the Scheme (which included the Plaintiffs), also paid the costs of
registration of the land, the levelling of it and also for its conversion
from agriculture to housing.

If the Defendant’s above contention is to be accepted, it must be

borne in mind that there were another 20 Plaintiffs who did pay for
the construction costs of the houses under the Final Agreement.
Having scrutinise the four corners of the Final Agreement, I am
unable to find any provision which states that the purchaser/s under
the Agreement agrees to forego their rights to the balance of the land
which they are entitled to under the Land Scheme.

In absence of any provision in the agreement stating so, the task of

interpreting the agreement to determine the rights and obligations of
parties must be left to the Court and not the Defendant. In stating so, I
am guided by decision of the Federal Court in SPM Membrane Switch
v. Sdn Bhd v. Kerajaan Negeri Selangor [2016] 1 CLJ 177, wherein
paragraph [49] of the judgment is re-produced below:

“……The principles set out by Lord Hoffman are neatly

summarized in an article by Professor Richard Hooley Implied
Terms After Belize Telecom [2014] 73 CLJ 315, 324 -325.

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(1) A court has no power to improve the instrument it is

asked to construe whether to make it fairer or more
reasonable. It is concerned only to discover what the
instrument means.

(2) That meaning is what the instrument would convey to

a ‘reasonable person’ or ‘reasonable addressee’
having all the background knowledge which would
reasonably be available to the audience to whom the
instrument is addressed. This objective meaning of
the instrument is what is conventionally called the
intention of the parties or of whoever is the deemed
author of the instrument.

(3) The questions of implication arises where an

instrument does not expressly provide for what is to
happen when some event occurs. In most cases, the
usual inference is that nothing is to happen, and the
express provisions of the instrument continue to
operate undisturbed. If the event causes loss to one
of the parties, the loss lies where it falls.

(4) In some cases, however, the ‘reasonable addressee’

of the instrument will conclude that the only
meaning which the instrument can have, consistent
with its other terms and the relevant background is
that something is to happen in response to the
particular event that has not been expressly
provided for in the instrument’s terms. In such a
case, it is said that the court implies a term as to
what will happen if the event in question occur s.

(5) Nevertheless, that process does not add another

term to the instrument; it only spells out what the

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instrument means. In other words, the implication

of a term is an exercise in the construction of the
instrument as a whole.

(6) It follows that in every case of implication, the single

question for the court is whether the implied term
would spell out in express words what the
instrument, read as a whole against the relevant
background, would reasonably be understood to
mean.”

I am of the view that question of whether the participants have

relinquished their rights to the balance of their land by accepting
the single storey house under the Final Agreement, need not be
answered at this juncture as it is closely connected with the
issue of whether the Defendants was holding the land as trustee
or not for the participants. This will be discussed in the
following part of this judgment.

[10.4] Whether the Defendant is a trustee?

Relying on the preamble of both the 1981 and the 1984

Agreements, which states, “ WHEREAS the Society gratuitously
agreed to act as an intermediary for the Purchasers and help
implement the Projecf’, the Defendant contended that they were
only acting as intermediary and not as agents nor trustee for the
Land Scheme Participants. Being in such a position, where the
Defendant did gain any advantage from the transaction, the
Plaintiffs suit is mala fide and oppressive as the Plaintiffs have
join forces to intimidate and strike at the Defendant who is the
true victim in this case.

A. There is no Express Trust

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The Defendants contends that the Plaintiffs should not be

allowed to rely on the Deed of Trust dated 29.11.1995 in which
the Defendant clearly declared that it was holding the said Land
on trust for the participants of the Land scheme. In contending
so the Defendant states as follows:

(a) they have no specific knowledge regarding the Deed of

Trust;

(b) they do not have a copy of the Deed of Trust in their

possession;

(c) There was no resolution passed in any of the Defendant’s

Annual General Meeting leading to the preparation of the
Deed of Trust;

(d) The Deed of Trust has no legal impact and effect in law as
it was never registered at the requisite Land Office. In
addition, the Land held under Grant No. 17937 Lot No.
3032 consisting of 17.59 hectares in the District of
Seremban, Negeri Sembilan as stated in the Deed of Trust
has been sub-divided into plots in the size of 22’ x 70’
square feet with individual titles pursuant to the Final
Agreement;

(e) The Deed of Trust was not sealed by the Defendant which
means that there was ·no resolution by the Defendant’s
Board of Directors approving it;

(f) There actual stamped copy of the Deed of Trust does not
have APPENDIX A, whereas Trust Deed in Bundle F does
have an APPENDIX A. It is therefore not safe to rely on
the same;

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(g) The Deed of Trust has no legal impact and effect in law as
the same was signed unilaterally without the signature of
any of the initiators or participants of the Land Scheme;

(h) The Deed of Trust did not provide an obligation for the
Defendant to deliver the remaining Lands to the Plaintiffs;

(i) The Deed of Trust is not valid as one of the three (3)
requirements of an express trust has not been met, namely
there is no certainty on what is the particular subject
matter of the trust (reliance placed on the case of
Metramac Corporation Sdn Bhd v. Fawziah Holding
[2004] CLJ 725 and Seow Hoon Hin v. Hartalega
Berhad&Ors [2019] 1 LNS 779). Furthermore, the Deed of
Trust does not mention that the Defendant must deliver
acres of the Land to each participant;

(j) There is no trust account set up for the alleged trust; and

(k) In the event the Deed of Trust is not valid, a resulting will
arise where the Defendant becomes a bare trustee. As the
Defendant had discharged all its obligations under the
Final Agreement, no liability can be imposed on the
Defendant in his capacity as a bare trustee;

B. No Resulting Trust

On the issue of whether there is a resulting trust, the Defendant

contended that:

(i) The Plaintiffs had failed to sufficiently plead the

particulars of the resulting trust claimed as required under
the provisions of O. 18 r. 12 of the RC 2012;

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(ii) In the event there was a presumption of the existence of a

resulting trust, that presumption can be rebutted due to the
fact that the Defendant had incurred cost and expenses
from the transaction carried out on behalf of the Plaintiffs.
The documentary evidence contained in the Part B
documents collective shows that Defendant had incurred
more than RM8 million in the development of the Land
scheme. This would include payments listed in the
accountant’s report prepared by Sankar & Co, expenses in
dealing with Revathy Development (M) Sdn Bhd, expenses
in dealing with Astral Panorama (M) Sdn Bhd and other
miscellaneous expenses.

(iii) The existence of a resulting trust arises when the intention

and/or understanding of parties were not expressed. In the
present suit, the intention of the participants of the Land
Scheme is clear namely, they want to develop the Land
Scheme. As the Land has been developed by the
Defendants, the claim for resulting trust must fail (reliance
placed on the Federal Court decision in Takako Sakao (P)
v. Ng Pek Yuan and Anor [2009] 6 MLJ 751 and Foo Lai
Sin v. Wong Lee Hong [2017] MLJU 2063).

C. No Constructive Trust

On the issue of the whether there is constructive trust, the

Defendant contended as follows:

(i) The Plaintiff’s notion that a constructive trust exist is

misplaced. Based on the Final Agreement executed
between the participants of the Land Scheme and the
Defendant, the Plaintiffs have agreed to accept a single
storey house measuring 22’ x 70’ with 1,540 square feet of

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land. Any allegation that they are entitled to at least 1.4

acre is therefore baseless and untrue;

(ii) A constructive trust only arises where there is: (a) an

unconscionable conduct by the Defendant; and (b) where
the Defendant asserted beneficial interest in the property
(by making a profit for himself) and denies the beneficial
of another (reliance placed on Takako Sakao (P) v. Ng Pek
Yuan and Anor(supra)). The Plaintiffs have failed to show
that the Defendant benefited from the Land;

(iii) The Plaintiff has failed to show any wrongdoing by the

Defendant. Conversely, the Defendant has fulfilled its
obligation under the Y2000 Agreement by completing and
handing over the houses thereunder to the purchasers.

Findings

A. There is an express trusts

Geraint Thomas & Alastair Hudson in The Law of Trusts (2 nd

Ed) at p19, defines an express trust as:

“...as one that is created consciously by the absolute

owner of the property either by declaring himself to be the
trustee of the property for the identified beneficiaries, or
declaring that some other person is to be the trustee of the
property for identified beneficiaries and the transferring
legal title in the trust property to those trustees ”.

With the above definition in mind, it seems clear that the trust in
the present suit is of the 1 st kind as defined in the above
publication ie, “one that is created consciously by the absolute

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owner of the property either by declaring himself to be the

trustee of the property for the identified beneficiaries ”. Hence,
at the outset, I wish to state thatthere is no doubt in my mind
that the existence of an express trust in this case is proven
beyond the shadow of doubt.

In opining so, I need only refer to Deed of Trust dated

29.11.1995 which in itself declares that the Defendant was
holding the Land on trust for the participants of the Scheme (see
pages 1245- 1253 of Bundle F). This included all the Plaintiffs
who were either the named in the Deed of Trust and also their
successors in title which includes Plaintiffs nos. 1, 3, 6, 7, 9, 13,
15, 16-19, 20, 23 -30.

Whilst the Defendants have listed a number of grounds as to

why the Deed of Trust is not valid and has no legal effect,
including the Defence that they have no knowledge of the Deed
of Trust and have no copy in their possession, the Defendants
have never pleaded that the said document is a forgery or was
created by the Plaintiffs. The failure to do so is very alarming in
view of the fact that the document is placed in Part B of the
Common Bundle of Documents which connotes that the
Defendant is not disputing the authenticity of it.

Even if authenticity was an issue, any doubts about it was easily

dispelled by the fact that the said document was produced by
Plaintiff no. 17 who received it from the Defendant’s solicitors
at the material time, Messrs Muthuvelu Param Rosdin & Co vis a
vis a cover letter dated 25.11.99. The partner of the said law
firm, Mr. Muthuvelu was subpoenaed as a witness who testified
inter alia:

(i) He was a director of the Defendant since 2001;

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(ii) He did sent the letter dated 25.11.99 to Plaintiff No. 17;
and

(iii) Whilst his firm did not prepare the Deed of Trust, he did
receive it from the Defendant and has an actual stamped
copy in his possession.

It is most alarming that the Deed was signed by the present chairman
of the Defendant, who was then the secretary back in 1995. Despite,
attending Court throughout the duration of the trial, the said Chairman
was never called to testify on the contents of the Deed of Trust. To
my mind, my findings as listed above, invites the presumption of
adverse inference under paragraph 114 (g) of the Evidence Act 1950
against the Defendants.

The existence of the trust was also acknowledged in the Defendant’s

38 th AGM held on 26-6-2005 (see Bundle I page 2502) wherein it was
resolved that:

“ This 38 th Annual General Meeting of Delegates hereby

resolves unanimously that the Society had acted as a Trustee
only for the land held under Grant No. 17937 Lot No. 3032
comprising an area of 17.59 hectares in the Mukim of Seremban
in the State of Negeri Sembilan and to develop the land on
behalf of the land owners and therefore not liable to pay any
claim that may arise thereon.”

Similarly, the existence of the trust was also acknowledge by the

Defendant in the Seremban High Court Suit No. MT2-22-97-04, a suit
by 3 participants of the Temiang Land Scheme against the Defendant
herein. In their Statement of Defence in answer to the claim brought
by the 3 participants, the Defendant herein pleaded that their only role
in relation to the said Land was only as “pemegang amanah” and not

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as the beneficial owner (see paragraph 9 of the Defence at page

24889 of Bundle I).

With all these evidences stacked against the Defendant, I

hold the view that the Defendant is estopped from denying
of the existence of the Deed of Trust.

As to the Defendant’s submission that the Deed of Trust fails for

uncertainty of the subject matter thereof, I am constraint to hold
otherwise. I opine so for the following reasons:

Firstly, the pre-amble of the Deed of Trust clearly refer to the

Temiang housing project. Secondly, the pre-amble also refers to 160
purchasers who had agreed to participate in the project. These 160
purchasers have been identified as the beneficiaries under Clause 1 of
the Deed of Trust. As held earlier, the Plaintiffs herein have proven
that they are part of the 160 purchasers mentioned in the Deed of
Trust. Thirdly, the particulars of the land stated therein being land
held under Grant No. 17937 Lot No. 3032 comprising an area of 17.59
hectares in the Mukim of Seremban in the State of Negeri Sembilan,
being the subject matter of this suit has been identified with precision.
Fourthly, the Defendant has at Clause 1 of the said Deed stated
unequivocally that they hold the said land in TRUST for the persons
stated in the Schedule

Contrary to the submissions of the Defendant that the Deed of Trust

fails for uncertainty, I find that the 3 valid essentials of a valid trust
namely:

(a) there is certainty of words; (b) there is certainty of subject

and (c) there is certainty of object of the trust are present
in the said Deed of Trust (see the Supreme Court decision
in Yeong Ah Chee @ Yan Hon Wah v. Lee Chong Hai &
Anor [1994] 3 CLJ 20).

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[B] Resulting trust

A resulting trust arises in two set 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 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 (see Takako Sakao
(P) v. Ng Pek Yuen and Anor [2009] 6 MLJ 751 FC).

It should however be borne in mind, this is only a presumption which

is rebuttable by producing evidence to the contrary in the form an
advancement or by way of adducing evidence of A’s intention to make
the transfer outright in nature in favour of B.

In the present suit, the subject Land under the Land Scheme was
bought and paid in full by the participants of the scheme (see
paragraph 5 of the statement of Claim). The participants also paid for
the conversion, earth works, registration fees, conversion charges for
the land from the category agriculture as its land use to the category
of housing. The Defendant themselves admits these facts and confirms
that they did not pay a single cent towards the acquisition of the Land.

Premised on the above undisputed facts, the presumption of a

resulting trusts in favour of the participants of the Temiang Land
Scheme clearly exists.

Contrary to the Defendant’s submission that the Plaintiffs did not

plead sufficient particulars of such a resulting trust, I find that the
Plaintiffs have sufficiently pleaded sufficient particulars at paragraph
3 to 7 of the Statement of Claim.

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In an attempt to rebut the presumption on the existence of a resulting

trust in favour of the Plaintiffs, the Defendant’s argues that they have
expended substantial amount of monies towards the development of
the Land. In support of this proposition, the Defendant relies on the
report prepared by their accountant Sankar & Co showing expenses of
more than RM3 million being incurred towards the development of the
Land.

Although the report by Sankar & Co was placed in Part B, the maker
of the report was not called to give evidence in relation to the
contents of the report. The fact that the report was placed in Part B of
the Common Bundle of Documents only relates to the issue of the
authenticity of the documents, unlike when a document is placed in
Part of the Common Bundle where the authenticity of the documents
and its contents are not disputed. It is my ruling, that the truth of the
contents of the report is a different matter which must be proven by
calling the person who prepared the report.

With reference to the Defendant’s argument that the purpose of the

trust has been achieved by the completion and handing over of the
houses under the Land scheme, I propose to deal with this issue under
the heading of constructive trust below.

In so far as proof of the sum expended is concerned, the evidence led

by the Defendant falls short of the required standard of proof. I hold
so as the maker Accountant’s Report by Sankar & Co was not called
as a witness to testify on the contents thereof. The fact that the report
was placed in Part B of the Common Bundle of Documents only
relates to the issue of the authenticity of the documents. It does not
mean that the contents of the report has been accepted and makes it
admissible as a whole compared to document which are marked in
Part A of the Common Bundle. Needless to say that, as SD-1 was not
the maker of the report, he is not the proper witness to give evidence

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on the contents thereof as to accept his evidence would be contrary to

the rule against hearsay evidence being admitted.

C. Constructive trust

A ‘constructive trust’ arises whenever the circumstances are such that

it would be unconscionable of the owner of the legal title (who did
acquire such title on his own in the first place) to assert his own
beneficial interest and deny the beneficial interest of another. Under
such circumstances, equity converts the legal owner into a trustee (see
RHB Bank Bhd v. Travel sight (M) Sdn Bhd [2016] 1 MLJ 175 FC).

In the present case, the Defendant had over and over again pleaded
and contended that they were just an intermediary and not a trustee.
Despite, stating so, the Defendant took it upon themselves the
authority to enter into a profit-sharing agreement with Project
manager to develop various houses and shophouses which were not
for the participants of the scheme. The Defendant had also sold off
various plots which formed part of the subject Land under the Land
Scheme to 3 rd parties. This revelation was made by SD-1 during his
cross examination (see page 785-786 of the Notes of Evidence Volume
3). SD-1 also admitted that the Project Management Agreement was
never given to the participants of the Land Scheme.

Bearing in mind that the participants of the scheme (which includes

the Plaintiffs) had paid for the full purchase price of the land, the
conversion, earth works, registration fees, conversion charges and
construction of the houses under the Final Agreement, the Defendant
cannot expect to retain the benefit of the profit sharing agreement at
the expense of the participants of the Land Scheme. Thus, it is my
view that the Defendant is a constructive trustee to the participants of
the scheme and/or the Plaintiffs.

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[10.5] Whether there was a breach of trust on the part of

the Defendant?

In light of their stand that there is no trust at all, be it express,

resulting or constructive, the Defendants took the position that
there is no breach of trust nor a breach of any fiduciary duty
related to trust (reliance based on Perman Sdn Bhd& 6 Ors v.
European Commodities Sdn Bhd [2006] 1 AMR 115).

In the event this Court is minded to hold the existence of a trust,

which the Defendant denies, the trust has been extinguished as
the Defendants has discharged its duties as a trustee by
successfully completing the purpose of the trust, which is to
subdivide and develop the Land.

Findings:

It is a cardinal principle of the law of Trust that a trustee who is put

in a position of trust, is under an obligation not to profit from that
office. In other words, a trustee must not allow a conflict to arise
between his duty to the trust and his personal interest. This duty is
fiduciary in nature and must be adhered to strictly (see New Zealand
Netherlands Soceity v. Kuys [1973] 1 WLR 1126 Privy Council).

It must be remembered that the main purposes of the Temiang land

Scheme was to provided landed property to its participants. It was for
this purpose, the participants vested the legal title of the Land
concerned to the Defendant.

Despite, the Defendant procuring the participants to enter into the

1981 and 1984 Agreements, the houses sought after by the
participants never got built. Then in 1990, the Defendant being the
legal owner of the Land managed to procure planning approval to
develop the Land. This included the development of residential

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buildings, shophouses and future development. Notwithstanding the

said approval, the houses never got built until the Final Agreement
was executed where the Defendant has changed from being the land
owner (see the 1981 and 1984 Agreements), to being the developer.

For purposes of the Final Agreement, the Defendant entered into an

agreement with Astral Panorama Sdn Bhd (“AP”) dated 25.2.2000 (see
Bundle I page 2503 in particular Clause 1.5 at page 2505: which
states: “ The said Co-operative and the said Project Manager hereby
agree in consideration of this Agreement, to share the net profit from
the said Project on a equal basis...”) and similarly at Clause 1.5 of the
Supplementary Project Agreement dated 23.4.2003 at Bundle I page
2523), wherein AP as the Project Manager was to carry out the
construction works under the development. Under the agreement with
AP, the Defendant and AP agrees to share the net profit of the Project
on an equal basis.

Due to a turn of events, AP assigned its rights under the above

agreement to Dhaya Maju Infrastructure Sdn Bhd (“DP”). This
resulted into the Defendant entering into a Supplementary Project
Agreement dated 23.4.2003 with DP (see Bundle I page 2519) on a
similar profit sharing basis.

This led to not only the construction of 160 houses to the participants
of the scheme but also many other houses evidenced by the schedules
to the Supplementary Agreement with DP and also the letter from the
Negeri Sembilan PTG dated 1-11-2016. The participants were never
privy to this arrangement of profit sharing between the Defendant and
DP.

Apart from building and selling of houses to non-participants of the

scheme, the Defendant also carted away part of the participants
remaining balance of the land (after having minus the land utilised to

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build the 160 houses for the participants) by selling them to 3 rd

parties. This too, without the knowledge of the participants.

Having regard to the fact that the Defendant never paid a single cent
for the Land and was entrusted with the title of the Land in a position
as trustee, the profit sharing agreement with DP, the selling of houses
to non-participants of the Land scheme and the selling of land plots to
3 rd parties clearly tantamount to a breach of trust by the Defendant.

[10.6] Whether the delivery of the houses under the

Y2000 Agreement absolves and releases the
Defendant of its duties as a trustee?

As an alternative submission, the Defendant submitted that if the

alleged trust is found to exists, the delivery of the properties
pursuant to the Final Agreement amounts to a discharge of the
Defendant’s duties whether in contract or in trust. In the present
suit, the trust deed conferred powers and duties to the Defendant
to develop the land into a housing development.

The Defendant in turn, had discharged its duties by completing

the development whereby vacant possession of houses were
delivered to the participants with titles issued in their name. The
Defendant did not enjoy any benefit from the said Land (reliance
placed on the case of Chong Thian Fook & Ors v. Sarawak Shell
Berhad & Ors [2004] 7 MLJ 53).

Findings

In so far as the above issue is concerned, it would suffice for me to

state that the Defendant’s submission on this issue completely
disregards that they had never paid for the subject Land and that the
houses built for the participants which included the Plaintiffs were
paid by the participants themselves and not the Defendants or any 3rct

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party. It cannot be denied that the Defendant entered into a profit-

sharing agreement with AP dated 25.2.2000 (see Bundle I page 2503
in particular Clause 1.5 at page 2505) and the Supplementary Project
Agreement with DP dated 23.4.2003 at Bundle I page 2519).

In consideration of Astral Panorama building the houses and shop lots

under the Agreement, the Defendant gave to Astral Panorama a total
of 200 over sub divided titles. Whilst there is evidence that the
Defendant later on had to buy back those titles from Astral Panorama,
I fail to understand as to how the Defendants could have handed those
titles to Astral Panorama in the 1 st place bearing in mind that there is
no basis to suggest that the participants had given away their
remaining portion of their entitlement to the Land in return for land in
the size of 1540 square feet which the Participants themselves had
paid for in the 1 st place.

Taking into account the Defendant’s contention that they are only the
Plaintiff’s intermediary and the fact that the Defendant have incurred
expenses in developing the Land, first and foremost, I wish to state
such an argument does not water down my findings that the Defendant
is a trustee of the participants to the Land Scheme. Being in such a
position, they Defendant has fiduciary duty not to act in a manner
conflicted with such position. Thus, even if the Defendant had
incurred expenses, that does not entitle them to enter into the profit-
sharing agreement without informing the participants.

Secondly, I wish to state that the Defendant’s did not file a counter
claim for the amount expended by them towards the development of
the Land. Neither was a defence of set off pleaded. Thirdly, in so far
as proof of the sum expended is concerned, the evidence led by the
Defendant falls short of the required standard of proof. I hold so as
the maker Accountant’s Report by Sankar & Co was not called as a
witness to testify on the contents thereof. The fact that the report was

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placed in Part B of the Common Bundle of Documents only relates to

the issue of the authenticity of the documents. It does not mean that
the contents of the report has been accepted and makes it admissible
as a whole compared to document which are marked in Part A of the
Common Bundle. Needless to say that, SD-1 not being the maker of
the report was not the proper witness to give evidence on the contents
thereof as to accept his evidence would be contrary to the rule against
hearsay evidence being admitted.

At the end of the day, I am of the view that until the Defendant
presents the accounts for the revenue receive in relation to the sale of
other houses and land plots sold to non-participants to scheme, the
Defendant cannot be said to have discharge its duties as trustees.

[10.7] Whether there was constructive and/or equitable

fraud?

Based on the premise that there is no trust at all, be it express,

resulting or constructive as pleaded by the Plaintiffs, the
Defendant takes the position that there is no constructive and/or
equitable fraud committed by them.

Findings

In analysing this issue, the history as to how the Land came to being
registered under the Defendant’s name is of paramount importance. In
this regard, the Defendant was entrusted to assist members of the
Indian community in Negeri Sembilan to develop the Temiang land
Scheme into a housing development area for the benefit of the
participants of the scheme.

Yet, what transpired thereafter is appalling. Instead of exercising skill

and care in the discharge of the reliance and trust placed upon them,
the Defendant acted in a manner conflicted with the interest of the

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participants (see Takako Sakao (f) v. Ng Pek Yuan & Anor (supra)). In
stating so, the evidence adduced by the Plaintiff have also led me to
the following findings:

(i) the Defendant had taken advantage of the trust placed by

the participants of the Land scheme by dealing with the
said Land for its own benefit and profit;

(ii) the Defendants had knowingly carted away part of the

Land for its own benefit and profit;

(iii) the Defendant had taken advantage of the ignorance,

inexperience and the inability of the participants to
understand the agreements prepared by the Defendant’s
solicitors to retain the beneficial interest of the Land for
themselves;

(iv) the Defendant had wrongly converted the participants

rights and interest in the Land for its own use; and

(v) the Defendant had unconscionably reduced the participants

entitlement in the Land from approximately % acre each
(approximately 10,900 square feet) to an area in the size of
1540 square feet.

[10.8] Whether the action of the Plaintiffs is barred by

limitation?

The Defendant contends that the Plaintiffs’ action is time barred

pursuant to:

(i) S. 22 of the Limitation Act 1953 which provides as

follows:

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“(1) No period of limitation prescribed by this Act shall

apply to an action by a beneficiary under a trust, being an
action -

(a) in respect of any fraud or fraudulent breach of

trust to which the trustee was a party of privy;
or

(b) to recover from the trustee trust propert y or

the proceeds thereof in the possession of the
trustee, or previously received by the trustee
and converted to his own use

(2) Subject as aforesaid, an action by a beneficiary to

recover trust property or in respect of a breach of trust,
not being an action for which a period of limitation is
prescribed by any other provision of this Act, shall be
brought after expiration of six years from the date on
which the right of action accrued:

Provided that the right of action shall not be deemed to

have accrued to any beneficiary entitled to a future
interest in the trust property, until the interest fell into
possession.

(3) No beneficiary as against whom there would be a

good defence under this Act shall derive any grea ter or
other benefit from a judgment or order obtained by any
other beneficiary than he could have obtained if he had
brought the action and this Act had been pleaded in
defence.”

(ii) Section 23 of the same Act which provides:

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“Subject to the provisions of Section 22(1) of this Act, no

action in respect of any claim to the personal estate of a
deceased person or to any share or interest in such estate,
whether under a will or on intestacy, shall be brought
after the expiration of twelve years from the date when the
right to receive the share or interest accrued, and no
action to recover arrears of interest in respect of any
legacy, or damages in respect of such arrears, shall be
brought after the expiration of six years from the date on
which interest became due.”

In addition to the defence of limitation, the Defendant contends

that the action by the Plaintiffs is barred by !aches and
acquiescence (reliance placed on the celebrated case of Alfred
Templeton &Ors v. Low Yat Holdings Sdn Bhd & Anor [1989] 2
MLJ 202).

In contending that the Plaintiffs’ claim is time barred, the

Defendant took the following position:

(a) In light of the fact that none of the participants of the Land
scheme nor the Plaintiffs has ever raised any allegation of
fraud against the Defendants from the time vacant
possession of the houses under the Final Agreement was
delivered till prior to the commencement of this present
suit, the allegation of fraud herein is an afterthought;

(b) With vacant possession of the houses under the Final

Agreement being delivered to the participants of the Land
scheme, such allegation of fraud is baseless.

With the allegation of fraud being extinguished, the Plaintiffs’ cause

of action which is based on a notion of the existence of a trust must
comply with the provisions of S. 22(2) of the Act whereby, the time

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frame to bring an action is six years from the date on which the right
of action accrued, which is 6 years from the date of delivery of vacant
possession of the houses in.

Even if the Plaintiffs are claiming on behalf of a personal estate of a

deceased person, the provisions of S. 23 of the Act is applicable.
Hence, such action must be brought within twelve years from the date
the representative of the estate receives the shares or interest in the
estate. In the event the representative of the estate is seeking to
recover arrears of interest due to the estate or damages in respect of
such arrears, such action must be commenced within six years from
the date in which the interest became due.

As the date of vacant possession of the houses was sometime in 2004,

the Plaintiff’s action which commenced in September 2016 is
therefore caught by limitation.

On the issue of !aches, the Defendants contended that the Plaintiffs

had delayed in prosecuting their claim. Due to the Plaintiffs’ own
acquiescence, it implies that the Plaintiffs have abandoned their
rights, the result of which, the Plaintiffs are now estopped from
asserting those rights.

Findings

Having re-visited the Plaintiff’s Writ and Statement of Claim, it

is clear to me that the Plaintiff is not pursuing an action for
fraud under the Y2000 Agreement. The Plaintiff’s claim is based
on the cause of action of breach of trust under many forms
namely breach of a resulting trust, breach of constructive trust,
breach of an express trust and equitable fraud.

In light of my above finding on the existence of the many kinds

of trusts and equitable fraud as alleged by the Plaintiffs, the

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provisions of S. 22(1) of the Limitation Act, clearly permits the

commencement of the suit beyond the expiry of six years from
the date the alleged cause of action accrued or beyond the
twelve years as provided under S. 23 of the same Act.

In so far as the word “fraud” under S. 22(1) is concerned, it is

not limited to actual fraud as prescribed by common law but
includes equitable fraud and unconscionable conduct (see Koh
Siew Keng & Anor v. Koh Heng Jin [2008] 3 MLJ 822).

In this regard, the Plaintiffs were not privy to the Project

Management Agreement and Supplemental Project Agreement
between the Defendant and the Project Managers. There is also
no proof that the Plaintiffs were informed of the fact that under
both the Agreements, the Defendant would be making a profit
from the development of the said Land despite repeatedly stating
that they are only acting as intermediary to participants of the
Land Scheme. This was in fact confirmed by DW-1 during cross
examination.

As correctly submitted by the Plaintiffs, the Plaintiffs only

discovered both the above Agreements via the Seremban High
Court suit which was settled be when parties sometime after
2010.Thus, if the Defendant’s contention that the Plaintiffs’
cause of action accrued from the time the Plaintiffs had
knowledge of the contents of the Agreement, based on the
proviso to S. 22(2), the Plaintiffs action herein is still within the
six years allowed under Section 22(2).

With reference to the Defendant’s submission on the

applicability of the !aches and acquiescence, this Defence was
never pleaded in the Defendant’s amended Defence. To allow
the Defendant to rely on such a defence is contrary to the
cardinal rule that parties are bound by their pleadings. No

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evidence on this issue was also led by the Defendant. Had the
defence done so, the Plaintiffs would have been able to address
the same through their witnesses. Under this circumstance, I am
disinclined to accept the Defendant’s submission that !aches has
set in and that the Plaintiffs are estopped from pursuing this
action.

Conclusion

[11] As this Court is of the view that it was the Defendants who had
terminated and repudiated the Agreement prematurely, the
Plaintiff’s claim is hereby allowed with cost. Consequentially,
the Defendants’ counter claim that it was the Plaintiffs who
were in breach of the Agreement is dismissed with costs.

[12] On the issue of damages, I am of the view that proper

quantification of damages can only be done vis a vis an
assessment proceedings.

[13] Having heard brief submissions by parties on the issue of costs,

having considered that the trial took 5 days and 6 submissions
filed (3 by each parties), I am of the view that a sum of RM
45,000.00 is reasonable as costs of the proceedings before this
Court (RM 30,000.00 for the trial and RM 15,000.00 towards
submission). I order so accordingly. In the above premise, the
Plaintiff’s claim is hereby allowed.

Dated: 17 MAY 2020

(MOHD FIRUZ JAFFRIL)

Judge
High Court Of Malaya
At Kuala Lumpur

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COUNSEL:

For the plaintiff - M/s Kumar & Associates, Advocates & Solicitors

For the defendants - M/s Aru & Co, Advocates & Solicitors

Legislation referred to:

Evidence Act 1950, s. 114 (g)

Limitation Act 1953, ss. 22(1)(2), 23

Others referred to:

page 785-786 of the Notes of Evidence Volume 3

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